SEC Form U-7D

What Is SEC Form U-7D?

SEC form U-7D is a document that must be recorded when a utility holding company leases a utility facility to an operating public utility company. It is a required filing by the Securities and Exchange Commission (SEC).

Understanding SEC Form U-7D

Form U-7D is required by rule 7(d) of the Public Utility Holding Company Act of 1935. The Public Utility Holding Company Act was put into effect to safeguard the public and investors from the oligopoly made by the small number of utilities holding companies that owned and worked a large majority of the country's utility companies.

Three duplicates of the form must be recorded in something like 30 days of lease execution. Holding companies that don't do so are in violation of the Public Utility Holding Company Act of 1935.

SEC form U-7D is basically a certificate that summarizes the leasing arrangements. The SEC Form U-7D contains a breakdown of the cost of the facility, as well as financing terms and a description of the facility itself. The term of the lease must likewise be included, and assessments or substitutions can be made on the off chance that definitive information isn't yet accessible. An amended form must be recorded in something like 30 days in the event that there is a change of name of the entity, a transfer of beneficial interest, or the lease is changed or terminated.

Information Required in Event of a Lease

As per the Form's instructions, the initial term of a lease is to be stated in years from the date the facility is delivered to the lessee or the date fixed in the lease to compute rent on the off chance that it doesn't contrast physically from the delivery date. Lessee's obligations to make interim payments prior to delivery' might be ignored assuming they are equivalent to interest for the postponement. Renewal options, if any, should be summed succinctly and remote possibilities might be disregarded.

For instance, "Might be extended for two 5-year periods at lessee's political decision" would be sufficient. . The description of the facility should state simply its nature and an indication of its capacity. Such descriptions as the accompanying would be sufficient:

• Two turbo generators 50,000 kW
• Two LNG storage tanks 100,000 MCF nuclear fuel get together

The cost of the facility is the cost to the lessors. On the off chance that the lease indicates a cost, that figure might be used in the event that it doesn't vary substantially from the lessors' total expenditures, including borrowed funds. On the off chance that the lease states a fundamental rent, that amount might be shown in the event that it doesn't vary substantially from the previous. Assuming that the essential rent defined in the lease is stated in terms of a percentage of cost, the form should show an amount computed by applying that percentage to the cost shown, whether actual or estimated.

Features

• SEC Form U-7D must be recorded after the execution of any lease of a utility facility to an operating public utility company.
• Form U-7D must be documented in three-fold in the span of 30 days of execution of an applicable lease.
• The Form is pursuant to Rules 7(d), 21, and 22 under the Public Utility Holding Act of 1935.