Regulation S-X
Rule 3-10 - Appendix C

Who Is the "Parent Company" under Rule 3-10?

Example No. 1:

• Company A is an Exchange Act reporting company.
• Company A owns 100% of Company B.
• Company B is not an Exchange Act reporting company.
• Company B issues securities.
• Company A guarantees those securities.
• No other company in this corporate structure co-issues or guarantees the securities.

Company A is the "parent company" for purposes of applying Rule 3-10 to the subject securities.

Example No. 2:

• Company A is an Exchange Act reporting company.
• Company A issues securities.
• Company A owns 100% of Company B.
• Company B is not an Exchange Act reporting company.
• Company B guarantees the subject securities.
• No other company in this corporate structure co-issues or guarantees the securities.

Company A is the "parent company" for purposes of applying Rule 3-10 to the subject securities.

Example No. 3:

• Company A is an Exchange Act reporting company.
• Company A owns 100% of Company B.
• Company B is an Exchange Act reporting company.
• Company B issues securities.
• Company B owns 100% of Company C.
• Company C is not an Exchange Act reporting company.
• Company C guarantees the subject securities.
• Neither Company A nor any other company in this corporate structure co-issues or guarantees the securities.

Company B is the "parent company" for purposes of applying Rule 3-10 to the subject securities. The consolidated financial statements of Company A may not be substituted for those of Company B, even if Company A's financial statements are substantially the same as Company B's. The parent company for purposes of Rule 3-10 must be an issuer or guarantor of the subject security.

Example No. 4:

• Company A is not an Exchange Act reporting company.
• Company A owns 100% of Company B.
• Company B is an Exchange Act reporting company.
• Company B issues securities.
• Company B owns 100% of Company C.
• Company C is not an Exchange Act reporting company.
• Company C guarantees the subject securities.
• Neither Company A nor any other company in this corporate structure co-issues or guarantees the securities.

Company B is the "parent company" for purposes of applying Rule 3-10 to the subject securities.

Example No. 5:

• Company A is an Exchange Act reporting company.
• Company A owns 100% of Company B.
• Company B is an Exchange Act reporting company.
• Company B owns 100% of Company C.
• Company C is not an Exchange Act reporting company.
• Company C issues securities.
• Company A and Company B guarantee the subject securities.
• No other company in this corporate structure co-issues or guarantees the securities.

Company A is the "parent company" for purposes of applying Rule 3-10 to the subject securities. The consolidated financial statements of Company B may not be substituted for those of Company A, even if Company B's financial statements are substantially the same as Company A's. There are no exceptions to the parent company's obligation to provide the financial statements for a registrant under Rule 3-10(a).

Example No. 6:

• Company A is an Exchange Act reporting company.
• Company A owns 100% of Company B and Company C.
• Neither Company B nor Company C is an Exchange Act reporting company.
• Company B owns 50% of Company D.
• Company C owns the other 50% of Company D.
• Company D is not an Exchange Act reporting company.
• Company D owns 100% of Company E.
• Company E is not an Exchange Act reporting company.
• Company E issues securities.
• Companies A, B, C, and D guarantee the subject securities.
• No other company in this corporate structure co-issues or guarantees the securities.

Company A is the "parent company" for purposes of applying Rule 3-10 to the subject securities.

Example No. 7:

• Company A is not Exchange Act reporting company.
• Company A owns 100% of Company B and Company C.
• Neither Company B nor Company C is an Exchange Act reporting company.
• Company B owns 50% of Company D.
• Company C owns the other 50% of Company D.
• Company D is an Exchange Act reporting company.
• Company D owns 100% of Company E.
• Company E is not an Exchange Act reporting company.
• Company E issues securities.
• Company D guarantees the subject securities.
• No other company in this corporate structure co-issues or guarantees the securities.

Company D is the "parent company" for purposes of applying Rule 3-10 to the subject securities.