INVESTMENT COMPANY ACT OF 1940 [A S A MENDED THROUGH P.L. Sec. 15. Sec. Transactions by Unregistered Investment Companies. 0000015011 00000 n Filing of Documents With Commission in Civil Actions. Sec. 57. Findings and Declaration of Policy. Rules and Regulations; Procedure for Issuance. Receive email updates about best performers, news, CE accredited webcasts and more. Section 7 prohibits investment companies from doing business until registration,[6] including public offerings; in 2018, the SEC acted against a cryptocurrency hedge fund for allegedly violating section 7. Those rules require that funds have either less than 100 or less than 499 investors who meet certain standards. x�]�PT��ϲ��"�{���ݫ�yS����HLxXAшF`w�܅}`)1j&�2;L0Ƥ)y, _5�M�W�j�8Qc5�F�i;����ڤ�ݞe칻T�3��s����}߹*�D!�J���4���V:k̖b�{��nY���\谛+wZ��e�I^���Q�#j�ny,�d{���pwͅ�tH�R�?�~����i{v�[z�n�����+�������pIk�ug��Y㶘S$)��AZ��wI�,.�����uH!��%�HneeG��^rX����ni�H��R�ݜ�pJ6z��u�̶������I1c��,f�̑"e�}�,BhA~]馲BK�ڢ��k6�gdfeOZ������"� 65. Sec. Sec. Subclassification of Management Companies. While mutual funds continue to evolve, the Act still provides a legal framework for protecting the average investor from fraud. Again, this is designed to protect investors and provide impartial oversight of the fund. 3. Rules, Regulations, and Orders; General Powers of Commission. General Definitions. %PDF-1.4 %���� Ultimately, the bill was designed "to mitigate and eliminate the conditions which adversely affect the national public interest and the interest of investors.” It does this in several ways. While it’s not the only piece of regulation governing Wall Street, the Investment Company Act of 1940 certainly affects our portfolios in the biggest way. The Investment Company Act of 1940 is an act of Congress which regulates investment funds. Annual Reports of Commission; Employees of the Commission. Secondly, each investment company must have a board of directors, and 75% of those board members must be independent or not affiliated with the fund’s activities. Definition of Investment Company. 0000017668 00000 n Sec. 38. The definition of investment company also includes some exemptions.[5]. )Ve������!����"�)Bc������2*\x��A����5��2 �Ŀ w�>� [2] The law as originally introduced was different from the law which passed; the original draft granted more broad power to the SEC, while the final bill was a compromise between the SEC and industry which was drafted and submitted to Congress by joint members of the SEC and industry, and Congress ultimately passed a similar version. Many investors assume that changes in a mutual fund’s net asset value (NAV)... For investors looking to add mutual funds to their portfolio, they need to... Disclaimer: By registering, you agree to share your data with MutualFunds.com and opt-in to receiving occasional communications about projects and events. Enhance retirement outcomes with helpful tactics. It was passed as a United States Public Law (Pub.L. 0000001780 00000 n It has been updated by the Dodd-Frank Act of 2010. 0000013468 00000 n Sec. After the Great Recession and Credit Crisis of 2008/2009, the Dodd-Frank Act of 2010 added some extra ammunition to the original Investment Company Act of 1940. 8. Providing the necessary oversight, checks and balances, and requirements for mutual funds and other investment vehicles, the Act basically allows investors to sleep at night, knowing that their investments are safe from fraud. 1. 17. [2]:xxvi, Section 9 outlines disqualification provisions which restrict people who have committed misconduct from practice in the industry; in practice, the SEC has historically granted waivers to allow such persons to remain involved. Transactions With Certain Affiliates. 1. Distribution, Redemption, and Repurchase of. Sec. 111-257, APPROVED OCTOBER 5, 2010] TABLE OF CONTENTS Sec.
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