Rules and regulations promulgated under the investment advisers act of 1940 17 cfr part 275 forms prescribed under the investment advisers act of 1940. An issuer also could apply for an order from the securities and exchange commission declaring that it is not an investment company. Since section 36bs enactment nearly half a century ago, the fund industry. The investment company act of 1940 1940 act regulates investment companies, i. Prompted in part by a 1935 report to congress on investment. It has been impacted by the doddfrank act of 2010 with numerous revisions. Rule 22e4 under the investment company act of 1940, also called the liquidity rule, became partially effective on december 1, 2018. Rule 22e4 under the investment company act of 1940, also. Versus capital multimanager real estate income fund. One of these, the investment company act of 1940, clearly defined the responsibilities of investment companies. This compilation includes small business administration.
Along with the securities exchange act of 1934 and investment advisers act of 1940, and extensive rules issued by. Through note above and below at the bottom of each page of the pdf version and. Generally, section 3 of the 1940 act defines an investment company as an issuer that holds itself out as being engaged primarily, or proposes to engage primarily, in the. Not later than 1 year after the date of enactment of this act oct. The investment company act of 1940 was created through an act of congress to regulate the organization of investment companies and the activities they engage in. This compilation re flects this amendment even though the italicized words were not in the underlying law at the time of the amendment. Investment company act of 1940 securities lawyers deskbook.
How to avoid registration under the investment company act. The investment company act of 1940 is an act of congress. Investment advisers act of 1940 house office of the. Company act to consider for a collective investment vehicle that may be viewed as or fall within the definition of an investment company under the investment company act. Investment company act of 1940 the investment company act or the act and rules thereunder. An act to provide for the registration and regulation of investment. The investment adviser performs its services pursuant to a written contract with the fund. Be it enacted by the senate and house of representatives. The purpose of the act is to minimize conflicts of interest that may occur during these operations. The investment company act of 1940 is an act of congress which regulates investment funds. Section 8 registration of investment companies section 9 ineligibility of certain affiliated persons and underwriters section 10 affiliations or interest of directors, officers, and employees. The investment company act of 1940 columbias history department.
This page provides links to pdf versions of sec public forms and many of the rules, regulations, and schedules associated with these forms. Congress, senate, committee on banking and currency, investment trusts and investment companies. In other words, the act must be read in the light of the nature of the industry and the problems sought to be corrected, of the administrations approach to such problems as evidenced by other legislation and of the fact that the act. The curse of 1940 was a superstitious explanation for why the new york rangers of the national hockey league nhl did not win the leagues championship trophy, the stanley cup, from 1940 to 1994.
Investment company act of 1940 house office of the legislative. On march, 2020, in response to the potential effects of coronavirus disease 2019. Small business act, except that, for purposes of this act a an investment by a venture capital firm, investment company including a small business investment company employee welfare benefit plan or pension plan, or trust, foundation, or endowment that is exempt from federal income taxation. Advisor or skba means skba capital management, llc, the funds investment advisor. Special type of closedend fund regulated under the investment company act of 1940 the 1940 act. Investment company act of 1940 as amended an act to provide for the registration and regulation of investment companies and investment advisers, and for other purposes. The investment company act of 1940 regulates the organization of companies who primarily engage in investing, reinvesting, and securities trading, and who offer their own securities to the public.
Year 1940 mcmxl was a leap year starting on monday link will display the full 1940 calendar of the gregorian calendar. Be it enacted by the senate and house of representatives of the united states of america in congress assembled, findings and declaration of policy sec. This same year, what would become ici was established in new york as the national committee of investment companies, an organization to aid in the administration of the act. Section 1 findings and declaration of policy section 2 definitions section 3 definition of investment company section 4 classification of investment. Investment companies closedend funds and regular openend mutual funds were still a relative novelty at the time. Investment company act of 1940 private funds duane morris llp. Accordingly, mutual fund directors, like the directors of. The investment company act of 1940 is the primary legislation governing investment companies and their investment product offerings. The provisions of subparagraphs a and b of paragraph 1 of subsection a of this section shall not apply to investment companies operating under the small business investment act of 1958 15 u. One of the worse situations a company may face to be determined to be an investment company under the investment company act of 1940, as amended the act. This act regulates the organization of companies, including mutual funds, that engage primarily in investing, reinvesting, and trading in securities, and whose own securities are offered to the investing public. Order under section 6c and section 38a of the investment company. Investment restrictions under the 1940 act, a bdc generally cannot acquire securities issued by. Sec extends deadline for form adv and form pf filing for.
See the full text of the trust indenture act of 1939. In addition, we recognize that registered management investment companies and unit investment trusts together, registered funds may facechallenges if, as a result of. This act regulates the organization of companies, including mutual funds, that engage primarily in investing. To provide for the registration and regulation of investment companies and. The investment company act of 1940 was created through an act of congress to regulate the organization of investment companies and the. Secs exemptive power in regulating investment companies pdf. Notwithstanding subsection a of section 3 of the investment company act of 1940, none of the following persons is an investment company within the meaning of this subchapter. Reports and financial statements of investment companies and affiliated persons. See the full text of the investment company act of 1940. Section 3c1 exemption from definition of investment.
Section 3c1 exemption from definition of investment company. Section 36b of the investment company act of 1940 ica establishes a fiduciary duty on the part of fund advisers with respect to their receipt of fees, and grants fund shareholders the express right to bring lawsuits in federal court for breaches of this duty. Investment advisers act of 1940 oreferences in brackets o. The undersigned investment company hereby notifies the securities and exchange commission that it registers under and pursuant to the provisions of section 8a of the investment company act of 1940 and in connection with such notification of. The secs division of investment management has announced that requests for hearing applications on notices of applications for exemptive orders under the investment company act of 1940 and the investment advisers act of 1940 must be submitted by email. Investment company act of 1940 this act regulates the organization of companies, including mutual funds, that engage primarily in investing, reinvesting, and trading in securities, and whose own securities are offered to the investing public. Overview of the investment company act of 1940 hedge. Simultaneously, the sec issued an order the 1940 act release under the investment company act of 1940 investment company act granting similar relief to registered funds and business development companies bdcs from certain filing requirements. Responsibilities under state law mutual funds, like other corporations and business trusts, are organized pursuant to state, not federal, law. If determined to be an investment company, the company is subject to the full regulation under the act. It is hereby declared that the policy and purposes of this title, in accordance with which the provisions of this title shall be interpreted, are to mitigate and, so far as is.
To find a form, either select the appropriate category below or scroll through the full list of sec forms in alphanumeric order. No person shall serve as a director of a registered investment company unless elected to that office by the holders of the outstanding voting securities of such company, at an annual or a special meeting duly called for that purpose. The investment company act of 1940 investment banker means any person engaged in the business of underwriting securities issued by other persons, but does not include an investment company, any person who acts as an underwriter in isolated transactions but not as a part of a regular business, or any person. Title ii of chapter 686 of the 76th congress as amended through p. Notification of registration filed pursuant to section 8a. Section 15 of the investment company act, as amended 1940 act, requires that each investment advisory contract with a registered investment company be approved initially by a majority of the funds. One key requirement that became effective on december 1, 2018, was that an openend mutual fund. The investment company act provides very strict regulations for entities which are investment companies such as mutual funds. It is hereby declared that the policy and purposes of this title, in accordance with which the provisions of this title shall be interpreted, are to mitigate and, so far as is feasible, to eliminate the. Duane morris llp a delaware limited liability partnership. Provides small, growing co mpanies access to capital enables private equity funds to access public capital markets enables retail investors to participate in t. The sec tightened the risklimiting conditions of rule 2a7 by strengthening the investment parameters and mitigating the risks associated with each funds investments. The investment company act of 1940 the investment company act is what gives structure to the hedge fund industry.
In order to get the general investing public interested in these vehicles, congress wrote up the investment company act of 1940 and gave power to the sec to enforce its attributes. This publication is a compilation of the text of title ii of chapter 686 of the 76th congress. Investment adviser ia pursuant to the investment advisers act of 1940 the ia act. With the ultimate goal of protecting investors, the reforms impacted the credit quality. Rules and regulations promulgated under the investment company act of 1940 17 cfr part 270 forms prescribed under the investment company act of 1940. A management company that does not advise the private fund on the substantive investment or trading activities, and limits its activities to administrative duties and functions, is not required to register as an ia.
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