-CITE-
    15 USC CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS       01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS

-HEAD-
              CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS          


-MISC1-
                    SUBCHAPTER I - INVESTMENT COMPANIES                
    Sec.                                                     
    80a-1.      Findings and declaration of policy.                   
    80a-2.      Definitions; applicability; rulemaking considerations.
    80a-3.      Definition of investment company.                     
    80a-3a.     Protection of philanthropy under State law.           
    80a-4.      Classification of investment companies.               
    80a-5.      Subclassification of management companies.            
    80a-6.      Exemptions.                                           
    80a-7.      Transactions by unregistered investment companies.    
    80a-8.      Registration of investment companies.                 
    80a-9.      Ineligibility of certain affiliated persons and
                 underwriters.                                        
    80a-10.     Affiliations or interest of directors, officers, and
                 employees.                                           
    80a-11.     Offers to exchange securities.                        
    80a-12.     Functions and activities of investment companies.     
    80a-13.     Changes in investment policy.                         
    80a-14.     Size of investment companies.                         
    80a-15.     Contracts of advisers and underwriters.               
    80a-16.     Board of directors.                                   
    80a-17.     Transactions of certain affiliated persons and
                 underwriters.                                        
    80a-18.     Capital structure of investment companies.            
    80a-19.     Payments or distributions.                            
    80a-20.     Proxies; voting trusts; circular ownership.           
    80a-21.     Loans by management companies.                        
    80a-22.     Distribution, redemption, and repurchase of
                 securities; regulations by securities associations.  
    80a-23.     Closed-end companies.                                 
    80a-24.     Registration of securities under Securities Act of
                 1933.                                                
    80a-25.     Reorganization plans; reports by Commission.          
    80a-26.     Unit investment trusts.                               
    80a-27.     Periodic payment plans.                               
    80a-28.     Face-amount certificate companies.                    
    80a-29.     Reports and financial statements of investment
                 companies and affiliated persons.                    
    80a-30.     Accounts and records.                                 
    80a-31.     Accountants and auditors.                             
    80a-32.     Filing of documents with Commission in civil actions. 
    80a-33.     Destruction and falsification of reports and records. 
    80a-34.     Unlawful representations and names.                   
    80a-35.     Breach of fiduciary duty.                             
    80a-36.     Larceny and embezzlement.                             
    80a-37.     Rules, regulations, and orders.                       
    80a-38.     Procedure for issuance of rules and regulations.      
    80a-39.     Procedure for issuance of orders.                     
    80a-40.     Hearings by Commission.                               
    80a-41.     Enforcement of subchapter.                            
    80a-42.     Court review of orders.                               
    80a-43.     Jurisdiction of offenses and suits.                   
    80a-44.     Disclosure of information filed with Commission;
                 copies.                                              
    80a-45.     Reports by Commission; hiring and leasing authority.  
    80a-46.     Validity of contracts.                                
    80a-47.     Violation of subchapter.                              
    80a-48.     Penalties.                                            
    80a-49.     Construction with other laws.                         
    80a-50.     Separability.                                         
    80a-51.     Short title.                                          
    80a-52.     Effective date.                                       
    80a-53.     Election to be regulated as business development
                 company.                                             
    80a-54.     Acquisition of assets by business development
                 companies.                                           
    80a-55.     Qualifications of directors.                          
    80a-56.     Transactions with certain affiliates.                 
    80a-57.     Changes in investment policy.                         
    80a-58.     Incorporation of subchapter provisions.               
    80a-59.     Functions and activities of business development
                 companies.                                           
    80a-60.     Capital structure.                                    
    80a-61.     Loans.                                                
    80a-62.     Distribution and repurchase of securities.            
    80a-63.     Accounts and records.                                 
    80a-64.     Preventing compliance with subchapter; liability of
                 controlling persons.                                 

                    SUBCHAPTER II - INVESTMENT ADVISERS                
    80b-1.      Findings.                                             
    80b-2.      Definitions.                                          
    80b-3.      Registration of investment advisers.                  
    80b-3a.     State and Federal responsibilities.                   
    80b-4.      Reports by investment advisers.                       
    80b-4a.     Prevention of misuse of nonpublic information.        
    80b-5.      Investment advisory contracts.                        
    80b-6.      Prohibited transactions by investment advisers.       
    80b-6a.     Exemptions.                                           
    80b-7.      Material misstatements.                               
    80b-8.      General prohibitions.                                 
    80b-9.      Enforcement of subchapter.                            
    80b-10.     Disclosure of information by Commission.              
    80b-10a.    Consultation.                                         
    80b-11.     Rules, regulations, and orders of Commission.         
    80b-12.     Hearings.                                             
    80b-13.     Court review of orders.                               
    80b-14.     Jurisdiction of offenses and suits.                   
    80b-15.     Validity of contracts.                                
    80b-16.     Omitted.                                              
    80b-17.     Penalties.                                            
    80b-18.     Hiring and leasing authority of Commission.           
    80b-18a.    State regulation of investment advisers.              
    80b-19.     Separability.                                         
    80b-20.     Short title.                                          
    80b-21.     Effective date.                                       

-End-


-CITE-
    15 USC SUBCHAPTER I - INVESTMENT COMPANIES                  01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
                    SUBCHAPTER I - INVESTMENT COMPANIES                

-End-



-CITE-
    15 USC Sec. 80a-1                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-1. Findings and declaration of policy

-STATUTE-
    (a) Findings
      Upon the basis of facts disclosed by the record and reports of
    the Securities and Exchange Commission made pursuant to section 79z-
    4 (!1) of this title, and facts otherwise disclosed and
    ascertained, it is found that investment companies are affected
    with a national public interest in that, among other things - 

        (1) the securities issued by such companies, which constitute a
      substantial part of all securities publicly offered, are
      distributed, purchased, paid for, exchanged, transferred,
      redeemed, and repurchased by use of the mails and means and
      instrumentalities of interstate commerce, and in the case of the
      numerous companies which issue redeemable securities this process
      of distribution and redemption is continuous;
        (2) the principal activities of such companies - investing,
      reinvesting, and trading in securities - are conducted by use of
      the mails and means and instrumentalities of interstate commerce,
      including the facilities of national securities exchanges, and
      constitute a substantial part of all transactions effected in the
      securities markets of the Nation;
        (3) such companies customarily invest and trade in securities
      issued by, and may dominate and control or otherwise affect the
      policies and management of, companies engaged in business in
      interstate commerce;
        (4) such companies are media for the investment in the national
      economy of a substantial part of the national savings and may
      have a vital effect upon the flow of such savings into the
      capital markets; and
        (5) the activities of such companies, extending over many
      States, their use of the instrumentalities of interstate commerce
      and the wide geographic distribution of their security holders,
      make difficult, if not impossible, effective State regulation of
      such companies in the interest of investors.
    (b) Policy
      Upon the basis of facts disclosed by the record and reports of
    the Securities and Exchange Commission made pursuant to section 79z-
    4 (!1) of this title, and facts otherwise disclosed and
    ascertained, it is declared that the national public interest and
    the interest of investors are adversely affected - 
        (1) when investors purchase, pay for, exchange, receive
      dividends upon, vote, refrain from voting, sell, or surrender
      securities issued by investment companies without adequate,
      accurate, and explicit information, fairly presented, concerning
      the character of such securities and the circumstances, policies,
      and financial responsibility of such companies and their
      management;
        (2) when investment companies are organized, operated, managed,
      or their portfolio securities are selected, in the interest of
      directors, officers, investment advisers, depositors, or other
      affiliated persons thereof, in the interest of underwriters,
      brokers, or dealers, in the interest of special classes of their
      security holders, or in the interest of other investment
      companies or persons engaged in other lines of business, rather
      than in the interest of all classes of such companies' security
      holders;
        (3) when investment companies issue securities containing
      inequitable or discriminatory provisions, or fail to protect the
      preferences and privileges of the holders of their outstanding
      securities;
        (4) when the control of investment companies is unduly
      concentrated through pyramiding or inequitable methods of
      control, or is inequitably distributed, or when investment
      companies are managed by irresponsible persons;
        (5) when investment companies, in keeping their accounts, in
      maintaining reserves, and in computing their earnings and the
      asset value of their outstanding securities, employ unsound or
      misleading methods, or are not subjected to adequate independent
      scrutiny;
        (6) when investment companies are reorganized, become inactive,
      or change the character of their business, or when the control or
      management thereof is transferred, without the consent of their
      security holders;
        (7) when investment companies by excessive borrowing and the
      issuance of excessive amounts of senior securities increase
      unduly the speculative character of their junior securities; or
        (8) when investment companies operate without adequate assets
      or reserves.

    It is declared that the policy and purposes of this subchapter, in
    accordance with which the provisions of this subchapter shall be
    interpreted, are to mitigate and, so far as is feasible, to
    eliminate the conditions enumerated in this section which adversely
    affect the national public interest and the interest of investors.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 1, 54 Stat. 789.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      Section 79z-4 of this title, referred to in text, was repealed by
    Pub. L. 109-58, title XII, Sec. 1263, Aug. 8, 2005, 119 Stat. 974.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    15 USC Sec. 80a-2                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-2. Definitions; applicability; rulemaking considerations

-STATUTE-
    (a) Definitions
      When used in this subchapter, unless the context otherwise
    requires - 
        (1) "Advisory board" means a board, whether elected or
      appointed, which is distinct from the board of directors or board
      of trustees, of an investment company, and which is composed
      solely of persons who do not serve such company in any other
      capacity, whether or not the functions of such board are such as
      to render its members "directors" within the definition of that
      term, which board has advisory functions as to investments but
      has no power to determine that any security or other investment
      shall be purchased or sold by such company.
        (2) "Affiliated company" means a company which is an affiliated
      person.
        (3) "Affiliated person" of another person means (A) any person
      directly or indirectly owning, controlling, or holding with power
      to vote, 5 per centum or more of the outstanding voting
      securities of such other person; (B) any person 5 per centum or
      more of whose outstanding voting securities are directly or
      indirectly owned, controlled, or held with power to vote, by such
      other person; (C) any person directly or indirectly controlling,
      controlled by, or under common control with, such other person;
      (D) any officer, director, partner, copartner, or employee of
      such other person; (E) if such other person is an investment
      company, any investment adviser thereof or any member of an
      advisory board thereof; and (F) if such other person is an
      unincorporated investment company not having a board of
      directors, the depositor thereof.
        (4) "Assignment" includes any direct or indirect transfer or
      hypothecation of a contract or chose in action by the assignor,
      or of a controlling block of the assignor's outstanding voting
      securities by a security holder of the assignor; but does not
      include an assignment of partnership interests incidental to the
      death or withdrawal of a minority of the members of the
      partnership having only a minority interest in the partnership
      business or to the admission to the partnership of one or more
      members who, after such admission, shall be only a minority of
      the members and shall have only a minority interest in the
      business.
        (5) "Bank" means (A) a depository institution (as defined in
      section 1813 of title 12) or a branch or agency of a foreign bank
      (as such terms are defined in section 3101 of title 12), (B) a
      member bank of the Federal Reserve System, (C) any other banking
      institution or trust company, whether incorporated or not, doing
      business under the laws of any State or of the United States, a
      substantial portion of the business of which consists of
      receiving deposits or exercising fiduciary powers similar to
      those permitted to national banks under the authority of the
      Comptroller of the Currency, and which is supervised and examined
      by State or Federal authority having supervision over banks, and
      which is not operated for the purpose of evading the provisions
      of this subchapter, and (D) a receiver, conservator, or other
      liquidating agent of any institution or firm included in clauses
      (A), (B), or (C) of this paragraph.
        (6) The term "broker" has the same meaning as given in section
      3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c], except
      that such term does not include any person solely by reason of
      the fact that such person is an underwriter for one or more
      investment companies.
        (7) "Commission" means the Securities and Exchange Commission.
        (8) "Company" means a corporation, a partnership, an
      association, a joint-stock company, a trust, a fund, or any
      organized group of persons whether incorporated or not; or any
      receiver, trustee in a case under title 11 or similar official or
      any liquidating agent for any of the foregoing, in his capacity
      as such.
        (9) "Control" means the power to exercise a controlling
      influence over the management or policies of a company, unless
      such power is solely the result of an official position with such
      company.
        Any person who owns beneficially, either directly or through
      one or more controlled companies, more than 25 per centum of the
      voting securities of a company shall be presumed to control such
      company. Any person who does not so own more than 25 per centum
      of the voting securities of any company shall be presumed not to
      control such company. A natural person shall be presumed not to
      be a controlled person within the meaning of this subchapter. Any
      such presumption may be rebutted by evidence, but except as
      hereinafter provided, shall continue until a determination to the
      contrary made by the Commission by order either on its own motion
      or on application by an interested person. If an application
      filed hereunder is not granted or denied by the Commission within
      sixty days after filing thereof, the determination sought by the
      application shall be deemed to have been temporarily granted
      pending final determination of the Commission thereon. The
      Commission, upon its own motion or upon application, may by order
      revoke or modify any order issued under this paragraph whenever
      it shall find that the determination embraced in such original
      order is no longer consistent with the facts.
        (10) "Convicted" includes a verdict, judgment, or plea of
      guilty, or a finding of guilt on a plea of nolo contendere, if
      such verdict, judgment, plea, or finding has not been reversed,
      set aside, or withdrawn, whether or not sentence has been
      imposed.
        (11) The term "dealer" has the same meaning as given in the
      Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], but does
      not include an insurance company or investment company.
        (12) "Director" means any director of a corporation or any
      person performing similar functions with respect to any
      organization, whether incorporated or unincorporated, including
      any natural person who is a member of a board of trustees of a
      management company created as a common-law trust.
        (13) "Employees' securities company" means any investment
      company or similar issuer all of the outstanding securities of
      which (other than short-term paper) are beneficially owned (A) by
      the employees or persons on retainer of a single employer or of
      two or more employers each of which is an affiliated company of
      the other, (B) by former employees of such employer or employers,
      (C) by members of the immediate family of such employees, persons
      on retainer, or former employees, (D) by any two or more of the
      foregoing classes of persons, or (E) by such employer or
      employers together with any one or more of the foregoing classes
      of persons.
        (14) "Exchange" means any organization, association, or group
      of persons, whether incorporated or unincorporated, which
      constitutes, maintains, or provides a market place or facilities
      for bringing together purchasers and sellers of securities or for
      otherwise performing with respect to securities the functions
      commonly performed by a stock exchange as that term is generally
      understood, and includes the market place and the market
      facilities maintained by such exchange.
        (15) "Face-amount certificate" means any certificate,
      investment contract, or other security which represents an
      obligation on the part of its issuer to pay a stated or
      determinable sum or sums at a fixed or determinable date or dates
      more than twenty-four months after the date of issuance, in
      consideration of the payment of periodic installments of a stated
      or determinable amount (which security shall be known as a face-
      amount certificate of the "installment type"); or any security
      which represents a similar obligation on the part of a face-
      amount certificate company, the consideration for which is the
      payment of a single lump sum (which security shall be known as a
      "fully paid" face-amount certificate).
        (16) "Government security" means any security issued or
      guaranteed as to principal or interest by the United States, or
      by a person controlled or supervised by and acting as an
      instrumentality of the Government of the United States pursuant
      to authority granted by the Congress of the United States; or any
      certificate of deposit for any of the foregoing.
        (17) "Insurance company" means a company which is organized as
      an insurance company, whose primary and predominant business
      activity is the writing of insurance or the reinsuring of risks
      underwritten by insurance companies, and which is subject to
      supervision by the insurance commissioner or a similar official
      or agency of a State; or any receiver or similar official or any
      liquidating agent for such a company, in his capacity as such.
        (18) "Interstate commerce" means trade, commerce,
      transportation, or communication among the several States, or
      between any foreign country and any State, or between any State
      and any place or ship outside thereof.
        (19) "Interested person" of another person means - 
          (A) when used with respect to an investment company - 
            (i) any affiliated person of such company,
            (ii) any member of the immediate family of any natural
          person who is an affiliated person of such company,
            (iii) any interested person of any investment adviser of or
          principal underwriter for such company,
            (iv) any person or partner or employee of any person who at
          any time since the beginning of the last two completed fiscal
          years of such company has acted as legal counsel for such
          company,
            (v) any person or any affiliated person of a person (other
          than a registered investment company) that, at any time
          during the 6-month period preceding the date of the
          determination of whether that person or affiliated person is
          an interested person, has executed any portfolio transactions
          for, engaged in any principal transactions with, or
          distributed shares for - 
              (I) the investment company;
              (II) any other investment company having the same
            investment adviser as such investment company or holding
            itself out to investors as a related company for purposes
            of investment or investor services; or
              (III) any account over which the investment company's
            investment adviser has brokerage placement discretion,

            (vi) any person or any affiliated person of a person (other
          than a registered investment company) that, at any time
          during the 6-month period preceding the date of the
          determination of whether that person or affiliated person is
          an interested person, has loaned money or other property to -
          
              (I) the investment company;
              (II) any other investment company having the same
            investment adviser as such investment company or holding
            itself out to investors as a related company for purposes
            of investment or investor services; or
              (III) any account for which the investment company's
            investment adviser has borrowing authority,(!1)


            (vii) any natural person whom the Commission by order shall
          have determined to be an interested person by reason of
          having had, at any time since the beginning of the last two
          completed fiscal years of such company, a material business
          or professional relationship with such company or with the
          principal executive officer of such company or with any other
          investment company having the same investment adviser or
          principal underwriter or with the principal executive officer
          of such other investment company:

        Provided, That no person shall be deemed to be an interested
        person of an investment company solely by reason of (aa) his
        being a member of its board of directors or advisory board or
        an owner of its securities, or (bb) his membership in the
        immediate family of any person specified in clause (aa) of this
        proviso; and
          (B) when used with respect to an investment adviser of or
        principal underwriter for any investment company - 
            (i) any affiliated person of such investment adviser or
          principal underwriter,
            (ii) any member of the immediate family of any natural
          person who is an affiliated person of such investment adviser
          or principal underwriter,
            (iii) any person who knowingly has any direct or indirect
          beneficial interest in, or who is designated as trustee,
          executor, or guardian of any legal interest in, any security
          issued either by such investment adviser of principal
          underwriter or by a controlling person or such investment
          adviser or principal underwriter,
            (iv) any person or partner or employee of any person who at
          any time since the beginning of the last two completed fiscal
          years of such investment company has acted as legal counsel
          for such investment adviser or principal underwriter,
            (v) any person or any affiliated person of a person (other
          than a registered investment company) that, at any time
          during the 6-month period preceding the date of the
          determination of whether that person or affiliated person is
          an interested person, has executed any portfolio transactions
          for, engaged in any principal transactions with, or
          distributed shares for - 
              (I) any investment company for which the investment
            adviser or principal underwriter serves as such;
              (II) any investment company holding itself out to
            investors, for purposes of investment or investor services,
            as a company related to any investment company for which
            the investment adviser or principal underwriter serves as
            such; or
              (III) any account over which the investment adviser has
            brokerage placement discretion,

            (vi) any person or any affiliated person of a person (other
          than a registered investment company) that, at any time
          during the 6-month period preceding the date of the
          determination of whether that person or affiliated person is
          an interested person, has loaned money or other property to -
          
              (I) any investment company for which the investment
            adviser or principal underwriter serves as such;
              (II) any investment company holding itself out to
            investors, for purposes of investment or investor services,
            as a company related to any investment company for which
            the investment adviser or principal underwriter serves as
            such; or
              (III) any account for which the investment adviser has
            borrowing authority,(!1)

            (vii) any natural person whom the Commission by order shall
          have determined to be an interested person by reason of
          having had at any time since the beginning of the last two
          completed fiscal years of such investment company a material
          business or professional relationship with such investment
          adviser or principal underwriter or with the principal
          executive officer or any controlling person of such
          investment adviser or principal underwriter.

      For the purposes of this paragraph (19), "member of the immediate
      family" means any parent, spouse of a parent, child, spouse of a
      child, spouse, brother, or sister, and includes step and adoptive
      relationships. The Commission may modify or revoke any order
      issued under clause (vi) of subparagraph (A) or (B) of this
      paragraph whenever it finds that such order is no longer
      consistent with the facts. No order issued pursuant to clause
      (vi) of subparagraph (A) or (B) of this paragraph shall become
      effective until at least sixty days after the entry thereof, and
      no such order shall affect the status of any person for the
      purposes of this subchapter or for any other purpose for any
      period prior to the effective date of such order.
        (20) "Investment adviser" of an investment company means (A)
      any person (other than a bona fide officer, director, trustee,
      member of an advisory board, or employee of such company, as
      such) who pursuant to contract with such company regularly
      furnishes advice to such company with respect to the desirability
      of investing in, purchasing or selling securities or other
      property, or is empowered to determine what securities or other
      property shall be purchased or sold by such company, and (B) any
      other person who pursuant to contract with a person described in
      clause (A) of this paragraph regularly performs substantially all
      of the duties undertaken by such person described in said clause
      (A); but does not include (i) a person whose advice is furnished
      solely through uniform publications distributed to subscribers
      thereto, (ii) a person who furnishes only statistical and other
      factual information, advice regarding economic factors and
      trends, or advice as to occasional transactions in specific
      securities, but without generally furnishing advice or making
      recommendations regarding the purchase or sale of securities,
      (iii) a company furnishing such services at cost to one or more
      investment companies, insurance companies, or other financial
      institutions, (iv) any person the character and amount of whose
      compensation for such services must be approved by a court, or
      (v) such other persons as the Commission may by rules and
      regulations or order determine not to be within the intent of
      this definition.
        (21) "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 solely by reason of the fact that
      such person is an underwriter for one or more investment
      companies.
        (22) "Issuer" means every person who issues or proposes to
      issue any security, or has outstanding any security which it has
      issued.
        (23) "Lend" includes a purchase coupled with an agreement by
      the vendor to repurchase; "borrow" includes a sale coupled with a
      similar agreement.
        (24) "Majority-owned subsidiary" of a person means a company 50
      per centum or more of the outstanding voting securities of which
      are owned by such person, or by a company which, within the
      meaning of this paragraph, is a majority-owned subsidiary of such
      person.
        (25) "Means or instrumentality of interstate commerce" includes
      any facility of a national securities exchange.
        (26) "National securities exchange" means an exchange
      registered under section 6 of the Securities Exchange Act of 1934
      [15 U.S.C. 78f].
        (27) "Periodic payment plan certificate" means (A) any
      certificate, investment contract, or other security providing for
      a series of periodic payments by the holder, and representing an
      undivided interest in certain specified securities or in a unit
      or fund of securities purchased wholly or partly with the
      proceeds of such payments, and (B) any security the issuer of
      which is also issuing securities of the character described in
      clause (A) of this paragraph and the holder of which has
      substantially the same rights and privileges as those which
      holders of securities of the character described in said clause
      (A) have upon completing the periodic payments for which such
      securities provide.
        (28) "Person" means a natural person or a company.
        (29) "Principal underwriter" of or for any investment company
      other than a closed-end company, or of any security issued by
      such a company, means any underwriter who as principal purchases
      from such company, or pursuant to contract has the right (whether
      absolute or conditional) from time to time to purchase from such
      company, any such security for distribution, or who as agent for
      such company sells or has the right to sell any such security to
      a dealer or to the public or both, but does not include a dealer
      who purchases from such company through a principal underwriter
      acting as agent for such company. "Principal underwriter" of or
      for a closed-end company or any issuer which is not an investment
      company, or of any security issued by such a company or issuer,
      means any underwriter who, in connection with a primary
      distribution of securities, (A) is in privity of contract with
      the issuer or an affiliated person of the issuer; (B) acting
      alone or in concert with one or more other persons, initiates or
      directs the formation of an underwriting syndicate; or (C) is
      allowed a rate of gross commission, spread, or other profit
      greater than the rate allowed another underwriter participating
      in the distribution.
        (30) "Promoter" of a company or a proposed company means a
      person who, acting alone or in concert with other persons, is
      initiating or directing, or has within one year initiated or
      directed, the organization of such company.
        (31) "Prospectus", as used in section 80a-22 of this title,
      means a written prospectus intended to meet the requirements of
      section 10(a) of the Securities Act of 1933 [15 U.S.C. 77j(a)]
      and currently in use. As used elsewhere, "prospectus" means a
      prospectus as defined in the Securities Act of 1933 [15 U.S.C.
      77a et seq.].
        (32) "Redeemable security" means any security, other than short-
      term paper, under the terms of which the holder, upon its
      presentation to the issuer or to a person designated by the
      issuer, is entitled (whether absolutely or only out of surplus)
      to receive approximately his proportionate share of the issuer's
      current net assets, or the cash equivalent thereof.
        (33) "Reorganization" means (A) a reorganization under the
      supervision of a court of competent jurisdiction; (B) a merger or
      consolidation; (C) a sale of 75 per centum or more in value of
      the assets of a company; (D) a restatement of the capital of a
      company, or an exchange of securities issued by a company for any
      of its own outstanding securities; (E) a voluntary dissolution or
      liquidation of a company; (F) a recapitalization or other
      procedure or transaction which has for its purpose the
      alteration, modification, or elimination of any of the rights,
      preferences, or privileges of any class of securities issued by a
      company, as provided in its charter or other instrument creating
      or defining such rights, preferences, and privileges; (G) an
      exchange of securities issued by a company for outstanding
      securities issued by another company or companies, preliminary to
      and for the purpose of effecting or consummating any of the
      foregoing; or (H) any exchange of securities by a company which
      is not an investment company for securities issued by a
      registered investment company.
        (34) "Sale", "sell", "offer to sell", or "offer for sale"
      includes every contract of sale or disposition of, attempt or
      offer to dispose of, or solicitation of an offer to buy, a
      security or interest in a security, for value. Any security given
      or delivered with, or as a bonus on account of, any purchase of
      securities or any other thing, shall be conclusively presumed to
      constitute a part of the subject of such purchase and to have
      been sold for value.
        (35) "Sales load" means the difference between the price of a
      security to the public and that portion of the proceeds from its
      sale which is received and invested or held for investment by the
      issuer (or in the case of a unit investment trust, by the
      depositor or trustee), less any portion of such difference
      deducted for trustee's or custodian's fees, insurance premiums,
      issue taxes, or administrative expenses or fees which are not
      properly chargeable to sales or promotional activities. In the
      case of a periodic payment plan certificate, "sales load"
      includes the sales load on any investment company securities in
      which the payments made on such certificate are invested, as well
      as the sales load on the certificate itself.
        (36) "Security" means any note, stock, treasury stock, security
      future, bond, debenture, evidence of indebtedness, certificate of
      interest or participation in any profit-sharing agreement,
      collateral-trust certificate, preorganization certificate or
      subscription, transferable share, investment contract, voting-
      trust certificate, certificate of deposit for a security,
      fractional undivided interest in oil, gas, or other mineral
      rights, any put, call, straddle, option, or privilege on any
      security (including a certificate of deposit) or on any group or
      index of securities (including any interest therein or based on
      the value thereof), or any put, call, straddle, option, or
      privilege entered into on a national securities exchange relating
      to foreign currency, or, in general, any interest or instrument
      commonly known as a "security", or any certificate of interest or
      participation in, temporary or interim certificate for, receipt
      for, guarantee of, or warrant or right to subscribe to or
      purchase, any of the foregoing.
        (37) "Separate account" means an account established and
      maintained by an insurance company pursuant to the laws of any
      State or territory of the United States, or of Canada or any
      province thereof, under which income, gains and losses, whether
      or not realized, from assets allocated to such account, are, in
      accordance with the applicable contract, credited to or charged
      against such account without regard to other income, gains, or
      losses of the insurance company.
        (38) "Short-term paper" means any note, draft, bill of
      exchange, or banker's acceptance payable on demand or having a
      maturity at the time of issuance of not exceeding nine months,
      exclusive of days of grace, or any renewal thereof payable on
      demand or having a maturity likewise limited; and such other
      classes of securities, of a commercial rather than an investment
      character, as the Commission may designate by rules and
      regulations.
        (39) "State" means any State of the United States, the District
      of Columbia, Puerto Rico, the Virgin Islands, or any other
      possession of the United States.
        (40) "Underwriter" means any person who has purchased from an
      issuer with a view to, or sells for an issuer in connection with,
      the distribution of any security, or participates or has a direct
      or indirect participation in any such undertaking, or
      participates or has a participation in the direct or indirect
      underwriting of any such undertaking; but such term shall not
      include a person whose interest is limited to a commission from
      an underwriter or dealer not in excess of the usual and customary
      distributor's or seller's commission. As used in this paragraph
      the term "issuer" shall include, in addition to an issuer, any
      person directly or indirectly controlling or controlled by the
      issuer, or any person under direct or indirect common control
      with the issuer. When the distribution of the securities in
      respect of which any person is an underwriter is completed such
      person shall cease to be an underwriter in respect of such
      securities or the issuer thereof.
        (41) "Value", with respect to assets of registered investment
      companies, except as provided in subsection (b) of section 80a-28
      of this title, means - 
          (A) as used in sections 80a-3, 80a-5, and 80a-12 of this
        title, (i) with respect to securities owned at the end of the
        last preceding fiscal quarter for which market quotations are
        readily available, the market value at the end of such quarter;
        (ii) with respect to other securities and assets owned at the
        end of the last preceding fiscal quarter, fair value at the end
        of such quarter, as determined in good faith by the board of
        directors; and (iii) with respect to securities and other
        assets acquired after the end of the last preceding fiscal
        quarter, the cost thereof; and
          (B) as used elsewhere in this subchapter, (i) with respect to
        securities for which market quotations are readily available,
        the market value of such securities; and (ii) with respect to
        other securities and assets, fair value as determined in good
        faith by the board of directors;

      in each case as of such time or times as determined pursuant to
      this subchapter, and the rules and regulations issued by the
      Commission hereunder. Notwithstanding the fact that market
      quotations for securities issued by controlled companies are
      available, the board of directors may in good faith determine the
      value of such securities: Provided, That the value so determined
      is not in excess of the higher of market value or asset value of
      such securities in the case of majority-owned subsidiaries, and
      is not in excess of market value in the case of other controlled
      companies.
        For purposes of the valuation of those assets of a registered
      diversified company which are not subject to the limitations
      provided for in section 80a-5(b)(1) of this title, the Commission
      may, by rules and regulations or orders, permit any security to
      be carried at cost, if it shall determine that such procedure is
      consistent with the general intent and purposes of this
      subchapter. For purposes of sections 80a-5 and 80a-12 of this
      title in lieu of values determined as provided in clause (A)
      above, the Commission shall by rules and regulations permit
      valuation of securities at cost or other basis in cases where it
      may be more convenient for such company to make its computations
      on such basis by reason of the necessity or desirability of
      complying with the provisions of any United States revenue laws
      or rules and regulations issued thereunder, or the laws or the
      rules and regulations issued thereunder of any State in which the
      securities of such company may be qualified for sale.
        The foregoing definition shall not derogate from the authority
      of the Commission with respect to the reports, information, and
      documents to be filed with the Commission by any registered
      company, or with respect to the accounting policies and
      principles to be followed by any such company, as provided in
      sections 80a-8, 80a-29, and 80a-30 of this title.
        (42) "Voting security" means any security presently entitling
      the owner or holder thereof to vote for the election of directors
      of a company. A specified percentage of the outstanding voting
      securities of a company means such amount of its outstanding
      voting securities as entitles the holder or holders thereof to
      cast said specified percentage of the aggregate votes which the
      holders of all the outstanding voting securities of such company
      are entitled to cast. The vote of a majority of the outstanding
      voting securities of a company means the vote, at the annual or a
      special meeting of the security holders of such company duly
      called, (A) of 67 per centum or more of the voting securities
      present at such meeting, if the holders of more than 50 per
      centum of the outstanding voting securities of such company are
      present or represented by proxy; or (B) of more than 50 per
      centum of the outstanding voting securities of such company,
      whichever is the less.
        (43) "Wholly-owned subsidiary" of a person means a company 95
      per centum or more of the outstanding voting securities of which
      are owned by such person, or by a company which, within the
      meaning of this paragraph, is a wholly-owned subsidiary of such
      person.
        (44) "Securities Act of 1933" [15 U.S.C. 77a et seq.],
      "Securities Exchange Act of 1934" [15 U.S.C. 78a et seq.],
      "Public Utility Holding Company Act of 1935",(!2) and "Trust
      Indenture Act of 1939" [15 U.S.C. 77aaa et seq.] mean those acts,
      respectively, as heretofore or hereafter amended.

        (45) "Savings and loan association" means a savings and loan
      association, building and loan association, cooperative bank,
      homestead association, or similar institution, which is
      supervised and examined by State or Federal authority having
      supervision over any such institution, and a receiver,
      conservator, or other liquidating agent of any such institution.
        (46) "Eligible portfolio company" means any issuer which - 
          (A) is organized under the laws of, and has its principal
        place of business in, any State or States;
          (B) is neither an investment company as defined in section
        80a-3 of this title (other than a small business investment
        company which is licensed by the Small Business Administration
        to operate under the Small Business Investment Act of 1958 [15
        U.S.C. 661 et seq.] and which is a wholly-owned subsidiary of
        the business development company) nor a company which would be
        an investment company except for the exclusion from the
        definition of investment company in section 80a-3(c) of this
        title; and
          (C) satisfies one of the following:
            (i) it does not have any class of securities with respect
          to which a member of a national securities exchange, broker,
          or dealer may extend or maintain credit to or for a customer
          pursuant to rules or regulations adopted by the Board of
          Governors of the Federal Reserve System under section 7 of
          the Securities Exchange Act of 1934 [15 U.S.C. 78g];
            (ii) it is controlled by a business development company,
          either alone or as part of a group acting together, and such
          business development company in fact exercises a controlling
          influence over the management or policies of such eligible
          portfolio company and, as a result of such control, has an
          affiliated person who is a director of such eligible
          portfolio company;
            (iii) it has total assets of not more than $4,000,000, and
          capital and surplus (shareholders' equity less retained
          earnings) of not less than $2,000,000, except that the
          Commission may adjust such amounts by rule, regulation, or
          order to reflect changes in 1 or more generally accepted
          indices or other indicators for small businesses; or
            (iv) it meets such other criteria as the Commission may, by
          rule, establish as consistent with the public interest, the
          protection of investors, and the purposes fairly intended by
          the policy and provisions of this subchapter.

        (47) "Making available significant managerial assistance" by a
      business development company means - 
          (A) any arrangement whereby a business development company,
        through its directors, officers, employees, or general
        partners, offers to provide, and, if accepted, does so provide,
        significant guidance and counsel concerning the management,
        operations, or business objectives and policies of a portfolio
        company;
          (B) the exercise by a business development company of a
        controlling influence over the management or policies of a
        portfolio company by the business development company acting
        individually or as part of a group acting together which
        controls such portfolio company; or
          (C) with respect to a small business investment company
        licensed by the Small Business Administration to operate under
        the Small Business Investment Act of 1958 [15 U.S.C. 661 et
        seq.], the making of loans to a portfolio company.

      For purposes of subparagraph (A), the requirement that a business
      development company make available significant managerial
      assistance shall be deemed to be satisfied with respect to any
      particular portfolio company where the business development
      company purchases securities of such portfolio company in
      conjunction with one or more other persons acting together, and
      at least one of the persons in the group makes available
      significant managerial assistance to such portfolio company,
      except that such requirement will not be deemed to be satisfied
      if the business development company, in all cases, makes
      available significant managerial assistance solely in the manner
      described in this sentence.
        (48) "Business development company" means any closed-end
      company which - 
          (A) is organized under the laws of, and has its principal
        place of business in, any State or States;
          (B) is operated for the purpose of making investments in
        securities described in paragraphs (1) through (3) of section
        80a-54(a) of this title, and makes available significant
        managerial assistance with respect to the issuers of such
        securities, provided that a business development company must
        make available significant managerial assistance only with
        respect to the companies which are treated by such business
        development company as satisfying the 70 per centum of the
        value of its total assets condition of section 80a-54 of this
        title; and provided further that a business development company
        need not make available significant managerial assistance with
        respect to any company described in paragraph (46)(C)(iii), or
        with respect to any other company that meets such criteria as
        the Commission may by rule, regulation, or order permit, as
        consistent with the public interest, the protection of
        investors, and the purposes of this subchapter; and
          (C) has elected pursuant to section 80a-53(a) of this title
        to be subject to the provisions of sections 80a-54 through 80a-
        64 of this title.

        (49) "Foreign securities authority" means any foreign
      government or any governmental body or regulatory organization
      empowered by a foreign government to administer or enforce its
      laws as they relate to securities matters.
        (50) "Foreign financial regulatory authority" means any (A)
      foreign securities authority, (B) other governmental body or
      foreign equivalent of a self-regulatory organization empowered by
      a foreign government to administer or enforce its laws relating
      to the regulation of fiduciaries, trusts, commercial lending,
      insurance, trading in contracts of sale of a commodity for future
      delivery, or other instruments traded on or subject to the rules
      of a contract market, board of trade or foreign equivalent, or
      other financial activities, or (C) membership organization a
      function of which is to regulate the participation of its members
      in activities listed above.
        (51)(A) "Qualified purchaser" means - 
          (i) any natural person (including any person who holds a
        joint, community property, or other similar shared ownership
        interest in an issuer that is excepted under section 80a-
        3(c)(7) of this title with that person's qualified purchaser
        spouse) who owns not less than $5,000,000 in investments, as
        defined by the Commission;
          (ii) any company that owns not less than $5,000,000 in
        investments and that is owned directly or indirectly by or for
        2 or more natural persons who are related as siblings or spouse
        (including former spouses), or direct lineal descendants by
        birth or adoption, spouses of such persons, the estates of such
        persons, or foundations, charitable organizations, or trusts
        established by or for the benefit of such persons;
          (iii) any trust that is not covered by clause (ii) and that
        was not formed for the specific purpose of acquiring the
        securities offered, as to which the trustee or other person
        authorized to make decisions with respect to the trust, and
        each settlor or other person who has contributed assets to the
        trust, is a person described in clause (i), (ii), or (iv); or
          (iv) any person, acting for its own account or the accounts
        of other qualified purchasers, who in the aggregate owns and
        invests on a discretionary basis, not less than $25,000,000 in
        investments.

        (B) The Commission may adopt such rules and regulations
      applicable to the persons and trusts specified in clauses (i)
      through (iv) of subparagraph (A) as it determines are necessary
      or appropriate in the public interest or for the protection of
      investors.
        (C) The term "qualified purchaser" does not include a company
      that, but for the exceptions provided for in paragraph (1) or (7)
      of section 80a-3(c) of this title, would be an investment company
      (hereafter in this paragraph referred to as an "excepted
      investment company"), unless all beneficial owners of its
      outstanding securities (other than short-term paper), determined
      in accordance with section 80a-3(c)(1)(A) of this title, that
      acquired such securities on or before April 30, 1996 (hereafter
      in this paragraph referred to as "pre-amendment beneficial
      owners"), and all pre-amendment beneficial owners of the
      outstanding securities (other than short-term paper) of any
      excepted investment company that, directly or indirectly, owns
      any outstanding securities of such excepted investment company,
      have consented to its treatment as a qualified purchaser.
      Unanimous consent of all trustees, directors, or general partners
      of a company or trust referred to in clause (ii) or (iii) of
      subparagraph (A) shall constitute consent for purposes of this
      subparagraph.
        (52) The terms "security future" and "narrow-based security
      index" have the same meanings as provided in section 3(a)(55) of
      the Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(55)].
        (53) The term "credit rating agency" has the same meaning as in
      section 3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c].
    (b) Applicability to government
      No provision in this subchapter shall apply to, or be deemed to
    include, the United States, a State, or any political subdivision
    of a State, or any agency, authority, or instrumentality of any one
    or more of the foregoing, or any corporation which is wholly owned
    directly or indirectly by any one or more of the foregoing, or any
    officer, agent, or employee of any of the foregoing acting as such
    in the course of his official duty, unless such provision makes
    specific reference thereto.
    (c) Consideration of promotion of efficiency, competition, and
      capital formation
      Whenever pursuant to this subchapter the Commission is engaged in
    rulemaking and is required to consider or determine whether an
    action is consistent with the public interest, the Commission shall
    also consider, in addition to the protection of investors, whether
    the action will promote efficiency, competition, and capital
    formation.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 2, 54 Stat. 790; Proc. No.
    2695, eff. July 4, 1946, 11 F.R. 7517, 60 Stat. 1352; Aug. 10,
    1954, ch. 667, title IV, Sec. 401, 68 Stat. 688; Pub. L. 86-70,
    Sec. 12(d), June 25, 1959, 73 Stat. 143; Pub. L. 86-624, Sec. 7(c),
    July 12, 1960, 74 Stat. 412; Pub. L. 91-547, Sec. 2(a), Dec. 14,
    1970, 84 Stat. 1413; Pub. L. 95-598, title III, Sec. 310(a), Nov.
    6, 1978, 92 Stat. 2676; Pub. L. 96-477, title I, Sec. 101, Oct. 21,
    1980, 94 Stat. 2275; Pub. L. 97-303, Sec. 5, Oct. 13, 1982, 96
    Stat. 1409; Pub. L. 100-181, title VI, Secs. 601-603, Dec. 4, 1987,
    101 Stat. 1260; Pub. L. 101-550, title II, Sec. 206(a), Nov. 15,
    1990, 104 Stat. 2720; Pub. L. 104-290, title I, Sec. 106(c), title
    II, Sec. 209(b), title V, Secs. 503, 504, Oct. 11, 1996, 110 Stat.
    3425, 3434, 3445; Pub. L. 105-353, title III, Sec. 301(c)(1), Nov.
    3, 1998, 112 Stat. 3236; Pub. L. 106-102, title II, Secs. 213(a),
    (b), 215, 216, 223, Nov. 12, 1999, 113 Stat. 1397, 1399, 1401; Pub.
    L. 106-554, Sec. 1(a)(5) [title II, Sec. 209(a)(1), (3)], Dec. 21,
    2000, 114 Stat. 2763, 2763A-435, 2763A-436; Pub. L. 109-291, Sec.
    4(b)(2)(A), Sept. 29, 2006, 120 Stat. 1337.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Exchange Act of 1934, referred to in subsec.
    (a)(11), (44), is act June 6, 1934, ch. 404, 48 Stat. 881, as
    amended, which is classified generally to chapter 2B (Sec. 78a et
    seq.) of this title. For complete classification of this Act to the
    Code, see section 78a of this title and Tables.
      The Securities Act of 1933, referred to in subsec. (a)(31), (44),
    is act May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended,
    which is classified generally to subchapter I (Sec. 77a et seq.) of
    chapter 2A of this title. For complete classification of this Act
    to the Code, see section 77a of this title and Tables.
      The Public Utility Holding Company Act of 1935, referred to in
    subsec. (a)(44), is title I of act Aug. 26, 1935, ch. 687, 49 Stat.
    803, as amended, which was classified generally to chapter 2C (Sec.
    79 et seq.) of this title, prior to repeal by Pub. L. 109-58, title
    XII, Sec. 1263, Aug. 8, 2005, 119 Stat. 974. For complete
    classification of this Act to the Code, see Tables.
      The Trust Indenture Act of 1939, referred to in subsec. (a)(44),
    is title III of act May 27, 1933, ch. 38, as added Aug. 3, 1939,
    ch. 411, 53 Stat. 1149, as amended, which is classified generally
    to subchapter III (Sec. 77aaa et seq.) of chapter 2A of this title.
    For complete classification of this Act to the Code, see section
    77aaa of this title and Tables.
      The Small Business Investment Act of 1958, referred to in subsec.
    (a)(46)(B), (47)(C), is Pub. L. 85-699, Aug. 21, 1958, 72 Stat.
    689, as amended, which is classified principally to chapter 14B
    (Sec. 661 et seq.) of this title. For complete classification of
    this Act to the Code, see Short Title note set out under section
    661 of this title and Tables.

-COD-
                               CODIFICATION                           
      Words "Philippine Islands" deleted from definition of term
    "State" under authority of Proc. No. 2695, which granted
    independence to the Philippine Islands. Proc. No. 2695 was issued
    pursuant to section 1394 of Title 22, Foreign Relations and
    Intercourse, and is set out as a note under that section.


-MISC1-
                                AMENDMENTS                            
      2006 - Subsec. (a)(53). Pub. L. 109-291 added par. (53).
      2000 - Subsec. (a)(36). Pub. L. 106-554, Sec. 1(a)(5) [title II,
    Sec. 209(a)(1)], inserted "security future," after "treasury
    stock,".
      Subsec. (a)(52). Pub. L. 106-554, Sec. 1(a)(5) [title II, Sec.
    209(a)(3)], added par. (52).
      1999 - Subsec. (a)(5)(A). Pub. L. 106-102, Sec. 223, substituted
    "a depository institution (as defined in section 1813 of title 12)
    or a branch or agency of a foreign bank (as such terms are defined
    in section 3101 of title 12)" for "a banking institution organized
    under the laws of the United States".
      Subsec. (a)(6). Pub. L. 106-102, Sec. 215, amended par. (6)
    generally. Prior to amendment, par. (6) read as follows: " 'Broker'
    means any person engaged in the business of effecting transactions
    in securities for the account of others, but does not include a
    bank or any person solely by reason of the fact that such person is
    an underwriter for one or more investment companies."
      Subsec. (a)(11). Pub. L. 106-102, Sec. 216, amended par. (11)
    generally. Prior to amendment, par. (11) read as follows: "
    'Dealer' means any person regularly engaged in the business of
    buying and selling securities for his own account, through a broker
    or otherwise, but does not include a bank, insurance company, or
    investment company, or any person insofar as he is engaged in
    investing, reinvesting, or trading in securities, or in owning or
    holding securities, for his own account, either individually or in
    some fiduciary capacity, but not as a part of a regular business."
      Subsec. (a)(19)(A)(v). Pub. L. 106-102, Sec. 213(a)(1), added cl.
    (v) and struck out former cl. (v) which read as follows: "any
    broker or dealer registered under the Securities Exchange Act of
    1934 or any affiliated person of such a broker or dealer, and".
      Subsec. (a)(19)(A)(vi), (vii). Pub. L. 106-102, Sec. 213(a)(2),
    (3), added cl. (vi) and redesignated former cl. (vi) as (vii).
      Subsec. (a)(19)(B)(v). Pub. L. 106-102, Sec. 213(b)(1), added cl.
    (v) and struck out former cl. (v) which read as follows: "any
    broker or dealer registered under the Securities Exchange Act of
    1934 or any affiliated person of such a broker or dealer, and".
      Subsec. (a)(19)(B)(vi), (vii). Pub. L. 106-102, Sec. 213(b)(2),
    (3), added cl. (vi) and redesignated former cl. (vi) as (vii).
      1998 - Subsec. (a)(8). Pub. L. 105-353 made a technical amendment
    to reference in original act which appears in text as reference to
    title 11.
      1996 - Subsec. (a)(46)(C)(iii), (iv). Pub. L. 104-290, Sec. 503,
    added cl. (iii) and redesignated former cl. (iii) as (iv).
      Subsec. (a)(48)(B). Pub. L. 104-290, Sec. 504, inserted at end
    "provided further that a business development company need not make
    available significant managerial assistance with respect to any
    company described in paragraph (46)(C)(iii), or with respect to any
    other company that meets such criteria as the Commission may by
    rule, regulation, or order permit, as consistent with the public
    interest, the protection of investors, and the purposes of this
    subchapter; and".
      Subsec. (a)(51). Pub. L. 104-290, Sec. 209(b), added par. (51).
      Subsec. (c). Pub. L. 104-290, Sec. 106(c), added subsec. (c).
      1990 - Subsec. (a)(49), (50). Pub. L. 101-550 added pars. (49)
    and (50).
      1987 - Subsec. (a)(19). Pub. L. 100-181, Sec. 601, inserted
    "completed" before "fiscal years" wherever appearing in subpars.
    (A)(iv), (vi) and (B)(iv), (vi).
      Subsec. (a)(39). Pub. L. 100-181, Sec. 602, struck out reference
    to Canal Zone.
      Subsec. (a)(48)(B). Pub. L. 100-181, Sec. 603, substituted
    "paragraphs (1) through (3) of section 80a-54(a) of this title" for
    "sections 80a-54(a)(1) through (3) of this title".
      1982 - Subsec. (a)(36). Pub. L. 97-303 inserted "any put, call,
    straddle, option, or privilege on any security (including a
    certificate of deposit) or on any group or index of securities
    (including any interest therein or based on the value thereof), or
    any put, call, straddle, option, or privilege entered into on a
    national securities exchange relating to foreign currency," after
    "mineral rights,".
      1980 - Subsec. (a)(46) to (48). Pub. L. 96-477 added pars. (46)
    to (48).
      1978 - Subsec. (a)(8). Pub. L. 95-598 substituted "a case under
    title 11" for "bankruptcy".
      1970 - Subsec. (a)(5). Pub. L. 91-547, Sec. 2(a)(1), substituted
    "under the authority of the Comptroller of the Currency" for "under
    section 248(k) of title 12,".
      Subsec. (a)(19). Pub. L. 91-547, Sec. 2(a)(3), added par. (19).
    Former par. (19) redesignated (20).
      Subsecs. (a)(20) to (36). Pub. L. 91-547, Sec. 2(a)(2),
    redesignated former pars. (19) to (35) as (20) to (36),
    respectively.
      Subsec. (a)(37). Pub. L. 91-547, Sec. 2(a)(4), added par. (37).
    Former par. (37) redesignated (39).
      Subsecs. (a)(38) to (44). Pub. L. 91-547, Sec. 2(a)(2),
    redesignated former pars. (36) to (42) as (38) to (44).
      Subsec. (a)(45). Pub. L. 91-547, Sec. 2(a)(5), added par. (45).
      1960 - Subsec. (a)(37). Pub. L. 86-624 struck out reference to
    Hawaii.
      1959 - Subsec. (a)(37). Pub. L. 86-70 struck out reference to
    Alaska.
      1954 - Subsec. (a)(30). Act Aug. 10, 1954, substituted "section
    10(a) of the Securities Act of 1933" for "section 5(b) of the
    Securities Act of 1933".

                     EFFECTIVE DATE OF 1999 AMENDMENT                 
      Amendment by Pub. L. 106-102 effective 18 months after Nov. 12,
    1999, see section 225 of Pub. L. 106-102, set out as a note under
    section 77c of this title.

                     EFFECTIVE DATE OF 1996 AMENDMENT                 
      Section 209(e) of Pub. L. 104-290 provided that: "The amendments
    made by this section [amending this section and section 80a-3 of
    this title] shall take effect on the earlier of - 
        "(1) 180 days after the date of enactment of this Act [Oct. 11,
      1996]; or
        "(2) the date on which the rulemaking required under subsection
      (d)(2) [set out below] is completed."

                     EFFECTIVE DATE OF 1978 AMENDMENT                 
      Amendment by Pub. L. 95-598 effective Oct. 1, 1979, see section
    402(a) of Pub. L. 95-598, set out as an Effective Date note
    preceding section 101 of Title 11, Bankruptcy.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.

                     EFFECTIVE DATE OF 1954 AMENDMENT                 
      Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10,
    1954, see note set out under section 77b of this title.

                                REGULATIONS                            
      Section 209(d)(2) of Pub. L. 104-290 provided that: "Not later
    than 180 days after the date of enactment of this Act [Oct. 11,
    1996], the Commission shall prescribe rules defining the term, or
    otherwise identifying, 'investments' for purposes of section
    2(a)(51) of the Investment Company Act of 1940 [15 U.S.C. 80a-
    2(a)(51)], as added by this Act."


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-FOOTNOTE-               

    (!1) So in original. Probably should be followed by the word
         "and".

    (!2) See References in Text note below.


-End-



-CITE-
    15 USC Sec. 80a-3                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-3. Definition of investment company

-STATUTE-
    (a) Definitions
      (1) When used in this subchapter, "investment company" means any
    issuer which - 
        (A) is or holds itself out as being engaged primarily, or
      proposes to engage primarily, in the business of investing,
      reinvesting, or trading in securities;
        (B) is engaged or proposes to engage in the business of issuing
      face-amount certificates of the installment type, or has been
      engaged in such business and has any such certificate
      outstanding; or
        (C) is engaged or proposes to engage in the business of
      investing, reinvesting, owning, holding, or trading in
      securities, and owns or proposes to acquire investment securities
      having a value exceeding 40 per centum of the value of such
      issuer's total assets (exclusive of Government securities and
      cash items) on an unconsolidated basis.

      (2) As used in this section, "investment securities" includes all
    securities except (A) Government securities, (B) securities issued
    by employees' securities companies, and (C) securities issued by
    majority-owned subsidiaries of the owner which (i) are not
    investment companies, and (ii) are not relying on the exception
    from the definition of investment company in paragraph (1) or (7)
    of subsection (c) of this section.
    (b) Exemption from provisions
      Notwithstanding paragraph (1)(C) of subsection (a) of this
    section, none of the following persons is an investment company
    within the meaning of this subchapter:
        (1) Any issuer primarily engaged, directly or through a wholly-
      owned subsidiary or subsidiaries, in a business or businesses
      other than that of investing, reinvesting, owning, holding, or
      trading in securities.
        (2) Any issuer which the Commission, upon application by such
      issuer, finds and by order declares to be primarily engaged in a
      business or businesses other than that of investing, reinvesting,
      owning, holding, or trading in securities either directly or (A)
      through majority-owned subsidiaries or (B) through controlled
      companies conducting similar types of businesses. The filing of
      an application under this paragraph in good faith by an issuer
      other than a registered investment company shall exempt the
      applicant for a period of sixty days from all provisions of this
      subchapter applicable to investment companies as such. For cause
      shown, the Commission by order may extend such period of
      exemption for an additional period or periods. Whenever the
      Commission, upon its own motion or upon application, finds that
      the circumstances which gave rise to the issuance of an order
      granting an application under this paragraph no longer exist, the
      Commission shall by order revoke such order.
        (3) Any issuer all the outstanding securities of which (other
      than short-term paper and directors' qualifying shares) are
      directly or indirectly owned by a company excepted from the
      definition of investment company by paragraph (1) or (2) of this
      subsection.
    (c) Further exemptions
      Notwithstanding subsection (a) of this section, none of the
    following persons is an investment company within the meaning of
    this subchapter:
        (1) Any issuer whose outstanding securities (other than short-
      term paper) are beneficially owned by not more than one hundred
      persons and which is not making and does not presently propose to
      make a public offering of its securities. Such issuer shall be
      deemed to be an investment company for purposes of the
      limitations set forth in subparagraphs (A)(i) and (B)(i) of
      section 80a-12(d)(1) of this title governing the purchase or
      other acquisition by such issuer of any security issued by any
      registered investment company and the sale of any security issued
      by any registered open-end investment company to any such issuer.
      For purposes of this paragraph:
          (A) Beneficial ownership by a company shall be deemed to be
        beneficial ownership by one person, except that, if the company
        owns 10 per centum or more of the outstanding voting securities
        of the issuer, and is or, but for the exception provided for in
        this paragraph or paragraph (7), would be an investment
        company, the beneficial ownership shall be deemed to be that of
        the holders of such company's outstanding securities (other
        than short-term paper).
          (B) Beneficial ownership by any person who acquires
        securities or interests in securities of an issuer described in
        the first sentence of this paragraph shall be deemed to be
        beneficial ownership by the person from whom such transfer was
        made, pursuant to such rules and regulations as the Commission
        shall prescribe as necessary or appropriate in the public
        interest and consistent with the protection of investors and
        the purposes fairly intended by the policy and provisions of
        this subchapter, where the transfer was caused by legal
        separation, divorce, death, or other involuntary event.

        (2)(A) Any person primarily engaged in the business of
      underwriting and distributing securities issued by other persons,
      selling securities to customers, acting as broker, and acting as
      market intermediary, or any one or more of such activities, whose
      gross income normally is derived principally from such business
      and related activities.
        (B) For purposes of this paragraph - 
          (i) the term "market intermediary" means any person that
        regularly holds itself out as being willing contemporaneously
        to engage in, and that is regularly engaged in, the business of
        entering into transactions on both sides of the market for a
        financial contract or one or more such financial contracts; and
          (ii) the term "financial contract" means any arrangement that
        - 
            (I) takes the form of an individually negotiated contract,
          agreement, or option to buy, sell, lend, swap, or repurchase,
          or other similar individually negotiated transaction commonly
          entered into by participants in the financial markets;
            (II) is in respect of securities, commodities, currencies,
          interest or other rates, other measures of value, or any
          other financial or economic interest similar in purpose or
          function to any of the foregoing; and
            (III) is entered into in response to a request from a
          counter party for a quotation, or is otherwise entered into
          and structured to accommodate the objectives of the counter
          party to such arrangement.

        (3) Any bank or insurance company; any savings and loan
      association, building and loan association, cooperative bank,
      homestead association, or similar institution, or any receiver,
      conservator, liquidator, liquidating agent, or similar official
      or person thereof or therefor; or any common trust fund or
      similar fund maintained by a bank exclusively for the collective
      investment and reinvestment of moneys contributed thereto by the
      bank in its capacity as a trustee, executor, administrator, or
      guardian, if - 
          (A) such fund is employed by the bank solely as an aid to the
        administration of trusts, estates, or other accounts created
        and maintained for a fiduciary purpose;
          (B) except in connection with the ordinary advertising of the
        bank's fiduciary services, interests in such fund are not - 
            (i) advertised; or
            (ii) offered for sale to the general public; and

          (C) fees and expenses charged by such fund are not in
        contravention of fiduciary principles established under
        applicable Federal or State law.

        (4) Any person substantially all of whose business is confined
      to making small loans, industrial banking, or similar businesses.
        (5) Any person who is not engaged in the business of issuing
      redeemable securities, face-amount certificates of the
      installment type or periodic payment plan certificates, and who
      is primarily engaged in one or more of the following businesses:
      (A) Purchasing or otherwise acquiring notes, drafts, acceptances,
      open accounts receivable, and other obligations representing part
      or all of the sales price of merchandise, insurance, and
      services; (B) making loans to manufacturers, wholesalers, and
      retailers of, and to prospective purchasers of, specified
      merchandise, insurance, and services; and (C) purchasing or
      otherwise acquiring mortgages and other liens on and interests in
      real estate.
        (6) Any company primarily engaged, directly or through majority-
      owned subsidiaries, in one or more of the businesses described
      in paragraphs (3), (4), and (5) of this subsection, or in one or
      more of such businesses (from which not less than 25 per centum
      of such company's gross income during its last fiscal year was
      derived) together with an additional business or businesses other
      than investing, reinvesting, owning, holding, or trading in
      securities.
        (7)(A) Any issuer, the outstanding securities of which are
      owned exclusively by persons who, at the time of acquisition of
      such securities, are qualified purchasers, and which is not
      making and does not at that time propose to make a public
      offering of such securities. Securities that are owned by persons
      who received the securities from a qualified purchaser as a gift
      or bequest, or in a case in which the transfer was caused by
      legal separation, divorce, death, or other involuntary event,
      shall be deemed to be owned by a qualified purchaser, subject to
      such rules, regulations, and orders as the Commission may
      prescribe as necessary or appropriate in the public interest or
      for the protection of investors.
        (B) Notwithstanding subparagraph (A), an issuer is within the
      exception provided by this paragraph if - 
          (i) in addition to qualified purchasers, outstanding
        securities of that issuer are beneficially owned by not more
        than 100 persons who are not qualified purchasers, if - 
            (I) such persons acquired any portion of the securities of
          such issuer on or before September 1, 1996; and
            (II) at the time at which such persons initially acquired
          the securities of such issuer, the issuer was excepted by
          paragraph (1); and

          (ii) prior to availing itself of the exception provided by
        this paragraph - 
            (I) such issuer has disclosed to each beneficial owner, as
          determined under paragraph (1), that future investors will be
          limited to qualified purchasers, and that ownership in such
          issuer is no longer limited to not more than 100 persons; and
            (II) concurrently with or after such disclosure, such
          issuer has provided each beneficial owner, as determined
          under paragraph (1), with a reasonable opportunity to redeem
          any part or all of their interests in the issuer,
          notwithstanding any agreement to the contrary between the
          issuer and such persons, for that person's proportionate
          share of the issuer's net assets.

        (C) Each person that elects to redeem under subparagraph
      (B)(ii)(II) shall receive an amount in cash equal to that
      person's proportionate share of the issuer's net assets, unless
      the issuer elects to provide such person with the option of
      receiving, and such person agrees to receive, all or a portion of
      such person's share in assets of the issuer. If the issuer elects
      to provide such persons with such an opportunity, disclosure
      concerning such opportunity shall be made in the disclosure
      required by subparagraph (B)(ii)(I).
        (D) An issuer that is excepted under this paragraph shall
      nonetheless be deemed to be an investment company for purposes of
      the limitations set forth in subparagraphs (A)(i) and (B)(i) of
      section 80a-12(d)(1) of this title relating to the purchase or
      other acquisition by such issuer of any security issued by any
      registered investment company and the sale of any security issued
      by any registered open-end investment company to any such issuer.
        (E) For purposes of determining compliance with this paragraph
      and paragraph (1), an issuer that is otherwise excepted under
      this paragraph and an issuer that is otherwise excepted under
      paragraph (1) shall not be treated by the Commission as being a
      single issuer for purposes of determining whether the outstanding
      securities of the issuer excepted under paragraph (1) are
      beneficially owned by not more than 100 persons or whether the
      outstanding securities of the issuer excepted under this
      paragraph are owned by persons that are not qualified purchasers.
      Nothing in this subparagraph shall be construed to establish that
      a person is a bona fide qualified purchaser for purposes of this
      paragraph or a bona fide beneficial owner for purposes of
      paragraph (1).
        (8) Any company subject to regulation under the Public Utility
      Holding Company Act of 1935.(!1)

        (9) Any person substantially all of whose business consists of
      owning or holding oil, gas, or other mineral royalties or leases,
      or fractional interests therein, or certificates of interest or
      participation in or investment contracts relative to such
      royalties, leases, or fractional interests.
        (10)(A) Any company organized and operated exclusively for
      religious, educational, benevolent, fraternal, charitable, or
      reformatory purposes - 
          (i) no part of the net earnings of which inures to the
        benefit of any private shareholder or individual; or
          (ii) which is or maintains a fund described in subparagraph
        (B).

        (B) For the purposes of subparagraph (A)(ii), a fund is
      described in this subparagraph if such fund is a pooled income
      fund, collective trust fund, collective investment fund, or
      similar fund maintained by a charitable organization exclusively
      for the collective investment and reinvestment of one or more of
      the following:
          (i) assets of the general endowment fund or other funds of
        one or more charitable organizations;
          (ii) assets of a pooled income fund;
          (iii) assets contributed to a charitable organization in
        exchange for the issuance of charitable gift annuities;
          (iv) assets of a charitable remainder trust or of any other
        trust, the remainder interests of which are irrevocably
        dedicated to any charitable organization;
          (v) assets of a charitable lead trust;
          (vi) assets of a trust, the remainder interests of which are
        revocably dedicated to or for the benefit of 1 or more
        charitable organizations, if the ability to revoke the
        dedication is limited to circumstances involving - 
            (I) an adverse change in the financial circumstances of a
          settlor or an income beneficiary of the trust;
            (II) a change in the identity of the charitable
          organization or organizations having the remainder interest,
          provided that the new beneficiary is also a charitable
          organization; or
            (III) both the changes described in subclauses (I) and
          (II);

          (vii) assets of a trust not described in clauses (i) through
        (v), the remainder interests of which are revocably dedicated
        to a charitable organization, subject to subparagraph (C); or
          (viii) such assets as the Commission may prescribe by rule,
        regulation, or order in accordance with section 80a-6(c) of
        this title.

        (C) A fund that contains assets described in clause (vii) of
      subparagraph (B) shall be excluded from the definition of an
      investment company for a period of 3 years after December 8,
      1995, but only if - 
          (i) such assets were contributed before the date which is 60
        days after December 8, 1995; and
          (ii) such assets are commingled in the fund with assets
        described in one or more of clauses (i) through (vi) and (viii)
        of subparagraph (B).

        (D) For purposes of this paragraph - 
          (i) a trust or fund is "maintained" by a charitable
        organization if the organization serves as a trustee or
        administrator of the trust or fund or has the power to remove
        the trustees or administrators of the trust or fund and to
        designate new trustees or administrators;
          (ii) the term "pooled income fund" has the same meaning as in
        section 642(c)(5) of title 26;
          (iii) the term "charitable organization" means an
        organization described in paragraphs (1) through (5) of section
        170(c) or section 501(c)(3) of title 26;
          (iv) the term "charitable lead trust" means a trust described
        in section 170(f)(2)(B), 2055(e)(2)(B), or 2522(c)(2)(B) of
        title 26;
          (v) the term "charitable remainder trust" means a charitable
        remainder annuity trust or a charitable remainder unitrust, as
        those terms are defined in section 664(d) of title 26; and
          (vi) the term "charitable gift annuity" means an annuity
        issued by a charitable organization that is described in
        section 501(m)(5) of title 26.

        (11) Any employee's stock bonus, pension, or profit-sharing
      trust which meets the requirements for qualification under
      section 401 of title 26; or any governmental plan described in
      section 77c(a)(2)(C) of this title; or any collective trust fund
      maintained by a bank consisting solely of assets of one or more
      of such trusts, government plans, or church plans, companies or
      accounts that are excluded from the definition of an investment
      company under paragraph (14) of this subsection; or any separate
      account the assets of which are derived solely from (A)
      contributions under pension or profit-sharing plans which meet
      the requirements of section 401 of title 26 or the requirements
      for deduction of the employer's contribution under section
      404(a)(2) of title 26, (B) contributions under governmental plans
      in connection with which interests, participations, or securities
      are exempted from the registration provisions of section 77e of
      this title by section 77c(a)(2)(C) of this title, and (C)
      advances made by an insurance company in connection with the
      operation of such separate account.
        (12) Any voting trust the assets of which consist exclusively
      of securities of a single issuer which is not an investment
      company.
        (13) Any security holders' protective committee or similar
      issuer having outstanding and issuing no securities other than
      certificates of deposit and short-term paper.
        (14) Any church plan described in section 414(e) of title 26,
      if, under any such plan, no part of the assets may be used for,
      or diverted to, purposes other than the exclusive benefit of plan
      participants or beneficiaries, or any company or account that is -
       
          (A) established by a person that is eligible to establish and
        maintain such a plan under section 414(e) of title 26; and
          (B) substantially all of the activities of which consist of -
        
            (i) managing or holding assets contributed to such church
          plans or other assets which are permitted to be commingled
          with the assets of church plans under title 26; or
            (ii) administering or providing benefits pursuant to church
          plans.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 3, 54 Stat. 797; Oct. 21,
    1942, ch. 619, title I, Sec. 162(e), 56 Stat. 867; Pub. L. 89-485,
    Sec. 13(i), July 1, 1966, 80 Stat. 243; Pub. L. 91-547, Sec. 3(a),
    (b), Dec. 14, 1970, 84 Stat. 1414; Pub. L. 94-210, title III, Sec.
    308(c), Feb. 5, 1976, 90 Stat. 57; Pub. L. 96-477, title I, Sec.
    102, title VII, Sec. 703, Oct. 21, 1980, 94 Stat. 2276, 2295; Pub.
    L. 100-181, title VI, Secs. 604-606, Dec. 4, 1987, 101 Stat. 1260;
    Pub. L. 104-62, Sec. 2(a), Dec. 8, 1995, 109 Stat. 682; Pub. L. 104-
    290, title II, Sec. 209(a), (c), title V, Sec. 508(a), Oct. 11,
    1996, 110 Stat. 3432, 3435, 3447; Pub. L. 105-353, title III, Sec.
    301(c)(2), Nov. 3, 1998, 112 Stat. 3236; Pub. L. 106-102, title II,
    Sec. 221(c), Nov. 12, 1999, 113 Stat. 1401; Pub. L. 108-359, Sec.
    1(a), Oct. 25, 2004, 118 Stat. 1666.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Public Utility Holding Company Act of 1935, referred to in
    subsec. (c)(8), is title I of act Aug. 26, 1935, ch. 687, 49 Stat.
    803, as amended, which was classified generally to chapter 2C (Sec.
    79 et seq.) of this title, prior to repeal by Pub. L. 109-58, title
    XII, Sec. 1263, Aug. 8, 2005, 119 Stat. 974. For complete
    classification of this Act to the Code, see Tables.


-MISC1-
                                AMENDMENTS                            
      2004 - Subsec. (c)(11). Pub. L. 108-359, which directed the
    substitution of "one or more of such trusts, government plans, or
    church plans, companies or accounts that are excluded from the
    definition of an investment company under paragraph (14) of this
    subsection" for "such trusts or government plans, or both", was
    executed by making the substitution for "such trusts or
    governmental plans, or both", to reflect the probable intent of
    Congress.
      1999 - Subsec. (c)(3). Pub. L. 106-102 inserted ", if - " and
    subpars. (A) to (C) before period at end.
      1998 - Subsec. (b). Pub. L. 105-353 substituted "paragraph
    (1)(C)" for "paragraph (3)" in introductory provisions.
      1996 - Subsec. (a). Pub. L. 104-290, Sec. 209(c)(1)-(5),
    designated existing introductory provisions as par. (1),
    redesignated former pars. (1) to (3) as subpars. (A) to (C),
    respectively, and designated existing concluding provisions as par.
    (2).
      Subsec. (a)(2)(C). Pub. L. 104-290, Sec. 209(c)(6), substituted
    "which (i) are" for "which are" and added cl. (ii).
      Subsec. (c)(1). Pub. L. 104-290, Sec. 209(a)(1), inserted after
    first sentence "Such issuer shall be deemed to be an investment
    company for purposes of the limitations set forth in subparagraphs
    (A)(i) and (B)(i) of section 80a-12(d)(1) of this title governing
    the purchase or other acquisition by such issuer of any security
    issued by any registered investment company and the sale of any
    security issued by any registered open-end investment company to
    any such issuer."
      Subsec. (c)(1)(A). Pub. L. 104-290, Sec. 209(a)(2), inserted "and
    is or, but for the exception provided for in this paragraph or
    paragraph (7), would be an investment company," after "voting
    securities of the issuer," and struck out "unless, as of the date
    of the most recent acquisition by such company of securities of
    that issuer, the value of all securities owned by such company of
    all issuers which are or would, but for the exception set forth in
    this subparagraph, be excluded from the definition of investment
    company solely by this paragraph, does not exceed 10 per centum of
    the value of the company's total assets. Such issuer nonetheless is
    deemed to be an investment company for purposes of section 80a-
    12(d)(1) of this title" after "(other than short-term paper)".
      Subsec. (c)(2). Pub. L. 104-290, Sec. 209(a)(3), designated
    existing provisions as subpar. (A), substituted "acting as broker,
    and acting as market intermediary," for "and acting as broker,",
    and added subpar. (B).
      Subsec. (c)(7). Pub. L. 104-290, Sec. 209(a)(4), added par. (7)
    and struck out former par. (7) "Reserved."
      Subsec. (c)(14). Pub. L. 104-290, Sec. 508(a), added par. (14).
      1995 - Subsec. (c)(10). Pub. L. 104-62 amended par. (10)
    generally. Prior to amendment, par. (10) read as follows: "Any
    company organized and operated exclusively for religious,
    educational, benevolent, fraternal, charitable, or reformatory
    purposes, no part of the net earnings of which inures to the
    benefit of any private shareholder or individual."
      1987 - Subsec. (c)(3). Pub. L. 100-181, Sec. 604, inserted "or"
    after "therefor;" and struck out "; or any common trust fund or
    similar fund, established before June 22, 1936, by a corporation
    which is supervised or examined by State or Federal authority
    having supervision over banks, if a majority of the units of
    beneficial interest in such fund, other than units owned by
    charitable or educational institutions, are held under instruments
    providing for payment of income to one or more persons and of
    principal to another or others" after "guardian".
      Subsec. (c)(7). Pub. L. 100-181, Sec. 605, substituted
    "Reserved." for "Any company (A) which is subject to regulation
    under section 314 of title 49, except that this exception shall not
    apply to a company which the Commission finds and by order declares
    to be primarily engaged, directly or indirectly, in the business of
    investing, reinvesting, owning, holding, or trading in securities,
    or (B) whose entire outstanding stock is owned or controlled by a
    company excepted under clause (A) hereof, if the assets of the
    controlled company consist substantially of securities issued by
    companies which are subject to regulation under section 314 of
    title 49."
      Subsec. (c)(11). Pub. L. 100-181, Sec. 606(1), substituted
    "Internal Revenue Code of 1986" for "Internal Revenue Code of 1954"
    wherever appearing, which for purposes of codification was
    translated as "title 26" thus requiring no change in text.
      Pub. L. 100-181, Sec. 606(2), (3), substituted "; or any
    governmental plan" for "or which holds only assets of governmental
    plans" and "trusts or governmental plans, or both" for "trusts".
      1980 - Subsec. (c)(1). Pub. L. 96-477, Sec. 102, designated
    existing provisions as subpar. (A), provided that beneficial
    ownership was to be deemed to be that of the holders of ten per
    cent of company's outstanding securities, other than short term
    paper, unless, as of the date of the most recent acquisition by
    such company of securities of that issuer, the value of all
    securities owned by such company of all issuers which were or
    would, but for the exception set forth in subpar. (A), be excluded
    from the definition of investment company solely by par. (1), did
    not exceed ten per cent of the value of the company's total assets,
    that such issuer nonetheless was deemed to be an investment company
    for purposes of section 80a-12(d)(1) of this title, and added
    subpar. (B).
      Subsec. (c)(11). Pub. L. 96-477, Sec. 703, excluded from
    consideration as an investment company for purposes of this
    subchapter any employee's stock bonus, pension, or profit-sharing
    trust which holds only assets of governmental plans described in
    section 77c(a)(2)(C) of this title, redesignated former cl. (B) as
    (C), and added cl. (B).
      1976 - Subsec. (c)(7). Pub. L. 94-210 designated existing
    provisions as cls. (A) and (B) and, as so designated, in cl. (A)
    provided for applicability to section 314 of title 49 and inserted
    exception to exception, in cl. (B) inserted provisions relating to
    companies regulated under section 314 of title 49 and made changes
    in phraseology to conform cl. to cl. (A), and struck out proviso
    relating to assets of controlled company.
      1970 - Subsec. (b)(2). Pub. L. 91-547, Sec. 3(a), inserted "in
    good faith" after "paragraph" in second sentence.
      Subsec. (c). Pub. L. 91-547, Sec. 3(b)(1), struck out reference
    to subsec. (b) in introductory text.
      Subsec. (c)(4). Pub. L. 91-547, Sec. 3(b)(2), redesignated par.
    (5) as (4). See 1966 Amendment note with respect to repeal of
    former par. (4).
      Subsec. (c)(5). Pub. L. 91-547, Sec. 3(b)(2), (3), redesignated
    par. (6) as (5) and inserted "redeemable securities," before "face-
    amount certificates". Former par. (5) redesignated (4).
      Subsec. (c)(6). Pub. L. 91-547, Sec. 3(b)(2), redesignated par.
    (7) as (6), inserted reference to par. (4), and struck out
    reference to par. (6). Former par. (6) redesignated (5).
      Subsec. (c)(7). Pub. L. 91-547, Sec. 3(b)(2), redesignated par.
    (9) as (7). Former par. (7) redesignated (6).
      Subsec. (c)(8). Pub. L. 91-547, Sec. 3(b)(2), (4), redesignated
    par. (10) as (8), substituted "subject to regulation" for "with a
    registration in effect as a holding company", and struck out former
    par. (8) provision excluding as an investment company any company
    90 per centum or more of the value of whose investment securities
    are represented by securities of a single issuer included within a
    class of persons enumerated in pars. (5), (6), or (7) of this
    subsection.
      Subsecs. (c)(9), (10). Pub. L. 91-547, Sec. 3(b)(2), redesignated
    pars. (11) and (12) as (9) and (10), respectively. Former pars. (9)
    and (10) redesignated (7) and (8).
      Subsec. (c)(11). Pub. L. 91-547, Sec. 3(b)(2), (5), redesignated
    par. (13) as (11), substituted "requirements for qualification
    under section 401 of title 26 [I.R.C. 1954]" for "conditions of
    section 165 of title 26, as amended [I.R. 1939]", and inserted
    provisions for exclusion as an investment company any collective
    trust fund maintained by a bank consisting solely of assets of such
    trusts or any separate account the assets of which are derived from
    certain sources. Former par. (11) redesignated (9).
      Subsecs. (c)(12) to (15). Pub. L. 91-547, Sec. 3(b)(2),
    redesignated pars. (14) and (15) as (12) and (13), respectively.
    Former pars. (12) and (13) redesignated (10) and (11).
      1966 - Subsec. (c)(4). Pub. L. 89-485 repealed provisions which
    exempt holding company affiliates granted a general voting permit
    by the Board of Governors of the Federal Reserve System before 1940
    and any such affiliates with a later voting permit concerning which
    determinations were made of being primarily engaged, directly or
    indirectly, in the business of holding the stock of, and managing
    or controlling, banks, banking associations, savings banks, or
    trust companies.
      1942 - Subsec. (c)(13). Act Oct. 31, 1942, inserted "as amended".

                     EFFECTIVE DATE OF 1999 AMENDMENT                 
      Amendment by Pub. L. 106-102 effective 18 months after Nov. 12,
    1999, see section 225 of Pub. L. 106-102, set out as a note under
    section 77c of this title.

                     EFFECTIVE DATE OF 1996 AMENDMENT                 
      Amendment by section 209 of Pub. L. 104-290 effective on earlier
    of 180 days after Oct. 11, 1996, or date on which required
    rulemaking is completed, see section 209(e) of Pub. L. 104-290 set
    out as a note under section 80a-2 of this title.

                     EFFECTIVE DATE OF 1995 AMENDMENT                 
      Amendment by Pub. L. 104-62 applicable as defense to any claim in
    administrative and judicial actions pending on or commenced after
    Dec. 8, 1995, that any person, security, interest, or participation
    of type described in Pub. L. 104-62 is subject to the Securities
    Act of 1933, the Securities Exchange Act of 1934, the Investment
    Company Act of 1940, the Investment Advisers Act of 1940, or any
    State statute or regulation preempted as provided in section 80a-3a
    of this title, except as specifically provided in such statutes,
    see section 7 of Pub. L. 104-62, set out as a note under section
    77c of this title.

                     EFFECTIVE DATE OF 1976 AMENDMENT                 
      Section 308(d)(2), (3) of Pub. L. 94-210, as amended by Pub. L.
    94-555, title II, Sec. 220(c), Oct. 19, 1976, 90 Stat. 2629,
    provided that:
      "(2) The amendment made by subsection (b) of this section
    [amending section 78m of this title] shall not apply to any report
    by any person with respect to a fiscal year of such person which
    began before the date of enactment of this Act [Feb. 5, 1976].
      "(3) The amendment made by subsection (c) of this section
    [amending this section] shall take effect on the 60th day after the
    date of enactment of this Act [Feb. 5, 1976]".

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.

                     EFFECTIVE DATE OF 1942 AMENDMENT                 
      Section 162(d) of act Oct. 21, 1942 (Revenue Act of 1942), as
    amended by act Dec. 17, 1943, ch. 346, Sec. 3, 57 Stat. 602,
    provided: "Taxable Years to Which Amendments Applicable. - The
    amendments made by this section [to this section and sections 22,
    23, and 165 of Title 26, I.R.C. 1939] shall be applicable as to
    both the employer and employees only with respect to taxable years
    of the employer beginning after December 31, 1941, except that - 
      "(1) In the case of a stock bonus, pension, profit-sharing, or
    annuity plan in effect on or before September 1, 1942,
        "(A) such a plan shall not become subject to the requirements
      of section 165(a)(3), (4), (5), and (6) [of Title 26, I.R.C.
      1939] until the beginning of the first taxable year beginning
      after December 31, 1942.
        "(B) such a plan shall be considered as satisfying the
      requirements of section 165(a), (3), (4), and (5) and (6) [of
      Title 26, I.R.C. 1939] for the period beginning with the
      beginning of the first taxable year following December 31, 1942,
      and ending December 31, 1944, if the provisions thereof satisfy
      such requirements by December 31, 1944, and if by that time such
      provisions are made effective for all purposes as of a date not
      later than January 1, 1944.
        "(C) if the contribution of an employer to such a plan in the
      employer's taxable year beginning in 1942 exceeds the maximum
      amount deductible for such year under section 23(p)(1), as
      amended by this section, the amount deductible in such year shall
      be not less than the sum of - 
          "(i) the amount paid in such taxable year prior to September
        1, 1942, and deductible under section 23(a) or 23(p) prior to
        amendment by this section, and
          "(ii) with respect to the amount paid in such taxable year on
        or after September 1, 1942, that proportion of the amount
        deductible for the taxable year under section 23(p)(1), as
        amended by this section, which the number of months after
        August 31, 1942, in the taxable year bears to twelve.
      "(2) In the case of a stock bonus, pension, profit sharing or
    annuity plan put into effect after September 1, 1942, such a plan
    shall be considered as satisfying the requirements of section
    165(a)(3), (4), (5), and (6) [of Title 26, I.R.C. 1939] for the
    period beginning with the date such plan is put into effect and
    ending December 31, 1944, if the provisions thereof satisfy such
    requirements by December 31, 1944, and if by that time such
    provisions are made effective for all purposes as of a date not
    later than the effective date of such plan or January 1, 1944,
    whichever is the later."

                                REGULATIONS                            
      Section 209(d)(1) of Pub. L. 104-290 provided that: "Not later
    than 1 year after the date of enactment of this Act [Oct. 11,
    1996], the Commission shall prescribe rules to implement the
    requirements of section 3(c)(1)(B) of the Investment Company Act of
    1940 (15 U.S.C. 80a-3(c)(1)(B)), as amended by this section."
      Section 209(d)(3) of Pub. L. 104-290 provided that: "Not later
    than 1 year after the date of enactment of this Act [Oct. 11,
    1996], the Commission shall prescribe rules pursuant to its
    authority under section 6 of the Investment Company Act of 1940 [15
    U.S.C. 80a-6] to permit the ownership of securities by
    knowledgeable employees of the issuer of the securities or an
    affiliated person without loss of the exception of the issuer under
    paragraph (1) or (7) of section 3(c) of that Act [15 U.S.C. 80a-
    3(c)] from treatment as an investment company under that Act [15
    U.S.C. 80a-1 et seq.]."
      Section 209(d)(4) of Pub. L. 104-290 provided that: "Not later
    than 180 days after the date of enactment of this Act [Oct. 11,
    1996], the Commission shall prescribe rules defining the term
    'beneficial owner' for purposes of section 3(c)(7)(B) of the
    Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(7)(B)], as
    amended by this Act."


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.


-MISC2-
        PROTECTION OF CHURCH EMPLOYEE BENEFIT PLANS UNDER STATE LAW    
      Section 508(f) of Pub. L. 104-290 provided that:
      "(1) Registration requirements. - Any security issued by or any
    interest or participation in any church plan, company, or account
    that is excluded from the definition of an investment company under
    section 3(c)(14) of the Investment Company Act of 1940 [15 U.S.C.
    80a-3(c)(14)], as added by subsection (a) of this section, and any
    offer, sale, or purchase thereof, shall be exempt from any law of a
    State that requires registration or qualification of securities.
      "(2) Treatment of church plans. - No church plan described in
    section 414(e) of the Internal Revenue Code of 1986 [26 U.S.C.
    414(e)], no person or entity eligible to establish and maintain
    such a plan under the Internal Revenue Code of 1986 [26 U.S.C. 1 et
    seq.], no company or account that is excluded from the definition
    of an investment company under section 3(c)(14) of the Investment
    Company Act of 1940 [15 U.S.C. 80a-3(c)(14)], as added by
    subsection (a) of this section, and no trustee, director, officer,
    or employee of or volunteer for any such plan, person, entity,
    company, or account shall be required to qualify, register, or be
    subject to regulation as an investment company or as a broker,
    dealer, investment adviser, or agent under the laws of any State
    solely because such plan, person, entity, company, or account buys,
    holds, sells, or trades in securities for its own account or in its
    capacity as a trustee or administrator of or otherwise on behalf
    of, or for the account of, or provides investment advice to, for,
    or on behalf of, any such plan, person, or entity or any company or
    account that is excluded from the definition of an investment
    company under section 3(c)(14) of the Investment Company Act of
    1940, as added by subsection (a) of this section."

-FOOTNOTE-               

    (!1) See References in Text note below.


-End-



-CITE-
    15 USC Sec. 80a-3a                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-3a. Protection of philanthropy under State law

-STATUTE-
    (a) Registration requirements
      A security issued by or any interest or participation in any
    pooled income fund, collective trust fund, collective investment
    fund, or similar fund that is excluded from the definition of an
    investment company under section 80a-3(c)(10)(B) of this title, and
    the offer or sale thereof, shall be exempt from any statute or
    regulation of a State that requires registration or qualification
    of securities.
    (b) Treatment of charitable organizations
      No charitable organization, or any trustee, director, officer,
    employee, or volunteer of a charitable organization acting within
    the scope of such person's employment or duties, shall be required
    to register as, or be subject to regulation as, a dealer, broker,
    agent, or investment adviser under the securities laws of any State
    because such organization or person buys, holds, sells, or trades
    in securities for its own account in its capacity as trustee or
    administrator of, or otherwise on behalf of or for the account of
    one or more of the following:
        (1) a charitable organization;
        (2) a fund that is excluded from the definition of an
      investment company under section 80a-3(c)(10)(B) of this title;
      or
        (3) a trust or other donative instrument described in section
      80a-3(c)(10)(B) of this title, or the settlors (or potential
      settlors) or beneficiaries of any such trusts or other
      instruments.
    (c) State action
      Notwithstanding subsections (a) and (b) of this section, during
    the 3-year period beginning on December 8, 1995, a State may enact
    a statute that specifically refers to this section and provides
    prospectively that this section shall not preempt the laws of that
    State referred to in this section.
    (d) Definitions
      For purposes of this section - 
        (1) the term "charitable organization" means an organization
      described in paragraphs (1) through (5) of section 170(c) or
      section 501(c)(3) of title 26;
        (2) the term "security" has the same meaning as in section 78c
      of this title; and
        (3) the term "State" means each of the several States of the
      United States, the District of Columbia, the Commonwealth of
      Puerto Rico, the Virgin Islands, Guam, American Samoa, and the
      Commonwealth of the Northern Mariana Islands.

-SOURCE-
    (Pub. L. 104-62, Sec. 6, Dec. 8, 1995, 109 Stat. 685.)

-COD-
                               CODIFICATION                           
      Section was enacted as part of the Philanthropy Protection Act of
    1995, and not as part of the Investment Company Act of 1940 which
    comprises this subchapter.


-MISC1-
                              EFFECTIVE DATE                          
      Section applicable as defense to any claim in administrative and
    judicial actions pending on or commenced after Dec. 8, 1995, that
    any person, security, interest, or participation of type described
    in Pub. L. 104-62 is subject to the Securities Act of 1933, the
    Securities Exchange Act of 1934, the Investment Company Act of
    1940, the Investment Advisers Act of 1940, or any State statute or
    regulation preempted as provided in this section, except as
    specifically provided in such statutes, see section 7 of Pub. L.
    104-62, set out as an Effective Date of 1995 Amendment note under
    section 77c of this title.

-End-



-CITE-
    15 USC Sec. 80a-4                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-4. Classification of investment companies

-STATUTE-
      For the purposes of this subchapter, investment companies are
    divided into three principal classes, defined as follows:
        (1) "Face-amount certificate company" means an investment
      company which is engaged or proposes to engage in the business of
      issuing face-amount certificates of the installment type, or
      which has been engaged in such business and has any such
      certificate outstanding.
        (2) "Unit investment trust" means an investment company which
      (A) is organized under a trust indenture, contract of
      custodianship or agency, or similar instrument, (B) does not have
      a board of directors, and (C) issues only redeemable securities,
      each of which represents an undivided interest in a unit of
      specified securities; but does not include a voting trust.
        (3) "Management company" means any investment company other
      than a face-amount certificate company or a unit investment
      trust.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 4, 54 Stat. 799.)


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-5                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-5. Subclassification of management companies

-STATUTE-
    (a) Open-end and closed-end companies
      For the purposes of this subchapter, management companies are
    divided into open-end and closed-end companies, defined as follows:
        (1) "Open-end company" means a management company which is
      offering for sale or has outstanding any redeemable security of
      which it is the issuer.
        (2) "Closed-end company" means any management company other
      than an open-end company.
    (b) Diversified and non-diversified companies
      Management companies are further divided into diversified
    companies and non-diversified companies, defined as follows:
        (1) "Diversified company" means a management company which
      meets the following requirements: At least 75 per centum of the
      value of its total assets is represented by cash and cash items
      (including receivables), Government securities, securities of
      other investment companies, and other securities for the purposes
      of this calculation limited in respect of any one issuer to an
      amount not greater in value than 5 per centum of the value of the
      total assets of such management company and to not more than 10
      per centum of the outstanding voting securities of such issuer.
        (2) "Non-diversified company" means any management company
      other than a diversified company.
    (c) Loss of status as diversified company
      A registered diversified company which at the time of its
    qualification as such meets the requirements of paragraph (1) of
    subsection (b) of this section shall not lose its status as a
    diversified company because of any subsequent discrepancy between
    the value of its various investments and the requirements of said
    paragraph, so long as any such discrepancy existing immediately
    after its acquisition of any security or other property is neither
    wholly nor partly the result of such acquisition.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 5, 54 Stat. 800; Pub. L. 100-
    181, title VI, Sec. 607, Dec. 4, 1987, 101 Stat. 1261.)


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (a)(2). Pub. L. 100-181 substituted "Closed-end"
    for "Close-end".


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-6                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-6. Exemptions

-STATUTE-
    (a) Exemption of specified investment companies
      The following investment companies are exempt from the provisions
    of this subchapter:
        (1) Any company organized or otherwise created under the laws
      of and having its principal office and place of business in
      Puerto Rico, the Virgin Islands, or any other possession of the
      United States; but such exemption shall terminate if any security
      of which such company is the issuer is offered for sale or sold
      after the effective date of this subchapter, by such company or
      an underwriter therefor, to a resident of any State other than
      the State in which such company is organized.
        (2) Any company which since the effective date of this
      subchapter or within five years prior to such date has been
      reorganized under the supervision of a court of competent
      jurisdiction, if (A) such company was not an investment company
      at the commencement of such reorganization proceedings, (B) at
      the conclusion of such proceedings all outstanding securities of
      such company were owned by creditors of such company or by
      persons to whom such securities were issued on account of
      creditors' claims, and (C) more than 50 per centum of the voting
      securities of such company, and securities representing more than
      50 per centum of the net asset value of such company, are
      currently owned beneficially by not more than twenty-five
      persons; but such exemption shall terminate if any security of
      which such company is the issuer is offered for sale or sold to
      the public after the conclusion of such proceedings by the issuer
      or by or through any underwriter. For the purposes of this
      paragraph, any new company organized as part of the
      reorganization shall be deemed the same company as its
      predecessor; and beneficial ownership shall be determined in the
      manner provided in section 80a-3(c)(1) of this title.
        (3) Any issuer as to which there is outstanding a writing filed
      with the Commission by the Federal Savings and Loan Insurance
      Corporation stating that exemption of such issuer from the
      provisions of this subchapter is consistent with the public
      interest and the protection of investors and is necessary or
      appropriate by reason of the fact that such issuer holds or
      proposes to acquire any assets or any product of any assets which
      have been segregated (A) from assets of any company which at the
      filing of such writing is an insured institution within the
      meaning of section 1724(a) (!1) of title 12, or (B) as a part of
      or in connection with any plan for or condition to the insurance
      of accounts of any company by said corporation or the conversion
      of any company into a Federal savings and loan association. Any
      such writing shall expire when canceled by a writing similarly
      filed or at the expiration of two years after the date of its
      filing, whichever first occurs; but said corporation may,
      nevertheless, before, at, or after the expiration of any such
      writing file another writing or writings with respect to such
      issuer.

        (4) Any company which prior to March 15, 1940, was and now is a
      wholly-owned subsidiary of a registered face-amount certificate
      company and was prior to said date and now is organized and
      operating under the insurance laws of any State and subject to
      supervision and examination by the insurance commissioner
      thereof, and which prior to March 15, 1940, was and now is
      engaged, subject to such laws, in business substantially all of
      which consists of issuing and selling only to residents of such
      State and investing the proceeds from, securities providing for
      or representing participations or interests in intangible assets
      consisting of mortgages or other liens on real estate or notes or
      bonds secured thereby or in a fund or deposit of mortgages or
      other liens on real estate or notes or bonds secured thereby or
      having outstanding such securities so issued and sold.
        (5)(A) Any company that is not engaged in the business of
      issuing redeemable securities, the operations of which are
      subject to regulation by the State in which the company is
      organized under a statute governing entities that provide
      financial or managerial assistance to enterprises doing business,
      or proposing to do business, in that State if - 
          (i) the organizational documents of the company state that
        the activities of the company are limited to the promotion of
        economic, business, or industrial development in the State
        through the provision of financial or managerial assistance to
        enterprises doing business, or proposing to do business, in
        that State, and such other activities that are incidental or
        necessary to carry out that purpose;
          (ii) immediately following each sale of the securities of the
        company by the company or any underwriter for the company, not
        less than 80 percent of the securities of the company being
        offered in such sale, on a class-by-class basis, are held by
        persons who reside or who have a substantial business presence
        in that State;
          (iii) the securities of the company are sold, or proposed to
        be sold, by the company or by any underwriter for the company,
        solely to accredited investors, as that term is defined in
        section 77b(a)(15) of this title, or to such other persons that
        the Commission, as necessary or appropriate in the public
        interest and consistent with the protection of investors, may
        permit by rule, regulation, or order; and
          (iv) the company does not purchase any security issued by an
        investment company or by any company that would be an
        investment company except for the exclusions from the
        definition of the term "investment company" under paragraph (1)
        or (7) of section 80a-3(c) of this title, other than - 
            (I) any debt security that is rated investment grade by not
          less than 1 nationally recognized statistical rating
          organization; or
            (II) any security issued by a registered open-end
          investment company that is required by its investment
          policies to invest not less than 65 percent of its total
          assets in securities described in subclause (I) or securities
          that are determined by such registered open-end investment
          company to be comparable in quality to securities described
          in subclause (I).

        (B) Notwithstanding the exemption provided by this paragraph,
      section 80a-9 of this title (and, to the extent necessary to
      enforce section 80a-9 of this title, sections 80a-37 through 80a-
      50 of this title) shall apply to a company described in this
      paragraph as if the company were an investment company registered
      under this subchapter.
        (C) Any company proposing to rely on the exemption provided by
      this paragraph shall file with the Commission a notification
      stating that the company intends to do so, in such form and
      manner as the Commission may prescribe by rule.
        (D) Any company meeting the requirements of this paragraph may
      rely on the exemption provided by this paragraph upon filing with
      the Commission the notification required by subparagraph (C),
      until such time as the Commission determines by order that such
      reliance is not in the public interest or is not consistent with
      the protection of investors.
        (E) The exemption provided by this paragraph may be subject to
      such additional terms and conditions as the Commission may by
      rule, regulation, or order determine are necessary or appropriate
      in the public interest or for the protection of investors.
    (b) Exemption of employees' security company upon application;
      matters considered
      Upon application by any employees' security company, the
    Commission shall by order exempt such company from the provisions
    of this subchapter and of the rules and regulations hereunder, if
    and to the extent that such exemption is consistent with the
    protection of investors. In determining the provisions to which
    such an order of exemption shall apply, the Commission shall give
    due weight, among other things, to the form of organization and the
    capital structure of such company, the persons by whom its voting
    securities, evidences of indebtedness, and other securities are
    owned and controlled, the prices at which securities issued by such
    company are sold and the sales load thereon, the disposition of the
    proceeds of such sales, the character of the securities in which
    such proceeds are invested, and any relationship between such
    company and the issuer of any such security.
    (c) Exemption of persons, securities or any class or classes of
      persons as necessary and appropriate in public interest
      The Commission, by rules and regulations upon its own motion, or
    by order upon application, may conditionally or unconditionally
    exempt any person, security, or transaction, or any class or
    classes of persons, securities, or transactions, from any provision
    or provisions of this subchapter or of any rule or regulation
    thereunder, if and to the extent that such exemption is necessary
    or appropriate in the public interest and consistent with the
    protection of investors and the purposes fairly intended by the
    policy and provisions of this subchapter.
    (d) Exemption of closed-end investment companies
      The Commission, by rules and regulations or order, shall exempt a
    closed-end investment company from any or all provisions of this
    subchapter, but subject to such terms and conditions as may be
    necessary or appropriate in the public interest or for the
    protection of investors, if - 
        (1) the aggregate sums received by such company from the sale
      of all its outstanding securities, plus the aggregate offering
      price of all securities of which such company is the issuer and
      which it proposes to offer for sale, do not exceed $10,000,000,
      or such other amount as the Commission may set by rule,
      regulation, or order;
        (2) no security of which such company is the issuer has been or
      is proposed to be sold by such company or any underwriter
      therefor, in connection with a public offering, to any person who
      is not a resident of the State under the laws of which such
      company is organized or otherwise created; and
        (3) such exemption is not contrary to the public interest or
      inconsistent with the protection of investors.
    (e) Application of certain specified provisions of subchapter to
      otherwise exempt companies
      If, in connection with any rule, regulation, or order under this
    section exempting any investment company from any provision of
    section 80a-7 of this title, the Commission deems it necessary or
    appropriate in the public interest or for the protection of
    investors that certain specified provisions of this subchapter
    pertaining to registered investment companies shall be applicable
    in respect of such company, the provisions so specified shall apply
    to such company, and to other persons in their transactions and
    relations with such company, as though such company were a
    registered investment company.
    (f) Exemption of closed-end company treated as business development
      company
      Any closed-end company which - 
        (1) elects to be treated as a business development company
      pursuant to section 80a-53 of this title; or
        (2) would be excluded from the definition of an investment
      company by section 80a-3(c)(1) of this title, except that it
      presently proposes to make a public offering of its securities as
      a business development company, and has notified the Commission,
      in a form and manner which the Commission may, by rule,
      prescribe, that it intends in good faith to file, within 90 days,
      a notification of election to become subject to the provisions of
      sections 80a-54 through 80a-64 of this title,

    shall be exempt from sections 80a-1 through 80a-52 of this title,
    except to the extent provided in sections 80a-58 through 80a-64 of
    this title.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 6, 54 Stat. 800; Proc. No.
    2695, eff. July 4, 1946, 11 F.R. 7517, 60 Stat. 1352; Pub. L. 86-
    70, Sec. 12(e), June 25, 1959, 73 Stat. 143; Pub. L. 86-624, Sec.
    7(c), July 12, 1960, 74 Stat. 412; Pub. L. 95-598, title III, Sec.
    310(b), Nov. 6, 1978, 92 Stat. 2676; Pub. L. 96-477, title I, Sec.
    103, Oct. 21, 1980, 94 Stat. 2277; Pub. L. 100-181, title VI, Sec.
    608, Dec. 4, 1987, 101 Stat. 1261; Pub. L. 104-290, title V, Secs.
    501, 502, Oct. 11, 1996, 110 Stat. 3444, 3445.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      For the effective date of this subchapter, referred to in subsec.
    (a)(2), see section 80a-52 of this title.
      Section 1724 of title 12, referred to in subsec. (a)(3), was
    repealed by Pub. L. 101-73, title IV, Sec. 407, Aug. 9, 1989, 103
    Stat. 363.

-COD-
                               CODIFICATION                           
      Words "Philippine Islands" deleted from subsec. (a)(1) after
    "Puerto Rico" under the authority of Proc. No. 2695, granting
    independence to the Philippine Islands, which was issued pursuant
    to section 1394 of Title 22, Foreign Relations and Intercourse, and
    is set out as a note under that section.


-MISC1-
                                AMENDMENTS                            
      1996 - Subsec. (a)(5). Pub. L. 104-290, Sec. 501, added par. (5).
      Subsec. (d)(1). Pub. L. 104-290, Sec. 502, substituted
    "$10,000,000, or such other amount as the Commission may set by
    rule, regulation, or order" for "$100,000".
      1987 - Subsec. (a)(1). Pub. L. 100-181, Sec. 608(1), struck out
    reference to Canal Zone.
      Subsec. (a)(2) to (5). Pub. L. 100-181, Sec. 608(2), redesignated
    former pars. (3) to (5) as (2) to (4), and struck out former par.
    (2) which read as follows: "Any company for which, in a proceeding
    in any court of the United States or of a State, a receiver,
    trustee in a case under title 11, or similar officer had been
    appointed or elected prior to the effective date of this
    subchapter, and every such officer so appointed or elected prior to
    the effective date of this subchapter; but such exemption shall
    continue only so long as (A) the conduct of such company's business
    remains subject to the supervision of such court or officer
    thereof, and (B) such company does not sell exclusively for cash
    any security of which it is the issuer, except short-term paper and
    ordinary receiver's or trustee's certificates."
      1980 - Subsec. (f). Pub. L. 96-477 added subsec. (f).
      1978 - Subsec. (a)(2). Pub. L. 95-598 substituted "a case under
    title 11" for "bankruptcy".
      1960 - Subsec. (a)(1). Pub. L. 86-624 struck out reference to
    Hawaii.
      1959 - Subsec. (a)(1). Pub. L. 86-70 struck out reference to
    Alaska.

                     EFFECTIVE DATE OF 1978 AMENDMENT                 
      Amendment by Pub. L. 95-598 effective Oct. 1, 1979, see section
    402(a) of Pub. L. 95-598, set out as an Effective Date note
    preceding section 101 of Title 11, Bankruptcy.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      Federal Savings and Loan Insurance Corporation abolished and
    functions transferred, see sections 401 to 406 of Pub. L. 101-73,
    set out as a note under section 1437 of Title 12, Banks and
    Banking.
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.


-MISC2-
        INVESTMENT COMPANY PROVISIONS INAPPLICABLE TO CERTAIN LIFE
             INSURANCE BENEFITS ISSUED PRIOR TO MARCH 23, 1959
      Subchapter inapplicable to certain life insurance benefits issued
    prior to Mar. 23, 1959, under certain conditions, see section 29 of
    Pub. L. 91-547, Dec. 14, 1970, 84 Stat. 1436, set out as a note
    under section 77c of this title.

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    15 USC Sec. 80a-7                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-7. Transactions by unregistered investment companies

-STATUTE-
    (a) Prohibition of transactions in interstate commerce by companies
      No investment company organized or otherwise created under the
    laws of the United States or of a State and having a board of
    directors, unless registered under section 80a-8 of this title,
    shall directly or indirectly - 
        (1) offer for sale, sell, or deliver after sale, by the use of
      the mails or any means or instrumentality of interstate commerce,
      any security or any interest in a security, whether the issuer of
      such security is such investment company or another person; or
      offer for sale, sell, or deliver after sale any such security or
      interest, having reason to believe that such security or interest
      will be made the subject of a public offering by use of the mails
      or any means or instrumentality of interstate commerce;
        (2) purchase, redeem, retire, or otherwise acquire or attempt
      to acquire, by use of the mails or any means or instrumentality
      of interstate commerce, any security or any interest in a
      security, whether the issuer of such security is such investment
      company or another person;
        (3) control any investment company which does any of the acts
      enumerated in paragraphs (1) and (2) of this subsection;
        (4) engage in any business in interstate commerce; or
        (5) control any company which is engaged in any business in
      interstate commerce.

    The provisions of this subsection shall not apply to transactions
    of an investment company which are merely incidental to its
    dissolution.
    (b) Prohibition of transactions in interstate commerce by
      depositors or trustees of companies
      No depositor or trustee of or underwriter for any investment
    company, organized or otherwise created under the laws of the
    United States or of a State and not having a board of directors,
    unless such company is registered under section 80a-8 of this title
    or exempt under section 80a-6 of this title, shall directly or
    indirectly - 
        (1) offer for sale, sell, or deliver after sale, by use of the
      mails or any means or instrumentality of interstate commerce, any
      security or any interest in a security of which such company is
      the issuer; or offer for sale, sell, or deliver after sale any
      such security or interest, having reason to believe that such
      security or interest will be made the subject of a public
      offering by use of the mails or any means or instrumentality of
      interstate commerce;
        (2) purchase, redeem, or otherwise acquire or attempt to
      acquire, by use of the mails or any means or instrumentality of
      interstate commerce, any security or any interest in a security
      of which such company is the issuer; or
        (3) sell or purchase for the account of such company, by use of
      the mails or any means or instrumentality of interstate commerce,
      any security or interest in a security, by whomever issued.

    The provisions of this subsection shall not apply to transactions
    which are merely incidental to the dissolution of an investment
    company.
    (c) Prohibition of transactions in interstate commerce by promoters
      of proposed investment companies
      No promoter of a proposed investment company, and no underwriter
    for such a promoter, shall make use of the mails or any means or
    instrumentality of interstate commerce, directly or indirectly, to
    offer for sale, sell, or deliver after sale, in connection with a
    public offering, any preorganization certificate or subscription
    for such a company.
    (d) Prohibition of transactions in interstate commerce by companies
      not organized under laws of the United States or a State;
      exceptions
      No investment company, unless organized or otherwise created
    under the laws of the United States or of a State, and no depositor
    or trustee of or underwriter for such a company not so organized or
    created, shall make use of the mails or any means or
    instrumentality of interstate commerce, directly or indirectly, to
    offer for sale, sell, or deliver after sale, in connection with a
    public offering, any security of which such company is the issuer.
    Notwithstanding the provisions of this subsection and of section
    80a-8(a) of this title, the Commission is authorized, upon
    application by an investment company organized or otherwise created
    under the laws of a foreign country, to issue a conditional or
    unconditional order permitting such company to register under this
    subchapter, and to make a public offering of its securities by use
    of the mails and means or instrumentalities of interstate commerce,
    if the Commission finds that, by reason of special circumstances or
    arrangements, it is both legally and practically feasible
    effectively to enforce the provisions of this subchapter against
    such company and that the issuance of such order is otherwise
    consistent with the public interest and the protection of
    investors.
    (e) Disclosure by exempt charitable organizations
      Each fund that is excluded from the definition of an investment
    company under section 80a-3(c)(10)(B) of this title shall provide,
    to each donor to such fund, at the time of the donation or within
    90 days after December 8, 1995, whichever is later, written
    information describing the material terms of the operation of such
    fund.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 7, 54 Stat. 802; Pub. L. 104-
    62, Sec. 2(b), Dec. 8, 1995, 109 Stat. 683.)


-MISC1-
                                AMENDMENTS                            
      1995 - Subsec. (e). Pub. L. 104-62 added subsec. (e).

                     EFFECTIVE DATE OF 1995 AMENDMENT                 
      Amendment by Pub. L. 104-62 applicable as defense to any claim in
    administrative and judicial actions pending on or commenced after
    Dec. 8, 1995, that any person, security, interest, or participation
    of type described in Pub. L. 104-62 is subject to the Securities
    Act of 1933, the Securities Exchange Act of 1934, the Investment
    Company Act of 1940, the Investment Advisers Act of 1940, or any
    State statute or regulation preempted as provided in section 80a-3a
    of this title, except as specifically provided in such statutes,
    see section 7 of Pub. L. 104-62, set out as a note under section
    77c of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-8                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-8. Registration of investment companies

-STATUTE-
    (a) Notification of registration; effective date of registration
      Any investment company organized or otherwise created under the
    laws of the United States or of a State may register for the
    purposes of this subchapter by filing with the Commission a
    notification of registration, in such form as the Commission shall
    by rules and regulations prescribe as necessary or appropriate in
    the public interest or for the protection of investors. An
    investment company shall be deemed to be registered upon receipt by
    the Commission of such notification of registration.
    (b) Registration statement; contents
      Every registered investment company shall file with the
    Commission, within such reasonable time after registration as the
    Commission shall fix by rules and regulations, an original and such
    copies of a registration statement, in such form and containing
    such of the following information and documents as the Commission
    shall by rules and regulations prescribe as necessary or
    appropriate in the public interest or for the protection of
    investors:
        (1) a recital of the policy of the registrant in respect of
      each of the following types of activities, such recital
      consisting in each case of a statement whether the registrant
      reserves freedom of action to engage in activities of such type,
      and if such freedom of action is reserved, a statement briefly
      indicating, insofar as is practicable, the extent to which the
      registrant intends to engage therein: (A) the classification and
      subclassifications, as defined in sections 80a-4 and 80a-5 of
      this title, within which the registrant proposes to operate; (B)
      borrowing money; (C) the issuance of senior securities; (D)
      engaging in the business of underwriting securities issued by
      other persons; (E) concentrating investments in a particular
      industry or group of industries; (F) the purchase and sale of
      real estate and commodities, or either of them; (G) making loans
      to other persons; and (H) portfolio turn-over (including a
      statement showing the aggregate dollar amount of purchases and
      sales of portfolio securities, other than Government securities,
      in each of the last three full fiscal years preceding the filing
      of such registration statement);
        (2) a recital of all investment policies of the registrant, not
      enumerated in paragraph (1), which are changeable only if
      authorized by shareholder vote;
        (3) a recital of all policies of the registrant, not enumerated
      in paragraphs (1) and (2), in respect of matters which the
      registrant deems matters of fundamental policy;
        (4) the name and address of each affiliated person of the
      registrant; the name and principal address of every company,
      other than the registrant, of which each such person is an
      officer, director, or partner; a brief statement of the business
      experience for the preceding five years of each officer and
      director of the registrant; and
        (5) the information and documents which would be required to be
      filed in order to register under the Securities Act of 1933 [15
      U.S.C. 77a et seq.] and the Securities Exchange Act of 1934 [15
      U.S.C. 78a et seq.], all securities (other than short-term paper)
      which the registrant has outstanding or proposes to issue.
    (c) Alternative information
      The Commission shall make provision, by permissive rules and
    regulations or order, for the filing of the following, or so much
    of the following as the Commission may designate, in lieu of the
    information and documents required pursuant to subsection (b) of
    this section:
        (1) copies of the most recent registration statement filed by
      the registrant under the Securities Act of 1933 [15 U.S.C. 77a et
      seq.] and currently effective under such Act, or if the
      registrant has not filed such a statement, copies of a
      registration statement filed by the registrant under the
      Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.] and
      currently effective under such Act;
        (2) copies of any reports filed by the registrant pursuant to
      section 78m or 78o(d) of this title; and
        (3) a report containing reasonably current information
      regarding the matters included in copies filed pursuant to
      paragraphs (1) and (2) of this subsection, and such further
      information regarding matters not included in such copies as the
      Commission is authorized to require under subsection (b) of this
      section.
    (d) Registration of unit investment trusts
      If the registrant is a unit investment trust substantially all of
    the assets of which are securities issued by another registered
    investment company, the Commission is authorized to prescribe for
    the registrant, by rules and regulations or order, a registration
    statement which eliminates inappropriate duplication of information
    contained in the registration statement filed under this section by
    such other investment company.
    (e) Failure to file registration statement or omissions of material
      fact
      If it appears to the Commission that a registered investment
    company has failed to file the registration statement required by
    this section or a report required pursuant to section 80a-29 (a) or
    (b) of this title, or has filed such a registration statement or
    report but omitted therefrom material facts required to be stated
    therein, or has filed such a registration statement or report in
    violation of section 80a-33(b) of this title, the Commission shall
    notify such company by registered mail or by certified mail of the
    failure to file such registration statement or report, or of the
    respects in which such registration statement or report appears to
    be materially incomplete or misleading, as the case may be, and
    shall fix a date (in no event earlier than thirty days after the
    mailing of such notice) prior to which such company may file such
    registration statement or report or correct the same. If such
    registration statement or report is not filed or corrected within
    the time so fixed by the Commission or any extension thereof, the
    Commission, after appropriate notice and opportunity for hearing,
    and upon such conditions and with such exemptions as it deems
    appropriate for the protection of investors, may by order suspend
    the registration of such company until such statement or report is
    filed or corrected, or may by order revoke such registration, if
    the evidence establishes - 
        (1) that such company has failed to file a registration
      statement required by this section or a report required pursuant
      to section 80a-29(a) or (b) of this title, or has filed such a
      registration statement or report but omitted therefrom material
      facts required to be stated therein, or has filed such a
      registration statement or report in violation of section 80a-
      33(b) of this title; and
        (2) that such suspension or revocation is in the public
      interest.
    (f) Cessation of existence as investment company
      Whenever the Commission, on its own motion or upon application,
    finds that a registered investment company has ceased to be an
    investment company, it shall so declare by order and upon the
    taking effect of such order the registration of such company shall
    cease to be in effect. If necessary for the protection of
    investors, an order under this subsection may be made upon
    appropriate conditions. The Commission's denial of any application
    under this subsection shall be by order.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 8, 54 Stat. 803; Pub. L. 86-
    507, Sec. 1(14), June 11, 1960, 74 Stat. 201; Pub. L. 91-547, Sec.
    3(c), Dec. 14, 1970, 84 Stat. 1415.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Act of 1933, referred to in subsecs. (b)(5) and
    (c)(1), is act May 27, 1933, ch. 38, title I, 48 Stat. 74, as
    amended, which is classified generally to subchapter I (Sec. 77a et
    seq.) of chapter 2A of this title. For complete classification of
    this Act to the Code, see section 77a of this title and Tables.
      The Securities Exchange Act of 1934, referred to in subsecs.
    (b)(5) and (c)(1), is act June 6, 1934, ch. 404, 48 Stat. 881, as
    amended, which is classified generally to 2B (Sec. 78a et seq.) of
    this title. For complete classification of this Act to the Code,
    see section 78a of this title and Tables.
      Words "such Act", referred to in subsec. (c)(1), mean the
    Securities Act of 1933 and the Securities Exchange Act of 1934,
    respectively.


-MISC1-
                                AMENDMENTS                            
      1970 - Subsec. (b)(2). Pub. L. 91-547, Sec. 3(c)(1), substituted
    "all investment policies of the registrant" and "which are
    changeable only if authorized by shareholder vote" for "the policy
    of the registrant in respect of matters" and "which the registrant
    deems matters of fundamental policy and elects to treat as such",
    respectively. Former provisions are covered in par. (3).
      Subsec. (b)(3) to (5). Pub. L. 91-547, Sec. 3(c)(2), (3), added
    par. (3) and redesignated former pars. (3) and (4) as (4) and (5),
    respectively.
      1960 - Subsec. (e). Pub. L. 86-507 inserted "or by certified
    mail" after "registered mail".

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-9                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-9. Ineligibility of certain affiliated persons and
      underwriters

-STATUTE-
    (a) Persons deemed ineligible for service with investment
      companies, etc.; investment adviser
      It shall be unlawful for any of the following persons to serve or
    act in the capacity of employee, officer, director, member of an
    advisory board, investment adviser, or depositor of any registered
    investment company, or principal underwriter for any registered
    open-end company, registered unit investment trust, or registered
    face-amount certificate company:
        (1) any person who within 10 years has been convicted of any
      felony or misdemeanor involving the purchase or sale of any
      security or arising out of such person's conduct as an
      underwriter, broker, dealer, investment adviser, municipal
      securities dealer, government securities broker, government
      securities dealer, bank, transfer agent, credit rating agency, or
      entity or person required to be registered under the Commodity
      Exchange Act [7 U.S.C. 1 et seq.], or as an affiliated person,
      salesman, or employee of any investment company, bank, insurance
      company, or entity or person required to be registered under the
      Commodity Exchange Act;
        (2) any person who, by reason of any misconduct, is permanently
      or temporarily enjoined by order, judgment, or decree of any
      court of competent jurisdiction from acting as an underwriter,
      broker, dealer, investment adviser, municipal securities dealer,
      government securities broker, government securities dealer, bank,
      transfer agent, credit rating agency, or entity or person
      required to be registered under the Commodity Exchange Act [7
      U.S.C. 1 et seq.], or as an affiliated person, salesman, or
      employee of any investment company, bank, insurance company, or
      entity or person required to be registered under the Commodity
      Exchange Act, or from engaging in or continuing any conduct or
      practice in connection with any such activity or in connection
      with the purchase or sale of any security; or
        (3) a company any affiliated person of which is ineligible, by
      reason of paragraph (1) or (2) of this subsection, to serve or
      act in the foregoing capacities.

    For the purposes of paragraphs (1) to (3) of this subsection, the
    term "investment adviser" shall include an investment adviser as
    defined in subchapter II of this chapter.
    (b) Certain persons serving investment companies; administrative
      action of Commission
      The Commission may, after notice and opportunity for hearing, by
    order prohibit, conditionally or unconditionally, either
    permanently or for such period of time as it in its discretion
    shall deem appropriate in the public interest, any person from
    serving or acting as an employee, officer, director, member of an
    advisory board, investment adviser or depositor of, or principal
    underwriter for, a registered investment company or affiliated
    person of such investment adviser, depositor, or principal
    underwriter, if such person - 
        (1) has willfully made or caused to be made in any registration
      statement, application or report filed with the Commission under
      this subchapter any statement which was at the time and in the
      light of the circumstances under which it was made false or
      misleading with respect to any material fact, or has omitted to
      state in any such registration statement, application, or report
      any material fact which was required to be stated therein;
        (2) has willfully violated any provision of the Securities Act
      of 1933 [15 U.S.C. 77a et seq.], or of the Securities Exchange
      Act of 1934 [15 U.S.C. 78a et seq.], or of subchapter II of this
      chapter, or of this subchapter, or of the Commodity Exchange Act
      [7 U.S.C. 1 et seq.], or of any rule or regulation under any of
      such statutes;
        (3) has willfully aided, abetted, counseled, commanded,
      induced, or procured the violation by any other person of the
      Securities Act of 1933 [15 U.S.C. 77a et seq.], or of the
      Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], or of
      subchapter II of this chapter, or of this subchapter, or of the
      Commodity Exchange Act [7 U.S.C. 1 et seq.], or of any rule or
      regulation under any of such statutes;
        (4) has been found by a foreign financial regulatory authority
      to have - 
          (A) made or caused to be made in any application for
        registration or report required to be filed with a foreign
        securities authority, or in any proceeding before a foreign
        securities authority with respect to registration, any
        statement that was at the time and in light of the
        circumstances under which it was made false or misleading with
        respect to any material fact, or has omitted to state in any
        application or report to a foreign securities authority any
        material fact that is required to be stated therein;
          (B) violated any foreign statute or regulation regarding
        transactions in securities or contracts of sale of a commodity
        for future delivery traded on or subject to the rules of a
        contract market or any board of trade;
          (C) aided, abetted, counseled, commanded, induced, or
        procured the violation by any other person of any foreign
        statute or regulation regarding transactions in securities or
        contracts of sale of a commodity for future delivery traded on
        or subject to the rules of a contract market or any board of
        trade;

        (5) within 10 years has been convicted by a foreign court of
      competent jurisdiction of a crime, however denominated by the
      laws of the relevant foreign government, that is substantially
      equivalent to an offense set forth in paragraph (1) of subsection
      (a) of this section; or
        (6) by reason of any misconduct, is temporarily or permanently
      enjoined by any foreign court of competent jurisdiction from
      acting in any of the capacities, set forth in paragraph (2) of
      subsection (a) of this section, or a substantially equivalent
      foreign capacity, or from engaging in or continuing any conduct
      or practice in connection with any such activity or in connection
      with the purchase or sale of any security.
    (c) Application of ineligible person for exemption
      Any person who is ineligible, by reason of subsection (a) of this
    section, to serve or act in the capacities enumerated in such
    subsection, may file with the Commission an application for an
    exemption from the provisions of such subsection. The Commission
    shall by order grant such application, either unconditionally or on
    an appropriate temporary or other conditional basis, if it is
    established that the prohibitions of such subsection (a) as applied
    to such person, are unduly or disproportionately severe or that the
    conduct of such person has been such as not to make it against the
    public interest or protection of investors to grant such
    application.
    (d) Money penalties in administrative proceedings
      (1) Authority of Commission
        In any proceeding instituted pursuant to subsection (b) of this
      section against any person, the Commission may impose a civil
      penalty if it finds, on the record after notice and opportunity
      for hearing, that such person - 
          (A) has willfully violated any provision of the Securities
        Act of 1933 [15 U.S.C. 77a et seq.], the Securities Exchange
        Act of 1934 [15 U.S.C. 78a et seq.], subchapter II of this
        chapter, or this subchapter, or the rules or regulations
        thereunder;
          (B) has willfully aided, abetted, counseled, commanded,
        induced, or procured such a violation by any other person; or
          (C) has willfully made or caused to be made in any
        registration statement, application, or report required to be
        filed with the Commission under this subchapter, any statement
        which was, at the time and in the light of the circumstances
        under which it was made, false or misleading with respect to
        any material fact, or has omitted to state in any such
        registration statement, application, or report any material
        fact which was required to be stated therein;

      and that such penalty is in the public interest.
      (2) Maximum amount of penalty
        (A) First tier
          The maximum amount of penalty for each act or omission
        described in paragraph (1) shall be $5,000 for a natural person
        or $50,000 for any other person.
        (B) Second tier
          Notwithstanding subparagraph (A), the maximum amount of
        penalty for each such act or omission shall be $50,000 for a
        natural person or $250,000 for any other person if the act or
        omission described in paragraph (1) involved fraud, deceit,
        manipulation, or deliberate or reckless disregard of a
        regulatory requirement.
        (C) Third tier
          Notwithstanding subparagraphs (A) and (B), the maximum amount
        of penalty for each such act or omission shall be $100,000 for
        a natural person or $500,000 for any other person if - 
            (i) the act or omission described in paragraph (1) involved
          fraud, deceit, manipulation, or deliberate or reckless
          disregard of a regulatory requirement; and
            (ii) such act or omission directly or indirectly resulted
          in substantial losses or created a significant risk of
          substantial losses to other persons or resulted in
          substantial pecuniary gain to the person who committed the
          act or omission.
      (3) Determination of public interest
        In considering under this section whether a penalty is in the
      public interest, the Commission may consider - 
          (A) whether the act or omission for which such penalty is
        assessed involved fraud, deceit, manipulation, or deliberate or
        reckless disregard of a regulatory requirement;
          (B) the harm to other persons resulting either directly or
        indirectly from such act or omission;
          (C) the extent to which any person was unjustly enriched,
        taking into account any restitution made to persons injured by
        such behavior;
          (D) whether such person previously has been found by the
        Commission, another appropriate regulatory agency, or a self-
        regulatory organization to have violated the Federal
        securities laws, State securities laws, or the rules of a self-
        regulatory organization, has been enjoined by a court of
        competent jurisdiction from violations of such laws or rules,
        or has been convicted by a court of competent jurisdiction of
        violations of such laws or of any felony or misdemeanor
        described in section 80b-3(e)(2) of this title;
          (E) the need to deter such person and other persons from
        committing such acts or omissions; and
          (F) such other matters as justice may require.
      (4) Evidence concerning ability to pay
        In any proceeding in which the Commission may impose a penalty
      under this section, a respondent may present evidence of the
      respondent's ability to pay such penalty. The Commission may, in
      its discretion, consider such evidence in determining whether
      such penalty is in the public interest. Such evidence may relate
      to the extent of such person's ability to continue in business
      and the collectability of a penalty, taking into account any
      other claims of the United States or third parties upon such
      person's assets and the amount of such person's assets.
    (e) Authority to enter order requiring accounting and disgorgement
      In any proceeding in which the Commission may impose a penalty
    under this section, the Commission may enter an order requiring
    accounting and disgorgement, including reasonable interest. The
    Commission is authorized to adopt rules, regulations, and orders
    concerning payments to investors, rates of interest, periods of
    accrual, and such other matters as it deems appropriate to
    implement this subsection.
    (f) Cease-and-desist proceedings
      (1) Authority of Commission
        If the Commission finds, after notice and opportunity for
      hearing, that any person is violating, has violated, or is about
      to violate any provision of this subchapter, or any rule or
      regulation thereunder, the Commission may publish its findings
      and enter an order requiring such person, and any other person
      that is, was, or would be a cause of the violation, due to an act
      or omission the person knew or should have known would contribute
      to such violation, to cease and desist from committing or causing
      such violation and any future violation of the same provision,
      rule, or regulation. Such order may, in addition to requiring a
      person to cease and desist from committing or causing a
      violation, require such person to comply, or to take steps to
      effect compliance, with such provision, rule, or regulation, upon
      such terms and conditions and within such time as the Commission
      may specify in such order. Any such order may, as the Commission
      deems appropriate, require future compliance or steps to effect
      future compliance, either permanently or for such period of time
      as the Commission may specify, with such provision, rule, or
      regulation with respect to any security, any issuer, or any other
      person.
      (2) Hearing
        The notice instituting proceedings pursuant to paragraph (1)
      shall fix a hearing date not earlier than 30 days nor later than
      60 days after service of the notice unless an earlier or a later
      date is set by the Commission with the consent of any respondent
      so served.
      (3) Temporary order
        (A) In general
          Whenever the Commission determines that the alleged violation
        or threatened violation specified in the notice instituting
        proceedings pursuant to paragraph (1), or the continuation
        thereof, is likely to result in significant dissipation or
        conversion of assets, significant harm to investors, or
        substantial harm to the public interest, including, but not
        limited to, losses to the Securities Investor Protection
        Corporation, prior to the completion of the proceeding, the
        Commission may enter a temporary order requiring the respondent
        to cease and desist from the violation or threatened violation
        and to take such action to prevent the violation or threatened
        violation and to prevent dissipation or conversion of assets,
        significant harm to investors, or substantial harm to the
        public interest as the Commission deems appropriate pending
        completion of such proceedings. Such an order shall be entered
        only after notice and opportunity for a hearing, unless the
        Commission, notwithstanding section 80a-39(a) of this title,
        determines that notice and hearing prior to entry would be
        impracticable or contrary to the public interest. A temporary
        order shall become effective upon service upon the respondent
        and, unless set aside, limited, or suspended by the Commission
        or a court of competent jurisdiction, shall remain effective
        and enforceable pending the completion of the proceedings.
        (B) Applicability
          This paragraph shall apply only to a respondent that acts,
        or, at the time of the alleged misconduct acted, as a broker,
        dealer, investment adviser, investment company, municipal
        securities dealer, government securities broker, government
        securities dealer, or transfer agent, or is, or was at the time
        of the alleged misconduct, an associated person of, or a person
        seeking to become associated with, any of the foregoing.
      (4) Review of temporary orders
        (A) Commission review
          At any time after the respondent has been served with a
        temporary cease-and-desist order pursuant to paragraph (3), the
        respondent may apply to the Commission to have the order set
        aside, limited, or suspended. If the respondent has been served
        with a temporary cease-and-desist order entered without a prior
        Commission hearing, the respondent may, within 10 days after
        the date on which the order was served, request a hearing on
        such application and the Commission shall hold a hearing and
        render a decision on such application at the earliest possible
        time.
        (B) Judicial review
          Within - 
            (i) 10 days after the date the respondent was served with a
          temporary cease-and-desist order entered with a prior
          Commission hearing, or
            (ii) 10 days after the Commission renders a decision on an
          application and hearing under subparagraph (A), with respect
          to any temporary cease-and-desist order entered without a
          prior Commission hearing,

        the respondent may apply to the United States district court
        for the district in which the respondent resides or has its
        principal place of business, or for the District of Columbia,
        for an order setting aside, limiting, or suspending the
        effectiveness or enforcement of the order, and the court shall
        have jurisdiction to enter such an order. A respondent served
        with a temporary cease-and-desist order entered without a prior
        Commission hearing may not apply to the court except after
        hearing and decision by the Commission on the respondent's
        application under subparagraph (A) of this paragraph.
        (C) No automatic stay of temporary order
          The commencement of proceedings under subparagraph (B) of
        this paragraph shall not, unless specifically ordered by the
        court, operate as a stay of the Commission's order.
        (D) Exclusive review
          Section 80a-42 of this title shall not apply to a temporary
        order entered pursuant to this section.
      (5) Authority to enter order requiring accounting and
        disgorgement
        In any cease-and-desist proceeding under subsection (f)(1) of
      this section, the Commission may enter an order requiring
      accounting and disgorgement, including reasonable interest. The
      Commission is authorized to adopt rules, regulations, and orders
      concerning payments to investors, rates of interest, periods of
      accrual, and such other matters as it deems appropriate to
      implement this subsection.
    (g) Corporate or other trustees performing functions of investment
      advisers
      For the purposes of this section, the term "investment adviser"
    includes a corporate or other trustee performing the functions of
    an investment adviser.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 9, 54 Stat. 805; Pub. L. 91-
    547, Sec. 4, Dec. 14, 1970, 84 Stat. 1415; Pub. L. 94-29, Sec.
    28(6), June 4, 1975, 89 Stat. 166; Pub. L. 99-571, title I, Sec.
    102(l), Oct. 28, 1986, 100 Stat. 3220; Pub. L. 100-181, title VI,
    Sec. 609, Dec. 4, 1987, 101 Stat. 1261; Pub. L. 101-429, title III,
    Sec. 301, Oct. 15, 1990, 104 Stat. 941; Pub. L. 101-550, title II,
    Sec. 205(a), Nov. 15, 1990, 104 Stat. 2718; Pub. L. 106-102, title
    II, Sec. 222, Nov. 12, 1999, 113 Stat. 1401; Pub. L. 109-291, Sec.
    4(b)(2)(B), Sept. 29, 2006, 120 Stat. 1337.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Commodity Exchange Act, referred to in subsecs. (a)(1), (2)
    and (b)(2), (3), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, as
    amended, which is classified generally to chapter 1 (Sec. 1 et
    seq.) of Title 7, Agriculture. For complete classification of this
    Act to the Code, see section 1 of Title 7 and Tables.
      The Securities Act of 1933, referred to in subsecs. (b)(2), (3)
    and (d)(1)(A), is act May 27, 1933, ch. 38, title I, 48 Stat. 74,
    as amended, which is classified generally to subchapter I (Sec. 77a
    et seq.) of chapter 2A of this title. For complete classification
    of this Act to the Code, see section 77a of this title and Tables.
      The Securities Exchange Act of 1934, referred to in subsecs.
    (b)(2), (3) and (d)(1)(A), is act June 6, 1934, ch. 404, 48 Stat.
    881, as amended, which is classified generally to 2B (Sec. 78a et
    seq.) of this title. For complete classification of this Act to the
    Code, see section 78a of this title and Tables.


-MISC1-
                                AMENDMENTS                            
      2006 - Subsec. (a). Pub. L. 109-291 inserted "credit rating
    agency," after "transfer agent," in pars. (1) and (2).
      1999 - Subsec. (a)(1), (2). Pub. L. 106-102 substituted
    "securities dealer, bank, transfer agent," for "securities dealer,
    transfer agent,".
      1990 - Subsec. (b)(4) to (6). Pub. L. 101-550 added pars. (4) to
    (6).
      Subsecs. (d) to (f). Pub. L. 101-429, Sec. 301(1), (2), added
    subsecs. (d) to (f) and redesignated former subsec. (d) as (g).
      Subsec. (g). Pub. L. 101-429, Sec. 301(3), which directed the
    striking out of "subsections (a) through (c) of" after "the
    purposes of", was executed by striking out "subsection (a) through
    (c) of" as the probable intent of Congress.
      Pub. L. 101-429, Sec. 301(1), redesignated subsec. (d) as (g).
      1987 - Subsec. (a)(1), (2). Pub. L. 100-181 amended pars. (1) and
    (2) generally. Prior to amendment, pars. (1) and (2) read as
    follows:
      "(1) any person who within 10 years has been convicted of any
    felony or misdemeanor involving the purchase or sale of any
    security or arising out of such person's conduct as an underwriter,
    broker, dealer, investment adviser, municipal securities dealer,
    government securities broker, government securities dealer, or
    entity or person required to be registered under the Commodity
    Exchange Act, or as an affiliated person, salesman, or employee of
    any investment company, bank, insurance company, or entity or
    person required to be registered under the Commodity Exchange Act;
      "(2) any person who, by reason of any misconduct, is permanently
    or temporarily enjoined by order, judgment, or decree of any court
    of competent jurisdiction from acting as an underwriter, broker,
    dealer, investment adviser, municipal securities dealer, government
    securities broker, government securities dealer, or entity or
    person required to be registered under the Commodity Exchange Act,
    or as an affiliated person, salesman, or employee of any investment
    company, bank, insurance company, or entity or person required to
    be registered under the Commodity Exchange Act, or from engaging in
    or continuing any conduct or practice in connection with any such
    activity or in connection with the purchase or sale of any
    security; or".
      1986 - Subsec. (a)(1), (2). Pub. L. 99-571, Sec. 102(l)(1),
    inserted pars. (1) and (2) and struck out former pars. (1) and (2)
    which read as follows:
      "(1) any person who within ten years has been convicted of any
    felony or misdemeanor involving the purchase or sale of any
    security or arising out of such person's conduct as an underwriter,
    broker, dealer, or investment adviser, or as an affiliated person,
    salesman, or employee of any investment company, bank, or insurance
    company;
      "(2) any person who, by reason of any misconduct, is permanently
    or temporarily enjoined by order, judgment, or decree of any court
    of competent jurisdiction from acting as an underwriter, broker,
    dealer, or investment adviser, or as an affiliated person,
    salesman, or employee of any investment company, bank, or insurance
    company, or from engaging in or continuing any conduct or practice
    in connection with any such activity or in connection with the
    purchase or sale of any security; or".
      Subsec. (b)(2), (3). Pub. L. 99-571, Sec. 102(l)(2), (3),
    inserted reference to Commodity Exchange Act.
      1975 - Subsec. (d). Pub. L. 94-29 added subsec. (d).
      1970 - Subsec. (a). Pub. L. 91-547, Sec. 4(a), inserted
    "employee," before "officer" in introductory text.
      Subsecs. (b), (c). Pub. L. 91-547, Sec. 4(b), added subsec. (b)
    and redesignated former subsec. (b) as (c).

                     EFFECTIVE DATE OF 1999 AMENDMENT                 
      Amendment by Pub. L. 106-102 effective 18 months after Nov. 12,
    1999, see section 225 of Pub. L. 106-102, set out as a note under
    section 77c of this title.

                     EFFECTIVE DATE OF 1990 AMENDMENT                 
      Amendment by Pub. L. 101-429 effective Oct. 15, 1990, with
    provisions relating to civil penalties and accounting and
    disgorgement, see section 1(c)(1), (2) of Pub. L. 101-429, set out
    in a note under section 77g of this title.

                     EFFECTIVE DATE OF 1986 AMENDMENT                 
      Amendment by Pub. L. 99-571 effective 270 days after Oct. 28,
    1986, see section 401 of Pub. L. 99-571, set out as an Effective
    Date note under section 78o-5 of this title.

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-10                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-10. Affiliations or interest of directors, officers, and
      employees

-STATUTE-
    (a) Interested persons of company who may serve on board of
      directors
      No registered investment company shall have a board of directors
    more than 60 per centum of the members of which are persons who are
    interested persons of such registered company.
    (b) Employment and use of directors, officers, etc., as regular
      broker, principal underwriter, or investment banker
      No registered investment company shall - 
        (1) employ as regular broker any director, officer, or employee
      of such registered company, or any person of which any such
      director, officer, or employee is an affiliated person, unless a
      majority of the board of directors of such registered company
      shall be persons who are not such brokers or affiliated persons
      of any of such brokers;
        (2) use as a principal underwriter of securities issued by it
      any director, officer, or employee of such registered company or
      any person of which any such director, officer, or employee is an
      interested person, unless a majority of the board of directors of
      such registered company shall be persons who are not such
      principal underwriters or interested persons of any of such
      principal underwriters; or
        (3) have as director, officer, or employee any investment
      banker, or any affiliated person of an investment banker, unless
      a majority of the board of directors of such registered company
      shall be persons who are not investment bankers or affiliated
      persons of any investment banker. For the purposes of this
      paragraph, a person shall not be deemed an affiliated person of
      an investment banker solely by reason of the fact that he is an
      affiliated person of a company of the character described in
      section 80a-12(d)(3)(A) and (B) of this title.
    (c) Officers, directors, or employees of one bank or bank holding
      company as majority of board of directors of company; exceptions
      No registered investment company shall have a majority of its
    board of directors consisting of persons who are officers,
    directors, or employees of any one bank (together with its
    affiliates and subsidiaries) or any one bank holding company
    (together with its affiliates and subsidiaries) (as such terms are
    defined in section 1841 of title 12) or any one savings and loan
    holding company, together with its affiliates and subsidiaries (as
    such terms are defined in section 1467a of title 12),,(!1) except
    that, if on March 15, 1940, any registered investment company had a
    majority of its directors consisting of persons who are directors,
    officers, or employees of any one bank, such company may continue
    to have the same percentage of its board of directors consisting of
    persons who are directors, officers, or employees of such bank.

    (d) Exception to limitation of number of interested persons who may
      serve on board of directors
      Notwithstanding subsections (a) and (b)(2) of this section, a
    registered investment company may have a board of directors all the
    members of which, except one, are interested persons of the
    investment adviser of such company, or are officers or employees of
    such company, if - 
        (1) such investment company is an open-end company;
        (2) such investment adviser is registered under subchapter II
      of this chapter and is engaged principally in the business of
      rendering investment supervisory services as defined in
      subchapter II;
        (3) no sales load is charged on securities issued by such
      investment company;
        (4) any premium over net asset value charged by such company
      upon the issuance of any such security, plus any discount from
      net asset value charged on redemption thereof, shall not in the
      aggregate exceed 2 per centum;
        (5) no sales or promotion expenses are incurred by such
      registered company; but expenses incurred in complying with laws
      regulating the issue or sale of securities shall not be deemed
      sales or promotion expenses;
        (6) such investment adviser is the only investment adviser to
      such investment company, and such investment adviser does not
      receive a management fee exceeding 1 per centum per annum of the
      value of such company's net assets averaged over the year or
      taken as of a definite date or dates within the year;
        (7) all executive salaries and executive expenses and office
      rent of such investment company are paid by such investment
      adviser; and
        (8) such investment company has only one class of securities
      outstanding, each unit of which has equal voting rights with
      every other unit.
    (e) Death, disqualification, or resignation of directors as
      suspension of limitation provisions
      If by reason of the death, disqualification, or bona fide
    resignation of any director or directors, the requirements of the
    foregoing provisions of this section or of section 80a-15(f)(1) of
    this title in respect of directors shall not be met by a registered
    investment company, the operation of such provision shall be
    suspended as to such registered company - 
        (1) for a period of thirty days if the vacancy or vacancies may
      be filled by action of the board of directors;
        (2) for a period of sixty days if a vote of stockholders is
      required to fill the vacancy or vacancies; or
        (3) for such longer period as the Commission may prescribe, by
      rules and regulations upon its own motion or by order upon
      application, as not inconsistent with the protection of
      investors.
    (f) Officer, director, etc., of company acting as principal
      underwriter of security acquired by company
      No registered investment company shall knowingly purchase or
    otherwise acquire, during the existence of any underwriting or
    selling syndicate, any security (except a security of which such
    company is the issuer) a principal underwriter of which is an
    officer, director, member of an advisory board, investment adviser,
    or employee of such registered company, or is a person (other than
    a company of the character described in section 80a-12(d)(3)(A) and
    (B) of this title) of which any such officer, director, member of
    an advisory board, investment adviser, or employee is an affiliated
    person, unless in acquiring such security such registered company
    is itself acting as a principal underwriter for the issuer. The
    Commission, by rules and regulations upon its own motion or by
    order upon application, may conditionally or unconditionally exempt
    any transaction or classes of transactions from any of the
    provisions of this subsection, if and to the extent that such
    exemption is consistent with the protection of investors.
    (g) Advisory boards; restrictions on membership
      In the case of a registered investment company which has an
    advisory board, such board, as a distinct entity, shall be subject
    to the same restrictions as to its membership as are imposed upon a
    board of directors by this section.
    (h) Application of section to unincorporated registered management
      companies
      In the case of a registered management company which is an
    unincorporated company not having a board of directors, the
    provisions of this section shall apply as follows:
        (1) the provisions of subsection (a) of this section, as
      modified by subsection (e) of this section, shall apply to the
      board of directors of the depositor of such company;
        (2) the provisions of subsections (b) and (c) of this section,
      as modified by subsection (e) of this section, shall apply to the
      board of directors of the depositor and of every investment
      adviser of such company; and
        (3) the provisions of subsection (f) of this section shall
      apply to purchases and other acquisitions for the account of such
      company of securities a principal underwriter of which is the
      depositor or an investment adviser of such company, or an
      affiliated person of such depositor or investment adviser.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 10, 54 Stat. 806; Pub. L. 91-
    547, Sec. 5, Dec. 14, 1970, 84 Stat. 1416; Pub. L. 94-29, Sec.
    28(5), June 4, 1975, 89 Stat. 165; Pub. L. 106-102, title II, Sec.
    213(c), Nov. 12, 1999, 113 Stat. 1398; Pub. L. 109-351, title IV,
    Sec. 401(c), Oct. 13, 2006, 120 Stat. 1973.)


-MISC1-
                                AMENDMENTS                            
      2006 - Subsec. (c). Pub. L. 109-351 inserted "or any one savings
    and loan holding company, together with its affiliates and
    subsidiaries (as such terms are defined in section 1467a of title
    12)," after "1841 of title 12)".
      1999 - Subsec. (c). Pub. L. 106-102 substituted "bank (together
    with its affiliates and subsidiaries) or any one bank holding
    company (together with its affiliates and subsidiaries) (as such
    terms are defined in section 1841 of title 12), except" for "bank,
    except".
      1975 - Subsec. (e). Pub. L. 94-29 inserted reference to
    provisions of section 80a-15(f)(1) of this title.
      1970 - Subsec. (a). Pub. L. 91-547, Sec. 5(a), struck out
    introductory text "After one year from the effective date of this
    subchapter" and substituted "interested persons of such registered
    company" for "investment advisers of, affiliated persons of an
    investment adviser of, or officers or employees of, such registered
    company".
      Subsec. (b). Pub. L. 91-547, Sec. 5(b)(1), struck out
    introductory text "After one year from the effective date of this
    subchapter," and substituted "No" for "no".
      Subsec. (b)(2). Pub. L. 91-547, Sec. 5(b)(2), substituted
    "interested" for "affiliated" in two places.
      Subsec. (c). Pub. L. 91-547, Sec. 5(c), struck out introductory
    text "After the effective date of this subchapter", substituted
    "No", ", except that", "had a majority", and "such company" for
    "no", ": Provided, That", "shall have had a majority", and "such
    company", respectively, and inserted reference to employees where
    first appearing.
      Subsec. (d). Pub. L. 91-547, Sec. 5(d), reenacted provisions
    except for substitution of "interested persons" for "affiliated
    persons" in introductory text, deletion of "such investment
    adviser" before "is engaged" in item (2), and substitution of
    "class of securities" for "class of stock" and "unit" for "share"
    in two places in item (8).

                     EFFECTIVE DATE OF 1999 AMENDMENT                 
      Amendment by Pub. L. 106-102 effective 18 months after Nov. 12,
    1999, see section 225 of Pub. L. 106-102, set out as a note under
    section 77c of this title.

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      For effective date of amendment by Pub. L. 91-547, see section 30
    (introductory text and pars. (1) and (2)) of Pub. L. 91-547, set
    out as a note under section 80a-52 of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-FOOTNOTE-
    (!1) So in original.


-End-



-CITE-
    15 USC Sec. 80a-11                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-11. Offers to exchange securities

-STATUTE-
    (a) Approval by Commission for exchanges of securities on basis
      other than relative net asset value
      It shall be unlawful for any registered open-end company or any
    principal underwriter for such a company to make or cause to be
    made an offer to the holder of a security of such company or of any
    other open-end investment company to exchange his security for a
    security in the same or another such company on any basis other
    than the relative net asset values of the respective securities to
    be exchanged, unless the terms of the offer have first been
    submitted to and approved by the Commission or are in accordance
    with such rules and regulations as the Commission may have
    prescribed in respect of such offers which are in effect at the
    time such offer is made. For the purposes of this section, (A) an
    offer by a principal underwriter means an offer communicated to
    holders of securities of a class or series but does not include an
    offer made by such principal underwriter to an individual investor
    in the course of a retail business conducted by such principal
    underwriter, and (B) the net asset value means the net asset value
    which is in effect for the purpose of determining the price at
    which the securities, or class or series of securities involved,
    are offered for sale to the public either (1) at the time of the
    receipt by the offeror of the acceptance of the offer or (2) at
    such later times as is specified in the offer.
    (b) Application of section to offers pursuant to plan of
      reorganization
      The provisions of this section shall not apply to any offer made
    pursuant to any plan of reorganization, which is submitted to and
    requires the approval of the holders of at least a majority of the
    outstanding shares of the class or series to which the security
    owned by the offeree belongs.
    (c) Application of section to specific exchange offers
      The provisions of subsection (a) of this section shall be
    applicable, irrespective of the basis of exchange, (1) to any offer
    of exchange of any security of a registered open-end company for a
    security of a registered unit investment trust or registered face-
    amount certificate company; and (2) to any type of offer of
    exchange of the securities of registered unit investment trusts or
    registered face-amount certificate companies for the securities of
    any other investment company.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 11, 54 Stat. 808; Pub. L. 91-
    547, Sec. 6, Dec. 14, 1970, 84 Stat. 1417.)


-MISC1-
                                AMENDMENTS                            
      1970 - Subsec. (b). Pub. L. 91-547 struck out item (1)
    designation of existing provisions and item (2) provision for
    nonapplication of this section to any offer made pursuant to the
    right of conversion, at the option of the holder, from one class or
    series into another class or series of securities issued by the
    same company upon such terms as are specified in the charter,
    certificate of incorporation, articles of association, by-laws, or
    trust indenture subject to which the securities to be converted
    were issued or are to be issued.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-12                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-12. Functions and activities of investment companies

-STATUTE-
    (a) Purchase of securities on margin; joint trading accounts; short
      sales of securities; exceptions
      It shall be unlawful for any registered investment company, in
    contravention of such rules and regulations or orders as the
    Commission may prescribe as necessary or appropriate in the public
    interest or for the protection of investors - 
        (1) to purchase any security on margin, except such short-term
      credits as are necessary for the clearance of transactions;
        (2) to participate on a joint or a joint and several basis in
      any trading account in securities, except in connection with an
      underwriting in which such registered company is a participant;
      or
        (3) to effect a short sale of any security, except in
      connection with an underwriting in which such registered company
      is a participant.
    (b) Distribution by investment company of securities of which it is
      issuer
      It shall be unlawful for any registered open-end company (other
    than a company complying with the provisions of section 80a-10(d)
    of this title) to act as a distributor of securities of which it is
    the issuer, except through an underwriter, in contravention of such
    rules and regulations as the Commission may prescribe as necessary
    or appropriate in the public interest or for the protection of
    investors.
    (c) Limitations on commitments as underwriter
      It shall be unlawful for any registered diversified company to
    make any commitment as underwriter, if immediately thereafter the
    amount of its outstanding underwriting commitments, plus the value
    of its investments in securities of issuers (other than investment
    companies) of which it owns more than 10 per centum of the
    outstanding voting securities, exceeds 25 per centum of the value
    of its total assets.
    (d) Limitations on acquisition by investment companies of
      securities of other specific businesses
      (1)(A) It shall be unlawful for any registered investment company
    (the "acquiring company") and any company or companies controlled
    by such acquiring company to purchase or otherwise acquire any
    security issued by any other investment company (the "acquired
    company"), and for any investment company (the "acquiring company")
    and any company or companies controlled by such acquiring company
    to purchase or otherwise acquire any security issued by any
    registered investment company (the "acquired company"), if the
    acquiring company and any company or companies controlled by it
    immediately after such purchase or acquisition own in the aggregate
    - 
        (i) more than 3 per centum of the total outstanding voting
      stock of the acquired company;
        (ii) securities issued by the acquired company having an
      aggregate value in excess of 5 per centum of the value of the
      total assets of the acquiring company; or
        (iii) securities issued by the acquired company and all other
      investment companies (other than treasury stock of the acquiring
      company) having an aggregate value in excess of 10 per centum of
      the value of the total assets of the acquiring company.

      (B) It shall be unlawful for any registered open-end investment
    company (the "acquired company"), any principal underwriter
    therefor, or any broker or dealer registered under the Securities
    Exchange Act of 1934 [15 U.S.C. 78a et seq.], knowingly to sell or
    otherwise dispose of any security issued by the acquired company to
    any other investment company (the "acquiring company") or any
    company or companies controlled by the acquiring company, if
    immediately after such sale or disposition - 
        (i) more than 3 per centum of the total outstanding voting
      stock of the acquired company is owned by the acquiring company
      and any company or companies controlled by it; or
        (ii) more than 10 per centum of the total outstanding voting
      stock of the acquired company is owned by the acquiring company
      and other investment companies and companies controlled by them.

      (C) It shall be unlawful for any investment company (the
    "acquiring company") and any company or companies controlled by the
    acquiring company to purchase or otherwise acquire any security
    issued by a registered closed-end investment company, if
    immediately after such purchase or acquisition the acquiring
    company, other investment companies having the same investment
    adviser, and companies controlled by such investment companies, own
    more than 10 per centum of the total outstanding voting stock of
    such closed-end company.
      (D) The provisions of this paragraph shall not apply to a
    security received as a dividend or as a result of an offer of
    exchange approved pursuant to section 80a-11 of this title or of a
    plan of reorganization of any company (other than a plan devised
    for the purpose of evading the foregoing provisions).
      (E) The provisions of this paragraph shall not apply to a
    security (or securities) purchased or acquired by an investment
    company if - 
        (i) the depositor of, or principal underwriter for, such
      investment company is a broker or dealer registered under the
      Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], or a
      person controlled by such a broker or dealer;
        (ii) such security is the only investment security held by such
      investment company (or such securities are the only investment
      securities held by such investment company, if such investment
      company is a registered unit investment trust that issues two or
      more classes or series of securities, each of which provides for
      the accumulation of shares of a different investment company);
      and
        (iii) the purchase or acquisition is made pursuant to an
      arrangement with the issuer of, or principal underwriter for the
      issuer of, the security whereby such investment company is
      obligated - 
          (aa) either to seek instructions from its security holders
        with regard to the voting of all proxies with respect to such
        security and to vote such proxies only in accordance with such
        instructions, or to vote the shares held by it in the same
        proportion as the vote of all other holders of such security,
        and
          (bb) in the event that such investment company is not a
        registered investment company, to refrain substituting such
        security unless the Commission shall have approved such
        substitution in the manner provided in section 80a-26 of this
        title.

      (F) The provisions of this paragraph shall not apply to
    securities purchased or otherwise acquired by a registered
    investment company if - 
        (i) immediately after such purchase or acquisition not more
      than 3 per centum of the total outstanding stock of such issuer
      is owned by such registered investment company and all affiliated
      persons of such registered investment company; and
        (ii) such registered investment company has not offered or sold
      after January 1, 1971, and is not proposing to offer or sell any
      security issued by it through a principal underwriter or
      otherwise at a public offering price which includes a sales load
      of more than 1 1/2  per centum.

    No issuer of any security purchased or acquired by a registered
    investment company pursuant to this subparagraph shall be obligated
    to redeem such security in an amount exceeding 1 per centum of such
    issuer's total outstanding securities during any period of less
    than thirty days. Such investment company shall exercise voting
    rights by proxy or otherwise with respect to any security purchased
    or acquired pursuant to this subparagraph in the manner prescribed
    by subparagraph (E) of this subsection.
      (G)(i) This paragraph does not apply to securities of a
    registered open-end investment company or a registered unit
    investment trust (hereafter in this subparagraph referred to as the
    "acquired company") purchased or otherwise acquired by a registered
    open-end investment company or a registered unit investment trust
    (hereafter in this subparagraph referred to as the "acquiring
    company") if - 
        (I) the acquired company and the acquiring company are part of
      the same group of investment companies;
        (II) the securities of the acquired company, securities of
      other registered open-end investment companies and registered
      unit investment trusts that are part of the same group of
      investment companies, Government securities, and short-term paper
      are the only investments held by the acquiring company;
        (III) with respect to - 
          (aa) securities of the acquired company, the acquiring
        company does not pay and is not assessed any charges or fees
        for distribution-related activities, unless the acquiring
        company does not charge a sales load or other fees or charges
        for distribution-related activities; or
          (bb) securities of the acquiring company, any sales loads and
        other distribution-related fees charged, when aggregated with
        any sales load and distribution-related fees paid by the
        acquiring company with respect to securities of the acquired
        company, are not excessive under rules adopted pursuant to
        section 80a-22(b) of this title or section 80a-22(c) of this
        title by a securities association registered under section 15A
        of the Securities Exchange Act of 1934 [15 U.S.C. 78o-3], or
        the Commission;

        (IV) the acquired company has a policy that prohibits it from
      acquiring any securities of registered open-end investment
      companies or registered unit investment trusts in reliance on
      this subparagraph or subparagraph (F); and
        (V) such acquisition is not in contravention of such rules and
      regulations as the Commission may from time to time prescribe
      with respect to acquisitions in accordance with this
      subparagraph, as necessary and appropriate for the protection of
      investors.

      (ii) For purposes of this subparagraph, the term "group of
    investment companies" means any 2 or more registered investment
    companies that hold themselves out to investors as related
    companies for purposes of investment and investor services.
      (H) For the purposes of this paragraph, the value of an
    investment company's total assets shall be computed as of the time
    of a purchase or acquisition or as closely thereto as is reasonably
    possible.
      (I) In any action brought to enforce the provisions of this
    paragraph, the Commission may join as a party the issuer of any
    security purchased or otherwise acquired in violation of this
    paragraph, and the court may issue any order with respect to such
    issuer as may be necessary or appropriate for the enforcement of
    the provisions of this paragraph.
      (J) The Commission, by rule or regulation, upon its own motion or
    by order upon application, may conditionally or unconditionally
    exempt any person, security, or transaction, or any class or
    classes of persons, securities, or transactions from any provision
    of this subsection, if and to the extent that such exemption is
    consistent with the public interest and the protection of
    investors.
      (2) It shall be unlawful for any registered investment company
    and any company or companies controlled by such registered
    investment company to purchase or otherwise acquire any security
    (except a security received as a dividend or as a result of a plan
    of reorganization of any company, other than a plan devised for the
    purpose of evading the provisions of this paragraph) issued by any
    insurance company of which such registered investment company and
    any company or companies controlled by such registered company do
    not, at the time of such purchase or acquisition, own in the
    aggregate at least 25 per centum of the total outstanding voting
    stock, if such registered company and any company or companies
    controlled by it own in the aggregate, or as a result of such
    purchase or acquisition will own in the aggregate, more than 10 per
    centum of the total outstanding voting stock of such insurance
    company.
      (3) It shall be unlawful for any registered investment company
    and any company or companies controlled by such registered
    investment company to purchase or otherwise acquire any security
    issued by or any other interest in the business of any person who
    is a broker, a dealer, is engaged in the business of underwriting,
    or is either an investment adviser of an investment company or an
    investment adviser registered under subchapter II of this chapter,
    unless (A) such person is a corporation all the outstanding
    securities of which (other than short-term paper, securities
    representing bank loans, and directors' qualifying shares) are, or
    after such acquisition will be, owned by one or more registered
    investment companies; and (B) such person is primarily engaged in
    the business of underwriting and distributing securities issued by
    other persons, selling securities to customers, or any one or more
    of such or related activities, and the gross income of such person
    normally is derived principally from such business or related
    activities.
    (e) Acquisition of securities issued by corporations in business of
      underwriting, furnishing capital to industry, etc.
      Notwithstanding any provisions of this subchapter, any registered
    investment company may hereafter purchase or otherwise acquire any
    security issued by any one corporation engaged or proposing to
    engage in the business of underwriting, furnishing capital to
    industry, financing promotional enterprises, purchasing securities
    of issuers for which no ready market is in existence, and
    reorganizing companies or similar activities; provided - 
        (1) That the securities issued by such corporation (other than
      short-term paper and securities representing bank loans) shall
      consist solely of one class of common stock and shall have been
      originally issued or sold for investment to registered investment
      companies only;
        (2) That the aggregate cost of the securities of such
      corporation purchased by such registered investment company does
      not exceed 5 per centum of the value of the total assets of such
      registered company at the time of any purchase or acquisition of
      such securities; and
        (3) That the aggregate paid-in capital and surplus of such
      corporation does not exceed $100,000,000.

    For the purpose of paragraph (1) of section 80a-5(b) of this title
    any investment in any such corporation shall be deemed to be an
    investment in an investment company.
    (f) Organization and ownership by one registered face-amount
      certificate company of all or part of capital stock of not more
      than two other face-amount certificate companies; limitations
      Notwithstanding any provisions of this chapter, any registered
    face-amount certificate company may organize not more than two face-
    amount certificate companies and acquire and own all or any part
    of the capital stock thereof only if such stock is acquired and
    held for investment: Provided, That the aggregate cost to such
    registered company of all such stock so acquired shall not exceed
    six times the amount of the minimum capital stock requirement
    provided in subdivision (1) of subsection (a) of section 80a-28 of
    this title for a face-amount company organized on or after March
    15, 1940: And provided further, That the aggregate cost to such
    registered company of all such capital stock issued by face-amount
    certificate companies organized or otherwise created under laws
    other than the laws of the United States or any State thereof shall
    not exceed twice the amount of the minimum capital stock
    requirement provided in subdivision (1) of subsection (a) of said
    section 80a-28 for a company organized on or after March 15, 1940.
    Nothing contained in this subsection shall be deemed to prevent the
    sale of any such stock to any other person if the original purchase
    was made by such registered face-amount certificate company in good
    faith for investment and not for resale.
    (g) Exceptions to limitation on ownership by investment company of
      securities of insurance company
      Notwithstanding the provisions of this section any registered
    investment company and any company or companies controlled by such
    registered company may purchase or otherwise acquire from another
    investment company or any company or companies controlled by such
    registered company more than 10 per centum of the total outstanding
    voting stock of any insurance company owned by any such company or
    companies, or may acquire the securities of any insurance company
    if the Commission by order determines that such acquisition is in
    the public interest because the financial condition of such
    insurance company will be improved as a result of such acquisition
    or any plan contemplated as a result thereof. This section shall
    not be deemed to prohibit the promotion of a new insurance company
    or the acquisition of the securities of any newly created insurance
    company by a registered investment company, alone or with other
    persons. Nothing contained in this section shall in any way affect
    or derogate from the powers of any insurance commissioner or
    similar official or agency of the United States or any State, or to
    affect the right under State law of any insurance company to
    acquire securities of any other insurance company or insurance
    companies.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 12, 54 Stat. 808; Pub. L. 91-
    547, Sec. 7, Dec. 14, 1970, 84 Stat. 1417; Pub. L. 100-181, title
    VI, Sec. 610, Dec. 4, 1987, 101 Stat. 1261; Pub. L. 104-290, title
    II, Sec. 202, Oct. 11, 1996, 110 Stat. 3426; Pub. L. 105-353, title
    III, Sec. 301(c)(3), Nov. 3, 1998, 112 Stat. 3236.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Exchange Act of 1934, referred to in subsec.
    (d)(1)(B), (E)(i), is act June 6, 1934, ch. 404, 48 Stat. 881, as
    amended, which is classified generally to 2B (Sec. 78a et seq.) of
    this title. For complete classification of this Act to the Code,
    see section 78a of this title and Tables.


-MISC1-
                                AMENDMENTS                            
      1998 - Subsec. (d)(1)(G)(i)(III)(bb). Pub. L. 105-353 substituted
    "the acquired company" for "the acquired fund".
      1996 - Subsec. (d)(1)(D), (E). Pub. L. 104-290, Sec. 202(3),
    substituted "this paragraph" for "this paragraph (1)".
      Subsec. (d)(1)(E)(iii). Pub. L. 104-290, Sec. 202(1)(A), struck
    out "in the event such investment company is not a registered
    investment company," after "(iii)".
      Subsec. (d)(1)(E)(iii)(bb). Pub. L. 104-290, Sec. 202(1)(B),
    inserted "in the event that such investment company is not a
    registered investment company," after "(bb)".
      Subsec. (d)(1)(F). Pub. L. 104-290, Sec. 202(3), substituted
    "this paragraph" for "this paragraph (1)".
      Subsec. (d)(1)(G). Pub. L. 104-290, Sec. 202(2), (4), added
    subpar. (G). Former subpar. (G) redesignated (H).
      Subsec. (d)(1)(H). Pub. L. 104-290, Sec. 202(3), substituted
    "this paragraph" for "this paragraph (1)".
      Pub. L. 104-290, Sec. 202(2), redesignated subpar. (G) as (H).
    Former subpar. (H) redesignated (I).
      Subsec. (d)(1)(I). Pub. L. 104-290, Sec. 202(3), substituted
    "this paragraph" for "this paragraph (1)" wherever appearing.
      Pub. L. 104-290, Sec. 202(2), redesignated subpar. (H) as (I).
      Subsec. (d)(1)(J). Pub. L. 104-290, Sec. 202(5), added subpar.
    (J).
      1987 - Subsec. (d)(1)(A)(iii). Pub. L. 100-181, Sec. 610(1),
    substituted "treasury" for "Treasury".
      Subsec. (d)(1)(G). Pub. L. 100-181, Sec. 610(2), substituted "is
    reasonably possible" for "it reasonably possible".
      Subsec. (f). Pub. L. 100-181, Sec. 610(3), substituted "thereof
    only" for "only thereof".
      1970 - Subsec. (d)(1). Pub. L. 91-547 substituted provisions
    designated as subpars. (A) to (C) and (E) to (H) for former
    introductory provisions reading "It shall be unlawful for any
    registered investment company and any company or companies
    controlled by such registered investment company to purchase or
    otherwise acquire after August 22, 1940, any security issued by or
    any other interest in the business of - " and subpar. (1) reading
    "any other investment company of which such registered investment
    company and company or companies controlled by such registered
    company shall not at the time of such purchase or acquisition own
    in the aggregate at least 25 per centum of the total outstanding
    voting stock, if such registered investment company and any company
    or companies controlled by it own in the aggregate or as a result
    of such purchase or acquisition will own in the aggregate more than
    5 per centum of the total outstanding voting stock of such other
    investment company if the policy of such other investment company
    is the concentration of investments in a particular industry or
    group of industries, or more than 3 per centum of the total
    outstanding voting stock of such other investment company if the
    policy of such other investment company is not the concentration of
    investments in a particular industry or group of industries, except
    and cl. (B) exception reading "a security purchased with the
    proceeds of payments on periodic payment plan certificates,
    pursuant to the terms of the trust indenture under which such
    certificates are issued", cl. (A) of such subpar. (1) being
    incorporated in subpar. (D) of this par. (1).
      Subsec. (d)(2). Pub. L. 91-547 incorporated existing introductory
    text and subpar. (2) provisions in provisions redesignated as par.
    (2) and struck out "after August 22, 1940," after "purchase or
    otherwise acquire".
      Subsec. (d)(3). Pub. L. 91-547 incorporated existing introductory
    text and subpar. (3) provisions in provisions redesignated as par.
    (3) and struck out "after August 22, 1940," after "purchase or
    otherwise acquire".

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-13                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-13. Changes in investment policy

-STATUTE-
      (a) No registered investment company shall, unless authorized by
    the vote of a majority of its outstanding voting securities - 
        (1) change its subclassification as defined in section 80a-
      5(a)(1) and (2) of this title or its subclassification from a
      diversified to a nondiversified company;
        (2) borrow money, issue senior securities, underwrite
      securities issued by other persons, purchase or sell real estate
      or commodities or make loans to other persons, except in each
      case in accordance with the recitals of policy contained in its
      registration statement in respect thereto;
        (3) deviate from its policy in respect of concentration of
      investments in any particular industry or group of industries as
      recited in its registration statement, deviate from any
      investment policy which is changeable only if authorized by
      shareholder vote, or deviate from any policy recited in its
      registration statement pursuant to section 80a-8(b)(3) of this
      title; or
        (4) change the nature of its business so as to cease to be an
      investment company.

      (b) In the case of a common-law trust of the character described
    in section 80a-16(c) of this title, either written approval by
    holders of a majority of the outstanding shares of beneficial
    interest or the vote of a majority of such outstanding shares cast
    in person or by proxy at a meeting called for the purpose shall for
    the purposes of subsection (a) of this section be deemed the
    equivalent of the vote of a majority of the outstanding voting
    securities, and the provisions of paragraph (42) of section 80a-
    2(a) of this title as to a majority shall be applicable to the
    vote cast at such a meeting.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 13, 54 Stat. 811; Pub. L. 91-
    547, Secs. 2(b), 3(d), Dec. 14, 1970, 84 Stat. 1414, 1415; Pub. L.
    94-29, Sec. 28(4), June 4, 1975, 89 Stat. 165.)


-MISC1-
                                AMENDMENTS                            
      1975 - Subsec. (b). Pub. L. 94-29 substituted "section 80a-16(c)
    of this title" for "subsection (b) of section 80a-16 of this
    title".
      1970 - Subsec. (a)(3). Pub. L. 91-547, Sec. 3(d), prohibited
    deviation from any investment policy which is changeable only if
    authorized by shareholder vote, substituted "section 8(b)(3)" for
    "section 8(b)(2)", and in the latter deviation provision struck out
    "fundamental" before "policy".
      Subsec. (b). Pub. L. 91-547, Sec. 2(b), substituted reference to
    "paragraph (42)" for "paragraph (40)".

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.

-End-



-CITE-
    15 USC Sec. 80a-14                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-14. Size of investment companies

-STATUTE-
    (a) Public offerings
      No registered investment company organized after August 22, 1940,
    and no principal underwriter for such a company, shall make a
    public offering of securities of which such company is the issuer,
    unless - 
        (1) such company has a net worth of at least $100,000;
        (2) such company has previously made a public offering of its
      securities, and at the time of such offering had a net worth of
      at least $100,000; or
        (3) provision is made in connection with and as a condition of
      the registration of such securities under the Securities Act of
      1933 [15 U.S.C. 77a et seq.] which in the opinion of the
      Commission adequately insures (A) that after the effective date
      of such registration statement such company will not issue any
      security or receive any proceeds of any subscription for any
      security until firm agreements have been made with such company
      by not more than twenty-five responsible persons to purchase from
      it securities to be issued by it for an aggregate net amount
      which plus the then net worth of the company, if any, will equal
      at least $100,000; (B) that said aggregate net amount will be
      paid in to such company before any subscriptions for such
      securities will be accepted from any persons in excess of twenty-
      five; (C) that arrangements will be made whereby any proceeds so
      paid in, as well as any sales load, will be refunded to any
      subscriber on demand without any deduction, in the event that the
      net proceeds so received by the company do not result in the
      company having a net worth of at least $100,000 within ninety
      days after such registration statement becomes effective.

    At any time after the occurrence of the event specified in clause
    (C) of paragraph (3) of this subsection the Commission may issue a
    stop order suspending the effectiveness of the registration
    statement of such securities under the Securities Act of 1933 [15
    U.S.C. 77a et seq.] and may suspend or revoke the registration of
    such company under this subchapter.
    (b) Study on effects of size
      The Commission is authorized, at such times as it deems that any
    substantial further increase in size of investment companies
    creates any problem involving the protection of investors or the
    public interest, to make a study and investigation of the effects
    of size on the investment policy of investment companies and on
    security markets, on concentration of control of wealth and
    industry, and on companies in which investment companies are
    interested, and from time to time to report the results of its
    studies and investigations and its recommendations to the Congress.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 14, 54 Stat. 811.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Act of 1933, referred to in subsec. (a), is act
    May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is
    classified generally to subchapter I (Sec. 77a et seq.) of chapter
    2A of this title. For complete classification of this Act to the
    Code, see section 77a of this title and Tables.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-15                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-15. Contracts of advisers and underwriters

-STATUTE-
    (a) Written contract to serve or act as investment adviser;
      contents
      It shall be unlawful for any person to serve or act as investment
    adviser of a registered investment company, except pursuant to a
    written contract, which contract, whether with such registered
    company or with an investment adviser of such registered company,
    has been approved by the vote of a majority of the outstanding
    voting securities of such registered company, and - 
        (1) precisely describes all compensation to be paid thereunder;
        (2) shall continue in effect for a period more than two years
      from the date of its execution, only so long as such continuance
      is specifically approved at least annually by the board of
      directors or by vote of a majority of the outstanding voting
      securities of such company;
        (3) provides, in substance, that it may be terminated at any
      time, without the payment of any penalty, by the board of
      directors of such registered company or by vote of a majority of
      the outstanding voting securities of such company on not more
      than sixty days' written notice to the investment adviser; and
        (4) provides, in substance, for its automatic termination in
      the event of its assignment.
    (b) Written contract with company for sale by principal underwriter
      of security of which company is issuer; contents
      It shall be unlawful for any principal underwriter for a
    registered open-end company to offer for sale, sell, or deliver
    after sale any security of which such company is the issuer, except
    pursuant to a written contract with such company, which contract - 
        (1) shall continue in effect for a period more than two years
      from the date of its execution, only so long as such continuance
      is specifically approved at least annually by the board of
      directors or by vote of a majority of the outstanding voting
      securities of such company; and
        (2) provides, in substance, for its automatic termination in
      the event of its assignment.
    (c) Approval of contract to undertake service as investment adviser
      or principal underwriter by majority of noninterested directors
      In addition to the requirements of subsections (a) and (b) of
    this section, it shall be unlawful for any registered investment
    company having a board of directors to enter into, renew, or
    perform any contract or agreement, written or oral, whereby a
    person undertakes regularly to serve or act as investment adviser
    of or principal underwriter for such company, unless the terms of
    such contract or agreement and any renewal thereof have been
    approved by the vote of a majority of directors, who are not
    parties to such contract or agreement or interested persons of any
    such party, cast in person at a meeting called for the purpose of
    voting on such approval. It shall be the duty of the directors of a
    registered investment company to request and evaluate, and the duty
    of an investment adviser to such company to furnish, such
    information as may reasonably be necessary to evaluate the terms of
    any contract whereby a person undertakes regularly to serve or act
    as investment adviser of such company. It shall be unlawful for the
    directors of a registered investment company, in connection with
    their evaluation of the terms of any contract whereby a person
    undertakes regularly to serve or act as investment adviser of such
    company, to take into account the purchase price or other
    consideration any person may have paid in connection with a
    transaction of the type referred to in paragraph (1), (3), or (4)
    of subsection (f) of this section.
    (d) Equivalent of vote of majority of outstanding voting securities
      in case of common-law trust
      In the case of a common-law trust of the character described in
    section 80a-16(c) of this title, either written approval by holders
    of a majority of the outstanding shares of beneficial interest or
    the vote of a majority of such outstanding shares cast in person or
    by proxy at a meeting called for the purpose shall for the purposes
    of this section be deemed the equivalent of the vote of a majority
    of the outstanding voting securities, and the provisions of
    paragraph (42) of section 80a-2(a) of this title as to a majority
    shall be applicable to the vote cast at such a meeting.
    (e) Exemption of advisory boards or members from provisions of this
      section
      Nothing contained in this section shall be deemed to require or
    contemplate any action by an advisory board of any registered
    company or by any of the members of such a board.
    (f) Receipt of benefits by investment adviser from sale of
      securities or other interest in such investment adviser resulting
      in assignment of investment advisory contract
      (1) An investment adviser, or a corporate trustee performing the
    functions of an investment adviser, of a registered investment
    company or an affiliated person of such investment adviser or
    corporate trustee may receive any amount or benefit in connection
    with a sale of securities of, or a sale of any other interest in,
    such investment adviser or corporate trustee which results in an
    assignment of an investment advisory contract with such company or
    the change in control of or identity of such corporate trustee, if -
     
        (A) for a period of three years after the time of such action,
      at least 75 per centum of the members of the board of directors
      of such registered company or such corporate trustee (or
      successor thereto, by reorganization or otherwise) are not (i)
      interested persons of the investment adviser of such company or
      such corporate trustee, or (ii) interested persons of the
      predecessor investment adviser or such corporate trustee; and
        (B) there is not imposed an unfair burden on such company as a
      result of such transaction or any express or implied terms,
      conditions, or understandings applicable thereto.

      (2)(A) For the purpose of paragraph (1)(A) of this subsection,
    interested persons of a corporate trustee shall be determined in
    accordance with section 80a-2(a)(19)(B) of this title: Provided,
    That no person shall be deemed to be an interested person of a
    corporate trustee solely by reason of (i) his being a member of its
    board of directors or advisory board or (ii) his membership in the
    immediate family of any person specified in clause (i) of this
    subparagraph.
      (B) For the purpose of paragraph (1)(B) of this subsection, an
    unfair burden on a registered investment company includes any
    arrangement, during the two-year period after the date on which any
    such transaction occurs, whereby the investment adviser or
    corporate trustee or predecessor or successor investment advisers
    or corporate trustee or any interested person of any such adviser
    or any such corporate trustee receives or is entitled to receive
    any compensation directly or indirectly (i) from any person in
    connection with the purchase or sale of securities or other
    property to, from, or on behalf of such company, other than bona
    fide ordinary compensation as principal underwriter for such
    company, or (ii) from such company or its security holders for
    other than bona fide investment advisory or other services.
      (3) If - 
        (A) an assignment of an investment advisory contract with a
      registered investment company results in a successor investment
      adviser to such company, or if there is a change in control of or
      identity of a corporate trustee of a registered investment
      company, and such adviser or trustee is then an investment
      adviser or corporate trustee with respect to other assets
      substantially greater in amount than the amount of assets of such
      company, or
        (B) as a result of a merger of, or a sale of substantially all
      the assets by, a registered investment company with or to another
      registered investment company with assets substantially greater
      in amount, a transaction occurs which would be subject to
      paragraph (1)(A) of this subsection,

    such discrepancy in size of assets shall be considered by the
    Commission in determining whether or to what extent an application
    under section 80a-6(c) of this title for exemption from the
    provisions of paragraph (1)(A) of this subsection should be
    granted.
      (4) Paragraph (1)(A) of this subsection shall not apply to a
    transaction in which a controlling block of outstanding voting
    securities of an investment adviser to a registered investment
    company or of a corporate trustee performing the functions of an
    investment adviser to a registered investment company is - 
        (A) distributed to the public and in which there is, in fact,
      no change in the identity of the persons who control such
      investment adviser or corporate trustee, or
        (B) transferred to the investment adviser or the corporate
      trustee, or an affiliated person or persons of such investment
      adviser or corporate trustee, or is transferred from the
      investment adviser or corporate trustee to an affiliated person
      or persons of the investment adviser or corporate trustee:
      Provided, That (i) each transferee (other than such adviser or
      trustee) is a natural person and (ii) the transferees (other than
      such adviser or trustee) owned in the aggregate more than 25 per
      centum of such voting securities for a period of at least six
      months prior to such transfer.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 15, 54 Stat. 812; Pub. L. 91-
    547, Sec. 8, Dec. 14, 1970, 84 Stat. 1419; Pub. L. 94-29, Sec.
    28(1), (2), (4), June 4, 1975, 89 Stat. 164, 165; Pub. L. 100-181,
    title VI, Sec. 611, Dec. 4, 1987, 101 Stat. 1261.)


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (d). Pub. L. 100-181, Sec. 611(1), substituted
    "paragraph (42)" for "paragraph (40)".
      Subsec. (f)(3)(B). Pub. L. 100-181, Sec. 611(2), substituted a
    comma for the period at end.
      1975 - Subsec. (c). Pub. L. 94-29, Sec. 28(2), inserted
    provisions making it unlawful for the directors of a registered
    investment company, in connection with their evaluation of the
    terms of any contract whereby a person undertakes regularly to
    serve or act as investment adviser of such company, to take into
    account the purchase price or other consideration any person may
    have paid in connection with a transaction of the type referred to
    in paragraph (1), (3), or (4) of subsec. (f).
      Subsec. (d). Pub. L. 94-29, Sec. 28(4), substituted "section 80a-
    16(c) of this title" for "subsection (b) of section 80a-16 of this
    title".
      Subsec. (f). Pub. L. 94-29, Sec. 28(1), added subsec. (f).
      1970 - Subsec. (a). Pub. L. 91-547, Sec. 8(a), struck out
    introductory phrase "After one year from the effective date of this
    subchapter" and "unless in effect prior to March 15, 1940," before
    "has been approved", and "by the investment adviser" after
    "assignment" in item (4), and substituted "It" for "it".
      Subsec. (b). Pub. L. 91-547, Sec. 8(b), struck out introductory
    phrase "After one year from the effective date of this subchapter,"
    and concluding phrase ", unless in effect prior to March 15, 1940"
    after "which contract" before item (1), struck out "by such
    underwriter" after "assignment" in item (2), and substituted "It"
    for "it".
      Subsec. (c). Pub. L. 91-547, Sec. 8(c), made it the duty of the
    directors of a registered investment company to request and
    evaluate, and the duty of an investment adviser to such company to
    furnish, such information as may reasonably be necessary to
    evaluate the terms of any contract whereby a person undertakes
    regularly to serve or act as investment adviser of such company,
    substituted "interested persons" for "affiliated persons", and
    struck out "except a written agreement which was in effect prior to
    March 15, 1940," after "written or oral,", item (1) designation
    following "have been approved" and item "or (2) by the vote of a
    majority of the outstanding voting securities of such company"
    after "any such party,", and inserted "the vote" in phrase "by the
    vote of a majority", and provision respecting voting "cast in
    person at a meeting called for the purpose of voting on such
    approval".
      Subsecs. (d) to (f). Pub. L. 91-547, Sec. 8(d), redesignated
    subsecs. (e) and (f) as (d) and (e), respectively, and struck out
    former subsec. (d) which prohibited any person after March 15,
    1945, from acting as investment adviser to, or principal
    underwriter for, any registered investment company pursuant to a
    written contract in effect prior to March 15, 1940, unless such
    contract was renewed prior to March 15, 1945, in such form as to
    make it comply with subsecs. (a) or (b).

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective on expiration of one year
    after Dec. 14, 1970, see section 30(1) of Pub. L. 91-547, set out
    as a note under section 80a-52 of this title.

-End-



-CITE-
    15 USC Sec. 80a-16                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-16. Board of directors

-STATUTE-
    (a) Election of directors
      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; except that vacancies
    occurring between such meetings may be filled in any otherwise
    legal manner if immediately after filling any such vacancy at least
    two-thirds of the directors then holding office shall have been
    elected to such office by the holders of the outstanding voting
    securities of the company at such an annual or special meeting. In
    the event that at any time less than a majority of the directors of
    such company holding office at that time were so elected by the
    holders of the outstanding voting securities, the board of
    directors or proper officer of such company shall forthwith cause
    to be held as promptly as possible and in any event within sixty
    days a meeting of such holders for the purpose of electing
    directors to fill any existing vacancies in the board of directors
    unless the Commission shall by order extend such period. The
    foregoing provisions of this subsection shall not apply to members
    of an advisory board.
      Nothing herein shall, however, preclude a registered investment
    company from dividing its directors into classes if its charter,
    certificate of incorporation, articles of association, by-laws,
    trust indenture, or other instrument or the law under which it is
    organized, so provides and prescribes the tenure of office of the
    several classes: Provided, That no class shall be elected for a
    shorter period than one year or for a longer period than five years
    and the term of office of at least one class shall expire each
    year.
    (b) Term vacancies
      Any vacancy on the board of directors of a registered investment
    company which occurs in connection with compliance with section 80a-
    15(f)(1)(A) of this title and which must be filled by a person who
    is not an interested person of either party to a transaction
    subject to section 80a-15(f)(1)(A) of this title shall be filled
    only by a person (1) who has been selected and proposed for
    election by a majority of the directors of such company who are not
    such interested persons, and (2) who has been elected by the
    holders of the outstanding voting securities of such company,
    except that in the case of the death, disqualification, or bona
    fide resignation of a director selected and elected pursuant to
    clauses (1) and (2) of this subsection (b), the vacancy created
    thereby may be filled as provided in subsection (a) of this
    section.
    (c) Trustees of common-law trusts
      The foregoing provisions of this section shall not apply to a
    common-law trust existing on August 22, 1940, under an indenture of
    trust which does not provide for the election of trustees by the
    shareholders. No natural person shall serve as trustee of such a
    trust, which is registered as an investment company, after the
    holders of record of not less than two-thirds of the outstanding
    shares of beneficial interests in such trust have declared that he
    be removed from that office either by declaration in writing filed
    with the custodian of the securities of the trust or by votes cast
    in person or by proxy at a meeting called for the purpose.
    Solicitation of such a declaration shall be deemed a solicitation
    of a proxy within the meaning of section 80a-20(a) of this title.
      The trustees of such a trust shall promptly call a meeting of
    shareholders for the purpose of voting upon the question of removal
    of any such trustee or trustees when requested in writing so to do
    by the record holders of not less than 10 per centum of the
    outstanding shares.
      Whenever ten or more shareholders of record who have been such
    for at least six months preceding the date of application, and who
    hold in the aggregate either shares having a net asset value of at
    least $25,000 or at least 1 per centum of the outstanding shares,
    whichever is less, shall apply to the trustees in writing, stating
    that they wish to communicate with other shareholders with a view
    to obtaining signatures to a request for a meeting pursuant to this
    subsection and accompanied by a form of communication and request
    which they wish to transmit, the trustees shall within five
    business days after receipt of such application either - 
        (1) afford to such applicants access to a list of the names and
      addresses of all shareholders as recorded on the books of the
      trust; or
        (2) inform such applicants as to the approximate number of
      shareholders of record, and the approximate cost of mailing to
      them the proposed communication and form of request.

      If the trustees elect to follow the course specified in paragraph
    (2) of this subsection the trustees, upon the written request of
    such applicants, accompanied by a tender of the material to be
    mailed and of the reasonable expenses of mailing, shall, with
    reasonable promptness, mail such material to all shareholders of
    record at their addresses as recorded on the books, unless within
    five business days after such tender the trustees shall mail to
    such applicants and file with the Commission, together with a copy
    of the material to be mailed, a written statement signed by at
    least a majority of the trustees to the effect that in their
    opinion either such material contains untrue statements of fact or
    omits to state facts necessary to make the statements contained
    therein not misleading, or would be in violation of applicable law,
    and specifying the basis of such opinion.
      After opportunity for hearing upon the objections specified in
    the written statement so filed, the Commission may, and if demanded
    by the trustees or by such applicants shall, enter an order either
    sustaining one or more of such objections or refusing to sustain
    any of them. If the Commission shall enter an order refusing to
    sustain any of such objections, or if, after the entry of an order
    sustaining one or more of such objections, the Commission shall
    find, after notice and opportunity for hearing, that all objections
    so sustained have been met, and shall enter an order so declaring,
    the trustees shall mail copies of such material to all shareholders
    with reasonable promptness after the entry of such order and the
    renewal of such tender.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 16, 54 Stat. 813; Pub. L. 94-
    29, Sec. 28(3), June 4, 1975, 89 Stat. 165.)


-MISC1-
                                AMENDMENTS                            
      1975 - Subsecs. (b), (c). Pub. L. 94-29 added subsec. (b),
    redesignated former subsec. (b) as (c), and substituted "The
    foregoing provisions of this section" for "The provisions of
    subsection (a) of this section" in first sentence.

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-17                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-17. Transactions of certain affiliated persons and
      underwriters

-STATUTE-
    (a) Prohibited transactions
      It shall be unlawful for any affiliated person or promoter of or
    principal underwriter for a registered investment company (other
    than a company of the character described in section 80a-
    12(d)(3)(A) and (B) of this title), or any affiliated person of
    such a person, promoter, or principal underwriter, acting as
    principal - 
        (1) knowingly to sell any security or other property to such
      registered company or to any company controlled by such
      registered company, unless such sale involves solely (A)
      securities of which the buyer is the issuer, (B) securities of
      which the seller is the issuer and which are part of a general
      offering to the holders of a class of its securities, or (C)
      securities deposited with the trustee of a unit investment trust
      or periodic payment plan by the depositor thereof;
        (2) knowingly to purchase from such registered company, or from
      any company controlled by such registered company, any security
      or other property (except securities of which the seller is the
      issuer);
        (3) to borrow money or other property from such registered
      company or from any company controlled by such registered company
      (unless the borrower is controlled by the lender) except as
      permitted in section 80a-21(b) of this title; or
        (4) to loan money or other property to such registered company,
      or to any company controlled by such registered company, in
      contravention of such rules, regulations, or orders as the
      Commission may, after consultation with and taking into
      consideration the views of the Federal banking agencies (as
      defined in section 1813 of title 12), prescribe or issue
      consistent with the protection of investors.
    (b) Application for exemption of proposed transaction from certain
      restrictions
      Notwithstanding subsection (a) of this section, any person may
    file with the Commission an application for an order exempting a
    proposed transaction of the applicant from one or more provisions
    of said subsection. The Commission shall grant such application and
    issue such order of exemption if evidence establishes that - 
        (1) the terms of the proposed transaction, including the
      consideration to be paid or received, are reasonable and fair and
      do not involve overreaching on the part of any person concerned;
        (2) the proposed transaction is consistent with the policy of
      each registered investment company concerned, as recited in its
      registration statement and reports filed under this subchapter;
      and
        (3) the proposed transaction is consistent with the general
      purposes of this subchapter.
    (c) Sale or purchase of merchandise from any company or furnishing
      of services incident to lessor-lessee relationship
      Notwithstanding subsection (a) of this section, a person may, in
    the ordinary course of business, sell to or purchase from any
    company merchandise or may enter into a lessor-lessee relationship
    with any person and furnish the services incident thereto.
    (d) Joint or joint and several participation with company in
      transactions
      It shall be unlawful for any affiliated person of or principal
    underwriter for a registered investment company (other than a
    company of the character described in section 80a-12(d)(3) (A) and
    (B) of this title), or any affiliated person of such a person or
    principal underwriter, acting as principal to effect any
    transaction in which such registered company, or a company
    controlled by such registered company, is a joint or a joint and
    several participant with such person, principal underwriter, or
    affiliated person, in contravention of such rules and regulations
    as the Commission may prescribe for the purpose of limiting or
    preventing participation by such registered or controlled company
    on a basis different from or less advantageous than that of such
    other participant. Nothing contained in this subsection shall be
    deemed to preclude any affiliated person from acting as manager of
    any underwriting syndicate or other group in which such registered
    or controlled company is a participant and receiving compensation
    therefor.
    (e) Acceptance of compensation, commissions, fees, etc.
      It shall be unlawful for any affiliated person of a registered
    investment company, or any affiliated person of such person - 
        (1) acting as agent, to accept from any source any compensation
      (other than a regular salary or wages from such registered
      company) for the purchase or sale of any property to or for such
      registered company or any controlled company thereof, except in
      the course of such person's business as an underwriter or broker;
      or
        (2) acting as broker, in connection with the sale of securities
      to or by such registered company or any controlled company
      thereof, to receive from any source a commission, fee, or other
      remuneration for effecting such transaction which exceeds (A) the
      usual and customary broker's commission if the sale is effected
      on a securities exchange, or (B) 2 per centum of the sales price
      if the sale is effected in connection with a secondary
      distribution of such securities, or (C) 1 per centum of the
      purchase or sale price of such securities if the sale is
      otherwise effected unless the Commission shall, by rules and
      regulations or order in the public interest and consistent with
      the protection of investors, permit a larger commission.
    (f) Custody of securities
      (1) Every registered management company shall place and maintain
    its securities and similar investments in the custody of (A) a bank
    or banks having the qualifications prescribed in paragraph (1) of
    section 80a-26(a) of this title for the trustees of unit investment
    trusts; or (B) a company which is a member of a national securities
    exchange as defined in the Securities Exchange Act of 1934 [15
    U.S.C. 78a et seq.], subject to such rules and regulations as the
    Commission may from time to time prescribe for the protection of
    investors; or (C) such registered company, but only in accordance
    with such rules and regulations or orders as the Commission may
    from time to time prescribe for the protection of investors.
      (2) Subject to such rules, regulations, and orders as the
    Commission may adopt as necessary or appropriate for the protection
    of investors, a registered management company or any such
    custodian, with the consent of the registered management company
    for which it acts as custodian, may deposit all or any part of the
    securities owned by such registered management company in a system
    for the central handling of securities established by a national
    securities exchange or national securities association registered
    with the Commission under the Securities Exchange Act of 1934 [15
    U.S.C. 78a et seq.], or such other person as may be permitted by
    the Commission, pursuant to which system all securities of any
    particular class or series of any issuer deposited within the
    system are treated as fungible and may be transferred or pledged by
    bookkeeping entry without physical delivery of such securities.
      (3) Rules, regulations, and orders of the Commission under this
    subsection, among other things, may make appropriate provision with
    respect to such matters as the earmarking, segregation, and
    hypothecation of such securities and investments, and may provide
    for or require periodic or other inspections by any or all of the
    following: Independent public accountants, employees and agents of
    the Commission, and such other persons as the Commission may
    designate.
      (4) No such member which trades in securities for its own account
    may act as custodian except in accordance with rules and
    regulations prescribed by the Commission for the protection of
    investors.
      (5) If a registered company maintains its securities and similar
    investments in the custody of a qualified bank or banks, the cash
    proceeds from the sale of such securities and similar investments
    and other cash assets of the company shall likewise be kept in the
    custody of such a bank or banks, or in accordance with such rules
    and regulations or orders as the Commission may from time to time
    prescribe for the protection of investors, except that such a
    registered company may maintain a checking account in a bank or
    banks having the qualifications prescribed in paragraph (1) of
    section 80a-26(a) of this title for the trustees of unit investment
    trusts with the balance of such account or the aggregate balances
    of such accounts at no time in excess of the amount of the fidelity
    bond, maintained pursuant to subsection (g) of this section
    covering the officers or employees authorized to draw on such
    account or accounts.
      (6) The Commission may, after consultation with and taking into
    consideration the views of the Federal banking agencies (as defined
    in section 1813 of title 12), adopt rules and regulations, and
    issue orders, consistent with the protection of investors,
    prescribing the conditions under which a bank, or an affiliated
    person of a bank, either of which is an affiliated person,
    promoter, organizer, or sponsor of, or principal underwriter for, a
    registered management company may serve as custodian of that
    registered management company.
    (g) Bonding of officers and employees having access to securities
      or funds
      The Commission is authorized to require by rules and regulations
    or orders for the protection of investors that any officer or
    employee of a registered management investment company who may
    singly, or jointly with others, have access to securities or funds
    of any registered company, either directly or through authority to
    draw upon such funds or to direct generally the disposition of such
    securities (unless the officer or employee has such access solely
    through his position as an officer or employee of a bank) be bonded
    by a reputable fidelity insurance company against larceny and
    embezzlement in such reasonable minimum amounts as the Commission
    may prescribe.
    (h) Provisions in charter, by-laws, etc., protecting against
      liability for willful misfeasance, etc.
      After one year from the effective date of this subchapter,
    neither the charter, certificate of incorporation, articles of
    association, indenture of trust, nor the by-laws of any registered
    investment company, nor any other instrument pursuant to which such
    a company is organized or administered, shall contain any provision
    which protects or purports to protect any director or officer of
    such company against any liability to the company or to its
    security holders to which he would otherwise be subject by reason
    of willful misfeasance, bad faith, gross negligence or reckless
    disregard of the duties involved in the conduct of his office.
    (i) Provisions in contracts protecting against willful misfeasance,
      etc.
      After one year from the effective date of this subchapter no
    contract or agreement under which any person undertakes to act as
    investment adviser of, or principal underwriter for, a registered
    investment company shall contain any provision which protects or
    purports to protect such person against any liability to such
    company or its security holders to which he would otherwise be
    subject by reason of willful misfeasance, bad faith, or gross
    negligence, in the performance of his duties, or by reason of his
    reckless disregard of his obligations and duties under such
    contract or agreement.
    (j) Rules and regulations prohibiting fraudulent, deceptive or
      manipulative courses of conduct
      It shall be unlawful for any affiliated person of or principal
    underwriter for a registered investment company or any affiliated
    person of an investment adviser of or principal underwriter for a
    registered investment company, to engage in any act, practice, or
    course of business in connection with the purchase or sale,
    directly or indirectly, by such person of any security held or to
    be acquired by such registered investment company in contravention
    of such rules and regulations as the Commission may adopt to
    define, and prescribe means reasonably necessary to prevent, such
    acts, practices, or courses of business as are fraudulent,
    deceptive or manipulative. Such rules and regulations may include
    requirements for the adoption of codes of ethics by registered
    investment companies and investment advisers of, and principal
    underwriters for, such investment companies establishing such
    standards as are reasonably necessary to prevent such acts,
    practices, or courses of business.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 17, 54 Stat. 815; Pub. L. 91-
    547, Sec. 9, Dec. 14, 1970, 84 Stat. 1420; Pub. L. 100-181, title
    VI, Sec. 612, Dec. 4, 1987, 101 Stat. 1261; Pub. L. 106-102, title
    II, Secs. 211(a), 212, Nov. 12, 1999, 113 Stat. 1396.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Exchange Act of 1934, referred to in subsec.
    (f)(1)(B), (2), is act June 6, 1934, ch. 404, 48 Stat. 881, as
    amended, which is classified generally to chapter 2B (Sec. 78a et
    seq.) of this title. For complete classification of this Act to the
    Code, see section 78a of this title and Tables.
      For the effective date of this subchapter, referred to in
    subsecs. (h) and (i), see section 80a-52 of this title.


-MISC1-
                                AMENDMENTS                            
      1999 - Subsec. (a)(4). Pub. L. 106-102, Sec. 212, added par. (4).
      Subsec. (f). Pub. L. 106-102, Sec. 211(a), inserted heading,
    designated first sentence as par. (1) and cls. (1) to (3) as (A) to
    (C), respectively, designated second through fifth sentences as
    pars. (2) to (5), respectively, and realigned margins, and added
    par. (6).
      1987 - Subsec. (h). Pub. L. 100-181 struck out second sentence
    which read as follows: "In the event that any such instrument does
    not at the effective date of this chapter comply with the
    requirements of this subsection and is not amended to comply
    therewith prior to the expiration of said one year, such company
    may nevertheless continue to be a registered investment company and
    shall not be deemed to violate this subsection if prior to said
    expiration date each such director or officer shall have filed with
    the Commission a waiver in writing of any protective provision of
    the instrument to the extent that it does not comply with this
    subsection, and each such person subsequently elected or appointed
    shall before assuming office file a similar waiver."
      Subsec. (i). Pub. L. 100-181 struck out second sentence which
    read as follows: "In the event that any such contract or agreement
    does not at the effective date of this chapter comply with the
    requirements of this subsection and is not amended to comply
    therewith prior to the expiration of said one year, this subsection
    shall not be deemed to have been violated if prior to said
    expiration date each such investment adviser or principal
    underwriter shall have filed with the Commission a waiver in
    writing of any protective provision of the contract or agreement to
    the extent that it does not comply with this subsection."
      1970 - Subsec. (f). Pub. L. 91-547, Sec. 9(a), provided in cl.
    (1) for a registered investment company which is a collective fund
    maintained by a bank authority to keep its securities and similar
    investments in the custody of the sponsoring bank, authorized a
    registered management company or its custodian (with the consent of
    the management company), subject to the rulemaking power of the
    Commission, to deposit the securities of the management company in
    a central certificate depository established by a national
    securities exchange or a registered national securities
    association, and provided that if an investment company employs a
    bank as a custodian for securities and similar investments, then
    all of its cash assets, shall likewise be held by a bank, subject
    to direction as to expenditure and disposition by proper company
    officials, and provided for maintenance of a checking account or
    accounts in one or more banks in amounts not to exceed the amount
    of the fidelity bond covering persons authorized to draw on the
    accounts.
      Subsec. (g). Pub. L. 91-547, Sec. 9(b), substituted "officer or
    employee" for "officer and employee" and inserted "(unless the
    officer or employee has such access solely through his position as
    an officer or employee of a bank)" before "be bonded".
      Subsec. (j). Pub. L. 91-547, Sec. 9(c), added subsec. (j).

                     EFFECTIVE DATE OF 1999 AMENDMENT                 
      Amendment by Pub. L. 106-102 effective 18 months after Nov. 12,
    1999, see section 225 of Pub. L. 106-102, set out as a note under
    section 77c of this title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, except that
    amendment by section 9(a) of Pub. L. 91-547 effective on expiration
    of one year after Dec. 14, 1970, see section 30 (introductory text
    and par. (1)) of Pub. L. 91-547, set out as a note under section
    80a-52 of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-18                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-18. Capital structure of investment companies

-STATUTE-
    (a) Qualifications on issuance of senior securities
      It shall be unlawful for any registered closed-end company to
    issue any class of senior security, or to sell any such security of
    which it is the issuer, unless - 
        (1) if such class of senior security represents an indebtedness
      - 
          (A) immediately after such issuance or sale, it will have an
        asset coverage of at least 300 per centum;
          (B) provision is made to prohibit the declaration of any
        dividend (except a dividend payable in stock of the issuer), or
        the declaration of any other distribution, upon any class of
        the capital stock of such investment company, or the purchase
        of any such capital stock, unless, in every such case, such
        class of senior securities has at the time of the declaration
        of any such dividend or distribution or at the time of any such
        purchase an asset coverage of at least 300 per centum after
        deducting the amount of such dividend, distribution, or
        purchase price, as the case may be, except that dividends may
        be declared upon any preferred stock if such senior security
        representing indebtedness has an asset coverage of at least 200
        per centum at the time of declaration thereof after deducting
        the amount of such dividend; and
          (C) provision is made either - 
            (i) that, if on the last business day of each of twelve
          consecutive calendar months such class of senior securities
          shall have an asset coverage of less than 100 per centum, the
          holders of such securities voting as a class shall be
          entitled to elect at least a majority of the members of the
          board of directors of such registered company, such voting
          right to continue until such class of senior security shall
          have an asset coverage of 110 per centum or more on the last
          business day of each of three consecutive calendar months, or
            (ii) that, if on the last business day of each of twenty-
          four consecutive calendar months such class of senior
          securities shall have an asset coverage of less than 100 per
          centum, an event of default shall be deemed to have occurred;

        (2) if such class of senior security is a stock - 
          (A) immediately after such issuance or sale it will have an
        asset coverage of at least 200 per centum;
          (B) provision is made to prohibit the declaration of any
        dividend (except a dividend payable in common stock of the
        issuer), or the declaration of any other distribution, upon the
        common stock of such investment company, or the purchase of any
        such common stock, unless in every such case such class of
        senior security has at the time of the declaration of any such
        dividend or distribution or at the time of any such purchase an
        asset coverage of at least 200 per centum after deducting the
        amount of such dividend, distribution or purchase price, as the
        case may be;
          (C) provision is made to entitle the holders of such senior
        securities, voting as a class, to elect at least two directors
        at all times, and, subject to the prior rights, if any, of the
        holders of any other class of senior securities outstanding, to
        elect a majority of the directors if at any time dividends on
        such class of securities shall be unpaid in an amount equal to
        two full years' dividends on such securities, and to continue
        to be so represented until all dividends in arrears shall have
        been paid or otherwise provided for;
          (D) provision is made requiring approval by the vote of a
        majority of such securities, voting as a class, of any plan of
        reorganization adversely affecting such securities or of any
        action requiring a vote of security holders as in section 80a-
        13(a) of this title provided; and
          (E) such class of stock shall have complete priority over any
        other class as to distribution of assets and payment of
        dividends, which dividends shall be cumulative.
    (b) Asset coverage in respect of senior securities
      The asset coverage in respect of a senior security provided for
    in subsection (a) of this section may be determined on the basis of
    values calculated as of a time within forty-eight hours (not
    including Sundays or holidays) next preceding the time of such
    determination. The time of issue or sale shall, in the case of an
    offering of such securities to existing stockholders of the issuer,
    be deemed to be the first date on which such offering is made, and
    in all other cases shall be deemed to be the time as of which a
    firm commitment to issue or sell and to take or purchase such
    securities shall be made.
    (c) Prohibitions relating to issuance of senior securities
      Notwithstanding the provisions of subsection (a) of this section
    it shall be unlawful for any registered closed-end investment
    company to issue or sell any senior security representing
    indebtedness if immediately thereafter such company will have
    outstanding more than one class of senior security representing
    indebtedness, or to issue or sell any senior security which is a
    stock if immediately thereafter such company will have outstanding
    more than one class of senior security which is a stock, except
    that (1) any such class of indebtedness or stock may be issued in
    one or more series: Provided, That no such series shall have a
    preference or priority over any other series upon the distribution
    of the assets of such registered closed-end company or in respect
    of the payment of interest or dividends, and (2) promissory notes
    or other evidences of indebtedness issued in consideration of any
    loan, extension, or renewal thereof, made by a bank or other person
    and privately arranged, and not intended to be publicly
    distributed, shall not be deemed to be a separate class of senior
    securities representing indebtedness within the meaning of this
    subsection.
    (d) Warrants and rights to subscription
      It shall be unlawful for any registered management company to
    issue any warrant or right to subscribe to or purchase a security
    of which such company is the issuer, except in the form of warrants
    or rights to subscribe expiring not later than one hundred and
    twenty days after their issuance and issued exclusively and ratably
    to a class or classes of such company's security holders; except
    that any warrant may be issued in exchange for outstanding warrants
    in connection with a plan of reorganization.
    (e) Application of section to specific senior securities
      The provisions of this section shall not apply to any senior
    securities issued or sold by any registered closed-end company - 
        (1) for the purpose of refunding through payment, purchase,
      redemption, retirement, or exchange, any senior security of such
      registered investment company except that no senior security
      representing indebtedness shall be so issued or sold for the
      purpose of refunding any senior security which is a stock; or
        (2) pursuant to any plan of reorganization (other than for
      refunding as referred to in paragraph (1) of this subsection),
      provided - 
          (A) that such senior securities are issued or sold for the
        purpose of substituting or exchanging such senior securities
        for outstanding senior securities, and if such senior
        securities represent indebtedness they are issued or sold for
        the purpose of substituting or exchanging such senior
        securities for outstanding senior securities representing
        indebtedness, of any registered investment company which is a
        party to such plan of reorganization; or
          (B) that the total amount of such senior securities so issued
        or sold pursuant to such plan does not exceed the total amount
        of senior securities of all the companies which are parties to
        such plan, and the total amount of senior securities
        representing indebtedness so issued or sold pursuant to such
        plan does not exceed the total amount of senior securities
        representing indebtedness of all such companies, or,
        alternatively, the total amount of such senior securities so
        issued or sold pursuant to such plan does not have the effect
        of increasing the ratio of senior securities representing
        indebtedness to the securities representing stock or the ratio
        of senior securities representing stock to securities junior
        thereto when compared with such ratios as they existed before
        such reorganization.
    (f) Senior securities securing loans from bank; securities not
      included in "senior security"
      (1) It shall be unlawful for any registered open-end company to
    issue any class of senior security or to sell any senior security
    of which it is the issuer, except that any such registered company
    shall be permitted to borrow from any bank: Provided, That
    immediately after any such borrowing there is an asset coverage of
    at least 300 per centum for all borrowings of such registered
    company: And provided further, That in the event that such asset
    coverage shall at any time fall below 300 per centum such
    registered company shall, within three days thereafter (not
    including Sundays and holidays) or such longer period as the
    Commission may prescribe by rules and regulations, reduce the
    amount of its borrowings to an extent that the asset coverage of
    such borrowings shall be at least 300 per centum.
      (2) "Senior security" shall not, in the case of a registered open-
    end company, include a class or classes or a number of series of
    preferred or special stock each of which is preferred over all
    other classes or series in respect of assets specifically allocated
    to that class or series: Provided, That (A) such company has
    outstanding no class or series of stock which is not so preferred
    over all other classes or series, or (B) the only other outstanding
    class of the issuer's stock consists of a common stock upon which
    no dividend (other than a liquidating dividend) is permitted to be
    paid and which in the aggregate represents not more than one-half
    of 1 per centum of the issuer's outstanding voting securities. For
    the purpose of insuring fair and equitable treatment of the holders
    of the outstanding voting securities of each class or series of
    stock of such company, the Commission may by rule, regulation, or
    order direct that any matter required to be submitted to the
    holders of the outstanding voting securities of such company shall
    not be deemed to have been effectively acted upon unless approved
    by the holders of such percentage (not exceeding a majority) of the
    outstanding voting securities of each class or series of stock
    affected by such matter as shall be prescribed in such rule,
    regulation, or order.
    (g) "Senior security" defined
      Unless otherwise provided: "Senior security" means any bond,
    debenture, note, or similar obligation or instrument constituting a
    security and evidencing indebtedness, and any stock of a class
    having priority over any other class as to distribution of assets
    or payment of dividends; and "senior security representing
    indebtedness" means any senior security other than stock.
      The term "senior security", when used in subparagraphs (B) and
    (C) of paragraph (1) of subsection (a) of this section, shall not
    include any promissory note or other evidence of indebtedness
    issued in consideration of any loan, extension, or renewal thereof,
    made by a bank or other person and privately arranged, and not
    intended to be publicly distributed; nor shall such term, when used
    in this section, include any such promissory note or other evidence
    of indebtedness in any case where such a loan is for temporary
    purposes only and in an amount not exceeding 5 per centum of the
    value of the total assets of the issuer at the time when the loan
    is made. A loan shall be presumed to be for temporary purposes if
    it is repaid within sixty days and is not extended or renewed;
    otherwise it shall be presumed not to be for temporary purposes.
    Any such presumption may be rebutted by evidence.
    (h) "Asset coverage" defined
      "Asset coverage" of a class of senior security representing an
    indebtedness of an issuer means the ratio which the value of the
    total assets of such issuer, less all liabilities and indebtedness
    not represented by senior securities, bears to the aggregate amount
    of senior securities representing indebtedness of such issuer.
    "Asset coverage" of a class of senior security of an issuer which
    is a stock means the ratio which the value of the total assets of
    such issuer, less all liabilities and indebtedness not represented
    by senior securities, bears to the aggregate amount of senior
    securities representing indebtedness of such issuer plus the
    aggregate of the involuntary liquidation preference of such class
    of senior security which is a stock. The involuntary liquidation
    preference of a class of senior security which is a stock shall be
    deemed to mean the amount to which such class of senior security
    would be entitled on involuntary liquidation of the issuer in
    preference to a security junior to it.
    (i) Future issuance of stock as voting stock; exceptions
      Except as provided in subsection (a) of this section, or as
    otherwise required by law, every share of stock hereafter issued by
    a registered management company (except a common-law trust of the
    character described in section 80a-16(c) of this title) shall be a
    voting stock and have equal voting rights with every other
    outstanding voting stock: Provided, That this subsection shall not
    apply to shares issued pursuant to the terms of any warrant or
    subscription right outstanding on March 15, 1940, or any firm
    contract entered into before March 15, 1940, to purchase such
    securities from such company nor to shares issued in accordance
    with any rules, regulations, or orders which the Commission may
    make permitting such issue.
    (j) Securities issued by registered face-amount certificate company
      Notwithstanding any provision of this subchapter, it shall be
    unlawful, after August 22, 1940, for any registered face-amount
    certificate company - 
        (1) to issue, except in accordance with such rules,
      regulations, or orders as the Commission may prescribe in the
      public interest or as necessary or appropriate for the protection
      of investors, any security other than (A) a face-amount
      certificate; (B) a common stock having a par value and being
      without preference as to dividends or distributions and having at
      least equal voting rights with any outstanding security of such
      company; or (C) short-term payment or promissory notes or other
      indebtedness issued in consideration of any loan, extension, or
      renewal thereof, made by a bank or other person and privately
      arranged and not intended to be publicly offered;
        (2) if such company has outstanding any security, other than
      such face-amount certificates, common stock, promissory notes, or
      other evidence of indebtedness, to make any distribution or
      declare or pay any dividend on any capital security in
      contravention of such rules and regulations or orders as the
      Commission may prescribe in the public interest or as necessary
      or appropriate for the protection of investors or to insure the
      financial integrity of such company, to prevent the impairment of
      the company's ability to meet its obligations upon its face-
      amount certificates; or
        (3) to issue any of its securities except for cash or
      securities including securities of which such company is the
      issuer.
    (k) Application of section to companies operating under Small
      Business Investment Act provisions
      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.S.C. 661 et seq.], and the provisions of paragraph (2) of
    said subsection shall not apply to such companies so long as such
    class of senior security shall be held or guaranteed by the Small
    Business Administration.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 18, 54 Stat. 817; Pub. L. 85-
    699, title III, Sec. 307(c), Aug. 21, 1958, 72 Stat. 694; Pub. L.
    91-547, Sec. 10, Dec. 14, 1970, 84 Stat. 1421; Pub. L. 85-699,
    title III, Sec. 317, formerly Sec. 319, Aug. 21, 1958, as added
    Pub. L. 92-595, Sec. 2(g), Oct. 27, 1972, 86 Stat. 1316, renumbered
    Sec. 317, Pub. L. 104-208, div. D, title II, Sec. 208(h)(1)(E),
    Sept. 30, 1996, 110 Stat. 3009-747; Pub. L. 94-29, Sec. 28(4), June
    4, 1975, 89 Stat. 165; Pub. L. 100-181, title VI, Sec. 613, Dec. 4,
    1987, 101 Stat. 1261; Pub. L. 105-353, title III, Sec. 301(c)(4),
    Nov. 3, 1998, 112 Stat. 3236.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Small Business Investment Act of 1958, referred to in subsec.
    (k), is Pub. L. 85-699, Aug. 21, 1958, 72 Stat. 689, as amended,
    which is classified principally to chapter 14B (Sec. 661 et seq.)
    of this title. For complete classification of this Act to the Code,
    see Short Title note set out under section 661 of this title and
    Tables.


-MISC1-
                                AMENDMENTS                            
      1998 - Subsec. (e)(2). Pub. L. 105-353 substituted "paragraph (1)
    of this subsection" for "subsection (e)(2) of this section" in
    introductory provisions.
      1987 - Subsec. (e). Pub. L. 100-181 redesignated pars. (2) and
    (3) as (1) and (2), respectively, and struck out former par. (1)
    which read as follows: "pursuant to any firm contract to purchase
    or sell entered into prior to March 15, 1940;".
      1975 - Subsec. (i). Pub. L. 94-29 substituted "section 80a-16(c)
    of this title" for "section 80a-16(b) of this title".
      1972 - Subsec. (k). Section 319 of Pub. L. 85-699, as added by
    Pub. L. 92-595, inserted provision that subsec. (a)(2) shall not
    apply to companies operating under the Small Business Investment
    Act of 1958, so long as such class of senior security shall be held
    or guaranteed by the Small Business Administration.
      1970 - Subsec. (f)(2). Pub. L. 91-547 substituted "That (A)" and
    "or (B) the" for "(A) That" and "or (B) that the" and inserted
    provision for purpose of insuring fair and equitable treatment of
    the holders of the outstanding voting securities of each class or
    series of stock of such company, that the Commission may by rule,
    regulation, or order direct that any matter required to be
    submitted to the holders of the outstanding voting securities of
    such company shall not be deemed to have been effectively acted
    upon unless approved by the holders of such percentage (not
    exceeding a majority) of the outstanding voting securities of each
    class or series of stock affected by such matter as shall be
    prescribed in such rule, regulation, or order.
      1958 - Subsec. (k). Pub. L. 85-699 added subsec. (k).

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-19                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-19. Payments or distributions

-STATUTE-
    (a) Dividends; restriction; exception
      It shall be unlawful for any registered investment company to pay
    any dividend, or to make any distribution in the nature of a
    dividend payment, wholly or partly from any source other than - 
        (1) such company's accumulated undistributed net income,
      determined in accordance with good accounting practice and not
      including profits or losses realized upon the sale of securities
      or other properties; or
        (2) such company's net income so determined for the current or
      preceding fiscal year;

    unless such payment is accompanied by a written statement which
    adequately discloses the source or sources of such payment. The
    Commission may prescribe the form of such statement by rules and
    regulations in the public interest and for the protection of
    investors.
    (b) Long-term capital gains; limitation
      It shall be unlawful in contravention of such rules, regulations,
    or orders as the Commission may prescribe as necessary or
    appropriate in the public interest or for the protection of
    investors for any registered investment company to distribute long-
    term capital gains, as defined in title 26, more often than once
    every twelve months.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 19, 54 Stat. 821; Pub. L. 91-
    547, Sec. 11, Dec. 14, 1970, 84 Stat. 1422; Pub. L. 99-514, Sec.
    2, Oct. 22, 1986, 100 Stat. 2095.)


-MISC1-
                                AMENDMENTS                            
      1986 - Subsec. (b). Pub. L. 99-514 substituted "Internal Revenue
    Code of 1986" for "Internal Revenue Code of 1954", which for
    purposes of codification was translated as "title 26" thus
    requiring no change in text.
      1970 - Pub. L. 91-547 designated existing provisions as subsec.
    (a) and added subsec. (b).

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective on expiration of one year
    after Dec. 14, 1970, see section 30(1) of Pub. L. 91-547, set out
    as a note under section 80a-52 of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-20                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-20. Proxies; voting trusts; circular ownership

-STATUTE-
    (a) Prohibition on use of means of interstate commerce for
      solicitation of proxies
      It shall be unlawful for any person, by use of the mails or any
    means or instrumentality of interstate commerce or otherwise, to
    solicit or to permit the use of his name to solicit any proxy or
    consent or authorization in respect of any security of which a
    registered investment company is the issuer in contravention of
    such rules and regulations as the Commission may prescribe as
    necessary or appropriate in the public interest or for the
    protection of investors.
    (b) Prohibition on use of means of interstate commerce for sale of
      voting-trust certificates
      It shall be unlawful for any registered investment company or
    affiliated person thereof, any issuer of a voting-trust certificate
    relating to any security of a registered investment company, or any
    underwriter of such a certificate, by use of the mails or any means
    or instrumentality of interstate commerce, or otherwise, to offer
    for sale, sell, or deliver after sale, in connection with a public
    offering, any such voting-trust certificate.
    (c) Prohibition on purchase of securities knowingly resulting in
      cross-ownership or circular ownership
      No registered investment company shall purchase any voting
    security if, to the knowledge of such registered company, cross-
    ownership or circular ownership exists, or after such acquisition
    will exist, between such registered company and the issuer of such
    security. Cross-ownership shall be deemed to exist between two
    companies when each of such companies beneficially owns more than 3
    per centum of the outstanding voting securities of the other
    company. Circular ownership shall be deemed to exist between two
    companies if such companies are included within a group of three or
    more companies, each of which - 
        (1) beneficially owns more than 3 per centum of the outstanding
      voting securities of one or more other companies of the group;
      and
        (2) has more than 3 per centum of its own outstanding voting
      securities beneficially owned by another company, or by each of
      two or more other companies, of the group.
    (d) Duty to eliminate existing cross-ownership or circular
      ownership
      If cross-ownership or circular ownership between a registered
    investment company and any other company or companies comes into
    existence upon the purchase by a registered investment company of
    the securities of another company, it shall be the duty of such
    registered company, within one year after it first knows of the
    existence of such cross-ownership or circular ownership, to
    eliminate the same.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 20, 54 Stat. 822; Pub. L.
    100-181, title VI, Sec. 614, Dec. 4, 1987, 101 Stat. 1262.)


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (b). Pub. L. 100-181, Sec. 614(1), struck out at
    end "The prohibitions of this subsection shall not apply to a class
    of voting-trust certificates, if any certificate of such class was
    made the subject of a public offering by the issuer or by or
    through an underwriter prior to March 15, 1940."
      Subsec. (d). Pub. L. 100-181, Sec. 614(2), (3), struck out first
    sentence "If on the effective date of this subchapter cross-
    ownership or circular ownership exists between a registered
    investment company and any other company or companies, it shall be
    the duty of such registered company, within five years after such
    effective date, to eliminate such cross-ownership or circular
    ownership." and "at any time after the effective date of this
    subchapter" after "If" in second sentence.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-21                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-21. Loans by management companies

-STATUTE-
      It shall be unlawful for any registered management company to
    lend money or property to any person, directly or indirectly, if - 
      (a) the investment policies of such registered company, as
    recited in its registration statement and reports filed under this
    subchapter, do not permit such a loan; or
      (b) such person controls or is under common control with such
    registered company; except that the provisions of this paragraph
    shall not apply to any loan from a registered company to a company
    which owns all of the outstanding securities of such registered
    company, except directors' qualifying shares.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 21, 54 Stat. 822; Pub. L.
    100-181, title VI, Sec. 615, Dec. 4, 1987, 101 Stat. 1262.)


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (b). Pub. L. 100-181 struck out "to the extension
    or renewal of any such loan made prior to March 15, 1940, or" after
    "shall not apply".

-End-



-CITE-
    15 USC Sec. 80a-22                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-22. Distribution, redemption, and repurchase of
      securities; regulations by securities associations

-STATUTE-
    (a) Rules relating to minimum and maximum prices for purchase and
      sale of securities from investment company; time for resale and
      redemption
      A securities association registered under section 78o-3 of this
    title may prescribe, by rules adopted and in effect in accordance
    with said section and subject to all provisions of said section
    applicable to the rules of such an association - 
        (1) a method or methods for computing the minimum price at
      which a member thereof may purchase from any investment company
      any redeemable security issued by such company and the maximum
      price at which a member may sell to such company any redeemable
      security issued by it or which he may receive for such security
      upon redemption, so that the price in each case will bear such
      relation to the current net asset value of such security computed
      as of such time as the rules may prescribe; and
        (2) a minimum period of time which must elapse after the sale
      or issue of such security before any resale to such company by a
      member or its redemption upon surrender by a member;

    in each case for the purpose of eliminating or reducing so far as
    reasonably practicable any dilution of the value of other
    outstanding securities of such company or any other result of such
    purchase, redemption, or sale which is unfair to holders of such
    other outstanding securities; and said rules may prohibit the
    members of the association from purchasing, selling, or
    surrendering for redemption any such redeemable securities in
    contravention of said rules.
    (b) Rules relating to purchase of securities by members from issuer
      investment company
      (1) Such a securities association may also, by rules adopted and
    in effect in accordance with section 78o-3 of this title, and
    notwithstanding the provisions of subsection (b)(6) thereof but
    subject to all other provisions of said section applicable to the
    rules of such an association, prohibit its members from purchasing,
    in connection with a primary distribution of redeemable securities
    of which any registered investment company is the issuer, any such
    security from the issuer or from any principal underwriter except
    at a price equal to the price at which such security is then
    offered to the public less a commission, discount, or spread which
    is computed in conformity with a method or methods, and within such
    limitations as to the relation thereof to said public offering
    price, as such rules may prescribe in order that the price at which
    such security is offered or sold to the public shall not include an
    excessive sales load but shall allow for reasonable compensation
    for sales personnel, broker-dealers, and underwriters, and for
    reasonable sales loads to investors. The Commission shall on
    application or otherwise, if it appears that smaller companies are
    subject to relatively higher operating costs, make due allowance
    therefor by granting any such company or class of companies
    appropriate qualified exemptions from the provisions of this
    section.
      (2) At any time after the expiration of eighteen months from
    December 14, 1970 (or, if earlier, after a securities association
    has adopted for purposes of paragraph (1) any rule respecting
    excessive sales loads), the Commission may alter or supplement the
    rules of any securities association as may be necessary to
    effectuate the purposes of this subsection in the manner provided
    by section 78s(c) of this title.
      (3) If any provision of this subsection is in conflict with any
    provision of any law of the United States in effect on December 14,
    1970, the provisions of this subsection shall prevail.
    (c) Conflicting rules of Commission and associations
      The Commission may make rules and regulations applicable to
    registered investment companies and to principal underwriters of,
    and dealers in, the redeemable securities of any registered
    investment company, whether or not members of any securities
    association, to the same extent, covering the same subject matter,
    and for the accomplishment of the same ends as are prescribed in
    subsection (a) of this section in respect of the rules which may be
    made by a registered securities association governing its members.
    Any rules and regulations so made by the Commission, to the extent
    that they may be inconsistent with the rules of any such
    association, shall so long as they remain in force supersede the
    rules of the association and be binding upon its members as well as
    all other underwriters and dealers to whom they may be applicable.
    (d) Sale of securities except to or through principal underwriter;
      price of securities
      No registered investment company shall sell any redeemable
    security issued by it to any person except either to or through a
    principal underwriter for distribution or at a current public
    offering price described in the prospectus, and, if such class of
    security is being currently offered to the public by or through an
    underwriter, no principal underwriter of such security and no
    dealer shall sell any such security to any person except a dealer,
    a principal underwriter, or the issuer, except at a current public
    offering price described in the prospectus. Nothing in this
    subsection shall prevent a sale made (i) pursuant to an offer of
    exchange permitted by section 80a-11 of this title including any
    offer made pursuant to section 80a-11(b) of this title; (ii)
    pursuant to an offer made solely to all registered holders of the
    securities, or of a particular class or series of securities issued
    by the company proportionate to their holdings or proportionate to
    any cash distribution made to them by the company (subject to
    appropriate qualifications designed solely to avoid issuance of
    fractional securities); or (iii) in accordance with rules and
    regulations of the Commission made pursuant to subsection (b) of
    section 80a-12 of this title.
    (e) Suspension of right of redemption or postponement of date of
      payment
      No registered investment company shall suspend the right of
    redemption, or postpone the date of payment or satisfaction upon
    redemption of any redeemable security in accordance with its terms
    for more than seven days after the tender of such security to the
    company or its agent designated for that purpose for redemption,
    except - 
        (1) for any period (A) during which the New York Stock Exchange
      is closed other than customary week-end and holiday closings or
      (B) during which trading on the New York Stock Exchange is
      restricted;
        (2) for any period during which an emergency exists as a result
      of which (A) disposal by the company of securities owned by it is
      not reasonably practicable or (B) it is not reasonably
      practicable for such company fairly to determine the value of its
      net assets; or
        (3) for such other periods as the Commission may by order
      permit for the protection of security holders of the company.

    The Commission shall by rules and regulations determine the
    conditions under which (i) trading shall be deemed to be restricted
    and (ii) an emergency shall be deemed to exist within the meaning
    of this subsection.
    (f) Restrictions on transferability or negotiability of securities
      No registered open-end company shall restrict the transferability
    or negotiability of any security of which it is the issuer except
    in conformity with the statements with respect thereto contained in
    its registration statement nor in contravention of such rules and
    regulations as the Commission may prescribe in the interests of the
    holders of all of the outstanding securities of such investment
    company.
    (g) Issuance of securities for services or property other than cash
      No registered open-end company shall issue any of its securities
    (1) for services; or (2) for property other than cash or securities
    (including securities of which such registered company is the
    issuer), except as a dividend or distribution to its security
    holders or in connection with a reorganization.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 22, 54 Stat. 823; Pub. L. 91-
    547, Sec. 12, Dec. 14, 1970, 84 Stat. 1422; Pub. L. 100-181, title
    VI, Sec. 616, Dec. 4, 1987, 101 Stat. 1262.)


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (b). Pub. L. 100-181, Sec. 616(1), substituted
    "subsection (b)(6)" for "subsection (b)(8)" in par. (1).
      Pub. L. 100-181, Sec. 616(2), (3), redesignated par. (3) as (2)
    and substituted "section 78s(c)" for "section 78o-3(k)(2)",
    redesignated par. (4) as (3), and struck out former par. (2) which
    read as follows: "At any time after the expiration of eighteen
    months from December 14, 1970, or after a securities association
    has adopted rules as contemplated by this subsection, the
    Commission may make such rules and regulations pursuant to section
    78o(b)(10) of this title as are appropriate to effectuate the
    purpose of this subsection with respect to sales of shares of a
    registered investment company by broker-dealers subject to
    regulation under section 78o(b)(8) of this title: Provided, That
    the underwriter of such shares may file with the Commission at any
    time a notice of election to comply with the rules prescribed
    pursuant to this subsection by a national securities association
    specified in such notice, and thereafter the sales load shall not
    exceed that prescribed by such rules of such association, and the
    rules of the Commission as hereinabove authorized shall thereafter
    be inapplicable to such sales."
      Subsec. (e). Pub. L. 100-181, Sec. 616(4), (5), in introductory
    provisions, substituted "redemption, or postpone" for "redemption
    or postpone" and "redemption, except" for "redemption except", and,
    in closing provisions, struck out "Any company which, as of March
    15, 1940, was required by provision of its charter, certificate of
    incorporation, articles of association, or trust indenture, or of a
    bylaw or regulation duly adopted thereunder, to postpone the date
    of payment or satisfaction upon redemption of redeemable securities
    issued by it, shall be exempt from the requirements of this
    subsection; but such exemption shall terminate upon the expiration
    of one year from the effective date of this subchapter, or upon the
    repeal or amendment of such provision, or upon the sale by such
    company after March 15, 1940, of any security (other than short-
    term paper) of which it is the issuer, whichever first occurs."
      1970 - Subsec. (b). Pub. L. 91-547, Sec. 12(a), designated
    existing provisions as par. (1), inserted "notwithstanding the
    provisions of subsection (b)(8) thereof but", and "other" in phrase
    "all other provisions", substituted exclusion of "excessive sales
    load" for "unconscionable or grossly excessive sales load",
    provided for allowance for reasonable compensation for sales
    personnel, broker-dealers, and underwriters, and for reasonable
    sales loads to investors, and for grant by Commission of
    appropriate qualified exemptions from provisions of this section
    where on application or otherwise it appears that smaller companies
    are subject to relatively higher operating costs, and added pars.
    (2) to (4).
      Subsec. (c). Pub. L. 91-547, Sec. 12(b), provided for application
    of rules and regulations to registered investment companies, struck
    out introductory phrase "After one year from the effective date of
    this chapter", "registered" before "securities association" where
    first appearing, and substituted "prescribed in subsection (a) of
    this section" for "prescribed in subsections (a) and (b) of this
    section" and ". Any rules and regulations" for "; and any rules and
    regulations".
      Subsec. (d). Pub. L. 91-547, Sec. 12(c), substituted "public
    offering price described in the prospectus. Nothing in this
    subsection" for "public offering price described in the prospectus:
    Provided, however, That nothing in this subsection" and struck out
    "clause (1) or (2) of" before "section 80a-11(b) of this title".

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-23                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-23. Closed-end companies

-STATUTE-
    (a) Issuance of securities
      No registered closed-end company shall issue any of its
    securities (1) for services; or (2) for property other than cash or
    securities (including securities of which such registered company
    is the issuer), except as a dividend or distribution to its
    security holders or in connection with a reorganization.
    (b) Sale of common stock at price below current net asset value
      No registered closed-end company shall sell any common stock of
    which it is the issuer at a price below the current net asset value
    of such stock, exclusive of any distributing commission or discount
    (which net asset value shall be determined as of a time within
    forty-eight hours, excluding Sundays and holidays, next preceding
    the time of such determination), except (1) in connection with an
    offering to the holders of one or more classes of its capital
    stock; (2) with the consent of a majority of its common
    stockholders; (3) upon conversion of a convertible security in
    accordance with its terms; (4) upon the exercise of any warrant
    outstanding on August 22, 1940, or issued in accordance with the
    provisions of section 80a-18(d) of this title; or (5) under such
    other circumstances as the Commission may permit by rules and
    regulations or orders for the protection of investors.
    (c) Purchase of securities of which it is issuer; exceptions
      No registered closed-end company shall purchase any securities of
    any class of which it is the issuer except - 
        (1) on a securities exchange or such other open market as the
      Commission may designate by rules and regulations or orders:
      Provided, That if such securities are stock, such registered
      company shall, within the preceding six months, have informed
      stockholders of its intention to purchase stock of such class by
      letter or report addressed to stockholders of such class; or
        (2) pursuant to tenders, after reasonable opportunity to submit
      tenders given to all holders of securities of the class to be
      purchased; or
        (3) under such other circumstances as the Commission may permit
      by rules and regulations or orders for the protection of
      investors in order to insure that such purchases are made in a
      manner or on a basis which does not unfairly discriminate against
      any holders of the class or classes of securities to be
      purchased.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 23, 54 Stat. 825.)


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-24                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-24. Registration of securities under Securities Act of
      1933

-STATUTE-
    (a) Registration statement; contents
      In registering under the Securities Act of 1933 [15 U.S.C. 77a et
    seq.], any security of which it is the issuer, a registered
    investment company, in lieu of furnishing a registration statement
    containing the information and documents specified in schedule A of
    said Act [15 U.S.C. 77aa], may file a registration statement
    containing the following information and documents:
        (1) such copies of the registration statement filed by such
      company under this subchapter, and of such reports filed by such
      company pursuant to section 80a-29 of this title or such copies
      of portions of such registration statement and reports, as the
      Commission shall designate by rules and regulations; and
        (2) such additional information and documents (including a
      prospectus) as the Commission shall prescribe by rules and
      regulations as necessary or appropriate in the public interest or
      for the protection of investors.
    (b) Filing of three copies of advertisement, pamphlet, etc. in
      connection with public offering; time of filing
      It shall be unlawful for any of the following companies, or for
    any underwriter for such a company, in connection with a public
    offering of any security of which such company is the issuer, to
    make use of the mails or any means or instrumentalities of
    interstate commerce, to transmit any advertisement, pamphlet,
    circular, form letter, or other sales literature addressed to or
    intended for distribution to prospective investors unless three
    copies of the full text thereof have been filed with the Commission
    or are filed with the Commission within ten days thereafter:
        (1) any registered open-end company;
        (2) any registered unit investment trust; or
        (3) any registered face-amount certificate company.
    (c) Additional requirement for prospectuses relating to periodic
      payment plan certificates or face-amount certificate
      In addition to the powers relative to prospectuses granted the
    Commission by section 10 of the Securities Act of 1933 [15 U.S.C.
    77j], the Commission is authorized to require, by rules and
    regulations or order, that the information contained in any
    prospectus relating to any periodic payment plan certificate or
    face-amount certificate registered under the Securities Act of 1933
    [15 U.S.C. 77a et seq.], on or after the effective date of this
    subchapter be presented in such form and order of items, and such
    prospectus contain such summaries of any portion of such
    information, as are necessary or appropriate in the public interest
    or for the protection of investors.
    (d) Application of other provisions to securities of investment
      companies, face-amount certificate companies, and open-end
      companies or unit investment trust
      The exemption provided by paragraph (8) of section 3(a) of the
    Securities Act of 1933 [15 U.S.C. 77c(a)(8)] shall not apply to any
    security of which an investment company is the issuer. The
    exemption provided by paragraph (11) of said section 3(a) [15
    U.S.C. 77c(a)(11)] shall not apply to any security of which a
    registered investment company is the issuer. The exemption provided
    by section 4(3) of the Securities Act of 1933 [15 U.S.C. 77d(3)]
    shall not apply to any transaction in a security issued by a face-
    amount certificate company or in a redeemable security issued by
    an open-end management company or unit investment trust if any
    other security of the same class is currently being offered or sold
    by the issuer or by or through an underwriter in a distribution
    which is not exempted from section 5 of said Act [15 U.S.C. 77e],
    except to such extent and subject to such terms and conditions as
    the Commission, having due regard for the public interest and the
    protection of investors, may prescribe by rules or regulations with
    respect to any class of persons, securities, or transactions.
    (e) Amendment of registration statements relating to securities
      issued by face-amount certificate companies, open-end management
      companies or unit investment trusts
      For the purposes of section 11 of the Securities Act of 1933, as
    amended [15 U.S.C. 77k] the effective date of the latest amendment
    filed shall be deemed the effective date of the registration
    statement with respect to securities sold after such amendment
    shall have become effective. For the purposes of section 13 of the
    Securities Act of 1933, as amended [15 U.S.C. 77m], no such
    security shall be deemed to have been bona fide offered to the
    public prior to the effective date of the latest amendment filed
    pursuant to this subsection. Except to the extent the Commission
    otherwise provides by rules or regulations as appropriate in the
    public interest or for the protection of investors, no prospectus
    relating to a security issued by a face-amount certificate company
    or a redeemable security issued by an open-end management company
    or unit investment trust which varies for the purposes of
    subsection (a)(3) of section 10 of the Securities Act of 1933 [15
    U.S.C. 77j(a)(3)] from the latest prospectus filed as a part of the
    registration statement shall be deemed to meet the requirements of
    said section 10 [15 U.S.C. 77j] unless filed as part of an
    amendment to the registration statement under said Act [15 U.S.C.
    77a et seq.] and such amendment has become effective.
    (f) Registration of indefinite amount of securities
      (1) Registration of securities
        Upon the effective date of its registration statement, as
      provided by section 8 of the Securities Act of 1933 [15 U.S.C.
      77h], a face-amount certificate company, open-end management
      company, or unit investment trust, shall be deemed to have
      registered an indefinite amount of securities.
      (2) Payment of registration fees
        Not later than 90 days after the end of the fiscal year of a
      company or trust referred to in paragraph (1), the company or
      trust, as applicable, shall pay a registration fee to the
      Commission, calculated in the manner specified in section 6(b) of
      the Securities Act of 1933 [15 U.S.C. 77f(b)], based on the
      aggregate sales price for which its securities (including, for
      purposes of this paragraph, all securities issued pursuant to a
      dividend reinvestment plan) were sold pursuant to a registration
      of an indefinite amount of securities under this subsection
      during the previous fiscal year of the company or trust, reduced
      by - 
          (A) the aggregate redemption or repurchase price of the
        securities of the company or trust during that year; and
          (B) the aggregate redemption or repurchase price of the
        securities of the company or trust during any prior fiscal year
        ending not more than 1 year before October 11, 1996, that were
        not used previously by the company or trust to reduce fees
        payable under this section.
      (3) Interest due on late payment
        A company or trust paying the fee required by this subsection
      or any portion thereof more than 90 days after the end of the
      fiscal year of the company or trust shall pay to the Commission
      interest on unpaid amounts, at the average investment rate for
      Treasury tax and loan accounts published by the Secretary of the
      Treasury pursuant to section 3717(a) of title 31. The payment of
      interest pursuant to this paragraph shall not preclude the
      Commission from bringing an action to enforce the requirements of
      paragraph (2).
      (4) Rulemaking authority
        The Commission may adopt rules and regulations to implement
      this subsection.
    (g) Additional prospectuses
      In addition to any prospectus permitted or required by section
    10(a) of the Securities Act of 1933 [15 U.S.C. 77j(a)], the
    Commission shall permit, by rules or regulations deemed necessary
    or appropriate in the public interest or for the protection of
    investors, the use of a prospectus for purposes of section 5(b)(1)
    of that Act [15 U.S.C. 77e(b)(1)] with respect to securities issued
    by a registered investment company. Such a prospectus, which may
    include information the substance of which is not included in the
    prospectus specified in section 10(a) of the Securities Act of
    1933, shall be deemed to be permitted by section 10(b) of that Act
    [15 U.S.C. 77j(b)].

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 24, 54 Stat. 825; Aug. 10,
    1954, ch. 667, title IV, Secs. 402, 403, 68 Stat. 689; Pub. L. 91-
    547, Sec. 13, Dec. 14, 1970, 84 Stat. 1423; Pub. L. 100-181, title
    VI, Sec. 617, Dec. 4, 1987, 101 Stat. 1262; Pub. L. 104-290, title
    II, Secs. 203(a), (b), 204, Oct. 11, 1996, 110 Stat. 3427, 3428.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Act of 1933, referred to in subsecs. (a), (c), and
    (e), is act May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended,
    which is classified generally to subchapter I (Sec. 77a et seq.) of
    chapter 2A of this title. For complete classification of this Act
    to the Code, see section 77a of this title and Tables.
      For the effective date of this subchapter, referred to in subsec.
    (c), see section 80a-52 of this title.


-MISC1-
                                AMENDMENTS                            
      1996 - Subsec. (e). Pub. L. 104-290, Sec. 203(a), substituted
    "For" for "(3) For", struck out "pursuant to this subsection or
    otherwise" before "shall be deemed the effective date of the
    registration statement", and struck out pars. (1) and (2) which
    read as follows:
      "(1) A registration statement under the Securities Act of 1933
    relating to a security issued by a face-amount certificate company
    or a redeemable security issued by an open-end management company
    or unit investment trust may be amended after its effective date so
    as to increase the securities specified therein as proposed to be
    offered. At the time of filing such amendment there shall be paid
    to the Commission a fee, calculated in the manner specified in
    section 6(b) of said Act, with respect to the additional securities
    therein proposed to be offered.
      "(2) The filing of such an amendment to a registration statement
    under the Securities Act of 1933 shall not be deemed to have taken
    place unless it is accompanied by a United States postal money
    order or a certified bank check or cash for the amount of the fee
    required under paragraph (1) of this subsection."
      Subsec. (f). Pub. L. 104-290, Sec. 203(b), inserted heading and
    amended text generally. Prior to amendment, text read as follows:
    "In the case of securities issued by a face-amount certificate
    company or redeemable securities issued by an open-end management
    company or unit investment trust, which are sold in an amount in
    excess of the number of securities included in an effective
    registration statement of any such company, such company may, in
    accordance with such rules and regulations as the Commission shall
    adopt as it deems necessary or appropriate in the public interest
    or for the protection of investors, elect to have the registration
    of such securities deemed effective as of the time of their sale,
    upon payment to the Commission, within six months after any such
    sale, of a registration fee of three times the amount of the fee
    which would have otherwise been applicable to such securities. Upon
    any such election and payment, the registration statement of such
    company shall be considered to have been in effect with respect to
    such shares. The Commission may also adopt rules and regulations as
    it deems necessary or appropriate in the public interest or for the
    protection of investors to permit the registration of an indefinite
    number of the securities issued by a face-amount certificate
    company or redeemable securities issued by an open-end management
    company or unit investment trust."
      Subsec. (g). Pub. L. 104-290, Sec. 204, added subsec. (g).
      1987 - Subsec. (d). Pub. L. 100-181 struck out ", except a
    security sold or disposed of by the issuer or bona fide offered to
    the public prior to the effective date of this subchapter and with
    respect to a security so sold, disposed of, or offered, shall not
    apply to any new offering thereof on or after the effective date of
    this subchapter" at end of second sentence.
      1970 - Subsec. (d). Pub. L. 91-547, Sec. 13(a), substituted
    "section 4(3) of the Securities Act of 1933" for "the third clause
    of section 4(1) of the Securities Act of 1933" and struck out the
    comma before "if any".
      Subsec. (f). Pub. L. 91-547, Sec. 13(b), added subsec. (f).
      1954 - Subsec. (d). Act Aug. 10, 1954, Sec. 402, inserted
    provision making dealer's exemption contained in third clause of
    section 77d(1) of this title inapplicable to transactions in the
    securities of investment companies that are offered to the public
    on a continuous basis, subject to certain exceptions.
      Subsec. (e). Act Aug. 10, 1954, Sec. 403, added subsec. (e).

                     EFFECTIVE DATE OF 1996 AMENDMENT                 
      Section 203(c) of Pub. L. 104-290 provided that: "The amendments
    made by this section [amending this section] shall become effective
    on the earlier of - 
        "(1) 1 year after the date of enactment of this Act [Oct. 11,
      1996]; or
        "(2) the effective date of final rules or regulations issued in
      accordance with section 24(f) of the Investment Company Act of
      1940 [subsec. (f) of this section], as amended by this section."

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.

                     EFFECTIVE DATE OF 1954 AMENDMENT                 
      Amendment by act Aug. 10, 1954, effective sixty days after Aug.
    10, 1954, see note under section 77b of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-25                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-25. Reorganization plans; reports by Commission

-STATUTE-
    (a) Filing of reorganization plan and other information with
      Commission
      Any person who, by use of the mails or any means or
    instrumentality of interstate commerce or otherwise, solicits or
    permits the use of his name to solicit any proxy, consent,
    authorization, power of attorney, ratification, deposit, or dissent
    in respect of any plan of reorganization of any registered
    investment company shall file with, or mail to, the Commission for
    its information, within twenty-four hours after the commencement of
    any such solicitation, a copy of such plan and any deposit
    agreement relating thereto and of any proxy, consent,
    authorization, power of attorney, ratification, instrument of
    deposit, or instrument of dissent in respect thereto, if or to the
    extent that such documents shall not already have been filed with
    the Commission.
    (b) Advisory report by Commission at request of shareholders
      The Commission is authorized, if so requested, prior to any
    solicitation of security holders with respect to any plan of
    reorganization, by any registered investment company which is, or
    any of the securities of which are, the subject of or is a
    participant in any such plan, or if so requested by the holders of
    25 per centum of any class of its outstanding securities, to render
    an advisory report in respect of the fairness of any such plan and
    its effect upon any class or classes of security holders. In such
    event any registered investment company, in respect of which the
    Commission shall have rendered any such advisory report, shall mail
    promptly a copy of such advisory report to all its security holders
    affected by any such plan: Provided, That such advisory report
    shall have been received by it at least forty-eight hours (not
    including Sundays and holidays) before final action is taken in
    relation to such plan at any meeting of security holders called to
    act in relation thereto, or any adjournment of any such meeting, or
    if no meeting be called, then prior to the final date of acceptance
    of such plan by security holders. In respect of securities not
    registered as to ownership, in lieu of mailing a copy of such
    advisory report, such registered company shall publish promptly a
    statement of the existence of such advisory report in a newspaper
    of general circulation in its principal place of business and shall
    make available copies of such advisory report upon request.
    Notwithstanding the provision of this section the Commission shall
    not render such advisory report although so requested by any such
    investment company or such security holders if the fairness or
    feasibility of said plan is in issue in any proceeding pending in
    any court of competent jurisdiction unless such plan is submitted
    to the Commission for that purpose by such court.
    (c) Enjoinder of plan of reorganization
      Any district court of the United States in the State of
    incorporation of a registered investment company, or any such court
    for the district in which such company maintains its principal
    place of business, is authorized to enjoin the consummation of any
    plan of reorganization of such registered investment company upon
    proceedings instituted by the Commission (which is authorized so to
    proceed upon behalf of security holders of such registered company,
    or any class thereof), if such court shall determine that any such
    plan is not fair and equitable to all security holders.
    (d) Application of section to reorganizations under title 11
      Nothing contained in this section shall in any way affect or
    derogate from the powers of the courts of the United States and the
    Commission with reference to reorganizations contained in title 11.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 25, 54 Stat. 826; Pub. L. 91-
    547, Sec. 14, Dec. 14, 1970, 84 Stat. 1424; Pub. L. 95-598, title
    III, Sec. 310(c), Nov. 6, 1978, 92 Stat. 2676.)


-MISC1-
                                AMENDMENTS                            
      1978 - Subsec. (d). Pub. L. 95-598 substituted "title 11" for
    "the Bankruptcy Act of 1898, as amended".
      1970 - Subsec. (c). Pub. L. 91-547 substituted "that any such
    plan is not fair and equitable to all security holders" for "any
    such plan to be grossly unfair or to constitute gross misconduct or
    gross abuse of trust on the part of the officers, directors, or
    investment advisers of such registered company or other sponsors of
    such plan".

                     EFFECTIVE DATE OF 1978 AMENDMENT                 
      Amendment effective Oct. 1, 1979, see section 402(a) of Pub. L.
    95-598, set out as an Effective Date note preceding section 101 of
    Title 11, Bankruptcy.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-26                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-26. Unit investment trusts

-STATUTE-
    (a) Custody and sale of securities
      No principal underwriter for or depositor of a registered unit
    investment trust shall sell, except by surrender to the trustee for
    redemption, any security of which such trust is the issuer (other
    than short-term paper), unless the trust indenture, agreement of
    custodianship, or other instrument pursuant to which such security
    is issued - 
        (1) designates one or more trustees or custodians, each of
      which is a bank, and provides that each such trustee or custodian
      shall have at all times an aggregate capital, surplus, and
      undivided profits of a specified minimum amount, which shall not
      be less than $500,000 (but may also provide, if such trustee or
      custodian publishes reports of condition at least annually,
      pursuant to law or to the requirements of its supervising or
      examining authority, that for the purposes of this paragraph the
      aggregate capital, surplus, and undivided profits of such trustee
      or custodian shall be deemed to be its aggregate capital,
      surplus, and undivided profits as set forth in its most recent
      report of condition so published);
        (2) provides, in substance, (A) that during the life of the
      trust the trustee or custodian, if not otherwise remunerated, may
      charge against and collect from the income of the trust, and from
      the corpus thereof if no income is available, such fees for its
      services and such reimbursement for its expenses as are provided
      for in such instrument; (B) that no such charge or collection
      shall be made except for services theretofore performed or
      expenses theretofore incurred; (C) that no payment to the
      depositor of or a principal underwriter for such trust, or to any
      affiliated person or agent of such depositor or underwriter,
      shall be allowed the trustee or custodian as an expense (except
      that provision may be made for the payment to any such person of
      a fee, not exceeding such reasonable amount as the Commission may
      prescribe as compensation for performing bookkeeping and other
      administrative services, of a character normally performed by the
      trustee or custodian itself); and (D) that the trustee or
      custodian shall have possession of all securities and other
      property in which the funds of the trust are invested, all funds
      held for such investment, all equalization, redemption, and other
      special funds of the trust, and all income upon, accretions to,
      and proceeds of such property and funds, and shall segregate and
      hold the same in trust (subject only to the charges and
      collections allowed under clauses (A), (B), and (C) of this
      paragraph) until distribution thereof to the security holders of
      the trust;
        (3) provides, in substance, that the trustee or custodian shall
      not resign until either (A) the trust has been completely
      liquidated and the proceeds of the liquidation distributed to the
      security holders of the trust, or (B) a successor trustee or
      custodian, having the qualifications prescribed in paragraph (1)
      of this subsection, has been designated and has accepted such
      trusteeship or custodianship; and
        (4) provides, in substance, (A) that a record will be kept by
      the depositor or an agent of the depositor of the name and
      address of, and the shares issued by the trust and held by, every
      holder of any security issued pursuant to such instrument,
      insofar as such information is known to the depositor or agent;
      and (B) that whenever a security is deposited with the trustee in
      substitution for any security in which such security holder has
      an undivided interest, the depositor or the agent of the
      depositor will, within five days after such substitution, either
      deliver or mail to such security holder a notice of substitution,
      including an identification of the securities eliminated and the
      securities substituted, and a specification of the shares of such
      security holder affected by the substitution.
    (b) Bank or affiliated person of bank as trustee or custodian
      The Commission may, after consultation with and taking into
    consideration the views of the Federal banking agencies (as defined
    in section 1813 of title 12), adopt rules and regulations, and
    issue orders, consistent with the protection of investors,
    prescribing the conditions under which a bank, or an affiliated
    person of a bank, either of which is an affiliated person of a
    principal underwriter for, or depositor of, a registered unit
    investment trust, may serve as trustee or custodian under
    subsection (a)(1) of this section.
    (c) Substitution of securities
      It shall be unlawful for any depositor or trustee of a registered
    unit investment trust holding the security of a single issuer to
    substitute another security for such security unless the Commission
    shall have approved such substitution. The Commission shall issue
    an order approving such substitution if the evidence establishes
    that it is consistent with the protection of investors and the
    purposes fairly intended by the policy and provisions of this
    subchapter.
    (d) Binding contract or agreement embodying applicable provisions
      deemed to qualify non-complying instrument by which securities
      were issued
      In the event that a trust indenture, agreement of custodianship,
    or other instrument pursuant to which securities of a registered
    unit investment trust are issued does not comply with the
    requirements of subsection (a) of this section, such instrument
    will be deemed to meet such requirements if a written contract or
    agreement binding on the parties and embodying such requirements
    has been executed by the depositor on the one part and the trustee
    or custodian on the other part, and three copies of such contract
    or agreement have been filed with the Commission.
    (e) Liquidation of unit investment trust
      Whenever the Commission has reason to believe that a unit
    investment trust is inactive and that its liquidation is in the
    interest of the security holders of such trust, the Commission may
    file a complaint seeking the liquidation of such trust in the
    district court of the United States in any district wherein any
    trustee of such trust resides or has its principal place of
    business. A copy of such complaint shall be served on every trustee
    of such trust, and notice of the proceeding shall be given such
    other interested persons in such manner and at such times as the
    court may direct. If the court determines that such liquidation is
    in the interest of the security holders of such trust, the court
    shall order such liquidation and, after payment of necessary
    expenses, the distribution of the proceeds to the security holders
    of the trust in such manner and on such terms as may to the court
    appear equitable.
    (f) Exemption
      (1) In general
        Subsection (a) of this section does not apply to any registered
      separate account funding variable insurance contracts, or to the
      sponsoring insurance company and principal underwriter of such
      account.
      (2) Limitation on sales
        It shall be unlawful for any registered separate account
      funding variable insurance contracts, or for the sponsoring
      insurance company of such account, to sell any such contract - 
          (A) unless the fees and charges deducted under the contract,
        in the aggregate, are reasonable in relation to the services
        rendered, the expenses expected to be incurred, and the risks
        assumed by the insurance company, and, beginning on the earlier
        of August 1, 1997, or the earliest effective date of any
        registration statement or amendment thereto for such contract
        following October 11, 1996, the insurance company so represents
        in the registration statement for the contract; and
          (B) unless the insurance company - 
            (i) complies with all other applicable provisions of this
          section, as if it were a trustee or custodian of the
          registered separate account;
            (ii) files with the insurance regulatory authority of the
          State which is the domiciliary State of the insurance
          company, an annual statement of its financial condition,
          which most recent statement indicates that the insurance
          company has a combined capital and surplus, if a stock
          company, or an unassigned surplus, if a mutual company, of
          not less than $1,000,000, or such other amount as the
          Commission may from time to time prescribe by rule, as
          necessary or appropriate in the public interest or for the
          protection of investors; and
            (iii) together with its registered separate accounts, is
          supervised and examined periodically by the insurance
          authority of such State.
      (3) Fees and charges
        For purposes of paragraph (2), the fees and charges deducted
      under the contract shall include all fees and charges imposed for
      any purpose and in any manner.
      (4) Regulatory authority
        The Commission may issue such rules and regulations to carry
      out paragraph (2)(A) as it determines are necessary or
      appropriate in the public interest or for the protection of
      investors.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 26, 54 Stat. 827; Pub. L. 91-
    547, Sec. 15, Dec. 14, 1970, 84 Stat. 1424; Pub. L. 100-181, title
    VI, Secs. 618, 619, Dec. 4, 1987, 101 Stat. 1262; Pub. L. 104-290,
    title II, Sec. 205(a), Oct. 11, 1996, 110 Stat. 3429; Pub. L. 106-
    102, title II, Sec. 211(b), Nov. 12, 1999, 113 Stat. 1396.)


-MISC1-
                                AMENDMENTS                            
      1999 - Subsecs. (b) to (f). Pub. L. 106-102 added subsec. (b) and
    redesignated former subsecs. (b) to (e) as (c) to (f),
    respectively.
      1996 - Subsec. (e). Pub. L. 104-290 added subsec. (e).
      1987 - Subsec. (b). Pub. L. 100-181, Sec. 618, substituted
    "intended" for "intend".
      Subsec. (c). Pub. L. 100-181, Sec. 619, substituted "contract or
    agreement" for "contract of agreement".
      1970 - Subsecs. (b) to (d). Pub. L. 91-547 added subsec. (b),
    redesignated former subsec. (b) as (c), struck out "at the
    effective date of this subchapter" before "comply", substituted
    "contract of agreement" for "contract or agreement", and
    redesignated former subsec. (c) as (d).

                     EFFECTIVE DATE OF 1999 AMENDMENT                 
      Amendment by Pub. L. 106-102 effective 18 months after Nov. 12,
    1999, see section 225 of Pub. L. 106-102, set out as a note under
    section 77c of this title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-27                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-27. Periodic payment plans

-STATUTE-
    (a) Sale of certificates; restrictions
      It shall be unlawful for any registered investment company
    issuing periodic payment plan certificates, or for any depositor of
    or underwriter for such company, to sell any such certificate, if -
    
        (1) the sales load on such certificate exceeds 9 per centum of
      the total payments to be made thereon;
        (2) more than one-half of any of the first twelve monthly
      payments thereon, or their equivalent, is deducted for sales
      load;
        (3) the amount of sales load deducted from any one of such
      first payments exceeds proportionately the amount deducted from
      any other such payment, or the amount deducted from any
      subsequent payment exceeds proportionately the amount deducted
      from any other subsequent payment;
        (4) the first payment on such certificate is less than $20, or
      any subsequent payment is less than $10;
        (5) if such registered company is a management company, the
      proceeds of such certificate or the securities in which such
      proceeds are invested are subject to management fees (other than
      fees for administrative services of the character described in
      clause (C), paragraph (2), of section 80a-26(a) of this title)
      exceeding such reasonable amount as the Commission may prescribe,
      whether such fees are payable to such company or to investment
      advisers thereof; or
        (6) if such registered company is a unit investment trust the
      assets of which are securities issued by a management company,
      the depositor of or principal underwriter for such trust, or any
      affiliated person of such depositor or underwriter, is to receive
      from such management company or any affiliated person thereof any
      fee or payment on account of payments on such certificate
      exceeding such reasonable amount as the Commission may prescribe.
    (b) Exemptions
      If it appears to the Commission, upon application or otherwise,
    that smaller companies are subjected to relatively higher operating
    costs and that in order to make due allowance therefor it is
    necessary or appropriate in the public interest and consistent with
    the protection of investors that a provision or provisions of
    paragraph (1), (2), or (3) of subsection (a) of this section
    relative to sales load be relaxed in the case of certain registered
    investment companies issuing periodic payment plan certificates, or
    certain specified classes of such companies, the Commission is
    authorized by rules and regulations or order to grant any such
    company or class of companies appropriate qualified exemptions from
    the provisions of said paragraphs.
    (c) Sale of certificates; requirements
      It shall be unlawful for any registered investment company
    issuing periodic payment plan certificates, or for any depositor of
    or underwriter for such company, to sell any such certificate,
    unless - 
        (1) such certificate is a redeemable security; and
        (2) the proceeds of all payments on such certificate (except
      such amounts as are deducted for sales load) are deposited with a
      trustee or custodian having the qualifications prescribed in
      paragraph (1) of section 80a-26(a) of this title for the trustees
      of unit investment trusts, and are held by such trustee or
      custodian under an indenture or agreement containing, in
      substance, the provisions required by paragraphs (2) and (3) of
      section 80a-26(a) of this title for the trust indentures of unit
      investment trusts.
    (d) Surrender of certificates; regulations
      Notwithstanding subsection (a) of this section, it shall be
    unlawful for any registered investment company issuing periodic
    payment plan certificates, or for any depositor of or underwriter
    for such company, to sell any such certificate unless the
    certificate provide that the holder thereof may surrender the
    certificate at any time within the first eighteen months after the
    issuance of the certificate and receive in payment thereof, in
    cash, the sum of (1) the value of his account, and (2) an amount,
    from such underwriter or depositor, equal to that part of the
    excess paid for sales loading which is over 15 per centum of the
    gross payments made by the certificate holder. The Commission may
    make rules and regulations applicable to such underwriters and
    depositors specifying such reserve requirements as it deems
    necessary or appropriate in order for such underwriters and
    depositors to carry out the obligations to refund sales charges
    required by this subsection.
    (e) Refund privileges; notice; rules
      With respect to any periodic payment plan certificate sold
    subject to the provisions of subsection (d) of this section, the
    registered investment company issuing such periodic payment plan
    certificate, or any depositor of or underwriter for such company,
    shall in writing (1) inform each certificate holder who has missed
    three payments or more, within thirty days following the expiration
    of fifteen months after the issuance of the certificate, or, if any
    such holder has missed one payment or more after such period of
    fifteen months but prior to the expiration of eighteen months after
    the issuance of the certificate, at any time prior to the
    expiration of such eighteen-month period, of his right to surrender
    his certificate as specified in subsection (d) of this section, and
    (2) inform the certificate holder of (A) the value of the holder's
    account as of the time the written notice was given to such holder,
    and (B) the amount to which he is entitled as specified in
    subsection (d) of this section. The Commission may make rules
    specifying the method, form, and contents of the notice required by
    this subsection.
    (f) Charges, statement; rules; surrender of certificates;
      regulations
      With respect to any periodic payment plan (other than a plan
    under which the amount of sales load deducted from any payment
    thereon does not exceed 9 per centum of such payment), the
    custodian bank for such plan shall mail to each certificate holder,
    within sixty days after the issuance of the certificate, a
    statement of charges to be deducted from the projected payments on
    the certificate and a notice of his right of withdrawal as
    specified in this section. The Commission may make rules specifying
    the method, form, and contents of the notice required by this
    subsection. The certificate holder may within forty-five days of
    the mailing of the notice specified in this subsection surrender
    his certificate and receive in payment thereof, in cash, the sum of
    (1) the value of his account, and (2) an amount, from the
    underwriter or depositor, equal to the difference between the gross
    payments made and the net amount invested. The Commission may make
    rules and regulations applicable to underwriters and depositors of
    companies issuing any such certificate specifying such reserve
    requirements as it deems necessary or appropriate in order for such
    underwriters and depositors to carry out the obligations to refund
    sales charges required by this subsection.
    (g) Governing provisions; election
      Notwithstanding the provisions of subsections (a) and (d) of this
    section, a registered investment company issuing periodic payment
    plan certificates may elect, by written notice to the Commission,
    to be governed by the provisions of subsection (h) of this section
    rather than the provisions of subsections (a) and (d) of this
    section.
    (h) Sale of certificates; restrictions
      Upon making the election specified in subsection (g) of this
    section, it shall be unlawful for any such electing registered
    investment company issuing periodic payment plan certificates, or
    for any depositor of or underwriter for such company, to sell any
    such certificate, if - 
        (1) the sales load on such certificate exceeds 9 per centum of
      the total payments to be made thereon;
        (2) more than 20 per centum of any payment thereon is deducted
      for sales load, or an average of more than 16 per centum is
      deducted for sales load from the first forty-eight monthly
      payments thereon, or their equivalent;
        (3) the amount of sales load deducted from any one of the first
      twelve monthly payments, the thirteenth through twenty-fourth
      monthly payments, the twenty-fifth through thirty-sixth monthly
      payments, or the thirty-seventh through forty-eighth monthly
      payments, or their equivalents, respectively, exceeds
      proportionately the amount deducted from any other such payment,
      or the amount deducted from any subsequent payment exceeds
      proportionately the amount deducted from any other subsequent
      payment;
        (4) the deduction for sales load on the excess of the payment
      or payments in any month over the minimum monthly payment, or its
      equivalent, to be made on the certificate exceeds the sales load
      applicable to payments subsequent to the first forty-eight
      monthly payments or their equivalent;
        (5) the first payment on such certificate is less than $20, or
      any subsequent payment is less than $10;
        (6) if such registered company is a management company, the
      proceeds of such certificate or the securities in which such
      proceeds are invested are subject to management fees (other than
      fees for administrative services of the character described in
      clause (C) of paragraph (2) of section 80a-26(a) of this title)
      exceeding such reasonable amount as the Commission may prescribe,
      whether such fees are payable to such company or to investment
      advisers thereof; or
        (7) if such registered company is a unit investment trust the
      assets of which are securities issued by a management company,
      the depositor of or principal underwriter for such trust, or any
      affiliated person of such depositor or underwriter, is to receive
      from such management company or any affiliated person thereof any
      fee or payment on account of payments on such certificate
      exceeding such reasonable amount as the Commission may prescribe.
    (i) Applicability to registered separate account funding variable
      insurance contracts
      (1) This section does not apply to any registered separate
    account funding variable insurance contracts, or to the sponsoring
    insurance company and principal underwriter of such account, except
    as provided in paragraph (2).
      (2) It shall be unlawful for any registered separate account
    funding variable insurance contracts, or for the sponsoring
    insurance company of such account, to sell any such contract unless
    - 
        (A) such contract is a redeemable security; and
        (B) the insurance company complies with section 80a-26(f) of
      this title and any rules or regulations issued by the Commission
      under section 80a-26(f) of this title.
    (j) Termination of sales
      (1) Termination
        Effective 30 days after September 29, 2006, it shall be
      unlawful, subject to subsection (i) - 
          (A) for any registered investment company to issue any
        periodic payment plan certificate; or
          (B) for such company, or any depositor of or underwriter for
        any such company, or any other person, to sell such a
        certificate.
      (2) No invalidation of existing certificates
        Paragraph (1) shall not be construed to alter, invalidate, or
      otherwise affect any rights or obligations, including rights of
      redemption, under any periodic payment plan certificate issued
      and sold before 30 days after September 29, 2006.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 27, 54 Stat. 829; Pub. L. 91-
    547, Sec. 16, Dec. 14, 1970, 84 Stat. 1424; Pub. L. 92-165, Nov.
    23, 1971, 85 Stat. 487; Pub. L. 104-290, title II, Sec. 205(b),
    Oct. 11, 1996, 110 Stat. 3429; Pub. L. 109-290, Sec. 4(a), (b),
    Sept. 29, 2006, 120 Stat. 1318, 1319.)


-MISC1-
                                AMENDMENTS                            
      2006 - Subsec. (i)(2)(B). Pub. L. 109-290, Sec. 4(b), substituted
    "section 80a-26(f)" for "section 80a-26(e)" in two places.
      Subsec. (j). Pub. L. 109-290, Sec. 4(a), added subsec. (j).
      1996 - Subsec. (i). Pub. L. 104-290 added subsec. (i).
      1971 - Subsec. (f). Pub. L. 92-165 inserted "(other than a plan
    under which the amount of sales load deducted from any payment
    thereon does not exceed 9 per centum of such payment)".
      1970 - Subsecs. (d) to (h). Pub. L. 91-547 added subsecs. (d) to
    (h).

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective on expiration of six months
    after Dec. 14, 1970, see section 30(3) of Pub. L. 91-547, set out
    as a note under section 80a-52 of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-28                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-28. Face-amount certificate companies

-STATUTE-
    (a) Issuance or sale of certificates
      It shall be unlawful for any registered face-amount certificate
    company to issue or sell any face-amount certificate, or to collect
    or accept any payment on any such certificate issued by such
    company on or after the effective date of this subchapter, unless -
    
        (1) such company, if organized before March 15, 1940, was
      actively and continuously engaged in selling face-amount
      certificates on and before that date, and has outstanding capital
      stock worth upon a fair valuation of assets not less than
      $50,000; or if organized on or after March 15, 1940, has capital
      stock in an amount not less than $250,000 which has been bona
      fide subscribed and paid for in cash; and
        (2) such company maintains at all times minimum certificate
      reserves on all its outstanding face-amount certificates in an
      aggregate amount calculated and adjusted as follows:
          (A) the reserves for each certificate of the installment type
        shall be based on assumed annual, semi-annual, quarterly, or
        monthly reserve payments according to the manner in which gross
        payments for any certificate year are made by the holder, which
        reserve payments shall be sufficient in amount, as and when
        accumulated at a rate not to exceed 3 1/2  per centum per annum
        compounded annually, to provide the minimum maturity or face
        amount of the certificate when due. Such reserve payments may
        be graduated according to certificate years so that the reserve
        payment or payments for the first certificate year shall amount
        to at least 50 per centum of the required gross annual payment
        for such year and the reserve payment or payments for each of
        the second to fifth certificate years inclusive shall amount to
        at least 93 per centum of each such year's required gross
        annual payment and for the sixth and each subsequent
        certificate year the reserve payment or payments shall amount
        to at least 96 per centum of each such year's required gross
        annual payment: Provided, That such aggregate reserve payments
        shall amount to at least 93 per centum of the aggregate gross
        annual payments required to be made by the holder to obtain the
        maturity of the certificate. The company may at its option take
        as loading from the gross payment or payments for a certificate
        year, as and when made by the certificate holder, an amount or
        amounts equal in the aggregate for such year to not more than
        the excess, if any, of the gross payment or payments required
        to be made by the holder for such year, over and above the
        percentage of the gross annual payment required herein for such
        year for reserve purposes. Such loading may be taken by the
        company prior to or after the setting up of the reserve payment
        or payments for such year and the reserve payment or payments
        for such year may be graduated and adjusted to correspond with
        the amount of the gross payment or payments made by the
        certificate holder for such year less the loading so taken;
          (B) if the foregoing minimum percentages of the gross annual
        payments required under the provisions of such certificate
        should produce reserve payments larger than are necessary at 3
        1/2  per centum per annum compounded annually to provide the
        minimum maturity or face amount of the certificate when due,
        the reserve shall be based upon reserve payments accumulated as
        provided under preceding subparagraph (A) of this paragraph
        except that in lieu of the 3 1/2  per centum rate specified
        therein, such rate shall be lowered to the minimum rate,
        expressed in multiples of one-eighth of 1 per centum, which
        will accumulate such reserve payments to the maturity value
        when due;
          (C) if the actual annual gross payment to be made by the
        certificate holder on any certificate issued prior to or after
        the effective date of this chapter is less than the amount of
        any assumed reserve payment or payments for a certificate year,
        such company shall maintain as a part of such minimum
        certificate reserves a deficiency reserve equal to the total
        present value of future deficiencies in the gross payments,
        calculated at a rate not to exceed 3 1/2  per centum per annum
        compounded annually;
          (D) for each certificate of the installment type the amount
        of the reserve shall at any time be at least equal to (1) the
        then amount of the reserve payments set up under subparagraphs
        (A) or (B) of this paragraph; (2) the accumulations on such
        reserve payments as computed under subparagraphs (A) or (B) of
        this paragraph; (3) the amount of any deficiency reserve
        required under subparagraph (C) of this paragraph; and (4) such
        amount as shall have been credited to the account of each
        certificate holder in the form of any credit, or any dividend,
        or any interest in addition to the minimum maturity amount
        specified in such certificate, plus any accumulations on any
        amount or amounts so credited, at a rate not exceeding 3 1/2 
        per centum per annum compounded annually;
          (E) for each certificate which is fully paid, including any
        fully paid obligations resulting from or effected upon the
        maturity of the previously issued certificate, and for each
        paid-up certificate issued as provided in subsection (f) of
        this section prior to maturity, the amount of the reserve shall
        at any time be at least equal to (1) such amount as and when
        accumulated at a rate not to exceed 3 1/2  per centum per annum
        compounded annually, will provide the amount or amounts payable
        when due and (2) such amount as shall have been credited to the
        account of each such certificate holder in the form of any
        credit, or any dividend, or any interest in addition to the
        minimum maturity amount specified in the certificate, plus any
        accumulations on any amount or amounts so credited, at a rate
        not exceeding 3 1/2  per centum per annum compounded annually;
          (F) for each certificate of the installment type under which
        gross payments have been made by or credited to the holder
        thereof covering a payment period or periods or any part
        thereof beyond the then current payment period as defined by
        the terms of such certificate, and for which period or periods
        no reserve has been set up under subparagraph (A) or (B) of
        this paragraph, an advance payment reserve shall be set up and
        maintained in the amount of the present value of any such
        unapplied advance gross payments, computed at a rate not to
        exceed 3 1/2  per centum per annum compounded annually;
          (G) such appropriate contingency reserves for death and
        disability benefits and for reinstatement rights on any such
        certificate providing for such benefits or rights as the
        Commission shall prescribe by rule, regulation, or order based
        upon the experience of face-amount companies in relation to
        such contingencies.

    At no time shall the aggregate certificate reserves herein required
    by subparagraphs (A) to (F) of this paragraph, be less than the
    aggregate surrender values and other amounts to which all
    certificate holders may be then entitled.
      For the purpose of this subsection, no certificate of the
    installment type shall be deemed to be outstanding if before a
    surrender value has been attained the holder thereof has been in
    continuous default in making his payments thereon for a period of
    one year.
    (b) Asset requirements prior to sale of certificates
      It shall be unlawful for any registered face-amount certificate
    company to issue or sell any face-amount certificate, or to collect
    or accept any payment on any such certificate issued by such
    company on or after the effective date of this subchapter, unless
    such company has, in cash or qualified investments, assets having a
    value not less than the aggregate amount of the capital stock
    requirement and certificate reserves as computed under the
    provisions of subsection (a) of this section. As used in this
    subsection, "qualified investments" means investments of a kind
    which life-insurance companies are permitted to invest in or hold
    under the provisions of the Code of the District of Columbia as
    heretofore or hereafter amended, and such other investments as the
    Commission shall by rule, regulation, or order authorize as
    qualified investments. Such investments shall be valued in
    accordance with the provisions of said Code where such provisions
    are applicable. Investments to which such provisions do not apply
    shall be valued in accordance with such rules, regulations, or
    orders as the Commission shall prescribe for the protection of
    investors.
    (c) Certificate reserve requirements
      The Commission shall by rule, regulation, or order, in the public
    interest or for the protection of investors, require a registered
    face-amount certificate company to deposit and maintain, upon such
    terms and conditions as the Commission shall prescribe and as are
    appropriate for the protection of investors, with one or more
    institutions having the qualifications required by paragraph (1) of
    section 80a-26(a) of this title for a trustee of a unit investment
    trust, all or any part of the investments maintained by such
    company as certificate reserve requirements under the provisions of
    subsection (b) of this section: Provided, however, That where
    qualified investments are maintained on deposit by such company in
    respect of its liabilities under certificates issued to or held by
    residents of any State as required by the statute of such State or
    by any order, regulation, or requirement of such State or any
    official or agency thereof, the amount so on deposit, but not to
    exceed the amount of reserves required by subsection (a) of this
    section for the certificates so issued or held, shall be deducted
    from the amount of qualified investments that may be required to be
    deposited hereunder.
      Assets which are qualified investments under subsection (b) of
    this section and which are deposited under or as permitted by this
    subsection, may be used and shall be considered as a part of the
    assets required to be maintained under the provisions of said
    subsection (b).
    (d) Provisions required in certificate
      It shall be unlawful for any registered face-amount certificate
    company to issue or sell any face-amount certificate, or to collect
    or accept any payment on any such certificate issued by such
    company on or after the effective date of this subchapter, unless
    such certificate contains a provision or provisions to the effect -
    
        (1) that, in respect of any certificate of the installment
      type, during the first certificate year the holder of the
      certificate, upon surrender thereof, shall be entitled to a value
      payable in cash not less than the reserve payments as specified
      in subparagraph (A) or (B) of paragraph (2) of subsection (a) of
      this section and at the end of such certificate year, a value
      payable in cash at least equal to 50 per centum of the amount of
      the gross annual payment required thereby for such year;
        (2) that, in respect of any certificate of the installment
      type, at any time after the expiration of the first certificate
      year and prior to maturity, the holder of the certificate, upon
      surrender thereof, shall be entitled to a value payable in cash
      not less than the then amount of the reserve for such certificate
      required by numbered items (1) and (2) of subparagraph (D) of
      paragraph (2) of subsection (a) of this section, less a surrender
      charge that shall not exceed 2 per centum of the face or maturity
      amount of the certificate, or 15 per centum of the amount of such
      reserve, whichever is the lesser, but in no event shall such
      value be less than 50 per centum of the amount of such reserve.
      The amount of the surrender value for the end of each certificate
      year shall be set out in the certificate;
        (3) that, in respect of any certificate of the installment
      type, the holder of the certificate, upon surrender thereof for
      cash or upon receipt of a paid-up certificate as provided in
      subsection (f) of this section, shall be entitled to a value
      payable in cash equal to the then amount of any advance payment
      reserve under such certificate required by subparagraph (F) of
      paragraph (2) of subsection (a) of this section in addition to
      any other amounts due the holder hereunder;
        (4) that at any time prior to maturity, in respect of any
      certificate which is fully paid, the holder of the certificate,
      upon surrender thereof, shall be entitled to a value payable in
      cash not less than the then amount of the reserve for such
      certificate required by item (1) of subparagraph (E) of paragraph
      (2) of subsection (a) of this section, less a surrender charge
      that shall not exceed 2 per centum of the face or maturity amount
      of the certificate, or 15 per centum of the amount of such
      reserve, whichever is the lesser: Provided, however, That such
      surrender charge shall not apply as to any obligations of a fully
      paid type resulting from the maturity of a previously issued
      certificate. The amount of the surrender value for the end of
      each certificate year shall be set out in the certificate;
        (5) that in respect of any certificate, the holder of the
      certificate, upon maturity, upon surrender thereof for cash or
      upon receipt of a paid-up certificate as provided in subsection
      (f) of this section, shall be entitled to a value payable in cash
      equal to the then amount of the reserve, if any, for such
      certificate required by item (4) of subparagraph (D) of paragraph
      (2) of subsection (a) of this section or item (2) of subparagraph
      (E) of paragraph (2) of said subsection (a) in addition to any
      other amounts due the holder hereunder.

      The term "certificate year" as used in this section in respect of
    any certificate of the installment type means a period or periods
    for which one year's payment or payments as provided by the
    certificate have been made thereon by the holder and the
    certificate maintained in force by such payments for the time for
    which the same have been made, and in respect of any certificate
    which is fully paid or paid-up means any year ending on the
    anniversary of the date of issuance of the certificate.
      Any certificate may provide for loans or advances by the company
    to the certificate holder on the security of such certificate upon
    terms prescribed therein but at an interest rate not exceeding 6
    per centum per annum. The amount of the required reserves,
    deposits, and the surrender values thereof available to the holder
    may be adjusted to take into account any unpaid balance on such
    loans or advances and interest thereon, for the purposes of this
    subsection and subsections (b) and (c) of this section.
      Any certificate may provide that the company at its option may,
    prior to the maturity thereof, defer any payment or payments to the
    certificate holder to which he may be entitled under this
    subsection, for a period of not more than thirty days: Provided,
    That in the event such option is exercised by the company, interest
    shall accrue on any payment or payments due to the holder, for the
    period of such deferment at a rate equal to that used in
    accumulating the reserves for such certificate: And provided
    further, That the Commission may, by rules and regulations or
    orders in the public interest or for the protection of investors,
    make provision for any other deferment upon such terms and
    conditions as it shall prescribe.
    (e) Liability of holder to legal action for unpaid amount of
      certificate
      It shall be unlawful for any registered face-amount certificate
    company to issue or sell any face-amount certificate, or to collect
    or accept any payment on any such certificate issued by such
    company on or after the effective date of this subchapter, which
    certificate makes the holder liable to any legal action or
    proceeding for any unpaid amount on such certificate.
    (f) Optional right to paid up certificate in lieu of cash surrender
      value
      It shall be unlawful for any registered face-amount certificate
    company to issue or sell any face-amount certificate, or to collect
    or accept any payment on any such certificate issued by such
    company on or after the effective date of this subchapter, (1)
    unless such face-amount certificate contains a provision or
    provisions to the effect that the holder shall have an optional
    right to receive a paid-up certificate in lieu of the then attained
    cash surrender value provided therein and in the amount of such
    value plus accumulations thereon at a rate to be specified in the
    paid-up certificate equal to that used in computing the reserve on
    the original certificate under subparagraph (A) or (B) of paragraph
    (2) of subsection (a) of this section, such paid-up certificate to
    become due and payable at the end of a period equal to the balance
    of the term of such original certificate before maturity; and
    during the period prior to maturity such paid-up certificate shall
    have a cash value upon surrender thereof equal to the then amount
    of the reserve therefor; and (2) unless such face-amount
    certificate contains a further provision or provisions to the
    effect that if the holder be in continuous default in his payments
    on such certificate for a period of six months without having
    exercised his option to receive a paid-up certificate, as herein
    provided, the company at the expiration of such six months shall
    pay the surrender value in cash if such value is less than $100 or
    if such value is $100 or more shall issue such paid-up certificate
    to such holder and such payment or issuance, plus the payment of
    all other amounts to which he may be then entitled under the
    original certificate, shall operate to cancel his original
    certificate: Provided, That in lieu of the issuance of a new paid-
    up certificate the original certificate may be converted into a
    paid-up certificate with the same effect; and (3) unless, where
    such certificate provides, in the event of default, for the
    deferment of payments thereon by the holder or of the due dates of
    such payments or of the maturity date of the certificate, it shall
    also provide in effect for the right of reinstatement by the holder
    of the certificate after default and for an option in the holder,
    at the time of reinstatement, to make up the payment or payments
    for the default period next preceding such reinstatement with
    interest thereon not exceeding 6 per centum per annum, with the
    same effect as if no such default in making such payments had
    occurred.
      The term "default" as used in this subsection shall, without
    restricting its usual meaning, include a failure to make a payment
    or payments as and when provided by the certificate.
    (g) Application of section to company issuing certificates only to
      holders of previously issued certificates
      The foregoing provisions of this section shall not apply to a
    face-amount certificate company which on or before the effective
    date of this chapter has discontinued the offering of face-amount
    certificates to the public and issues face-amount certificates only
    to the holders of certificates previously issued pursuant to an
    obligation expressed or implied in such certificates.
    (h) Declaration or payment of dividends
      It shall be unlawful for any registered face-amount certificate
    company which does not maintain the minimum certificate reserve on
    all its outstanding face-amount certificates issued prior to the
    effective date of this chapter, in an aggregate amount calculated
    and adjusted as provided in this section to declare or pay any
    dividends on the shares of such company for or during any calendar
    year which shall exceed one-third of the net earnings for the next
    preceding calendar year or which shall exceed 10 per centum of the
    aggregate net earnings for the next preceding five calendar years,
    whichever is the lesser amount, or any dividend which shall have
    been forbidden by the Commission pursuant to the provision of the
    next sentence of this paragraph. At least thirty days before such
    company shall declare, pay, or distribute any dividend, it shall
    give the Commission written notice of its intention to declare,
    pay, or distribute the same; and if at any time it shall appear to
    the Commission that the declaration, payment or distribution of any
    dividend for or during any calendar year might impair the financial
    integrity of such company or its ability to meet its liabilities
    under its outstanding face-amount certificates, it may by order
    forbid the declaration, distribution, or payment of any such
    dividend.
    (i) Application of section to certificates issued prior to
      effective date of section
      The foregoing provisions of this section shall apply to all face-
    amount certificates issued prior to the effective date of this
    subsection; to the collection or acceptance of any payment on such
    certificates; to the issuance of face-amount certificates to the
    holders of such certificates pursuant to an obligation expressed or
    implied in such certificates; to the provisions of such
    certificates; to the minimum certificate reserves and deposits
    maintained with respect thereto; and to the assets that the issuer
    of such certificate was and is required to have with respect to
    such certificates. With respect to all face-amount certificates
    issued after the effective date of this subsection, the provisions
    of this section shall apply except as hereinafter provided.
      (1) Notwithstanding subparagraph (A) of paragraph (2) of
    subsection (a) of this section, the reserves for each certificate
    of the installment type shall be based on assumed annual,
    semiannual, quarterly, or monthly reserve payments according to the
    manner in which gross payments for any certificate year are made by
    the holder, which reserve payments shall be sufficient in amount,
    as and when accumulated at a rate not to exceed 3 1/2  per centum
    per annum compounded annually, to provide the minimum maturity or
    face amount of the certificate when due. Such reserve payments may
    be graduated according to certificate years so that the reserve
    payment or payments for the first three certificate years shall
    amount to at least 80 per centum of the required gross annual
    payment for such years; the reserve payment or payments for the
    fourth certificate year shall amount to at least 90 per centum of
    such year's required gross annual payment; the reserve payment or
    payments for the fifth certificate year shall amount to at least 93
    per centum of such year's gross annual payment; and for the sixth
    and each subsequent certificate year the reserve payment or
    payments shall amount to at least 96 per centum of each such year's
    required gross annual payment: Provided, That such aggregate
    reserve payments shall amount to at least 93 per centum of the
    aggregate gross annual payments required to be made by the holder
    to obtain the maturity of the certificate. The company may at its
    option take as loading from the gross payment or payments for a
    certificate year, as and when made by the certificate holder, an
    amount or amounts equal in the aggregate for such year to not more
    than the excess, if any, of the gross payment or payments required
    to be made by the holder for such year, over and above the
    percentage of the gross annual payment required herein for such
    year for reserve purposes. Such loading may be taken by the company
    prior to or after the setting up of the reserve payment or payments
    for such year and the reserve payment or payments for such year may
    be graduated and adjusted to correspond with the amount of the
    gross payment or payments made by the certificate holder for such
    year less the loading so taken.
      (2) Notwithstanding paragraphs (1) and (2) of subsection (d) of
    this section, (A) in respect of any certificate of the installment
    type, during the first certificate year, the holder of the
    certificate, upon surrender thereof, shall be entitled to a value
    payable in cash not less than 80 per centum of the amount of the
    gross payments made on the certificate; and (B) in respect of any
    certificate of the installment type, at any time after the
    expiration of the first certificate year and prior to maturity, the
    holder of the certificate, upon surrender thereof, shall be
    entitled to a value payable in cash not less than the then amount
    of the reserve for such certificate required by clauses (1) and (2)
    of subparagraph (D) of paragraph (2) of subsection (a) of this
    section, less a surrender charge that shall not exceed 2 per centum
    of the face or maturity amount of the certificate, or 15 per centum
    of the amount of such reserve, whichever is the lesser, but in no
    event shall such value be less than 80 per centum of the gross
    payments made on the certificate. The amount of the surrender value
    for the end of each certificate year shall be set out in the
    certificate.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 28, 54 Stat. 829; Pub. L. 91-
    547, Sec. 17, Dec. 14, 1970, 84 Stat. 1426; Pub. L. 100-181, title
    VI, Secs. 620, 621, Dec. 4, 1987, 101 Stat. 1262.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      For the effective date of this subchapter, referred to in
    subsecs. (a), (b), (d), (e), and (f), see section 80a-52 of this
    title.
      For the effective date of this chapter, referred to in subsecs.
    (a)(2)(C), (g), and (h), see sections 80a-52 and 80b-21 of this
    title.
      For the effective date of this subsection, referred to in subsec.
    (i), as the day upon expiration of 6 months after Dec. 14, 1970,
    see section 30(3) of Pub. L. 91-547, set out as a note under
    section 80a-52 of this title.


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (a)(2)(B). Pub. L. 100-181, Sec. 620, substituted
    "paragraph" for "subsection".
      Subsec. (d)(2). Pub. L. 100-181, Sec. 621, inserted "of" before
    "subsection (a)".
      1970 - Subsec. (i). Pub. L. 91-547 added subsec. (i).

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective on expiration of six months
    after Dec. 14, 1970, see section 30(3) of Pub. L. 91-547, set out
    as a note under section 80a-2 of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-29                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-29. Reports and financial statements of investment
      companies and affiliated persons

-STATUTE-
    (a) Annual report by company
      Every registered investment company shall file annually with the
    Commission such information, documents, and reports as investment
    companies having securities registered on a national securities
    exchange are required to file annually pursuant to section 13(a) of
    the Securities Exchange Act of 1934 [15 U.S.C. 78m(a)] and the
    rules and regulations issued thereunder.
    (b) Semi-annual or quarterly filing of information; copies of
      periodic or interim reports sent to security holders
      Every registered investment company shall file with the
    Commission - 
        (1) such information, documents, and reports (other than
      financial statements), as the Commission may require to keep
      reasonably current the information and documents contained in the
      registration statement of such company filed under this
      subchapter; and
        (2) copies of every periodic or interim report or similar
      communication containing financial statements and transmitted to
      any class of such company's security holders, such copies to be
      filed not later than ten days after such transmission.

    Any information or documents contained in a report or other
    communication to security holders filed pursuant to paragraph (2)
    of this subsection may be incorporated by reference in any report
    subsequently or concurrently filed pursuant to paragraph (1) of
    this subsection.
    (c) Minimizing reporting burdens
      (1) The Commission shall take such action as it deems necessary
    or appropriate, consistent with the public interest and the
    protection of investors, to avoid unnecessary reporting by, and
    minimize the compliance burdens on, registered investment companies
    and their affiliated persons in exercising its authority - 
        (A) under subsection (f) of this section; and
        (B) under subsection (b)(1) of this section, if the Commission
      requires the filing of information, documents, and reports under
      that subsection on a basis more frequently than semiannually.

      (2) Action taken by the Commission under paragraph (1) shall
    include considering, and requesting public comment on - 
        (A) feasible alternatives that minimize the reporting burdens
      on registered investment companies; and
        (B) the utility of such information, documents, and reports to
      the Commission in relation to the costs to registered investment
      companies and their affiliated persons of providing such
      information, documents, and reports.
    (d) Reports under this section in lieu of reports under other
      provisions of law
      The Commission shall issue rules and regulations permitting the
    filing with the Commission, and with any national securities
    exchange concerned, of copies of periodic reports, or of extracts
    therefrom, filed by any registered investment company pursuant to
    subsections (a) and (b) of this section, in lieu of any reports and
    documents required of such company under section 13 or 15(d) of the
    Securities Exchange Act of 1934 [15 U.S.C. 78m or 78o(d)].
    (e) Semiannual reports to stockholders
      Every registered investment company shall transmit to its
    stockholders, at least semiannually, reports containing such of the
    following information and financial statements or their equivalent,
    as of a reasonably current date, as the Commission may prescribe by
    rules and regulations for the protection of investors, which
    reports shall not be misleading in any material respect in the
    light of the reports required to be filed pursuant to subsections
    (a) and (b) of this section:
        (1) a balance sheet accompanied by a statement of the aggregate
      value of investments on the date of such balance sheet;
        (2) a list showing the amounts and values of securities owned
      on the date of such balance sheet;
        (3) a statement of income, for the period covered by the
      report, which shall be itemized at least with respect to each
      category of income and expense representing more than 5 per
      centum of total income or expense;
        (4) a statement of surplus, which shall be itemized at least
      with respect to each charge or credit to the surplus account
      which represents more than 5 per centum of the total charges or
      credits during the period covered by the report;
        (5) a statement of the aggregate remuneration paid by the
      company during the period covered by the report (A) to all
      directors and to all members of any advisory board for regular
      compensation; (B) to each director and to each member of an
      advisory board for special compensation; (C) to all officers; and
      (D) to each person of whom any officer or director of the company
      is an affiliated person; and
        (6) a statement of the aggregate dollar amounts of purchases
      and sales of investment securities, other than Government
      securities, made during the period covered by the report:

    Provided, That if in the judgment of the Commission any item
    required under this subsection is inapplicable or inappropriate to
    any specified type or types of investment company, the Commission
    may by rules and regulations permit in lieu thereof the inclusion
    of such item of a comparable character as it may deem applicable or
    appropriate to such type or types of investment company.
    (f) Additional information
      The Commission may, by rule, require that semiannual reports
    containing the information set forth in subsection (e) of this
    section include such other information as the Commission deems
    necessary or appropriate in the public interest or for the
    protection of investors.
    (g) Certificate of independent public accountants
      Financial statements contained in annual reports required
    pursuant to subsections (a) and (e) of this section, if required by
    the rules and regulations of the Commission, shall be accompanied
    by a certificate of independent public accountants. The certificate
    of such independent public accountants shall be based upon an audit
    not less in scope or procedures followed than that which
    independent public accountants would ordinarily make for the
    purpose of presenting comprehensive and dependable financial
    statements, and shall contain such information as the Commission
    may prescribe, by rules and regulations in the public interest or
    for the protection of investors, as to the nature and scope of the
    audit and the findings and opinion of the accountants. Each such
    report shall state that such independent public accountants have
    verified securities owned, either by actual examination, or by
    receipt of a certificate from the custodian, as the Commission may
    prescribe by rules and regulations.
    (h) Duties and liabilities of affiliated persons
      Every person who is directly or indirectly the beneficial owner
    of more than 10 per centum of any class of outstanding securities
    (other than short-term paper) of which a registered closed-end
    company is the issuer or who is an officer, director, member of an
    advisory board, investment adviser, or affiliated person of an
    investment adviser of such a company shall in respect of his
    transactions in any securities of such company (other than short-
    term paper) be subject to the same duties and liabilities as those
    imposed by section 16 of the Securities Exchange Act of 1934 [15
    U.S.C. 78p] upon certain beneficial owners, directors, and officers
    in respect of their transactions in certain equity securities.
    (i) Disclosure to church plan participants
      A person that maintains a church plan that is excluded from the
    definition of an investment company solely by reason of section 80a-
    3(c)(14) of this title shall provide disclosure to plan
    participants, in writing, and not less frequently than annually,
    and for new participants joining such a plan after May 31, 1996, as
    soon as is practicable after joining such plan, that - 
        (1) the plan, or any company or account maintained to manage or
      hold plan assets and interests in such plan, company, or account,
      are not subject to registration, regulation, or reporting under
      this subchapter, the Securities Act of 1933 [15 U.S.C. 77a et
      seq.], the Securities Exchange Act of 1934 [15 U.S.C. 78a et
      seq.], or State securities laws; and
        (2) plan participants and beneficiaries therefore will not be
      afforded the protections of those provisions.
    (j) Notice to Commission
      The Commission may issue rules and regulations to require any
    person that maintains a church plan that is excluded from the
    definition of an investment company solely by reason of section 80a-
    3(c)(14) of this title to file a notice with the Commission
    containing such information and in such form as the Commission may
    prescribe as necessary or appropriate in the public interest or
    consistent with the protection of investors.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 30, 54 Stat. 836; Pub. L.
    104-290, title II, Sec. 206, title V, Sec. 508(g), Oct. 11, 1996,
    110 Stat. 3430, 3449; Pub. L. 105-353, title III, Sec. 301(c)(5),
    Nov. 3, 1998, 112 Stat. 3237.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Act of 1933, referred to in subsec. (i)(1), is act
    May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is
    classified generally to subchapter I (Sec. 77a et seq.) of chapter
    2A of this title. For complete classification of this Act to the
    Code, see section 77a of this title and Tables.
      The Securities Exchange Act of 1934, referred to in subsec.
    (i)(1), is act June 6, 1934, ch. 404, 48 Stat. 881, as amended,
    which is classified principally to chapter 2B (Sec. 78a et seq.) of
    this title. For complete classification of this Act to the Code,
    see section 78a of this title and Tables.


-MISC1-
                                AMENDMENTS                            
      1998 - Subsec. (b)(1). Pub. L. 105-353, Sec. 301(c)(5)(A),
    inserted "and" after semicolon at end.
      Subsec. (e). Pub. L. 105-353, Sec. 301(c)(5)(B), substituted
    "semiannually" for "semi-annually" in introductory provisions.
      Subsecs. (g) to (j). Pub. L. 105-353, Sec. 301(c)(5)(C),
    redesignated subsecs. (g) and (h), relating to disclosure to church
    plan participants and notice to Commission, respectively, as (i)
    and (j), respectively.
      1996 - Subsec. (b)(1). Pub. L. 104-290, Sec. 206(1), added par.
    (1) and struck out former par. (1) which read as follows: "such
    information and documents (other than financial statements) as the
    Commission may require, on a semi-annual or quarterly basis, to
    keep reasonably current the information and documents contained in
    the registration statement of such company filed under this
    subchapter; and".
      Subsecs. (c) to (e). Pub. L. 104-290, Sec. 206(2), (3), added
    subsec. (c) and redesignated former subsecs. (c) and (d) as (d) and
    (e), respectively. Former subsec. (e) redesignated (g).
      Subsec. (f). Pub. L. 104-290, Sec. 206(2), (4), added subsec.
    (f). Former subsec. (f) redesignated (h).
      Subsec. (g). Pub. L. 104-290, Sec. 508(g), added subsec. (g),
    relating to disclosure to church plan participants.
      Pub. L. 104-290, Sec. 206(2), (5), redesignated subsec. (e),
    relating to certificate of independent public accountants, as (g),
    and substituted "pursuant to subsections (a) and (e) of this
    section" for "pursuant to subsections (a) and (d) of this section".
      Subsec. (h). Pub. L. 104-290, Sec. 508(g), added subsec. (h),
    relating to notice to Commission.
      Pub. L. 104-290, Sec. 206(2), redesignated subsec. (f), relating
    to duties and liabilities of affiliated persons, as (h).


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-30                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-30. Accounts and records

-STATUTE-
    (a) Maintenance of records
      (1) In general
        Each registered investment company, and each underwriter,
      broker, dealer, or investment adviser that is a majority-owned
      subsidiary of such a company, shall maintain and preserve such
      records (as defined in section 78c(a)(37) of this title) for such
      period or periods as the Commission, by rules and regulations,
      may prescribe as necessary or appropriate in the public interest
      or for the protection of investors. Each investment adviser that
      is not a majority-owned subsidiary of, and each depositor of any
      registered investment company, and each principal underwriter for
      any registered investment company other than a closed-end
      company, shall maintain and preserve for such period or periods
      as the Commission shall prescribe by rules and regulations, such
      records as are necessary or appropriate to record such person's
      transactions with such registered company.
      (2) Minimizing compliance burden
        In exercising its authority under this subsection, the
      Commission shall take such steps as it deems necessary or
      appropriate, consistent with the public interest and for the
      protection of investors, to avoid unnecessary recordkeeping by,
      and minimize the compliance burden on, persons required to
      maintain records under this subsection (hereafter in this section
      referred to as "subject persons"). Such steps shall include
      considering, and requesting public comment on - 
          (A) feasible alternatives that minimize the recordkeeping
        burdens on subject persons;
          (B) the necessity of such records in view of the public
        benefits derived from the independent scrutiny of such records
        through Commission examination;
          (C) the costs associated with maintaining the information
        that would be required to be reflected in such records; and
          (D) the effects that a proposed recordkeeping requirement
        would have on internal compliance policies and procedures.
    (b) Examinations of records
      (1) In general
        All records required to be maintained and preserved in
      accordance with subsection (a) of this section shall be subject
      at any time and from time to time to such reasonable periodic,
      special, and other examinations by the Commission, or any member
      or representative thereof, as the Commission may prescribe.
      (2) Availability
        For purposes of examinations referred to in paragraph (1), any
      subject person shall make available to the Commission or its
      representatives any copies or extracts from such records as may
      be prepared without undue effort, expense, or delay as the
      Commission or its representatives may reasonably request.
      (3) Commission action
        The Commission shall exercise its authority under this
      subsection with due regard for the benefits of internal
      compliance policies and procedures and the effective
      implementation and operation thereof.
    (c) Limitations on disclosure by Commission
      Notwithstanding any other provision of law, the Commission shall
    not be compelled to disclose any internal compliance or audit
    records, or information contained therein, provided to the
    Commission under this section. Nothing in this subsection shall
    authorize the Commission to withhold information from the Congress
    or prevent the Commission from complying with a request for
    information from any other Federal department or agency requesting
    the information for purposes within the scope of the jurisdiction
    of that department or agency, or complying with an order of a court
    of the United States in an action brought by the United States or
    the Commission. For purposes of section 552 of title 5, this
    section shall be considered a statute described in subsection
    (b)(3)(B) of such section 552.
    (d) Definitions
      For purposes of this section - 
        (1) the term "internal compliance policies and procedures"
      means policies and procedures designed by subject persons to
      promote compliance with the Federal securities laws; and
        (2) the term "internal compliance and audit record" means any
      record prepared by a subject person in accordance with internal
      compliance policies and procedures.
    (e) Regulatory authority
      The Commission may, in the public interest or for the protection
    of investors, issue rules and regulations providing for a
    reasonable degree of uniformity in the accounting policies and
    principles to be followed by registered investment companies in
    maintaining their accounting records and in preparing financial
    statements required pursuant to this subchapter.
    (f) Exemption authority
      The Commission, upon application made by any registered
    investment company, may by order exempt a specific transaction or
    transactions from the provisions of any rule or regulation made
    pursuant to subsection (e) of this section, if the Commission finds
    that such rule or regulation should not reasonably be applied to
    such transaction.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 31, 54 Stat. 838; Pub. L.
    104-290, title II, Sec. 207, Oct. 11, 1996, 110 Stat. 3430; Pub. L.
    105-353, title III, Sec. 301(c)(6), Nov. 3, 1998, 112 Stat. 3237.)


-MISC1-
                                AMENDMENTS                            
      1998 - Subsec. (f). Pub. L. 105-353 substituted "subsection (e)"
    for "subsection (c)".
      1996 - Subsecs. (a), (b). Pub. L. 104-290, Sec. 207(1), added
    subsecs. (a) and (b) and struck out former subsecs. (a) and (b)
    which read as follows:
      "(a) Every registered investment company, and every underwriter,
    broker, dealer, or investment adviser which is a majority-owned
    subsidiary of such a company, shall maintain and preserve for such
    period or periods as the Commission may prescribe by rules and
    regulations, such accounts, books, and other documents as
    constitute the record forming the basis for financial statements
    required to be filed pursuant to section 80a-29 of this title, and
    of the auditor's certificates relating thereto. Every investment
    adviser not a majority-owned subsidiary of, and every depositor of
    any registered investment company, and every principal underwriter
    for any registered investment company other than a closed-end
    company, shall maintain and preserve for such period or periods as
    the Commission shall prescribe by rules and regulations, such
    accounts, books, and other documents as are necessary or
    appropriate to record such person's transactions with such
    registered company.
      "(b) All accounts, books, and other records, required to be
    maintained and preserved by any person pursuant to subsection (a)
    of this section, shall be subject at any time and from time to time
    to such reasonable periodic, special, and other examinations by the
    Commission, or any member or representative thereof, as the
    Commission may prescribe. Any such person shall furnish to the
    Commission, within such reasonable time as the Commission may
    prescribe, copies of or extracts from such records which may be
    prepared without undue effort, expense, or delay, as the Commission
    may by order require."
      Subsecs. (c), (d). Pub. L. 104-290, Sec. 207(3), added subsecs.
    (c) and (d). Former subsecs. (c) and (d) redesignated (e) and (f),
    respectively.
      Subsec. (e). Pub. L. 104-290, Sec. 207(2), (4), redesignated
    subsec. (c) as (e) and inserted heading.
      Subsec. (f). Pub. L. 104-290, Sec. 207(2), (5), redesignated
    subsec. (d) as (f) and inserted heading.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-31                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-31. Accountants and auditors

-STATUTE-
    (a) Selection of accountant
      It shall be unlawful for any registered management company or
    registered face-amount certificate company to file with the
    Commission any financial statement signed or certified by an
    independent public accountant, unless - 
        (1) such accountant shall have been selected at a meeting held
      within thirty days before or after the beginning of the fiscal
      year or before the annual meeting of stockholders in that year by
      the vote, cast in person, of a majority of those members of the
      board of directors who are not interested persons of such
      registered company;
        (2) such selection shall have been submitted for ratification
      or rejection at the next succeeding annual meeting of
      stockholders if such meeting be held, except that any vacancy
      occurring between annual meetings, due to the death or
      resignation of the accountant, may be filled by the vote of a
      majority of those members of the board of directors who are not
      interested persons of such registered company, cast in person at
      a meeting called for the purpose of voting on such action;
        (3) the employment of such accountant shall have been
      conditioned upon the right of the company by vote of a majority
      of the outstanding voting securities at any meeting called for
      the purpose to terminate such employment forthwith without any
      penalty; and
        (4) such certificate or report of such accountant shall be
      addressed both to the board of directors of such registered
      company and to the security holders thereof.

    If the selection of an accountant has been rejected pursuant to
    paragraph (2) or his employment terminated pursuant to paragraph
    (3), the vacancy so occurring may be filled by a vote of a majority
    of the outstanding voting securities, either at the meeting at
    which the rejection or termination occurred or, if not so filled,
    at a subsequent meeting which shall be called for the purpose. In
    the case of a common-law trust of the character described in
    section 80a-16(c) of this title, no ratification of the employment
    of such accountant shall be required but such employment may be
    terminated and such accountant removed by action of the holders of
    record of a majority of the outstanding shares of beneficial
    interest in such trust in the same manner as is provided in section
    80a-16(c) of this title in respect of the removal of a trustee, and
    all the provisions therein contained as to the calling of a meeting
    shall be applicable. In the event of such termination and removal,
    the vacancy so occurring may be filled by action of the holders of
    record of a majority of the shares of beneficial interest either at
    the meeting, if any, at which such termination and removal occurs,
    or by instruments in writing filed with the custodian, or if not so
    filed within a reasonable time then at a subsequent meeting which
    shall be called by the trustees for the purpose. The provisions of
    paragraph (42) of section 80a-2(a) of this title as to a majority
    shall be applicable to the vote cast at any meeting of the
    shareholders of such a trust held pursuant to this subsection.
    (b) Selection of controller or other principal accounting officer
      No registered management company or registered face-amount
    certificate company shall file with the Commission any financial
    statement in the preparation of which the controller or other
    principal accounting officer or employee of such company
    participated, unless such controller, officer or employee was
    selected, either by vote of the holders of such company's voting
    securities at the last annual meeting of such security holders, or
    by the board of directors of such company.
    (c) Reports of accountants and auditors
      The Commission is authorized, by rules and regulations or order
    in the public interest or for the protection of investors, to
    require accountants and auditors to keep reports, work sheets, and
    other documents and papers relating to registered investment
    companies for such period or periods as the Commission may
    prescribe, and to make the same available for inspection by the
    Commission or any member or representative thereof.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 32, 54 Stat. 838; Pub. L. 91-
    547, Sec. 18, Dec. 14, 1970, 84 Stat. 1427; Pub. L. 94-29, Sec.
    28(4), June 4, 1975, 89 Stat. 165.)


-MISC1-
                                AMENDMENTS                            
      1975 - Subsec. (a). Pub. L. 94-29 substituted "section 80a-16(c)
    of this title" for "section 80a-16(b) of this title".
      1970 - Subsec. (a). Pub. L. 91-547 struck out introductory text
    "After one year from the effective date of this subchapter," and
    substituted "It" for "it"; inserted "the vote, cast in person, of"
    before "a majority" and substituted "interested persons of" for
    "investment advisers of, or affiliated persons of an investment
    adviser of, or officers or employees of," in par. (1); inserted
    "the vote of a majority of those members of" before "the board of
    directors" and "who are not interested persons of such registered
    company, cast in person at a meeting called for the purpose of
    voting on such action" after "the board of directors" in par. (2);
    substituted period for colon in par. (4); and in text after par.
    (4), substituted "if not so filled," for "if not so filled then"
    and "if not so filed" for "if not so filled", and substituted
    reference to par. (42) for par. (40) of section 80a-2(a) of this
    title.

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective on expiration of one year
    after Dec. 14, 1970, see section 30(1) of Pub. L. 91-547, set out
    as a note under section 80a-52 of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-32                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-32. Filing of documents with Commission in civil actions

-STATUTE-
      Every registered investment company which is a party and every
    affiliated person of such company who is a party defendant to any
    action or claim by a registered investment company or a security
    holder thereof in a derivative or representative capacity against
    an officer, director, investment adviser, trustee, or depositor of
    such company, shall file with the Commission, unless already so
    filed, (1) a copy of all pleadings, verdicts, or judgments filed
    with the court or served in connection with such action or claim,
    (2) a copy of any proposed settlement, compromise, or
    discontinuance of such action, and (3) a copy of such motions,
    transcripts, or other documents filed in or issued by the court or
    served in connection with such action or claim as may be requested
    in writing by the Commission. If any document referred to in clause
    (1) or (2) - 
        (A) is delivered to such company or party defendant, such
      document shall be filed with the Commission not later than ten
      days after the receipt thereof; or
        (B) is filed in such court or delivered by such company or
      party defendant, such documents shall be filed with the
      Commission not later than five days after such filing or
      delivery.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 33, 54 Stat. 839; Pub. L. 91-
    547, Sec. 19, Dec. 14, 1970, 84 Stat. 1428.)


-MISC1-
                                AMENDMENTS                            
      1970 - Pub. L. 91-547 inserted provision for party acting in
    representative capacity and substituted provisions for prompt
    filing with the Commission of copies of all pleadings, verdicts,
    judgments, settlements, compromises, or discontinuances served or
    filed in suits by a registered investment company or a security
    holder thereof against an officer, director, investment adviser,
    trustee, or depositor of such company and of copies of motions,
    transcripts, or other documents if the Commission requests them for
    prior requirement that registered companies and their affiliated
    persons who are defendants in derivative suits involving an alleged
    breach of official duty transmit to the Commission copies of the
    pleadings and the record in such actions after a settlement or
    compromise of the action has been approved by a court of competent
    jurisdiction or a verdict or final judgment on the merits has been
    rendered, Commission use of information, and nondisclosure of
    identity of persons.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-33                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-33. Destruction and falsification of reports and records

-STATUTE-
    (a) Willful destruction
      It shall be unlawful for any person, except as permitted by rule,
    regulation, or order of the Commission, willfully to destroy,
    mutilate, or alter any account, book, or other document the
    preservation of which has been required pursuant to section 80a-
    30(a) or 80a-31(c) of this title.
    (b) Untrue statements or omissions
      It shall be unlawful for any person to make any untrue statement
    of a material fact in any registration statement, application,
    report, account, record, or other document filed or transmitted
    pursuant to this subchapter or the keeping of which is required
    pursuant to section 80a-30 (a) of this title. It shall be unlawful
    for any person so filing, transmitting, or keeping any such
    document to omit to state therein any fact necessary in order to
    prevent the statements made therein, in the light of the
    circumstances under which they were made, from being materially
    misleading. For the purposes of this subsection, any part of any
    such document which is signed or certified by an accountant or
    auditor in his capacity as such shall be deemed to be made, filed,
    transmitted, or kept by such accountant or auditor, as well as by
    the person filing, transmitting, or keeping the complete document.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 34, 54 Stat. 840.)


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-34                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-34. Unlawful representations and names

-STATUTE-
    (a) Misrepresentation of guarantees
      (1) In general
        It shall be unlawful for any person, issuing or selling any
      security of which a registered investment company is the issuer,
      to represent or imply in any manner whatsoever that such security
      or company - 
          (A) has been guaranteed, sponsored, recommended, or approved
        by the United States, or any agency, instrumentality or officer
        of the United States;
          (B) has been insured by the Federal Deposit Insurance
        Corporation; or
          (C) is guaranteed by or is otherwise an obligation of any
        bank or insured depository institution.
      (2) Disclosures
        Any person issuing or selling the securities of a registered
      investment company that is advised by, or sold through, a bank
      shall prominently disclose that an investment in the company is
      not insured by the Federal Deposit Insurance Corporation or any
      other government agency. The Commission may, after consultation
      with and taking into consideration the views of the Federal
      banking agencies (as defined in section 1813 of title 12), adopt
      rules and regulations, and issue orders, consistent with the
      protection of investors, prescribing the manner in which the
      disclosure under this paragraph shall be provided.
      (3) Definitions
        The terms "insured depository institution" and "appropriate
      Federal banking agency" have the same meanings as given in
      section 1813 of title 12.
    (b) Unlawful representation of sponsorship by United States or
      agency thereof
      It shall be unlawful for any person registered under any section
    of this subchapter, to represent or imply in any manner whatsoever
    that such person has been sponsored, recommended, or approved, or
    that his abilities or qualifications have in any respect been
    passed upon by the United States or any agency or officer thereof.
    (c) Statement of registration under securities provisions
      No provision of subsection (a) or (b) of this section shall be
    construed to prohibit a statement that a person or security is
    registered under this chapter, the Securities Act of 1933 [15
    U.S.C. 77a et seq.], or the Securities Exchange Act of 1934 [15
    U.S.C. 78a et seq.], if such statement is true in fact and if the
    effect of such registration is not misrepresented.
    (d) Deceptive or misleading names
      It shall be unlawful for any registered investment company to
    adopt as a part of the name or title of such company, or of any
    securities of which it is the issuer, any word or words that the
    Commission finds are materially deceptive or misleading. The
    Commission is authorized, by rule, regulation, or order, to define
    such names or titles as are materially deceptive or misleading.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 35, 54 Stat. 840; Pub. L.
    104-290, title II, Sec. 208, Oct. 11, 1996, 110 Stat. 3432; Pub. L.
    106-102, title II, Sec. 214, Nov. 12, 1999, 113 Stat. 1398.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Act of 1933, referred to in subsec. (c), is act
    May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is
    classified generally to subchapter I (Sec. 77a et seq.) of chapter
    2A of this title. For complete classification of this Act to the
    Code, see section 77a of this title and Tables.
      The Securities Exchange Act of 1934, referred to in subsec. (c),
    is act June 6, 1934, ch. 404, 48 Stat. 881, as amended, which is
    classified generally to chapter 2B (Sec. 78a et seq.) of this
    title. For complete classification of this Act to the Code, see
    section 78a of this title and Tables.


-MISC1-
                                AMENDMENTS                            
      1999 - Subsec. (a). Pub. L. 106-102 inserted heading and amended
    text of subsec. (a) generally. Prior to amendment, text read as
    follows: "It shall be unlawful for any person, in issuing or
    selling any security of which a registered investment company is
    the issuer, to represent or imply in any manner whatsoever that
    such security or company has been guaranteed, sponsored,
    recommended, or approved by the United States or any agency or
    officer thereof."
      1996 - Subsec. (d). Pub. L. 104-290 inserted heading and amended
    text generally. Prior to amendment, text read as follows: "It shall
    be unlawful for any registered investment company hereafter to
    adopt as a part of the name or title of such company, or of any
    security of which it is the issuer, any word or words which the
    Commission finds and by order declares to be deceptive or
    misleading. The Commission is authorized to bring an action in the
    proper district court of the United States or United States court
    of any Territory or other place subject to the jurisdiction of the
    United States alleging that the name or title of any registered
    investment company, or of any security which it has issued, is
    materially deceptive or misleading. If the court finds that the
    Commission's allegations in this respect, taking into consideration
    the history of the investment company and the length of time which
    it may have used any such name or title, are established, the court
    shall enjoin such investment company from continuing to use any
    such name or title."

                     EFFECTIVE DATE OF 1999 AMENDMENT                 
      Amendment by Pub. L. 106-102 effective 18 months after Nov. 12,
    1999, see section 225 of Pub. L. 106-102, set out as a note under
    section 77c of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-35                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-35. Breach of fiduciary duty

-STATUTE-
    (a) Civil actions by Commission; jurisdiction; allegations;
      injunctive or other relief
      The Commission is authorized to bring an action in the proper
    district court of the United States, or in the United States court
    of any territory or other place subject to the jurisdiction of the
    United States, alleging that a person serving or acting in one or
    more of the following capacities has engaged within five years of
    the commencement of the action or is about to engage in any act or
    practice constituting a breach of fiduciary duty involving personal
    misconduct in respect of any registered investment company for
    which such person so serves or acts - 
        (1) as officer, director, member of any advisory board,
      investment adviser, or depositor; or
        (2) as principal underwriter, if such registered company is an
      open-end company, unit investment trust, or face-amount
      certificate company.

    If such allegations are established, the court may enjoin such
    persons from acting in any or all such capacities either
    permanently or temporarily and award such injunctive or other
    relief against such person as may be reasonable and appropriate in
    the circumstances, having due regard to the protection of investors
    and to the effectuation of the policies declared in section 80a-
    1(b) of this title.
    (b) Compensation or payments as basis of fiduciary duty; civil
      actions by Commission or security holder; burden of proof;
      judicial consideration of director or shareholder approval;
      persons liable; extent of liability; exempted transactions;
      jurisdiction; finding restriction
      For the purposes of this subsection, the investment adviser of a
    registered investment company shall be deemed to have a fiduciary
    duty with respect to the receipt of compensation for services, or
    of payments of a material nature, paid by such registered
    investment company or by the security holders thereof, to such
    investment adviser or any affiliated person of such investment
    adviser. An action may be brought under this subsection by the
    Commission, or by a security holder of such registered investment
    company on behalf of such company, against such investment adviser,
    or any affiliated person of such investment adviser, or any other
    person enumerated in subsection (a) of this section who has a
    fiduciary duty concerning such compensation or payments, for breach
    of fiduciary duty in respect of such compensation or payments paid
    by such registered investment company or by the security holders
    thereof to such investment adviser or person. With respect to any
    such action the following provisions shall apply:
      (1) It shall not be necessary to allege or prove that any
    defendant engaged in personal misconduct, and the plaintiff shall
    have the burden of proving a breach of fiduciary duty.
      (2) In any such action approval by the board of directors of such
    investment company of such compensation or payments, or of
    contracts or other arrangements providing for such compensation or
    payments, and ratification or approval of such compensation or
    payments, or of contracts or other arrangements providing for such
    compensation or payments, by the shareholders of such investment
    company, shall be given such consideration by the court as is
    deemed appropriate under all the circumstances.
      (3) No such action shall be brought or maintained against any
    person other than the recipient of such compensation or payments,
    and no damages or other relief shall be granted against any person
    other than the recipient of such compensation or payments. No award
    of damages shall be recoverable for any period prior to one year
    before the action was instituted. Any award of damages against such
    recipient shall be limited to the actual damages resulting from the
    breach of fiduciary duty and shall in no event exceed the amount of
    compensation or payment received from such investment company, or
    the security holders thereof, by such recipient.
      (4) This subsection shall not apply to compensation or payments
    made in connection with transactions subject to section 80a-17 of
    this title, or rules, regulations, or orders thereunder, or to
    sales loads for the acquisition of any security issued by a
    registered investment company.
      (5) Any action pursuant to this subsection may be brought only in
    an appropriate district court of the United States.
      (6) No finding by a court with respect to a breach of fiduciary
    duty under this subsection shall be made a basis (A) for a finding
    of a violation of this subchapter for the purposes of sections 80a-
    9 and 80a-48 of this title, section 78o of this title, or section
    80b-3 of this title, or (B) for an injunction to prohibit any
    person from serving in any of the capacities enumerated in
    subsection (a) of this section.
    (c) Corporate or other trustees performing functions of investment
      advisers
      For the purposes of subsections (a) and (b) of this section, the
    term "investment adviser" includes a corporate or other trustee
    performing the functions of an investment adviser.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 36, 54 Stat. 841; Pub. L. 91-
    547, Sec. 20, Dec. 14, 1970, 84 Stat. 1428; Pub. L. 94-29, Sec.
    28(7), June 4, 1975, 89 Stat. 166; Pub. L. 100-181, title VI, Sec.
    622, Dec. 4, 1987, 101 Stat. 1262.)


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (b)(4). Pub. L. 100-181, Sec. 622(1), substituted
    "loads" for "loans".
      Subsecs. (c), (d). Pub. L. 100-181, Sec. 622(2), (3),
    redesignated as subsec. (c) provisions which were added and
    designated as subsec. (d) by Pub. L. 94-29, and substituted
    "subsections (a) and (b)" for "subsections (a) through (c)".
      1975 - Subsec. (d). Pub. L. 94-29 added subsec. (d).
      1970 - Subsec. (a). Pub. L. 91-547 designated existing provisions
    as subsec. (a) and substituted in first sentence "has engaged
    within five years of the commencement of the action or is about to
    engage in any act or practice constituting a breach of fiduciary
    duty involving personal misconduct" for "has been guilty, after
    August 22, 1940, and within five years of the commencement of the
    action, of gross misconduct or gross abuse of trust" and second
    sentence reading "If such allegations are established, the court
    may enjoin such persons from acting in any or all such capacities
    either permanently or temporarily and award such injunctive or
    other relief against such person as may be reasonable and
    appropriate in the circumstances, having due regard to the
    protection of investors and to the effectuation of the policies
    declared in section 80a-1(b) of this title" for prior provision
    reading "If the Commission's allegations of such gross misconduct
    or gross abuse of trust are established, the court shall enjoin
    such person from acting in such capacity or capacities either
    permanently or for such period of time as it in its discretion
    shall deem appropriate."
      Subsec. (b). Pub. L. 91-547 added subsec. (b).

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, except that
    subsec. (b) of this section effective on expiration of eighteen
    months after Dec. 14, 1970, see section 30 (introductory text and
    par. (4)) of Pub. L. 91-547, set out as a note under section 80a-52
    of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-36                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-36. Larceny and embezzlement

-STATUTE-
      Whoever steals, unlawfully abstracts, unlawfully and willfully
    converts to his own use or to the use of another, or embezzles any
    of the moneys, funds, securities, credits, property, or assets of
    any registered investment company shall be deemed guilty of a
    crime, and upon conviction thereof shall be subject to the
    penalties provided in section 80a-48 of this title. A judgment of
    conviction or acquittal on the merits under the laws of any State
    shall be a bar to any prosecution under this section for the same
    act or acts.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 37, 54 Stat. 841.)

-End-



-CITE-
    15 USC Sec. 80a-37                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-37. Rules, regulations, and orders

-STATUTE-
    (a) Powers of Commission
      The Commission shall have authority from time to time to make,
    issue, amend, and rescind such rules and regulations and such
    orders as are necessary or appropriate to the exercise of the
    powers conferred upon the Commission elsewhere in this subchapter,
    including rules and regulations defining accounting, technical, and
    trade terms used in this subchapter, and prescribing the form or
    forms in which information required in registration statements,
    applications, and reports to the Commission shall be set forth. For
    the purposes of its rules or regulations the Commission may
    classify persons, securities, and other matters within its
    jurisdiction and prescribe different requirements for different
    classes of persons, securities, or matters.
    (b) Filing of information and documents
      The Commission, by such rules and regulations or order as it
    deems necessary or appropriate in the public interest or for the
    protection of investors, may authorize the filing of any
    information or documents required to be filed with the Commission
    under this subchapter, subchapter II of this chapter, the
    Securities Act of 1933 [15 U.S.C. 77a et seq.], the Securities
    Exchange Act of 1934 [15 U.S.C. 78a et seq.], the Public Utility
    Holding Company Act of 1935,(!1) or the Trust Indenture Act of 1939
    [15 U.S.C. 77aaa et seq.], by incorporating by reference any
    information or documents theretofore or concurrently filed with the
    Commission under this subchapter or any of such Acts.

    (c) Good faith conformance with rules, regulations, and orders
      No provision of this subchapter imposing any liability shall
    apply to any act done or omitted in good faith in conformity with
    any rule, regulation, or order of the Commission, notwithstanding
    that such rule, regulation, or order may, after such act or
    omission, by amended or rescinded or be determined by judicial or
    other authority to be invalid for any reason.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 38, 54 Stat. 841.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Act of 1933, referred to in subsec. (b), is act
    May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is
    classified generally to subchapter I (Sec. 77a et seq.) of chapter
    2A of this title. For complete classification of this Act to the
    Code, see section 77a of this title and Tables.
      The Securities Exchange Act of 1934, referred to in subsec. (b),
    is act June 6, 1934, ch. 404, 48 Stat. 881, as amended, which is
    classified generally to chapter 2B (Sec. 78a et seq.) of this
    title. For complete classification of this Act to the Code, see
    section 78a of this title and Tables.
      The Public Utility Holding Company Act of 1935, referred to in
    subsec. (b), is title I of act Aug. 26, 1935, ch. 687, 49 Stat.
    803, as amended, which was classified generally to chapter 2C (Sec.
    79 et seq.) of this title, prior to repeal by Pub. L. 109-58, title
    XII, Sec. 1263, Aug. 8, 2005, 119 Stat. 974. For complete
    classification of this Act to the Code, see Tables.
      The Trust Indenture Act of 1939, referred to in subsec. (b), is
    title III of act May 27, 1933, ch. 38, as added Aug. 3, 1939, ch.
    411, 53 Stat. 1149, as amended, which is classified generally to
    subchapter III (Sec. 77aaa et seq.) of chapter 2A of this title.
    For complete classification of this Act to the Code, see section
    77aaa of this title and Tables.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    15 USC Sec. 80a-38                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-38. Procedure for issuance of rules and regulations

-STATUTE-
      Subject to the provisions of chapter 15 of title 44 and
    regulations prescribed under the authority thereof, the rules and
    regulations of the Commission under this subchapter, and amendments
    thereof, shall be effective upon publication in the manner which
    the Commission shall prescribe, or upon such later date as may be
    provided in such rules and regulations.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 39, 54 Stat. 842.)

-COD-
                               CODIFICATION                           
      "Chapter 15 of title 44" substituted in text for "the Federal
    Register Act" on authority of Pub. L. 90-620, Sec. 2(b), Oct. 22,
    1968, 82 Stat. 1305, the first section of which enacted Title 44,
    Public Printing and Documents.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-39                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-39. Procedure for issuance of orders

-STATUTE-
    (a) Notice and hearing
      Orders of the Commission under this subchapter shall be issued
    only after appropriate notice and opportunity for hearing. Notice
    to the parties to a proceeding before the Commission shall be given
    by personal service upon each party or by registered mail or
    certified mail or confirmed telegraphic notice to the party's last
    known business address. Notice to interested persons, if any, other
    than parties may be given in the same manner or by publication in
    the Federal Register.
    (b) Application verified under oath admissible as evidence
      The Commission may provide, by appropriate rules or regulations,
    that an application verified under oath may be admissible in
    evidence in a proceeding before the Commission and that the record
    in such a proceeding may consist, in whole or in part, of such
    application.
    (c) Parties
      In any proceeding before the Commission, the Commission, in
    accordance with such rules and regulations as it may prescribe,
    shall admit as a party any interested State or State agency, and
    may admit as a party any representative of interested security
    holders, or any other person whose participation in the proceeding
    may be in the public interest or for the protection of investors.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 40, 54 Stat. 842; Pub. L. 86-
    507, Sec. 1(15), June 11, 1960, 74 Stat. 201.)


-MISC1-
                                AMENDMENTS                            
      1960 - Subsec. (a). Pub. L. 86-507 inserted "or certified mail"
    after "registered mail".


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-40                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-40. Hearings by Commission

-STATUTE-
      Hearings may be public and may be held before the Commission, any
    member or members thereof, or any officer or officers of the
    Commission designated by it, and appropriate records thereof shall
    be kept.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 41, 54 Stat. 842.)


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-41                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-41. Enforcement of subchapter

-STATUTE-
    (a) Investigation
      The Commission may make such investigations as it deems necessary
    to determine whether any person has violated or is about to violate
    any provision of this subchapter or of any rule, regulation, or
    order hereunder, or to determine whether any action in any court or
    any proceeding before the Commission shall be instituted under this
    subchapter against a particular person or persons, or with respect
    to a particular transaction or transactions. The Commission shall
    permit any person to file with it a statement in writing, under
    oath or otherwise as the Commission shall determine, as to all the
    facts and circumstances concerning the matter to be investigated.
    (b) Administration of oaths and affirmations, subpena of witnesses,
      etc.
      For the purpose of any investigation or any other proceeding
    under this subchapter, any member of the Commission, or any officer
    thereof designated by it, is empowered to administer oaths and
    affirmations, subpena witnesses, compel their attendance, take
    evidence, and require the production of any books, papers,
    correspondence, memoranda, contracts, agreements, or other records
    which are relevant or material to the inquiry. Such attendance of
    witnesses and the production of any such records may be required
    from any place in any State or in any Territory or other place
    subject to the jurisdiction of the United States at any designated
    place of hearing.
    (c) Jurisdiction of courts of United States
      In case of contumacy by, or refusal to obey a subpena issued to,
    any person, the Commission may invoke the aid of any court of the
    United States within the jurisdiction of which such investigation
    or proceeding is carried on, or where such person resides or
    carries on business, in requiring the attendance and testimony of
    witnesses and the production of books, papers, correspondence,
    memoranda, contracts, agreements, and other records. And such court
    may issue an order requiring such person to appear before the
    Commission or member or officer designated by the Commission, there
    to produce records, if so ordered, or to give testimony touching
    the matter under investigation or in question; any failure to obey
    such order of the court may be punished by such court as a contempt
    thereof. All process in any such case may be served in the judicial
    district whereof such person is an inhabitant or wherever he may be
    found. Any person who without just cause shall fail or refuse to
    attend and testify or to answer any lawful inquiry or to produce
    books, papers, correspondence, memoranda, contracts, agreements, or
    other records, if in his or its power so to do, in obedience to the
    subpena of the Commission, shall be guilty of a misdemeanor, and
    upon conviction shall be subject to a fine of not more than $1,000
    or to imprisonment for a term of not more than one year, or both.
    (d) Action for injunction
      Whenever it shall appear to the Commission that any person has
    engaged or is about to engage in any act or practice constituting a
    violation of any provision of this subchapter, or of any rule,
    regulation, or order hereunder, it may in its discretion bring an
    action in the proper district court of the United States, or the
    proper United States court of any Territory or other place subject
    to the jurisdiction of the United States, to enjoin such acts or
    practices and to enforce compliance with this subchapter or any
    rule, regulation, or order hereunder. Upon a showing that such
    person has engaged or is about to engage in any such act or
    practice, a permanent or temporary injunction or decree or
    restraining order shall be granted without bond. In any proceeding
    under this subsection to enforce compliance with section 80a-7 of
    this title, the court as a court of equity may, to the extent it
    deems necessary or appropriate, take exclusive jurisdiction and
    possession of the investment company or companies involved and the
    books, records, and assets thereof, wherever located; and the court
    shall have jurisdiction to appoint a trustee, who with the approval
    of the court shall have power to dispose of any or all of such
    assets, subject to such terms and conditions as the court may
    prescribe. The Commission may transmit such evidence as may be
    available concerning any violation of the provisions of this
    subchapter or of any rule, regulation, or order thereunder, to the
    Attorney General, who, in his discretion, may institute the
    appropriate criminal proceedings under this subchapter.
    (e) Money penalties in civil actions
      (1) Authority of Commission
        Whenever it shall appear to the Commission that any person has
      violated any provision of this subchapter, the rules or
      regulations thereunder, or a cease-and-desist order entered by
      the Commission pursuant to section 80a-9(f) of this title, the
      Commission may bring an action in a United States district court
      to seek, and the court shall have jurisdiction to impose, upon a
      proper showing, a civil penalty to be paid by the person who
      committed such violation.
      (2) Amount of penalty
        (A) First tier
          The amount of the penalty shall be determined by the court in
        light of the facts and circumstances. For each violation, the
        amount of the penalty shall not exceed the greater of (i)
        $5,000 for a natural person or $50,000 for any other person, or
        (ii) the gross amount of pecuniary gain to such defendant as a
        result of the violation.
        (B) Second tier
          Notwithstanding subparagraph (A), the amount of penalty for
        each such violation shall not exceed the greater of (i) $50,000
        for a natural person or $250,000 for any other person, or (ii)
        the gross amount of pecuniary gain to such defendant as a
        result of the violation, if the violation described in
        paragraph (1) involved fraud, deceit, manipulation, or
        deliberate or reckless disregard of a regulatory requirement.
        (C) Third tier
          Notwithstanding subparagraphs (A) and (B), the amount of
        penalty for each such violation shall not exceed the greater of
        (i) $100,000 for a natural person or $500,000 for any other
        person, or (ii) the gross amount of pecuniary gain to such
        defendant as a result of the violation, if - 
            (I) the violation described in paragraph (1) involved
          fraud, deceit, manipulation, or deliberate or reckless
          disregard of a regulatory requirement; and
            (II) such violation directly or indirectly resulted in
          substantial losses or created a significant risk of
          substantial losses to other persons.
      (3) Procedures for collection
        (A) Payment of penalty to Treasury
          A penalty imposed under this section shall be payable into
        the Treasury of the United States, except as otherwise provided
        in section 7246 of this title.
        (B) Collection of penalties
          If a person upon whom such a penalty is imposed shall fail to
        pay such penalty within the time prescribed in the court's
        order, the Commission may refer the matter to the Attorney
        General who shall recover such penalty by action in the
        appropriate United States district court.
        (C) Remedy not exclusive
          The actions authorized by this subsection may be brought in
        addition to any other action that the Commission or the
        Attorney General is entitled to bring.
        (D) Jurisdiction and venue
          For purposes of section 80a-43 of this title, actions under
        this paragraph shall be actions to enforce a liability or a
        duty created by this subchapter.
      (4) Special provisions relating to a violation of a cease-and-
        desist order
        In an action to enforce a cease-and-desist order entered by the
      Commission pursuant to section 80a-9(f) of this title, each
      separate violation of such order shall be a separate offense,
      except that in the case of a violation through a continuing
      failure to comply with the order, each day of the failure to
      comply shall be deemed a separate offense.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 42, 54 Stat. 842; Pub. L. 91-
    452, title II, Sec. 215, Oct. 15, 1970, 84 Stat. 929; Pub. L. 100-
    181, title VI, Sec. 623, Dec. 4, 1987, 101 Stat. 1262; Pub. L. 101-
    429, title III, Sec. 302, Oct. 15, 1990, 104 Stat. 945; Pub. L.
    107-204, title III, Sec. 308(d)(4), July 30, 2002, 116 Stat. 785.)


-MISC1-
                                AMENDMENTS                            
      2002 - Subsec. (e)(3)(A). Pub. L. 107-204 inserted ", except as
    otherwise provided in section 7246 of this title" before period at
    end.
      1990 - Subsec. (e). Pub. L. 101-429 added subsec. (e).
      1987 - Subsecs. (d), (e). Pub. L. 100-181 redesignated subsec.
    (e) as (d).
      1970 - Subsec. (d). Pub. L. 91-452 struck out subsec. (d) which
    related to immunity from prosecution of any individual compelled to
    testify or produce evidence, documentary or otherwise, after
    claiming his privilege against self-incrimination.

                     EFFECTIVE DATE OF 1990 AMENDMENT                 
      Amendment by Pub. L. 101-429 effective Oct. 15, 1990, with
    provisions relating to civil penalties and accounting and
    disgorgement, see section 1(c)(1), (2) of Pub. L. 101-429, set out
    in a note under section 77g of this title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-452 effective on sixtieth day following
    Oct. 15, 1970, see section 260 of Pub. L. 91-452, set out as an
    Effective Date; Savings Provision note under section 6001 of Title
    18, Crimes and Criminal Procedure.

                             SAVINGS PROVISION                         
      Amendment by Pub. L. 91-452 not to affect any immunity to which
    any individual is entitled under this section by reason of any
    testimony given before the sixtieth day following Oct. 15, 1970,
    see section 260 of Pub. L. 91-452, set out as an Effective Date;
    Savings Provision note under section 6001 of Title 18, Crimes and
    Criminal Procedure.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-42                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-42. Court review of orders

-STATUTE-
      (a) Any person or party aggrieved by an order issued by the
    Commission under this subchapter may obtain a review of such order
    in the United States court of appeals within any circuit wherein
    such person resides or has his principal place of business, or in
    the United States Court of Appeals for the District of Columbia, by
    filing in such court, within sixty days after the entry of such
    order, a written petition praying that the order of the Commission
    be modified or set aside in whole or in part. A copy of such
    petition shall be forthwith transmitted by the clerk of the court
    to any member of the Commission or any officer thereof designated
    by the Commission for that purpose, and thereupon the Commission
    shall file in the court the record upon which the order complained
    of was entered, as provided in section 2112 of title 28. Upon the
    filing of such petition such court shall have jurisdiction, which
    upon the filing of the record shall be exclusive, to affirm,
    modify, or set aside such order, in whole or in part. No objection
    to the order of the Commission shall be considered by the court
    unless such objection shall have been urged before the Commission
    or unless there were reasonable grounds for failure so to do. The
    findings of the Commission as to the facts, if supported by
    substantial evidence, shall be conclusive. If application is made
    to the court for leave to adduce additional evidence, and it is
    shown to the satisfaction of the court that such additional
    evidence is material and that there were reasonable grounds for
    failure to adduce such evidence in the proceeding before the
    Commission, the court may order such additional evidence to be
    taken before the Commission and to be adduced upon the hearing in
    such manner and upon such terms and conditions as to the court may
    seem proper. The Commission may modify its findings as to the facts
    by reason of the additional evidence so taken, and it shall file
    with the court such modified or new findings, which, if supported
    by substantial evidence, shall be conclusive, and its
    recommendation, if any, for the modification or setting aside of
    the original order. The judgment and decree of the court affirming,
    modifying, or setting aside, in whole or in part, any such order of
    the Commission shall be final, subject to review by the Supreme
    Court of the United States upon certiorari or certification as
    provided in section 1254 of title 28.
      (b) The commencement of proceedings under subsection (a) of this
    section to review an order of the Commission issued under section
    80a-8(e) of this title shall operate as a stay of the Commission's
    order unless the court otherwise orders. The commencement of
    proceedings under subsection (a) of this section to review an order
    of the Commission issued under any provision of this subchapter
    other than section 80a-8(e) of this title shall not operate as a
    stay of the Commission's order unless the court specifically so
    orders.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 43, 54 Stat. 844; June 25,
    1948, ch. 646, Sec. 32(a), 62 Stat. 991; May 24, 1949, ch. 139,
    Sec. 127, 63 Stat. 107; Pub. L. 85-791, Sec. 25, Aug. 28, 1958, 72
    Stat. 949; Pub. L. 91-547, Sec. 21, Dec. 14, 1970, 84 Stat. 1430.)


-MISC1-
                                AMENDMENTS                            
      1970 - Pub. L. 91-547 substituted reference to "section 1254" for
    "sections 346 and 347" of title 28.
      1958 - Subsec. (a). Pub. L. 85-791, in second sentence,
    substituted "transmitted by the clerk of the court to any member of
    the Commission or" for "served upon any member of the Commission or
    upon", substituted "file in the court" for "certify and file in the
    court a transcript of", and inserted "as provided in section 2112
    of title 28" and, in third sentence, substituted "petition" for
    "transcript", and "jurisdiction, which upon the filing of the
    record shall be exclusive" for "exclusive jurisdiction".

-CHANGE-
                              CHANGE OF NAME                          
      Act June 25, 1948, eff. Sept. 1, 1948, as amended by act May 24,
    1949, substituted "court of appeals" for "circuit court of
    appeals".


-MISC2-
                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-43                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-43. Jurisdiction of offenses and suits

-STATUTE-
      The district courts of the United States and the United States
    courts of any Territory or other place subject to the jurisdiction
    of the United States shall have jurisdiction of violations of this
    subchapter or the rules, regulations, or orders thereunder, and,
    concurrently with State and Territorial courts, of all suits in
    equity and actions at law brought to enforce any liability or duty
    created by, or to enjoin any violation of, this subchapter or the
    rules, regulations, or orders thereunder. Any criminal proceeding
    may be brought in the district wherein any act or transaction
    constituting the violation occurred. A criminal proceeding based
    upon a violation of section 80a-33 of this title, or upon a failure
    to file a report or other document required to be filed under this
    subchapter, may be brought in the district wherein the defendant is
    an inhabitant or maintains his principal office or place of
    business. Any suit or action to enforce any liability or duty
    created by, or to enjoin any violation of, this subchapter or
    rules, regulations, or orders thereunder, may be brought in any
    such district or in the district wherein the defendant is an
    inhabitant or transacts business, and process in such cases may be
    served in any district of which the defendant is an inhabitant or
    transacts business or wherever the defendant may be found.
    Judgments and decrees so rendered shall be subject to review as
    provided in sections 1254, 1291, 1292, and 1294 of title 28. No
    costs shall be assessed for or against the Commission in any
    proceeding under this subchapter brought by or against the
    Commission in any court. The Commission may intervene as a party in
    any action or suit to enforce any liability or duty created by, or
    to enjoin any noncompliance with, section 80a-35(b) of this title
    at any stage of such action or suit prior to final judgment
    therein.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 44, 54 Stat. 844; Pub. L. 91-
    547, Sec. 22, Dec. 14, 1970, 84 Stat. 1430.)


-MISC1-
                                AMENDMENTS                            
      1970 - Pub. L. 91-547 substituted reference to "sections 1254,
    1291, 1292, and 1294 of title 28" for "sections 225 and 347 of
    title 28 and section 7, as amended, of the Act entitled 'An Act to
    establish a court of appeals for the District of Columbia, approved
    February 9, 1893' " and provided for Commission intervention as a
    party in any action or suit to enforce any liability or duty
    created by, or to enjoin any noncompliance with, section 80a-35(b)
    of this title at any stage of such action or suit prior to final
    judgment therein, respectively.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-44                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-44. Disclosure of information filed with Commission;
      copies

-STATUTE-
      (a) The information contained in any registration statement,
    application, report, or other document filed with the Commission
    pursuant to any provision of this subchapter or of any rule or
    regulation thereunder (as distinguished from any information or
    document transmitted to the Commission) shall be made available to
    the public, unless and except insofar as the Commission, by rules
    and regulations upon its own motion, or by order upon application,
    finds that public disclosure is neither necessary nor appropriate
    in the public interest or for the protection of investors. Except
    as provided in section 78x(c) of this title, it shall be unlawful
    for any member, officer, or employee of the Commission to use for
    personal benefit, or to disclose to any person other than an
    official or employee of the United States or of a State, for
    official use, or for any such official or employee to use for
    personal benefit, any information contained in any document so
    filed or transmitted, if such information is not available to the
    public.
      (b) Photostatic or other copies of information contained in
    documents filed with the Commission under this subchapter and made
    available to the public shall be furnished any person at such
    reasonable charge and under such reasonable limitations as the
    Commission shall prescribe.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 45, 54 Stat. 845; Pub. L.
    101-550, title II, Sec. 202(b)(1), Nov. 15, 1990, 104 Stat. 2715.)


-MISC1-
                                AMENDMENTS                            
      1990 - Subsec. (a). Pub. L. 101-550 substituted "Except as
    provided in section 78x(c) of this title, it shall be unlawful" for
    "It shall be unlawful".


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-45                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-45. Reports by Commission; hiring and leasing authority

-STATUTE-
    (a) Omitted
    (b) Hiring and leasing authority
      The provisions of section 78d(b) of this title shall be
    applicable with respect to the power of the Commission - 
        (1) to appoint and fix the compensation of such employees as
      may be necessary for carrying out its functions under this
      subchapter, and
        (2) to lease and allocate such real property as may be
      necessary for carrying out its functions under this subchapter.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 46, 54 Stat. 845; Oct. 28,
    1949, ch. 782, title XI, Sec. 1106(a), 63 Stat. 972; Pub. L. 101-
    550, title I, Sec. 104(c), Nov. 15, 1990, 104 Stat. 2714.)

-COD-
                               CODIFICATION                           
      Subsection (a), which required the Securities and Exchange
    Commission to submit an annual report to Congress on the work of
    the Commission, terminated, effective May 15, 2000, pursuant to
    section 3003 of Pub. L. 104-66, as amended, set out as a note under
    section 1113 of Title 31, Money and Finance. See, also, page 191 of
    House Document No. 103-7.


-MISC1-
                                AMENDMENTS                            
      1990 - Subsec. (b). Pub. L. 101-550 amended subsec. (b)
    generally. Prior to amendment, subsec. (b) related to appointment
    and compensation of employees.
      1949 - Subsec. (b). Act Oct. 28, 1949, substituted
    "Classification Act of 1949" for "Classification Act of 1923".

                                  REPEALS                              
      Act Oct. 28, 1949, ch. 782, set out in the credit of this
    section, was repealed (subject to a savings clause) by Pub. L. 89-
    554, Sept. 6, 1966, Sec. 8, 80 Stat. 632, 655.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80a-46                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-46. Validity of contracts

-STATUTE-
    (a) Waiver of compliance as void
      Any condition, stipulation, or provision binding any person to
    waive compliance with any provision of this subchapter or with any
    rule, regulation, or order thereunder shall be void.
    (b) Equitable results; rescission; severance
      (1) A contract that is made, or whose performance involves, a
    violation of this subchapter, or of any rule, regulation, or order
    thereunder, is unenforceable by either party (or by a nonparty to
    the contract who acquired a right under the contract with knowledge
    of the facts by reason of which the making or performance violated
    or would violate any provision of this subchapter or of any rule,
    regulation, or order thereunder) unless a court finds that under
    the circumstances enforcement would produce a more equitable result
    than nonenforcement and would not be inconsistent with the purposes
    of this subchapter.
      (2) To the extent that a contract described in paragraph (1) has
    been performed, a court may not deny rescission at the instance of
    any party unless such court finds that under the circumstances the
    denial of rescission would produce a more equitable result than its
    grant and would not be inconsistent with the purposes of this
    subchapter.
      (3) This subsection shall not apply (A) to the lawful portion of
    a contract to the extent that it may be severed from the unlawful
    portion of the contract, or (B) to preclude recovery against any
    person for unjust enrichment.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 47, 54 Stat. 845; Pub. L. 96-
    477, title I, Sec. 104, Oct. 21, 1980, 94 Stat. 2277.)


-MISC1-
                                AMENDMENTS                            
      1980 - Subsec. (b). Pub. L. 96-477 provided that a contract whose
    terms violated this subchapter or any rule, regulation, or order
    thereunder would be unenforceable by either party or by a nonparty
    to the contract who acquired a right under such contract with
    knowledge of the facts by reason of which the making or performance
    of the contract would violate this subchapter, struck out
    provisions declaring such contracts void as regards the rights of
    the violators or nonparties to the contract with actual knowledge
    of its illegality, authorized the court to enforce such contracts
    where the court found that under the circumstances enforcement
    would produce a more equitable result than nonenforcement and such
    enforcement would not be inconsistent with the purposes of this
    subchapter, authorized the same two-part test to save from
    rescission any portions of such contracts which had been performed,
    and provided that subsec. (b) was not to apply to a lawful portion
    of a contract to the extent it could be severed from an unlawful
    portion of such contract, or to preclude recovery against any
    person for unjust enrichment.

-End-



-CITE-
    15 USC Sec. 80a-47                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-47. Violation of subchapter

-STATUTE-
    (a) Procurement
      It shall be unlawful for any person, directly or indirectly, to
    cause to be done any act or thing through or by means of any other
    person which it would be unlawful for such person to do under the
    provisions of this subchapter or any rule, regulation, or order
    thereunder.
    (b) Obstructing compliance
      It shall be unlawful for any person without just cause to hinder,
    delay, or obstruct the making, filing, or keeping of any
    information, document, report, record, or account required to be
    made, filed, or kept under any provision of this subchapter or any
    rule, regulation, or order thereunder.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 48, 54 Stat. 846.)

-End-



-CITE-
    15 USC Sec. 80a-48                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-48. Penalties

-STATUTE-
      Any person who willfully violates any provision of this
    subchapter or of any rule, regulation, or order hereunder, or any
    person who willfully in any registration statement, application,
    report, account, record, or other document filed or transmitted
    pursuant to this subchapter or the keeping of which is required
    pursuant to section 80a-30(a) of this title makes any untrue
    statement of a material fact or omits to state any material fact
    necessary in order to prevent the statements made therein from
    being materially misleading in the light of the circumstances under
    which they were made, shall upon conviction be fined not more than
    $10,000 or imprisoned not more than five years, or both; but no
    person shall be convicted under this section for the violation of
    any rule, regulation, or order if he proves that he had no actual
    knowledge of such rule, regulation, or order.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 49, 54 Stat. 846; Pub. L. 94-
    29, Sec. 27(e), June 4, 1975, 89 Stat. 163.)


-MISC1-
                                AMENDMENTS                            
      1975 - Pub. L. 94-29 substituted "or imprisoned not more than
    five years" for "or imprisoned not more than two years".

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.

-End-



-CITE-
    15 USC Sec. 80a-49                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-49. Construction with other laws

-STATUTE-
      Except where specific provision is made to the contrary, nothing
    in this subchapter shall affect (1) the jurisdiction of the
    Commission under the Securities Act of 1933 [15 U.S.C. 77a et
    seq.], the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.],
    the Public Utility Holding Company Act of 1935,(!1) the Trust
    Indenture Act of 1939 [15 U.S.C. 77aaa et seq.], or subchapter II
    of this chapter, over any person, security, or transaction, or (2)
    the rights, obligations, duties, or liabilities of any person under
    such Acts; nor shall anything in this subchapter affect the
    jurisdiction of any other commission, board, agency, or officer of
    the United States or of any State or political subdivision of any
    State, over any person, security, or transaction, insofar as such
    jurisdiction does not conflict with any provision of this
    subchapter or of any rule, regulation, or order hereunder.


-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 50, 54 Stat. 846.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Act of 1933, referred to in text, is act May 27,
    1933, ch. 38, title I, 48 Stat. 74, as amended, which is classified
    generally to subchapter I (Sec. 77a et seq.) of chapter 2A of this
    title. For complete classification of this Act to the Code, see
    section 77a of this title and Tables.
      The Securities Exchange Act of 1934, referred to in text, is act
    June 6, 1934, ch. 404, 48 Stat. 881, as amended, which is
    classified generally to chapter 2B (Sec. 78a et seq.) of this
    title. For complete classification of this Act to the Code, see
    section 78a of this title and Tables.
      The Public Utility Holding Company Act of 1935, referred to in
    text, is title I of act Aug. 26, 1935, ch. 687, 49 Stat. 803, as
    amended, which was classified generally to chapter 2C (Sec. 79 et
    seq.) of this title, prior to repeal by Pub. L. 109-58, title XII,
    Sec. 1263, Aug. 8, 2005, 119 Stat. 974. For complete classification
    of this Act to the Code, see Tables.
      The Trust Indenture Act of 1939, referred to in text, is title
    III of act May 27, 1933, ch. 38, as added Aug. 3, 1939, ch. 411, 53
    Stat. 1149, and amended, which is classified generally to
    subchapter III (Sec. 77aaa et seq.) of chapter 2A of this title.
    For complete classification of this Act to the Code, see section
    77aaa of this title and Tables.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    15 USC Sec. 80a-50                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-50. Separability

-STATUTE-
      If any provision of this subchapter or any provision incorporated
    in this subchapter by reference, or the application of any such
    provision to any person or circumstances, shall be held invalid,
    the remainder of this subchapter and the application of any such
    provision to person or circumstances other than those as to which
    it is held invalid shall not be affected thereby.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 51, 54 Stat. 846.)

-End-



-CITE-
    15 USC Sec. 80a-51                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-51. Short title

-STATUTE-
      This subchapter may be cited as the "Investment Company Act of
    1940".

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 52, 54 Stat. 847.)


-MISC1-
                       SHORT TITLE OF 1996 AMENDMENT                   
      Pub. L. 104-290, title II, Sec. 201, Oct. 11, 1996, 110 Stat.
    3426, provided that: "This title [amending sections 80a-2, 80a-3,
    80a-12, 80a-24, 80a-26, 80a-27, 80a-29, 80a-30, 80a-34, and 80b-5
    of this title and enacting provisions set out as notes under
    sections 80a-2, 80a-3, and 80a-24 of this title] may be cited as
    the 'Investment Company Act Amendments of 1996'."

                       SHORT TITLE OF 1995 AMENDMENT                   
      Pub. L. 104-62, Sec. 1(a), Dec. 8, 1995, 109 Stat. 682, provided
    that: "This Act [enacting section 80a-3a of this title, amending
    sections 77c, 78c, 78l, 80a-3, 80a-7, and 80b-3 of this title, and
    enacting provisions set out as a note under section 77c of this
    title] may be cited as the 'Philanthropy Protection Act of 1995'."

                       SHORT TITLE OF 1980 AMENDMENT                   
      Pub. L. 96-477, Sec. 1, Oct. 21, 1980, 94 Stat. 2275, provided
    that: "That this Act [enacting sections 80a-53 to 80a-64 and 80c to
    80c-3 of this title, amending sections 77b, 77c, 77d, 77s, 77ddd,
    78c, 78kk, 80a-2, 80a-3, 80a-6, 80a-46, 80b-2, 80b-3, and 80b-5 of
    this title, and enacting provisions set out as notes under sections
    77a and 80c of this title] may be cited as the 'Small Business
    Investment Incentive Act of 1980'."

                       SHORT TITLE OF 1970 AMENDMENT                   
      Pub. L. 91-547, Sec. 1, Dec. 14, 1970, 84 Stat. 1413, provided:
    "That this Act [enacting section 80b-6a of this title, amending
    sections 77b, 77c, 78c, 78l, 80a-2, 80a-3, 80a-8 to 80a-13, 80a-15,
    80a-17 to 80a-19, 80a-22, 80a-24 to 80a-28, 80a-31, 80a-32, 80a-35,
    80a-42, 80a-43, 80b-2, 80b-3, and 80b-5 of this title, and enacting
    provisions set out as notes under sections 77c and 80a-2 of this
    title] may be cited as the 'Investment Company amendments Act of
    1970'."

-End-



-CITE-
    15 USC Sec. 80a-52                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-52. Effective date

-STATUTE-
      The effective date of the provisions of this subchapter, so far
    as the same relate to face-amount certificates or to face-amount
    certificate companies, is January 1, 1941. The effective date of
    provisions hereof, insofar as the same do not apply to face-amount
    certificates or face-amount certificate companies is November 1,
    1940. Except as herein otherwise provided, every provision of this
    subchapter shall take effect on November 1, 1940.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 53, 54 Stat. 847; Pub. L.
    100-181, title VI, Sec. 624, Dec. 4, 1987, 101 Stat. 1262.)


-MISC1-
                                AMENDMENTS                            
      1987 - Pub. L. 100-181 struck out at end of first sentence ":
    Provided, however, That any such face-amount certificate company
    may register prior to said date, as provided by section 80a-8 of
    this title, and such registration shall not operate to change or
    affect said effective date as to any such company or any face-
    amount certificates issued by it".

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Section 30 of Pub. L. 91-547 provided that: "This Act [see Short
    Title note set out under section 80a-51 of this title] shall take
    effect on the date of its enactment [Dec. 14, 1970], except that - 
        "(1) sections (5)(a), (b), and (c); 8; 9(a); 11; 18; 24(a); and
      25 (amending sections 10(a), (b), and (c) [section 80a-10(a),
      (b), and (c)]; 15 [section 80a-15]; 17(f) [section 80a-17(f)]; 19
      [section 80a-19]; and 32(a) of the Investment Company Act of 1940
      [section 80a-31(a)]; and sections 203(b) and 205 of the
      Investment Advisers Act of 1940 [sections 80b-3(b) and 80b-5 of
      this title], respectively) shall take effect upon the expiration
      of one year after the date of enactment of this Act [Dec. 14,
      1970];
        "(2) that part of section 5(d) which substitutes 'interested
      persons' for 'affiliated persons' in section 10(d) of the
      Investment Company Act of 1940 [section 80a-10(d) of this title]
      shall take effect upon the expiration of one year after the date
      of enactment of this Act [Dec. 14, 1970];
        "(3) sections 16 and 17 (amending section 27 and 28 of the
      Investment Company Act of 1940 [sections 80a-27 and 80a-28 of
      this title]) shall take effect upon the expiration of six months
      after the date of enactment of this Act [Dec. 14, 1970]; and
        "(4) that part of section 20 which adds a subsection (b) to
      section 36 of the Investment Company Act of 1940 [section 80a-35
      of this title] shall take effect upon the expiration of eighteen
      months after the date of enactment of this Act [Dec. 14, 1970]."

-End-



-CITE-
    15 USC Sec. 80a-53                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-53. Election to be regulated as business development
      company

-STATUTE-
    (a) Eligibility
      Any company defined in section 80a-2(a)(48)(A) and (B) of this
    title may elect to be subject to the provisions of sections 80a-54
    through 80a-64 of this title by filing with the Commission a
    notification of election, if such company - 
        (1) has a class of its equity securities registered under
      section 78l of this title; or
        (2) has filed a registration statement pursuant to section 78l
      of this title for a class of its equity securities.
    (b) Form and manner of notification; effect
      The Commission may, by rule, prescribe the form and manner in
    which notification of election under this section shall be given. A
    business development company shall be deemed to be subject to
    sections 80a-54 through 80a-64 of this title upon receipt by the
    Commission of such notification of election.
    (c) Revocation or withdrawal of election
      Whenever the Commission finds, on its own motion or upon
    application, that a business development company which has filed a
    notification of election pursuant to subsection (a) of this section
    has ceased to engage in business, the Commission shall so declare
    by order revoking such company's election. Any business development
    company may voluntarily withdraw its election under subsection (a)
    of this section by filing a notice of withdrawal of election with
    the Commission, in a form and manner which the Commission may, by
    rule, prescribe. Such withdrawal shall be effective immediately
    upon receipt by the Commission.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 54, as added Pub. L. 96-477,
    title I, Sec. 105, Oct. 21, 1980, 94 Stat. 2278; amended Pub. L.
    100-181, title VI, Sec. 625, Dec. 4, 1987, 101 Stat. 1262.)


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (a). Pub. L. 100-181 substituted "defined in
    section" for "defined in sections".

-End-



-CITE-
    15 USC Sec. 80a-54                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-54. Acquisition of assets by business development
      companies

-STATUTE-
    (a) Permissible assets; percentage
      It shall be unlawful for a business development company to
    acquire any assets (other than those described in paragraphs (1)
    through (7) of this subsection) unless, at the time the acquisition
    is made, assets described in paragraphs (1) through (6) below
    represent at least 70 per centum of the value of its total assets
    (other than assets described in paragraph (7) below):
        (1) securities purchased, in transactions not involving any
      public offering or in such other transactions as the Commission
      may, by rule, prescribe if it finds that enforcement of this
      subchapter and of the Securities Act of 1933 [15 U.S.C. 77a et
      seq.] with respect to such transactions is not necessary in the
      public interest or for the protection of investors by reason of
      the small amount, or the limited nature of the public offering,
      involved in such transactions - 
          (A) from the issuer of such securities, which issuer is an
        eligible portfolio company, from any person who is, or who
        within the preceding thirteen months has been, an affiliated
        person of such eligible portfolio company, or from any other
        person, subject to such rules and regulations as the Commission
        may prescribe as necessary or appropriate in the public
        interest or for the protection of investors; or
          (B) from the issuer of such securities, which issuer is
        described in section 80a-2(a)(46)(A) and (B) of this title but
        is not an eligible portfolio company because it has issued a
        class of securities with respect to which a member of a
        national securities exchange, broker, or dealer may extend or
        maintain credit to or for a customer pursuant to rules or
        regulations adopted by the Board of Governors of the Federal
        Reserve System under section 78g of this title, or from any
        person who is an officer or employee of such issuer, if - 
            (i) at the time of the purchase, the business development
          company owns at least 50 per centum of - 
              (I) the greatest number of equity securities of such
            issuer and securities convertible into or exchangeable for
            such securities; and
              (II) the greatest amount of debt securities of such
            issuer,

          held by such business development company at any point in
          time during the period when such issuer was an eligible
          portfolio company, except that options, warrants, and similar
          securities which have by their terms expired and debt
          securities which have been converted, or repaid or prepaid in
          the ordinary course of business or incident to a public
          offering of securities of such issuer, shall not be
          considered to have been held by such business development
          company for purposes of this requirement; and
            (ii) the business development company is one of the 20
          largest holders of record of such issuer's outstanding voting
          securities;

        (2) securities of any eligible portfolio company with respect
      to which the business development company satisfies the
      requirements of section 80a-2(a)(46)(C)(ii) of this title;
        (3) securities purchased in transactions not involving any
      public offering from an issuer described in sections 80a-
      2(a)(46)(A) and (B) of this title or from a person who is, or
      who within the preceding thirteen months has been, an affiliated
      person of such issuer, or from any person in transactions
      incident thereto, if such securities were - 
          (A) issued by an issuer that is, or was immediately prior to
        the purchase of its securities by the business development
        company, in bankruptcy proceedings, subject to reorganization
        under the supervision of a court of competent jurisdiction, or
        subject to a plan or arrangement resulting from such bankruptcy
        proceedings or reorganization;
          (B) issued by an issuer pursuant to or in consummation of
        such a plan or arrangement; or
          (C) issued by an issuer that, immediately prior to the
        purchase of such issuer's securities by the business
        development company, was not in bankruptcy proceedings but was
        unable to meet its obligations as they came due without
        material assistance other than conventional lending or
        financing arrangements;

        (4) securities of eligible portfolio companies purchased from
      any person in transactions not involving any public offering, if
      there is no ready market for such securities and if immediately
      prior to such purchase the business development company owns at
      least 60 per centum of the outstanding equity securities of such
      issuer (giving effect to all securities presently convertible
      into or exchangeable for equity securities of such issuer as if
      such securities were so converted or exchanged);
        (5) securities received in exchange for or distributed on or
      with respect to securities described in paragraphs (1) through
      (4) of this subsection, or pursuant to the exercise of options,
      warrants, or rights relating to securities described in such
      paragraphs;
        (6) cash, cash items, Government securities, or high quality
      debt securities maturing in one year or less from the time of
      investment in such high quality debt securities; and
        (7) office furniture and equipment, interests in real estate
      and leasehold improvements and facilities maintained to conduct
      the business operations of the business development company,
      deferred organization and operating expenses, and other
      noninvestment assets necessary and appropriate to its operations
      as a business development company, including notes of
      indebtedness of directors, officers, employees, and general
      partners held by a business development company as payment for
      securities of such company issued in connection with an executive
      compensation plan described in section 80a-56(j) of this title.
    (b) Valuation of assets
      For purposes of this section, the value of a business development
    company's assets shall be determined as of the date of the most
    recent financial statements filed by such company with the
    Commission pursuant to section 78m of this title, and shall be
    determined no less frequently than annually.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 55, as added Pub. L. 96-477,
    title I, Sec. 105, Oct. 21, 1980, 94 Stat. 2278; amended Pub. L.
    100-181, title VI, Sec. 626, Dec. 4, 1987, 101 Stat. 1263; Pub. L.
    104-290, title V, Sec. 505, Oct. 11, 1996, 110 Stat. 3446.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Act of 1933, referred to in subsec. (a)(1), is act
    May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is
    classified generally to subchapter I (Sec. 77a et seq.) of chapter
    2A of this title. For complete classification of this Act to the
    Code, see section 77a of this title and Tables.


-MISC1-
                                AMENDMENTS                            
      1996 - Subsec. (a)(1)(A). Pub. L. 104-290 substituted "from any
    person" for "or from any person" and inserted before semicolon ",
    or from any other person, subject to such rules and regulations as
    the Commission may prescribe as necessary or appropriate in the
    public interest or for the protection of investors".
      1987 - Subsec. (a)(1)(B). Pub. L. 100-181 substituted "described
    in section" for "described in sections".

-End-



-CITE-
    15 USC Sec. 80a-55                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-55. Qualifications of directors

-STATUTE-
    (a) Non-interested persons
      A majority of a business development company's directors or
    general partners shall be persons who are not interested persons of
    such company.
    (b) Vacancies; suspension of provisions
      If, by reason of the death, disqualification, or bona fide
    resignation of any director or general partner, a business
    development company does not meet the requirements of subsection
    (a) of this section, or the requirements of section 80a-15(f)(1) of
    this title with respect to directors, the operation of such
    provisions shall be suspended for a period of 90 days or for such
    longer period as the Commission may prescribe, upon its own motion
    or by order upon application, as not inconsistent with the
    protection of investors.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 56, as added Pub. L. 96-477,
    title I Sec. 105, Oct. 21, 1980, 94 Stat. 2280.)

-End-



-CITE-
    15 USC Sec. 80a-56                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-56. Transactions with certain affiliates

-STATUTE-
    (a) Transactions involving controlling or closely affiliated
      persons
      It shall be unlawful for any person who is related to a business
    development company in a manner described in subsection (b) of this
    section, acting as principal - 
        (1) knowingly to sell any security or other property to such
      business development company or to any company controlled by such
      business development company, unless such sale involves solely
      (A) securities of which the buyer is the issuer, or (B)
      securities of which the seller is the issuer and which are part
      of a general offering to the holders of a class of its
      securities;
        (2) knowingly to purchase from such business development
      company or from any company controlled by such business
      development company, any security or other property (except
      securities of which the seller is the issuer);
        (3) knowingly to borrow money or other property from such
      business development company or from any company controlled by
      such business development company (unless the borrower is
      controlled by the lender), except as permitted in section 80a-
      21(b) or section 80a-61 of this title; or
        (4) knowingly to effect any transaction in which such business
      development company or a company controlled by such business
      development company is a joint or a joint and several participant
      with such person in contravention of such rules and regulations
      as the Commission may prescribe for the purpose of limiting or
      preventing participation by such business development company or
      controlled company on a basis less advantageous than that of such
      person, except that nothing contained in this paragraph shall be
      deemed to preclude any person from acting as manager of any
      underwriting syndicate or other group in which such business
      development company or controlled company is a participant and
      receiving compensation therefor.
    (b) Controlling or closely affiliated persons
      The provisions of subsection (a) of this section shall apply to
    the following persons:
        (1) Any director, officer, employee, or member of an advisory
      board of a business development company or any person (other than
      the business development company itself) who is, within the
      meaning of section 80a-2(a)(3)(C) of this title, an affiliated
      person of any such person specified in this paragraph.
        (2) Any investment adviser or promoter of, general partner in,
      principal underwriter for, or person directly or indirectly
      either controlling, controlled by, or under common control with,
      a business development company (except the business development
      company itself and any person who, if it were not directly or
      indirectly controlled by the business development company, would
      not be directly or indirectly under the control of a person who
      controls the business development company), or any person who is,
      within the meaning of section 80a-2(a)(3)(C) or (D) of this
      title, an affiliated person of any such person specified in this
      paragraph.
    (c) Exemption orders
      Notwithstanding paragraphs (1), (2), and (3) of subsection (a) of
    this section, any person may file with the Commission an
    application for an order exempting a proposed transaction of the
    applicant from one or more provisions of such paragraphs. The
    Commission shall grant such application and issue such order of
    exemption if evidence establishes that - 
        (1) the terms of the proposed transaction, including the
      consideration to be paid or received, are reasonable and fair and
      do not involve overreaching of the business development company
      or its shareholders or partners on the part of any person
      concerned;
        (2) the proposed transaction is consistent with the policy of
      the business development company as recited in the filings made
      by such company with the Commission under the Securities Act of
      1933 [15 U.S.C. 77a et seq.], its registration statement and
      reports filed under the Securities Exchange Act of 1934 [15
      U.S.C. 78a et seq.], and its reports to shareholders or partners;
      and
        (3) the proposed transaction is consistent with the general
      purposes of this subchapter.
    (d) Transactions involving noncontrolling shareholders or
      affiliated persons
      It shall be unlawful for any person who is related to a business
    development company in the manner described in subsection (e) of
    this section and who is not subject to the prohibitions of
    subsection (a) of this section, acting as principal - 
        (1) knowingly to sell any security or other property to such
      business development company or to any company controlled by such
      business development company, unless such sale involves solely
      (A) securities of which the buyer is the issuer, or (B)
      securities of which the seller is the issuer and which are part
      of a general offering to the holders of a class of its
      securities;
        (2) knowingly to purchase from such business development
      company or from any company controlled by such business
      development company, any security or other property (except
      securities of which the seller is the issuer);
        (3) knowingly to borrow money or other property from such
      business development company or from any company controlled by
      such business development company (unless the borrower is
      controlled by the lender), except as permitted in section 80a-
      21(b) of this title; or
        (4) knowingly to effect any transaction in which such business
      development company or a company controlled by such business
      development company is a joint or a joint and several participant
      with such affiliated person in contravention of such rules and
      regulations as the Commission may prescribe for the purpose of
      limiting or preventing participation by such business development
      company or controlled company on a basis less advantageous than
      that of such affiliated person, except that nothing contained in
      this paragraph shall be deemed to preclude any person from acting
      as manager of any underwriting syndicate or other group in which
      such business development company or controlled company is a
      participant and receiving compensation therefor.
    (e) Noncontrolling shareholders or affiliated persons; executive
      officer
      The provisions of subsection (d) of this section shall apply to
    the following persons:
        (1) Any person (A) who is, within the meaning of section 80a-
      2(a)(3)(A) of this title, an affiliated person of a business
      development company, (B) who is an executive officer or a
      director of, or general partner in, any such affiliated person,
      or (C) who directly or indirectly either controls, is controlled
      by, or is under common control with, such affiliated person.
        (2) Any person who is an affiliated person of a director,
      officer, employee, investment adviser, member of an advisory
      board or promoter of, principal underwriter for, general partner
      in, or an affiliated person of any person directly or indirectly
      either controlling or under common control with a business
      development company (except the business development company
      itself and any person who, if it were not directly or indirectly
      controlled by the business development company, would not be
      directly or indirectly under the control of a person who controls
      the business development company).

    For purposes of this subsection, the term "executive officer" means
    the president, secretary, treasurer, any vice president in charge
    of a principal business function, and any other person who performs
    similar policymaking functions.
    (f) Approval of proposed transactions
      Notwithstanding subsection (d) of this section, a person
    described in subsection (e) of this section may engage in a
    proposed transaction described in subsection (d) of this section if
    such proposed transaction is approved by the required majority (as
    defined in subsection (o) of this section) of the directors of or
    general partners in the business development company on the basis
    that - 
        (1) the terms thereof, including the consideration to be paid
      or received, are reasonable and fair to the shareholders or
      partners of the business development company and do not involve
      overreaching of such company or its shareholders or partners on
      the part of any person concerned;
        (2) the proposed transaction is consistent with the interests
      of the shareholders or partners of the business development
      company and is consistent with the policy of such company as
      recited in filings made by such company with the Commission under
      the Securities Act of 1933 [15 U.S.C. 77a et seq.], its
      registration statement and reports filed under the Securities
      Exchange Act of 1934 [15 U.S.C. 78a et seq.], and its reports to
      shareholders or partners; and
        (3) the directors or general partners record in their minutes
      and preserve in their records, for such periods as if such
      records were required to be maintained pursuant to section 80a-
      30(a) of this title, a description of such transaction, their
      findings, the information or materials upon which their findings
      were based, and the basis therefor.
    (g) Transactions in the ordinary course of business
      Notwithstanding subsection (a) or (d) of this section, a person
    may, in the ordinary course of business, sell to or purchase from
    any company merchandise or may enter into a lessor-lessee
    relationship with any person and furnish the services incident
    thereto.
    (h) Inquiry procedures
      The directors of or general partners in any business development
    company shall adopt, and periodically review and update as
    appropriate, procedures reasonably designed to ensure that
    reasonable inquiry is made, prior to the consummation of any
    transaction in which such business development company or a company
    controlled by such business development company proposes to
    participate, with respect to the possible involvement in the
    transaction of persons described in subsections (b) and (e) of this
    section.
    (i) Rules and regulations of Commission
      Until the adoption by the Commission of rules or regulations
    under subsections (a) and (d) of this section, the rules and
    regulations of the Commission under subsections (a) and (d) of
    section 80a-17 of this title applicable to registered closed-end
    investment companies shall be deemed to apply to transactions
    subject to subsections (a) and (d) of this section. Any rules or
    regulations adopted by the Commission to implement this section
    shall be no more restrictive than the rules or regulations adopted
    by the Commission under subsections (a) and (d) of section 80a-17
    of this title that are applicable to all registered closed-end
    investment companies.
    (j) Warrants, options, and rights to purchase voting securities;
      loans to facilitate executive compensation plans
      Notwithstanding subsections (a) and (d) of this section, any
    director, officer, or employee of, or general partner in, a
    business development company may - 
        (1) acquire warrants, options, and rights to purchase voting
      securities of such business development company, and securities
      issued upon the exercise or conversion thereof, pursuant to an
      executive compensation plan offered by such company which meets
      the requirements of section 80a-60(a)(3)(B) of this title; and
        (2) borrow money from such business development company for the
      purpose of purchasing securities issued by such company pursuant
      to an executive compensation plan, if each such loan - 
          (A) has a term of not more than ten years;
          (B) becomes due within a reasonable time, not to exceed sixty
        days, after the termination of such person's employment or
        service;
          (C) bears interest at no less than the prevailing rate
        applicable to 90-day United States Treasury bills at the time
        the loan is made;
          (D) at all times is fully collateralized (such collateral may
        include any securities issued by such business development
        company); and
          (E)(i) in the case of a loan to any officer or employee of
        such business development company (including any officer or
        employee who is also a director of such company), is approved
        by the required majority (as defined in subsection (o) of this
        section) of the directors of or general partners in such
        company on the basis that the loan is in the best interests of
        such company and its shareholders or partners; or
          (ii) in the case of a loan to any director of such business
        development company who is not also an officer or employee of
        such company, or to any general partner in such company, is
        approved by order of the Commission, upon application, on the
        basis that the terms of the loan are fair and reasonable and do
        not involve overreaching of such company or its shareholders or
        partners.
    (k) Restriction on brokerage commissions
      It shall be unlawful for any person described in subsection (l)
    of this section - 
        (1) acting as agent, to accept from any source any compensation
      (other than a regular salary or wages from the business
      development company) for the purchase or sale of any property to
      or for such business development company or any controlled
      company thereof, except in the course of such person's business
      as an underwriter or broker; or
        (2) acting as broker, in connection with the sale of securities
      to or by the business development company or any controlled
      company thereof, to receive from any source a commission, fee, or
      other remuneration for effecting such transaction which exceeds -
      
          (A) the usual and customary broker's commission if the sale
        is effected on a securities exchange;
          (B) 2 per centum of the sales price if the sale is effected
        in connection with a secondary distribution of such securities;
        or
          (C) 1 per centum of the purchase or sale price of such
        securities if the sale is otherwise effected,

    unless the Commission, by rules and regulations or order in the
    public interest and consistent with the protection of investors,
    permits a larger commission.
    (l) Persons subject to brokerage commission restrictions
      The provisions of subsection (k) of this section shall apply to
    the following persons:
        (1) Any affiliated person of a business development company.
        (2)(A) Any person who is, within the meaning of section 80a-
      2(a)(3)(B), (C), or (D) of this title, an affiliated person or
      any director, officer, employee, or member of an advisory board
      of the business development company.
        (B) Any person who is, within the meaning of section 82a-
      2(a)(3)(A), (B), (C), or (D) of this title, an affiliated person
      of any investment adviser of, general partner in, or person
      directly or indirectly either controlling, controlled by, or
      under common control with, the business development company.
        (C) Any person who is, within the meaning of section 80a-
      2(a)(3)(C) of this title, an affiliated person of any person who
      is an affiliated person of the business development company
      within the meaning of section 80a-2(a)(3)(A) of this title.
    (m) Receipt of fee or salary from transaction participant
      For purposes of subsections (a) and (d) of this section, a person
    who is a director, officer, or employee of a party to a transaction
    and who receives his usual and ordinary fee or salary for usual and
    customary services as a director, officer, or employee from such
    party shall not be deemed to have a financial interest or to
    participate in the transaction solely by reason of his receipt of
    such fee or salary.
    (n) Profit-sharing plans
      (1) Notwithstanding subsection (a)(4) of this section, a business
    development company may establish and maintain a profit-sharing
    plan for its directors, officers, employees, and general partners
    and such directors, officers, employees, and general partners may
    participate in such profit-sharing plan, if - 
        (A)(i) in the case of a profit-sharing plan for officers and
      employees of the business development company (including any
      officer or employee who is also a director of such company), such
      profit-sharing plan is approved by the required majority (as
      defined in subsection (o) of this section) of the directors of or
      general partners in such company on the basis that such plan is
      reasonable and fair to the shareholders or partners of such
      company, does not involve overreaching of such company or its
      shareholders or partners on the part of any person concerned, and
      is consistent with the interests of the shareholders or partners
      of such company; or
        (ii) in the case of a profit-sharing plan which includes one or
      more directors of the business development company who are not
      also officers or employees of such company, or one or more
      general partners in such company, such profit-sharing plan is
      approved by order of the Commission, upon application, on the
      basis that such plan is reasonable and fair to the shareholders
      or partners of such company, does not involve overreaching of
      such company or its shareholders or partners on the part of any
      person concerned, and is consistent with the interests of the
      shareholders or partners of such company; and
        (B) the aggregate amount of benefits which would be paid or
      accrued under such plan shall not exceed 20 per centum of the
      business development company's net income after taxes in any
      fiscal year.

      (2) This subsection may not be used where the business
    development company has outstanding any stock option, warrant, or
    right issued as part of an executive compensation plan, including a
    plan pursuant to section 80a-60(a)(3)(B) of this title, or has an
    investment adviser registered or required to be registered under
    subchapter II of this chapter.
    (o) Required majority for approval of proposed transactions
      The term "required majority", when used with respect to the
    approval of a proposed transaction, plan, or arrangement, means
    both a majority of a business development company's directors or
    general partners who have no financial interest in such
    transaction, plan, or arrangement and a majority of such directors
    or general partners who are not interested persons of such company.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 57, as added Pub. L. 96-477,
    title I, Sec. 105, Oct. 21, 1980, 94 Stat. 2280; amended Pub. L.
    100-181, title VI, Sec. 627, Dec. 4, 1987, 101 Stat. 1263.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Act of 1933, referred to in subsecs. (c)(2) and
    (f)(2), is act May 27, 1933, ch. 38, title I, 48 Stat. 74, as
    amended, which is classified generally to subchapter I (Sec. 77a et
    seq.) of chapter 2A of this title. For complete classification of
    this Act to the Code, see section 77a of this title and Tables.
      The Securities Exchange Act of 1934, referred to in subsecs.
    (c)(2) and (f)(2), is act June 6, 1934, ch. 404, 48 Stat. 881, as
    amended, which is classified principally to chapter 2B (Sec. 78a et
    seq.) of this title. For complete classification of this Act to the
    Code, see section 78a of this title and Tables.


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (i). Pub. L. 100-181 substituted "subsections (a)
    and (d) of section 80a-17 of this title" for "sections 80a-17(a)
    and (d) of this title" in two places.

-End-



-CITE-
    15 USC Sec. 80a-57                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-57. Changes in investment policy

-STATUTE-
      No business development company shall, unless authorized by the
    vote of a majority of its outstanding voting securities or
    partnership interests, change the nature of its business so as to
    cease to be, or to withdraw its election as, a business development
    company.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 58, as added Pub. L. 96-477,
    title I, Sec. 105, Oct. 21, 1980, 94 Stat. 2285.)

-End-



-CITE-
    15 USC Sec. 80a-58                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-58. Incorporation of subchapter provisions

-STATUTE-
      Notwithstanding the exemption set forth in section 80-6(f) of
    this title, sections 80a-1, 80a-2, 80a-3, 80a-4, 80a-5, 80a-6, 80a-
    9, 80a-10(f), 80a-15(a), (c), and (f), 80a-16(b), 80a-17(f)
    through (j), 80a-19(a), 80a-20(b), 80a-31(a) and (c), 80a-32
    through 80a-46, and 80a-48 through 80a-52 of this title shall apply
    to a business development company to the same extent as if it were
    a registered closed-end investment company.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 59, as added Pub. L. 96-477,
    title I, Sec. 105, Oct. 21, 1980, 94 Stat. 2285.)

-End-



-CITE-
    15 USC Sec. 80a-59                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-59. Functions and activities of business development
      companies

-STATUTE-
      Notwithstanding the exemption set forth in section 80a-6(f) of
    this title, section 80a-12 of this title shall apply to a business
    development company to the same extent as if it were a registered
    closed-end investment company, except that the Commission shall not
    prescribe any rule, regulation, or order pursuant to section 80a-
    12(a)(1) of this title governing the circumstances in which a
    business development company may borrow from a bank in order to
    purchase any security.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 60, as added Pub. L. 96-477,
    title I, Sec. 105, Oct. 21, 1980, 94 Stat. 2285.)

-End-



-CITE-
    15 USC Sec. 80a-60                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-60. Capital structure

-STATUTE-
    (a) Exceptions for business development company
      Notwithstanding the exemption set forth in section 80a-6(f) of
    this title, section 80a-18 of this title shall apply to a business
    development company to the same extent as if it were a registered
    closed-end investment company, except as follows:
        (1) The asset coverage requirements of section 80a-18(a)(1)(A)
      and (B) of this title applicable to business development
      companies shall be 200 per centum.
        (2) Notwithstanding section 80a-18(c) of this title, a business
      development company may issue more than one class of senior
      security representing indebtedness.
        (3) Notwithstanding section 80a-18(d) of this title - 
          (A) a business development company may issue warrants,
        options, or rights to subscribe or convert to voting securities
        of such company, accompanied by securities, if - 
            (i) such warrants, options, or rights expire by their terms
          within ten years;
            (ii) such warrants, options, or rights are not separately
          transferable unless no class of such warrants, options, or
          rights and the securities accompanying them has been publicly
          distributed;
            (iii) the exercise or conversion price is not less than the
          current market value at the date of issuance, or if no such
          market value exists, the current net asset value of such
          voting securities; and
            (iv) the proposal to issue such securities is authorized by
          the shareholders or partners of such business development
          company, and such issuance is approved by the required
          majority (as defined in section 80a-56(o) of this title) of
          the directors of or general partners in such company on the
          basis that such issuance is in the best interests of such
          company and its shareholders or partners;

          (B) a business development company may issue, to its
        directors, officers, employees, and general partners, warrants,
        options, and rights to purchase voting securities of such
        company pursuant to an executive compensation plan, if - 
            (i)(I) in the case of warrants, options, or rights issued
          to any officer or employee of such business development
          company (including any officer or employee who is also a
          director of such company), such securities satisfy the
          conditions in clauses (i), (iii), and (iv) of subparagraph
          (A); or (II) in the case of warrants, options, or rights
          issued to any director of such business development company
          who is not also an officer or employee of such company, or to
          any general partner in such company, the proposal to issue
          such securities satisfies the conditions in clauses (i) and
          (iii) of subparagraph (A), is authorized by the shareholders
          or partners of such company, and is approved by order of the
          Commission, upon application, on the basis that the terms of
          the proposal are fair and reasonable and do not involve
          overreaching of such company or its shareholders or partners;
            (ii) such securities are not transferable except for
          disposition by gift, will, or intestacy;
            (iii) no investment adviser of such business development
          company receives any compensation described in paragraph (1)
          of section 80b-5 (!1) of this title, except to the extent
          permitted by clause (A) or (B) of that section; and

            (iv) such business development company does not have a
          profit-sharing plan described in section 80a-56(n) of this
          title; and

          (C) a business development company may issue warrants,
        options, or rights to subscribe to, convert to, or purchase
        voting securities not accompanied by securities, if - 
            (i) such warrants, options, or rights satisfy the
          conditions in clauses (i) and (iii) of subparagraph (A); and
            (ii) the proposal to issue such warrants, options, or
          rights is authorized by the shareholders or partners of such
          business development company, and such issuance is approved
          by the required majority (as defined in section 80a-56(o) of
          this title) of the directors of or general partners in such
          company on the basis that such issuance is in the best
          interests of the company and its shareholders or partners.

      Notwithstanding this paragraph, the amount of voting securities
      that would result from the exercise of all outstanding warrants,
      options, and rights at the time of issuance shall not exceed 25
      per centum of the outstanding voting securities of the business
      development company, except that if the amount of voting
      securities that would result from the exercise of all outstanding
      warrants, options, and rights issued to such company's directors,
      officers, employees, and general partners pursuant to any
      executive compensation plan meeting the requirements of
      subparagraph (B) of this paragraph would exceed 15 per centum of
      the outstanding voting securities of such company, then the total
      amount of voting securities that would result from the exercise
      of all outstanding warrants, options, and rights at the time of
      issuance shall not exceed 20 per centum of the outstanding voting
      securities of such company.
        (4) For purposes of measuring the asset coverage requirements
      of section 80a-18(a) of this title, a senior security created by
      the guarantee by a business development company of indebtedness
      issued by another company shall be the amount of the maximum
      potential liability less the fair market value of the net
      unencumbered assets (plus the indebtedness which has been
      guaranteed) available in the borrowing company whose debts have
      been guaranteed, except that a guarantee issued by a business
      development company of indebtedness issued by a company which is
      a wholly-owned subsidiary of the business development company and
      is licensed as a small business investment company under the
      Small Business Investment Act of 1958 [15 U.S.C. 661 et seq.]
      shall not be deemed to be a senior security of such business
      development company for purposes of section 80a-18(a) of this
      title if the amount of the indebtedness at the time of its
      issuance by the borrowing company is itself taken fully into
      account as a liability by such business development company, as
      if it were issued by such business development company, in
      determining whether such business development company, at that
      time, satisfies the asset coverage requirements of section 80a-
      18(a) of this title.
    (b) Compliance
      A business development company shall comply with the provisions
    of this section at the time it becomes subject to sections 80a-54
    through 80a-64 of this title, as if it were issuing a security of
    each class which it has outstanding at such time.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 61, as added Pub. L. 96-477,
    title I, Sec. 105, Oct. 21, 1980, 94 Stat. 2286; amended Pub. L.
    104-290, title V, Sec. 506, Oct. 11, 1996, 110 Stat. 3446.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      Section 80b-5 of this title, referred to in subsec.
    (a)(3)(B)(iii), was amended generally by Pub. L. 100-181, title
    VII, Sec. 703, Dec. 4, 1987, 101 Stat. 1263, and, as so amended,
    the subject matter of former paragraph (1) and clauses (A) and (B)
    of section 80b-5 is contained in subsections (a)(1) and (b)(1) and
    (2) of section 80b-5.
      The Small Business Investment Act of 1958, referred to in subsec.
    (a)(4), is Pub. L. 85-699, Aug. 21, 1958, 72 Stat. 689), as
    amended, which is classified principally to chapter 14B (Sec. 661
    et seq.) of this title. For complete classification of this Act to
    the Code, see Short Title note set out under section 661 of this
    title and Tables.


-MISC1-
                                AMENDMENTS                            
      1996 - Subsec. (a)(2). Pub. L. 104-290, Sec. 506(1), substituted
    a period for "if such business development company does not have
    outstanding any publicly held indebtedness, and all such securities
    of each class are - 
        "(A) privately held or guaranteed by the Small Business
      Administration, or banks, insurance companies, or other
      institutional investors; and
        "(B) not intended to be publicly distributed."
      Subsec. (a)(3)(A). Pub. L. 104-290, Sec. 506(2)(A), (B), inserted
    "accompanied by securities," after "of such company," and struck
    out "senior securities representing indebtedness accompanied by"
    before "warrants, options, or rights".
      Subsec. (a)(3)(A)(ii). Pub. L. 104-290, Sec. 506(2)(C), struck
    out "senior" before "securities".
      Subsec. (a)(3)(C). Pub. L. 104-290, Sec. 506(3), added subpar.
    (C).

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    15 USC Sec. 80a-61                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-61. Loans

-STATUTE-
      Notwithstanding the exemption set forth in section 80a-6(f) of
    this title, section 80a-21 of this title shall apply to a business
    development company to the same extent as if it were a registered
    closed-end investment company, except that nothing in that section
    shall be deemed to prohibit - 
        (1) any loan to a director, officer, or employee of, or general
      partner in, a business development company for the purpose of
      purchasing securities of such company as part of an executive
      compensation plan, if such loan meets the requirements of section
      80a-56(j) of this title; or
        (2) any loan to a company controlled by a business development
      company, which companies could be deemed to be under common
      control solely because a third person controls such business
      development company.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 62, as added Pub. L. 96-477,
    title I, Sec. 105, Oct. 21, 1980, 94 Stat. 2287.)

-End-



-CITE-
    15 USC Sec. 80a-62                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-62. Distribution and repurchase of securities

-STATUTE-
      Notwithstanding the exemption set forth in section 80a-6(f) of
    this title, section 80a-23 of this title shall apply to a business
    development company to the same extent as if it were a registered
    closed-end investment company, except as follows:
        (1) The prohibitions of section 80a-23(a)(2) of this title
      shall not apply to any company which (A) is a wholly-owned
      subsidiary of, or directly or indirectly controlled by, a
      business development company, and (B) immediately after the
      issuance of any of its securities for property other than cash or
      securities, will not be an investment company within the meaning
      of section 80a-3(a) of this title.
        (2) Notwithstanding the provisions of section 80a-23(b) of this
      title, a business development company may sell any common stock
      of which it is the issuer at a price below the current net asset
      value of such stock, and may sell warrants, options, or rights to
      acquire any such common stock at a price below the current net
      asset value of such stock, if - 
          (A) the holders of a majority of such business development
        company's outstanding voting securities, and the holders of a
        majority of such company's outstanding voting securities that
        are not affiliated persons of such company, approved such
        company's policy and practice of making such sales of
        securities at the last annual meeting of shareholders or
        partners within one year immediately prior to any such sale,
        except that the shareholder approval requirements of this
        subparagraph shall not apply to the initial public offering by
        a business development company of its securities;
          (B) a required majority (as defined in section 80a-56(o) of
        this title) of the directors of or general partners in such
        business development company have determined that any such sale
        would be in the best interests of such company and its
        shareholders or partners; and
          (C) a required majority (as defined in section 80a-56(o) of
        this title) of the directors of or general partners in such
        business development company, in consultation with the
        underwriter or underwriters of the offering if it is to be
        underwritten, have determined in good faith, and as of a time
        immediately prior to the first solicitation by or on behalf of
        such company of firm commitments to purchase such securities or
        immediately prior to the issuance of such securities, that the
        price at which such securities are to be sold is not less than
        a price which closely approximates the market value of those
        securities, less any distributing commission or discount.

        (3) A business development company may sell any common stock of
      which it is the issuer at a price below the current net asset
      value of such stock upon the exercise of any warrant, option, or
      right issued in accordance with section 80a-60(a)(3) of this
      title.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 63, as added Pub. L. 96-477,
    title I, Sec. 105, Oct. 21, 1980, 94 Stat. 2288.)

-End-



-CITE-
    15 USC Sec. 80a-63                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-63. Accounts and records

-STATUTE-
    (a) Exception for business development company
      Notwithstanding the exemption set forth in section 80a-6(f) of
    this title, section 80a-30 of this title shall apply to a business
    development company to the same extent as if it were a registered
    closed-end investment company, except that the reference to the
    financial statements required to be filed pursuant to section 80a-
    29 of this title shall be construed to refer to the financial
    statements required to be filed by such business development
    company pursuant to section 78m of this title.
    (b) Risk factors statement; availability
      (1) In addition to the requirements of subsection (a) of this
    section, a business development company shall file with the
    Commission and supply annually to its shareholders a written
    statement, in such form and manner as the Commission may, by rule,
    prescribe, describing the risk factors involved in an investment in
    the securities of a business development company due to the nature
    of such company's investment portfolio and capital structure, and
    shall supply copies of such statement to any registered broker or
    dealer upon request.
      (2) If the Commission finds it is necessary or appropriate in the
    public interest and consistent with the protection of investors and
    the purposes fairly intended by the policy and provisions of this
    subchapter, the Commission may also require, by rule, any person
    who, acting as principal or agent, sells a security of a business
    development company to inform the purchaser of such securities, at
    or before the time of sale, of the existence of the risk statement
    prepared by such business development company pursuant to this
    subsection, and make such risk statement available on request. The
    Commission, in making such rules and regulations, shall consider,
    among other matters, whether any such rule or regulation would
    impose any unreasonable burdens on such brokers or dealers or
    unreasonably impair the maintenance of fair and orderly markets.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 64, as added Pub. L. 96-477,
    title I Sec. 105, Oct. 21, 1980, 94 Stat. 2289; amended Pub. L. 104-
    290, title V, Sec. 507, Oct. 11, 1996, 110 Stat. 3446.)


-MISC1-
                                AMENDMENTS                            
      1996 - Subsec. (b)(1). Pub. L. 104-290 inserted "and capital
    structure" after "portfolio".

-End-



-CITE-
    15 USC Sec. 80a-64                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

-HEAD-
    Sec. 80a-64. Preventing compliance with subchapter; liability of
      controlling persons

-STATUTE-
      Notwithstanding the exemption set forth in section 80a-6(f) of
    this title, section 80a-47 of this title shall apply to a business
    development company to the same extent as if it were a registered
    closed-end investment company, except that the provisions of
    section 80a-47(a) of this title shall not be construed to require
    any company which is not an investment company within the meaning
    of section 80a-3(a) of this title to comply with the provisions of
    this subchapter which are applicable to a business development
    company solely because such company is a wholly-owned subsidiary
    of, or directly or indirectly controlled by, a business development
    company.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title I, Sec. 65, as added Pub. L. 96-477,
    title I, Sec. 105, Oct. 21, 1980, 94 Stat. 2289.)

-End-


-CITE-
    15 USC SUBCHAPTER II - INVESTMENT ADVISERS                  01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
                    SUBCHAPTER II - INVESTMENT ADVISERS                

-End-



-CITE-
    15 USC Sec. 80b-1                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-1. Findings

-STATUTE-
      Upon the basis of facts disclosed by the record and report of the
    Securities and Exchange Commission made pursuant to section 79z-4
    (!1) of this title, and facts otherwise disclosed and ascertained,
    it is found that investment advisers are of national concern, in
    that, among other things - 

        (1) their advice, counsel, publications, writings, analyses,
      and reports are furnished and distributed, and their contracts,
      subscription agreements, and other arrangements with clients are
      negotiated and performed, by the use of the mails and means and
      instrumentalities of interstate commerce;
        (2) their advice, counsel, publications, writings, analyses,
      and reports customarily relate to the purchase and sale of
      securities traded on national securities exchanges and in
      interstate over-the-counter markets, securities issued by
      companies engaged in business in interstate commerce, and
      securities issued by national banks and member banks of the
      Federal Reserve System; and
        (3) the foregoing transactions occur in such volume as
      substantially to affect interstate commerce, national securities
      exchanges, and other securities markets, the national banking
      system and the national economy.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 201, 54 Stat. 847.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      Section 79z-4 of this title, referred to in text, was repealed by
    Pub. L. 109-58, title XII, Sec. 1263, Aug. 8, 2005, 119 Stat. 974.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    15 USC Sec. 80b-2                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-2. Definitions

-STATUTE-
    (a) In general
      When used in this subchapter, unless the context otherwise
    requires, the following definitions shall apply:
        (1) "Assignment" includes any direct or indirect transfer or
      hypothecation of an investment advisory contract by the assignor
      or of a controlling block of the assignor's outstanding voting
      securities by a security holder of the assignor; but if the
      investment adviser is a partnership, no assignment of an
      investment advisory contract shall be deemed to result from the
      death or withdrawal of a minority of the members of the
      investment adviser having only a minority interest in the
      business of the investment adviser, or from the admission to the
      investment adviser of one or more members who, after such
      admission, shall be only a minority of the members and shall have
      only a minority interest in the business.
        (2) "Bank" means (A) a banking institution organized under the
      laws of the United States or a Federal savings association, as
      defined in section 1462(5) of title 12, (B) a member bank of the
      Federal Reserve System, (C) any other banking institution,
      savings association, as defined in section 1462(4) of title 12,
      or trust company, whether incorporated or not, doing business
      under the laws of any State or of the United States, a
      substantial portion of the business of which consists of
      receiving deposits or exercising fiduciary powers similar to
      those permitted to national banks under the authority of the
      Comptroller of the Currency, and which is supervised and examined
      by State or Federal authority having supervision over banks or
      savings associations, and which is not operated for the purpose
      of evading the provisions of this subchapter, and (D) a receiver,
      conservator, or other liquidating agent of any institution or
      firm included in clauses (A), (B), or (C) of this paragraph.
        (3) The term "broker" has the same meaning as given in section
      3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c].
        (4) "Commission" means the Securities and Exchange Commission.
        (5) "Company" means a corporation, a partnership, an
      association, a joint-stock company, a trust, or any organized
      group of persons, whether incorporated or not; or any receiver,
      trustee in a case under title 11, or similar official, or any
      liquidating agent for any of the foregoing, in his capacity as
      such.
        (6) "Convicted" includes a verdict, judgment, or plea of
      guilty, or a finding of guilt on a plea of nolo contendere, if
      such verdict, judgment, plea, or finding has not been reversed,
      set aside, or withdrawn, whether or not sentence has been
      imposed.
        (7) The term "dealer" has the same meaning as given in section
      3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c], but
      does not include an insurance company or investment company.
        (8) "Director" means any director of a corporation or any
      person performing similar functions with respect to any
      organization, whether incorporated or unincorporated.
        (9) "Exchange" means any organization, association, or group of
      persons, whether incorporated or unincorporated, which
      constitutes, maintains, or provides a market place or facilities
      for bringing together purchasers and sellers of securities or for
      otherwise performing with respect to securities the functions
      commonly performed by a stock exchange as that term is generally
      understood, and includes the market place and the market
      facilities maintained by such exchange.
        (10) "Interstate commerce" means trade, commerce,
      transportation, or communication among the several States, or
      between any foreign country and any State, or between any State
      and any place or ship outside thereof.
        (11) "Investment adviser" means any person who, for
      compensation, engages in the business of advising others, either
      directly or through publications or writings, as to the value of
      securities or as to the advisability of investing in, purchasing,
      or selling securities, or who, for compensation and as part of a
      regular business, issues or promulgates analyses or reports
      concerning securities; but does not include (A) a bank, or any
      bank holding company as defined in the Bank Holding Company Act
      of 1956 [12 U.S.C. 1841 et seq.] which is not an investment
      company, except that the term "investment adviser" includes any
      bank or bank holding company to the extent that such bank or bank
      holding company serves or acts as an investment adviser to a
      registered investment company, but if, in the case of a bank,
      such services or actions are performed through a separately
      identifiable department or division, the department or division,
      and not the bank itself, shall be deemed to be the investment
      adviser; (B) any lawyer, accountant, engineer, or teacher whose
      performance of such services is solely incidental to the practice
      of his profession; (C) any broker or dealer whose performance of
      such services is solely incidental to the conduct of his business
      as a broker or dealer and who receives no special compensation
      therefor; (D) the publisher of any bona fide newspaper, news
      magazine or business or financial publication of general and
      regular circulation; (E) any person whose advice, analyses or
      reports relate to no securities other than securities which are
      direct obligations of or obligations guaranteed as to principal
      or interest by the United States, or securities issued or
      guaranteed by corporations in which the United States has a
      direct or indirect interest which shall have been designated by
      the Secretary of the Treasury, pursuant to section 3(a)(12) of
      the Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(12)], as
      exempted securities for the purposes of that Act [15 U.S.C. 78a
      et seq.]; (F) any nationally recognized statistical rating
      organization, as that term is defined in section 3(a)(62) of the
      Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(62)], unless
      such organization engages in issuing recommendations as to
      purchasing, selling, or holding securities or in managing assets,
      consisting in whole or in part of securities, on behalf of
      others; or (G) such other persons not within the intent of this
      paragraph, as the Commission may designate by rules and
      regulations or order.
        (12) "Investment company", affiliated person, and "insurance
      company" have the same meanings as in the Investment Company Act
      of 1940 [15 U.S.C. 80a-1 et seq.]. "Control" means the power to
      exercise a controlling influence over the management or policies
      of a company, unless such power is solely the result of an
      official position with such company.
        (13) "Investment supervisory services" means the giving of
      continuous advice as to the investment of funds on the basis of
      the individual needs of each client.
        (14) "Means or instrumentality of interstate commerce" includes
      any facility of a national securities exchange.
        (15) "National securities exchange" means an exchange
      registered under section 6 of the Securities Exchange Act of 1934
      [15 U.S.C. 78f].
        (16) "Person" means a natural person or a company.
        (17) The term "person associated with an investment adviser"
      means any partner, officer, or director of such investment
      adviser (or any person performing similar functions), or any
      person directly or indirectly controlling or controlled by such
      investment adviser, including any employee of such investment
      adviser, except that for the purposes of section 80b-3 of this
      title (other than subsection (f) thereof), persons associated
      with an investment adviser whose functions are clerical or
      ministerial shall not be included in the meaning of such term.
      The Commission may by rules and regulations classify, for the
      purposes of any portion of portions of this subchapter, persons,
      including employees controlled by an investment adviser.
        (18) "Security" means any note, stock, treasury stock, security
      future, bond, debenture, evidence of indebtedness, certificate of
      interest or participation in any profit-sharing agreement,
      collateral-trust certificate, preorganization certificate or
      subscription, transferable share, investment contract, voting-
      trust certificate, certificate of deposit for a security,
      fractional undivided interest in oil, gas, or other mineral
      rights, any put, call, straddle, option, or privilege on any
      security (including a certificate of deposit) or on any group or
      index of securities (including any interest therein or based on
      the value thereof), or any put, call, straddle, option, or
      privilege entered into on a national securities exchange relating
      to foreign currency, or, in general, any interest or instrument
      commonly known as a "security", or any certificate of interest or
      participation in, temporary or interim certificate for, receipt
      for, guaranty of, or warrant or right to subscribe to or purchase
      any of the foregoing.
        (19) "State" means any State of the United States, the District
      of Columbia, Puerto Rico, the Virgin Islands, or any other
      possession of the United States.
        (20) "Underwriter" means any person who has purchased from an
      issuer with a view to, or sells for an issuer in connection with,
      the distribution of any security, or participates or has a direct
      or indirect participation in any such undertaking, or
      participates or has a participation in the direct or indirect
      underwriting of any such undertaking; but such term shall not
      include a person whose interest is limited to a commission from
      an underwriter or dealer not in excess of the usual and customary
      distributor's or seller's commission. As used in this paragraph
      the term "issuer" shall include in addition to an issuer, any
      person directly or indirectly controlling or controlled by the
      issuer, or any person under direct or indirect common control
      with the issuer.
        (21) "Securities Act of 1933" [15 U.S.C. 77a et seq.],
      "Securities Exchange Act of 1934" [15 U.S.C. 78a et seq.],
      "Public Utility Holding Company Act of 1935",(!1) and "Trust
      Indenture Act of 1939" [15 U.S.C. 77aaa et seq.], mean those
      Acts, respectively, as heretofore or hereafter amended.

        (22) "Business development company" means any company which is
      a business development company as defined in section 80a-2(a)(48)
      of this title and which complies with section 80a-54 of this
      title, except that - 
          (A) the 70 per centum of the value of the total assets
        condition referred to in sections 80a-2(a)(48) and 80a-54 of
        this title shall be 60 per centum for purposes of determining
        compliance therewith;
          (B) such company need not be a closed-end company and need
        not elect to be subject to the provisions of sections 80a-54
        through 80a-64 of this title; and
          (C) the securities which may be purchased pursuant to section
        80a-54(a) of this title may be purchased from any person.

      For purposes of this paragraph, all terms in sections 80a-
      2(a)(48) and 80a-54 of this title shall have the same meaning
      set forth in subchapter I of this chapter as if such company were
      a registered closed-end investment company, except that the value
      of the assets of a business development company which is not
      subject to the provisions of sections 80a-54 through 80a-64 of
      this title shall be determined as of the date of the most recent
      financial statements which it furnished to all holders of its
      securities, and shall be determined no less frequently than
      annually.
        (23) "Foreign securities authority" means any foreign
      government, or any governmental body or regulatory organization
      empowered by a foreign government to administer or enforce its
      laws as they relate to securities matters.
        (24) "Foreign financial regulatory authority" means any (A)
      foreign securities authority, (B) other governmental body or
      foreign equivalent of a self-regulatory organization empowered by
      a foreign government to administer or enforce its laws relating
      to the regulation of fiduciaries, trusts, commercial lending,
      insurance, trading in contracts of sale of a commodity for future
      delivery, or other instruments traded on or subject to the rules
      of a contract market, board of trade or foreign equivalent, or
      other financial activities, or (C) membership organization a
      function of which is to regulate the participation of its members
      in activities listed above.
        (25) "Supervised person" means any partner, officer, director
      (or other person occupying a similar status or performing similar
      functions), or employee of an investment adviser, or other person
      who provides investment advice on behalf of the investment
      adviser and is subject to the supervision and control of the
      investment adviser.
        (26) The term "separately identifiable department or division"
      of a bank means a unit - 
          (A) that is under the direct supervision of an officer or
        officers designated by the board of directors of the bank as
        responsible for the day-to-day conduct of the bank's investment
        adviser activities for one or more investment companies,
        including the supervision of all bank employees engaged in the
        performance of such activities; and
          (B) for which all of the records relating to its investment
        adviser activities are separately maintained in or extractable
        from such unit's own facilities or the facilities of the bank,
        and such records are so maintained or otherwise accessible as
        to permit independent examination and enforcement by the
        Commission of this subchapter or the Investment Company Act of
        1940 [15 U.S.C. 80a-1 et seq.] and rules and regulations
        promulgated under this subchapter or the Investment Company Act
        of 1940.

        (27) The terms "security future" and "narrow-based security
      index" have the same meanings as provided in section 3(a)(55) of
      the Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(55)].
        (28) The term "credit rating agency" has the same meaning as in
      section 3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c].
    (b) Applicability to Federal or State government, agency, or
      instrumentality, or to officers, agents, or employees thereof
      No provision in this subchapter shall apply to, or be deemed to
    include, the United States, a State, or any political subdivision
    of a State, or any agency, authority, or instrumentality of any one
    or more of the foregoing, or any corporation which is wholly owned
    directly or indirectly by any one or more of the foregoing, or any
    officer, agent, or employee of any of the foregoing acting as such
    in the course of his official duty, unless such provision makes
    specific reference thereto.
    (c) Consideration of promotion of efficiency, competition, and
      capital formation
      Whenever pursuant to this subchapter the Commission is engaged in
    rulemaking and is required to consider or determine whether an
    action is necessary or appropriate in the public interest, the
    Commission shall also consider, in addition to the protection of
    investors, whether the action will promote efficiency, competition,
    and capital formation.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 202, 54 Stat. 847; Pub. L.
    86-70, Sec. 12(c), June 25, 1959, 73 Stat. 143; Pub. L. 86-624,
    Sec. 7(d), July 12, 1960, 74 Stat. 412; Pub. L. 86-750, Sec. 1,
    Sept. 13, 1960, 74 Stat. 885; Pub. L. 89-485, Sec. 13(j), July 1,
    1966, 80 Stat. 243; Pub. L. 91-547, Sec. 23, Dec. 14, 1970, 84
    Stat. 1430; Pub. L. 95-598, title III, Sec. 311, Nov. 6, 1978, 92
    Stat. 2676; Pub. L. 96-477, title II, Sec. 201, Oct. 21, 1980, 94
    Stat. 2289; Pub. L. 97-303, Sec. 6, Oct. 13, 1982, 96 Stat. 1410;
    Pub. L. 100-181, title VII, Sec. 701, Dec. 4, 1987, 101 Stat. 1263;
    Pub. L. 101-550, title II, Sec. 206(b), Nov. 15, 1990, 104 Stat.
    2720; Pub. L. 104-290, title III, Sec. 303(c), Oct. 11, 1996, 110
    Stat. 3438; Pub. L. 106-102, title II, Secs. 217-219, 224, Nov. 12,
    1999, 113 Stat. 1399, 1400, 1402; Pub. L. 106-554, Sec. 1(a)(5)
    [title II, Sec. 209(a)(2), (4)], Dec. 21, 2000, 114 Stat. 2763,
    2763A-435, 2763A-436; Pub. L. 109-291, Sec. 4(b)(3)(A), (B), Sept.
    29, 2006, 120 Stat. 1337; Pub. L. 109-351, title IV, Sec.
    401(b)(1), Oct. 13, 2006, 120 Stat. 1973.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Bank Holding Company Act of 1956, referred to in subsec.
    (a)(11)(A), is act May 9, 1956, ch. 240, 70 Stat. 133, as amended,
    which is classified principally to chapter 17 (Sec. 1841 et seq.)
    of Title 12, Banks and Banking. For complete classification of this
    Act to the Code, see Short Title note set out under section 1841 of
    Title 12 and Tables.
      The Investment Company Act of 1940, referred to in subsec.
    (a)(12), (26)(B), is title I of act Aug. 22, 1940, ch. 686, 54
    Stat. 789, as amended, which is classified generally to subchapter
    I (Sec. 80a-1 et seq.) of this chapter. For complete classification
    of this Act to the Code, see section 80a-51 of this title and
    Tables.
      The Securities Act of 1933, referred to in subsec. (a)(21), is
    act May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which
    is classified generally to subchapter I (Sec. 77a et seq.) of
    chapter 2A of this title. For complete classification of this Act
    to the Code, see section 77a of this title and Tables.
      The Securities Exchange Act of 1934, referred to in subsec.
    (a)(21), is act June 6, 1934, ch. 404, 48 Stat. 881, as amended,
    which is classified generally to chapter 2B (Sec. 78a et seq.) of
    this title. For complete classification of this Act to the Code,
    see section 78a of this title and Tables.
      The Public Utility Holding Company Act of 1935, referred to in
    subsec. (a)(21), is title I of act Aug. 26, 1935, ch. 687, 49 Stat.
    803, as amended, which was classified generally to chapter 2C (Sec.
    79 et seq.) of this title, prior to repeal by Pub. L. 109-58, title
    XII, Sec. 1263, Aug. 8, 2005, 119 Stat. 974. For complete
    classification of this Act to the Code, see Tables.
      The Trust Indenture Act of 1939, referred to in subsec. (a)(21),
    is title III of act May 27, 1933, ch. 38, as added Aug. 3, 1939,
    ch. 411, 53 Stat. 1149, and amended, which is classified generally
    to subchapter III (Sec. 77aaa et seq.) of chapter 2A of this title.
    For complete classification of this Act to the Code, see section
    77aaa of this title and Tables.
      This subchapter, referred to in subsec. (a)(26)(B), was in the
    original "this Act" and was translated as reading "this title",
    meaning title II of act Aug. 22, 1940, ch. 686, known as the
    Investment Advisers Act of 1940, to reflect the probable intent of
    Congress.


-MISC1-
                                AMENDMENTS                            
      2006 - Subsec. (a)(2)(A). Pub. L. 109-351, Sec. 401(b)(1)(A),
    inserted "or a Federal savings association, as defined in section
    1462(5) of title 12" after "a banking institution organized under
    the laws of the United States".
      Subsec. (a)(2)(C). Pub. L. 109-351, Sec. 401(b)(1)(B), inserted
    ", savings association, as defined in section 1462(4) of title 12,"
    after "other banking institution" and "or savings associations"
    after "having supervision over banks".
      Subsec. (a)(11)(F), (G). Pub. L. 109-291, Sec. 4(b)(3)(B), added
    subpar. (F) and redesignated former subpar. (F) as (G).
      Subsec. (a)(28). Pub. L. 109-291, Sec. 4(b)(3)(A), added par.
    (28).
      2000 - Subsec. (a)(18). Pub. L. 106-554, Sec. 1(a)(5) [title II,
    Sec. 209(a)(2)], inserted "security future," after "treasury
    stock,".
      Subsec. (a)(27). Pub. L. 106-554, Sec. 1(a)(5) [title II, Sec.
    209(a)(4)], added par. (27).
      1999 - Subsec. (a)(3). Pub. L. 106-102, Sec. 218, amended par.
    (3) generally. Prior to amendment, par. (3) read as follows: "
    'Broker' means any person engaged in the business of effecting
    transactions in securities for the account of others, but does not
    include a bank."
      Subsec. (a)(7). Pub. L. 106-102, Sec. 219, amended par. (7)
    generally. Prior to amendment, par. (7) read as follows: " 'Dealer'
    means any person regularly engaged in the business of buying and
    selling securities for his own account, through a broker or
    otherwise, but does not include a bank, insurance company, or
    investment company, or any person insofar as he is engaged in
    investing, reinvesting or trading in securities, or in owning or
    holding securities, for his own account, either individually or in
    some fiduciary capacity, but not as a part of a regular business."
      Subsec. (a)(11)(A). Pub. L. 106-102, Sec. 217(a), substituted
    "investment company, except that the term 'investment adviser'
    includes any bank or bank holding company to the extent that such
    bank or bank holding company serves or acts as an investment
    adviser to a registered investment company, but if, in the case of
    a bank, such services or actions are performed through a separately
    identifiable department or division, the department or division,
    and not the bank itself, shall be deemed to be the investment
    adviser" for "investment company".
      Subsec. (a)(26). Pub. L. 106-102, Sec. 217(b), added par. (26).
      Subsec. (c). Pub. L. 106-102, Sec. 224, added subsec. (c).
      1996 - Subsec. (a). Pub. L. 104-290, Sec. 303(c)(1), substituted
    "requires, the following definitions shall apply:" for "requires -
    " in introductory provisions.
      Subsec. (a)(25). Pub. L. 104-290, Sec. 303(c)(2), added par.
    (25).
      1990 - Subsec. (a)(23), (24). Pub. L. 101-550 added pars. (23)
    and (24).
      1987 - Subsec. (a)(19). Pub. L. 100-181 struck out reference to
    Canal Zone.
      1982 - Subsec. (a)(18). Pub. L. 97-303 inserted "any put, call,
    straddle, option, or privilege on any security (including a
    certificate of deposit) or on any group or index of securities
    (including any interest therein or based on the value thereof), or
    any put, call, straddle, option, or privilege entered into on a
    national securities exchange relating to foreign currency," after
    "mineral rights,".
      1980 - Subsec. (a)(22). Pub. L. 96-477 added par. (22).
      1978 - Subsec. (a)(5). Pub. L. 95-598 substituted "a case under
    title 11" for "bankruptcy".
      1970 - Subsec. (a)(2). Pub. L. 91-547, Sec. 23(1), substituted
    "under the authority of the Comptroller of the Currency" for "under
    section 248(k) of Title 12".
      Subsec. (a)(17) to (21). Pub. L. 91-547, Sec. 23(2), added par.
    (17) and redesignated former pars. (17) to (20) as (18) to (21),
    respectively.
      1966 - Subsec. (a)(11)(A). Pub. L. 89-485 substituted "bank
    holding company as defined in the Bank Holding Company Act of 1956"
    for "holding company affiliate, as defined in the Banking Act of
    1933".
      1960 - Subsec. (a)(12). Pub. L. 86-750, Sec. 1(a), substituted
    definition of "control" as "the power to exercise a controlling
    influence over the management or policies of a company, unless such
    power is solely the result of an official position with such
    company" for its prior definition which was the same as in the
    Investment Company Act of 1940.
      Subsec. (a)(18). Pub. L. 86-750, Sec. 1(b), struck out reference
    to Philippine Islands, which change was previously executed in the
    codification of this section pursuant to Proc. No. 2695 that
    granted independence to the Philippine Islands.
      Pub. L. 86-624 struck out reference to Hawaii.
      1959 - Subsec. (a)(18). Pub. L. 86-70 struck out reference to
    Alaska.

                     EFFECTIVE DATE OF 1999 AMENDMENT                 
      Amendment by Pub. L. 106-102 effective 18 months after Nov. 12,
    1999, see section 225 of Pub. L. 106-102, set out as a note under
    section 77c of this title.

                     EFFECTIVE DATE OF 1996 AMENDMENT                 
      Section 308(a) of title III of Pub. L. 104-290, as amended by
    Pub. L. 105-8, Sec. 1, Mar. 31, 1997, 111 Stat. 15, provided that:
    "This title [enacting section 80b-3a of this title, amending this
    section, sections 80b-3 and 80b-18a of this title, and section 1002
    of Title 29, Labor, and enacting provisions set out as notes under
    sections 80b-3a, 80b-10, and 80b-20 of this title and section 1002
    of Title 29] and the amendments made by this title shall take
    effect 270 days after the date of enactment of this Act [Oct. 11,
    1996]."

                     EFFECTIVE DATE OF 1978 AMENDMENT                 
      Amendment by Pub. L. 95-598 effective Oct. 1, 1979, see section
    402(a) of Pub. L. 95-598, set out as an Effective Date note
    preceding section 101 of Title 11, Bankruptcy.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section
    30 of Pub. L. 91-547, set out as a note under section 80a-52 of
    this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    15 USC Sec. 80b-3                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-3. Registration of investment advisers

-STATUTE-
    (a) Necessity of registration
      Except as provided in subsection (b) of this section and section
    80b-3a of this title, it shall be unlawful for any investment
    adviser, unless registered under this section, to make use of the
    mails or any means or instrumentality of interstate commerce in
    connection with his or its business as an investment adviser.
    (b) Investment advisers who need not be registered
      The provisions of subsection (a) of this section shall not apply
    to - 
        (1) any investment adviser all of whose clients are residents
      of the State within which such investment adviser maintains his
      or its principal office and place of business, and who does not
      furnish advice or issue analyses or reports with respect to
      securities listed or admitted to unlisted trading privileges on
      any national securities exchange;
        (2) any investment adviser whose only clients are insurance
      companies;
        (3) any investment adviser who during the course of the
      preceding twelve months has had fewer than fifteen clients and
      who neither holds himself out generally to the public as an
      investment adviser nor acts as an investment adviser to any
      investment company registered under subchapter I of this chapter,
      or a company which has elected to be a business development
      company pursuant to section 80a-53 of this title and has not
      withdrawn its election. For purposes of determining the number of
      clients of an investment adviser under this paragraph, no
      shareholder, partner, or beneficial owner of a business
      development company, as defined in this subchapter, shall be
      deemed to be a client of such investment adviser unless such
      person is a client of such investment adviser separate and apart
      from his status as a shareholder, partner, or beneficial owner;
        (4) any investment adviser that is a charitable organization,
      as defined in section 3(c)(10)(D) of the Investment Company Act
      of 1940 [15 U.S.C. 80a-3(c)(10)(D)], or is a trustee, director,
      officer, employee, or volunteer of such a charitable organization
      acting within the scope of such person's employment or duties
      with such organization, whose advice, analyses, or reports are
      provided only to one or more of the following:
          (A) any such charitable organization;
          (B) a fund that is excluded from the definition of an
        investment company under section 3(c)(10)(B) of the Investment
        Company Act of 1940 [15 U.S.C. 80a-3(c)(10)(B)]; or
          (C) a trust or other donative instrument described in section
        3(c)(10)(B) of the Investment Company Act of 1940 [15 U.S.C.
        80a-3(c)(10)(B)], or the trustees, administrators, settlors (or
        potential settlors), or beneficiaries of any such trust or
        other instrument;

        (5) any plan described in section 414(e) of title 26, any
      person or entity eligible to establish and maintain such a plan
      under title 26, or any trustee, director, officer, or employee of
      or volunteer for any such plan or person, if such person or
      entity, acting in such capacity, provides investment advice
      exclusively to, or with respect to, any plan, person, or entity
      or any company, account, or fund that is excluded from the
      definition of an investment company under section 3(c)(14) of the
      Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(14)]; or
        (6) any investment adviser that is registered with the
      Commodity Futures Trading Commission as a commodity trading
      advisor whose business does not consist primarily of acting as an
      investment adviser, as defined in section 80b-2(a)(11) of this
      title, and that does not act as an investment adviser to - 
          (A) an investment company registered under subchapter I of
        this chapter; or
          (B) a company which has elected to be a business development
        company pursuant to section 80a-53 of this title and has not
        withdrawn its election.
    (c) Procedure for registration; filing of application; effective
      date of registration; amendment of registration
      (1) An investment adviser, or any person who presently
    contemplates becoming an investment adviser, may be registered by
    filing with the Commission an application for registration in such
    form and containing such of the following information and documents
    as the Commission, by rule, may prescribe as necessary or
    appropriate in the public interest or for the protection of
    investors:
        (A) the name and form of organization under which the
      investment adviser engages or intends to engage in business; the
      name of the State or other sovereign power under which such
      investment adviser is organized; the location of his or its
      principal business office and branch offices, if any; the names
      and addresses of his or its partners, officers, directors, and
      persons performing similar functions or, if such an investment
      adviser be an individual, of such individual; and the number of
      his or its employees;
        (B) the education, the business affiliations for the past ten
      years, and the present business affiliations of such investment
      adviser and of his or its partners, officers, directors, and
      persons performing similar functions and of any controlling
      person thereof;
        (C) the nature of the business of such investment adviser,
      including the manner of giving advice and rendering analyses or
      reports;
        (D) a balance sheet certified by an independent public
      accountant and other financial statements (which shall, as the
      Commission specifies, be certified);
        (E) the nature and scope of the authority of such investment
      adviser with respect to clients' funds and accounts;
        (F) the basis or bases upon which such investment adviser is
      compensated;
        (G) whether such investment adviser, or any person associated
      with such investment adviser, is subject to any disqualification
      which would be a basis for denial, suspension, or revocation of
      registration of such investment adviser under the provisions of
      subsection (e) of this section; and
        (H) a statement as to whether the principal business of such
      investment adviser consists or is to consist of acting as
      investment adviser and a statement as to whether a substantial
      part of the business of such investment adviser, consists or is
      to consist of rendering investment supervisory services.

      (2) Within forty-five days of the date of the filing of such
    application (or within such longer period as to which the applicant
    consents) the Commission shall - 
        (A) by order grant such registration; or
        (B) institute proceedings to determine whether registration
      should be denied. Such proceedings shall include notice of the
      grounds for denial under consideration and opportunity for
      hearing and shall be concluded within one hundred twenty days of
      the date of the filing of the application for registration. At
      the conclusion of such proceedings the Commission, by order,
      shall grant or deny such registration. The Commission may extend
      the time for conclusion of such proceedings for up to ninety days
      if it finds good cause for such extension and publishes its
      reasons for so finding or for such longer period as to which the
      applicant consents.

    The Commission shall grant such registration if the Commission
    finds that the requirements of this section are satisfied and that
    the applicant is not prohibited from registering as an investment
    adviser under section 80b-3a of this title. The Commission shall
    deny such registration if it does not make such a finding or if it
    finds that if the applicant were so registered, its registration
    would be subject to suspension or revocation under subsection (e)
    of this section.
    (d) Other acts prohibited by subchapter
      Any provision of this subchapter (other than subsection (a) of
    this section) which prohibits any act, practice, or course of
    business if the mails or any means or instrumentality of interstate
    commerce are used in connection therewith shall also prohibit any
    such act, practice, or course of business by any investment adviser
    registered pursuant to this section or any person acting on behalf
    of such an investment adviser, irrespective of any use of the mails
    or any means or instrumentality of interstate commerce in
    connection therewith.
    (e) Censure, denial, or suspension of registration; notice and
      hearing
      The Commission, by order, shall censure, place limitations on the
    activities, functions, or operations of, suspend for a period not
    exceeding twelve months, or revoke the registration of any
    investment adviser if it finds, on the record after notice and
    opportunity for hearing, that such censure, placing of limitations,
    suspension, or revocation is in the public interest and that such
    investment adviser, or any person associated with such investment
    adviser, whether prior to or subsequent to becoming so associated -
    
        (1) has willfully made or caused to be made in any application
      for registration or report required to be filed with the
      Commission under this subchapter, or in any proceeding before the
      Commission with respect to registration, any statement which was
      at the time and in the light of the circumstances under which it
      was made false or misleading with respect to any material fact,
      or has omitted to state in any such application or report any
      material fact which is required to be stated therein.
        (2) has been convicted within ten years preceding the filing of
      any application for registration or at any time thereafter of any
      felony or misdemeanor or of a substantially equivalent crime by a
      foreign court of competent jurisdiction which the Commission
      finds - 
          (A) involves the purchase or sale of any security, the taking
        of a false oath, the making of a false report, bribery,
        perjury, burglary, any substantially equivalent activity
        however denominated by the laws of the relevant foreign
        government, or conspiracy to commit any such offense;
          (B) arises out of the conduct of the business of a broker,
        dealer, municipal securities dealer, investment adviser, bank,
        insurance company, government securities broker, government
        securities dealer, fiduciary, transfer agent, credit rating
        agency, foreign person performing a function substantially
        equivalent to any of the above, or entity or person required to
        be registered under the Commodity Exchange Act [7 U.S.C. 1 et
        seq.] or any substantially equivalent statute or regulation;
          (C) involves the larceny, theft, robbery, extortion, forgery,
        counterfeiting, fraudulent concealment, embezzlement,
        fraudulent conversion, or misappropriation of funds or
        securities or substantially equivalent activity however
        denominated by the laws of the relevant foreign government; or
          (D) involves the violation of section 152, 1341, 1342, or
        1343 or chapter 25 or 47 of title 18, or a violation of (!1)
        substantially equivalent foreign statute.


        (3) has been convicted during the 10-year period preceding the
      date of filing of any application for registration, or at any
      time thereafter, of - 
          (A) any crime that is punishable by imprisonment for 1 or
        more years, and that is not described in paragraph (2); or
          (B) a substantially equivalent crime by a foreign court of
        competent jurisdiction.

        (4) is permanently or temporarily enjoined by order, judgment,
      or decree of any court of competent jurisdiction, including any
      foreign court of competent jurisdiction, from acting as an
      investment adviser, underwriter, broker, dealer, municipal
      securities dealer, government securities broker, government
      securities dealer, transfer agent, credit rating agency, foreign
      person performing a function substantially equivalent to any of
      the above, or entity or person required to be registered under
      the Commodity Exchange Act [7 U.S.C. 1 et seq.] or any
      substantially equivalent statute or regulation, or as an
      affiliated person or employee of any investment company, bank,
      insurance company, foreign entity substantially equivalent to any
      of the above, or entity or person required to be registered under
      the Commodity Exchange Act or any substantially equivalent
      statute or regulation, or from engaging in or continuing any
      conduct or practice in connection with any such activity, or in
      connection with the purchase or sale of any security.
        (5) has willfully violated any provision of the Securities Act
      of 1933 [15 U.S.C. 77a et seq.], the Securities Exchange Act of
      1934 [15 U.S.C. 78a et seq.], the Investment Company Act of 1940
      [15 U.S.C. 80a-1 et seq.], this subchapter, the Commodity
      Exchange Act [7 U.S.C. 1 et seq.], or the rules or regulations
      under any such statutes or any rule of the Municipal Securities
      Rulemaking Board, or is unable to comply with any such provision.
        (6) has willfully aided, abetted, counseled, commanded,
      induced, or procured the violation by any other person of any
      provision of the Securities Act of 1933 [15 U.S.C. 77a et seq.],
      the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], the
      Investment Company Act of 1940 [15 U.S.C. 80a-1 et seq.], this
      subchapter, the Commodity Exchange Act [7 U.S.C. 1 et seq.], the
      rules or regulations under any of such statutes, or the rules of
      the Municipal Securities Rulemaking Board, or has failed
      reasonably to supervise, with a view to preventing violations of
      the provisions of such statutes, rules and regulations, another
      person who commits such a violation, if such other person is
      subject to his supervision. For the purposes of this paragraph no
      person shall be deemed to have failed reasonably to supervise any
      person, if - 
          (A) there have been established procedures, and a system for
        applying such procedures, which would reasonably be expected to
        prevent and detect, insofar as practicable, any such violation
        by such other person, and
          (B) such person has reasonably discharged the duties and
        obligations incumbent upon him by reason of such procedures and
        system without reasonable cause to believe that such procedures
        and system were not being complied with.

        (7) is subject to any order of the Commission barring or
      suspending the right of the person to be associated with an
      investment adviser;
        (8) has been found by a foreign financial regulatory authority
      to have - 
          (A) made or caused to be made in any application for
        registration or report required to be filed with a foreign
        securities authority, or in any proceeding before a foreign
        securities authority with respect to registration, any
        statement that was at the time and in light of the
        circumstances under which it was made false or misleading with
        respect to any material fact, or has omitted to state in any
        application or report to a foreign securities authority any
        material fact that is required to be stated therein;
          (B) violated any foreign statute or regulation regarding
        transactions in securities or contracts of sale of a commodity
        for future delivery traded on or subject to the rules of a
        contract market or any board of trade; or
          (C) aided, abetted, counseled, commanded, induced, or
        procured the violation by any other person of any foreign
        statute or regulation regarding transactions in securities or
        contracts of sale of a commodity for future delivery traded on
        or subject to the rules of a contract market or any board of
        trade, or has been found, by the foreign finanical (!2)
        regulatory authority, to have failed reasonably to supervise,
        with a view to preventing violations of statutory provisions,
        and rules and regulations promulgated thereunder, another
        person who commits such a violation, if such other person is
        subject to his supervision; or


        (9) is subject to any final order of a State securities
      commission (or any agency or officer performing like functions),
      State authority that supervises or examines banks, savings
      associations, or credit unions, State insurance commission (or
      any agency or office performing like functions), an appropriate
      Federal banking agency (as defined in section 3 of the Federal
      Deposit Insurance Act (12 U.S.C. 1813(q))), or the National
      Credit Union Administration, that - 
          (A) bars such person from association with an entity
        regulated by such commission, authority, agency, or officer, or
        from engaging in the business of securities, insurance,
        banking, savings association activities, or credit union
        activities; or
          (B) constitutes a final order based on violations of any laws
        or regulations that prohibit fraudulent, manipulative, or
        deceptive conduct.
    (f) Bar or suspension from association with investment adviser;
      notice and hearing
      The Commission, by order, shall censure or place limitations on
    the activities of any person associated, seeking to become
    associated, or, at the time of the alleged misconduct, associated
    or seeking to become associated with an investment adviser, or
    suspend for a period not exceeding twelve months or bar any such
    person from being associated with an investment adviser, if the
    Commission finds, on the record after notice and opportunity for
    hearing, that such censure, placing of limitations, suspension, or
    bar is in the public interest and that such person has committed or
    omitted any act or omission enumerated in paragraph (1), (5), (6),
    (8), or (9) of subsection (e) of this section or has been convicted
    of any offense specified in paragraph (2) or (3) of subsection (e)
    of this section within ten years of the commencement of the
    proceedings under this subsection, or is enjoined from any action,
    conduct, or practice specified in paragraph (4) of subsection (e)
    of this section. It shall be unlawful for any person as to whom
    such an order suspending or barring him from being associated with
    an investment adviser is in effect willfully to become, or to be,
    associated with an investment adviser without the consent of the
    Commission, and it shall be unlawful for any investment adviser to
    permit such a person to become, or remain, a person associated with
    him without the consent of the Commission, if such investment
    adviser knew, or in the exercise of reasonable care, should have
    known, of such order.
    (g) Registration of successor to business of investment adviser
      Any successor to the business of an investment adviser registered
    under this section shall be deemed likewise registered hereunder,
    if within thirty days from its succession to such business it shall
    file an application for registration under this section, unless and
    until the Commission, pursuant to subsection (c) or subsection (e)
    of this section, shall deny registration to or revoke or suspend
    the registration of such successor.
    (h) Withdrawal of registration
      Any person registered under this section may, upon such terms and
    conditions as the Commission finds necessary in the public interest
    or for the protection of investors, withdraw from registration by
    filing a written notice of withdrawal with the Commission. If the
    Commission finds that any person registered under this section, or
    who has pending an application for registration filed under this
    section, is no longer in existence, is not engaged in business as
    an investment adviser, or is prohibited from registering as an
    investment adviser under section 80b-3a of this title, the
    Commission shall by order cancel the registration of such person.
    (i) Money penalties in administrative proceedings
      (1) Authority of Commission
        In any proceeding instituted pursuant to subsection (e) or (f)
      of this section against any person, the Commission may impose a
      civil penalty if it finds, on the record after notice and
      opportunity for hearing, that such person - 
          (A) has willfully violated any provision of the Securities
        Act of 1933 [15 U.S.C. 77a et seq.], the Securities Exchange
        Act of 1934 [15 U.S.C. 78a et seq.], subchapter I of this
        chapter, or this subchapter, or the rules or regulations
        thereunder;
          (B) has willfully aided, abetted, counseled, commanded,
        induced, or procured such a violation by any other person;
          (C) has willfully made or caused to be made in any
        application for registration or report required to be filed
        with the Commission under this subchapter, or in any proceeding
        before the Commission with respect to registration, any
        statement which was, at the time and in the light of the
        circumstances under which it was made, false or misleading with
        respect to any material fact, or has omitted to state in any
        such application or report any material fact which was required
        to be stated therein; or
          (D) has failed reasonably to supervise, within the meaning of
        subsection (e)(6) of this section, with a view to preventing
        violations of the provisions of this subchapter and the rules
        and regulations thereunder, another person who commits such a
        violation, if such other person is subject to his supervision;

      and that such penalty is in the public interest.
      (2) Maximum amount of penalty
        (A) First tier
          The maximum amount of penalty for each act or omission
        described in paragraph (1) shall be $5,000 for a natural person
        or $50,000 for any other person.
        (B) Second tier
          Notwithstanding subparagraph (A), the maximum amount of
        penalty for each such act or omission shall be $50,000 for a
        natural person or $250,000 for any other person if the act or
        omission described in paragraph (1) involved fraud, deceit,
        manipulation, or deliberate or reckless disregard of a
        regulatory requirement.
        (C) Third tier
          Notwithstanding subparagraphs (A) and (B), the maximum amount
        of penalty for each such act or omission shall be $100,000 for
        a natural person or $500,000 for any other person if - 
            (i) the act or omission described in paragraph (1) involved
          fraud, deceit, manipulation, or deliberate or reckless
          disregard of a regulatory requirement; and
            (ii) such act or omission directly or indirectly resulted
          in substantial losses or created a significant risk of
          substantial losses to other persons or resulted in
          substantial pecuniary gain to the person who committed the
          act or omission.
      (3) Determination of public interest
        In considering under this section whether a penalty is in the
      public interest, the Commission may consider - 
          (A) whether the act or omission for which such penalty is
        assessed involved fraud, deceit, manipulation, or deliberate or
        reckless disregard of a regulatory requirement;
          (B) the harm to other persons resulting either directly or
        indirectly from such act or omission;
          (C) the extent to which any person was unjustly enriched,
        taking into account any restitution made to persons injured by
        such behavior;
          (D) whether such person previously has been found by the
        Commission, another appropriate regulatory agency, or a self-
        regulatory organization to have violated the Federal
        securities laws, State securities laws, or the rules of a self-
        regulatory organization, has been enjoined by a court of
        competent jurisdiction from violations of such laws or rules,
        or has been convicted by a court of competent jurisdiction of
        violations of such laws or of any felony or misdemeanor
        described in subsection (e)(2) of this section;
          (E) the need to deter such person and other persons from
        committing such acts or omissions; and
          (F) such other matters as justice may require.
      (4) Evidence concerning ability to pay
        In any proceeding in which the Commission may impose a penalty
      under this section, a respondent may present evidence of the
      respondent's ability to pay such penalty. The Commission may, in
      its discretion, consider such evidence in determining whether
      such penalty is in the public interest. Such evidence may relate
      to the extent of such person's ability to continue in business
      and the collectability of a penalty, taking into account any
      other claims of the United States or third parties upon such
      person's assets and the amount of such person's assets.
    (j) Authority to enter order requiring accounting and disgorgement
      In any proceeding in which the Commission may impose a penalty
    under this section, the Commission may enter an order requiring
    accounting and disgorgement, including reasonable interest. The
    Commission is authorized to adopt rules, regulations, and orders
    concerning payments to investors, rates of interest, periods of
    accrual, and such other matters as it deems appropriate to
    implement this subsection.
    (k) Cease-and-desist proceedings
      (1) Authority of Commission
        If the Commission finds, after notice and opportunity for
      hearing, that any person is violating, has violated, or is about
      to violate any provision of this subchapter, or any rule or
      regulation thereunder, the Commission may publish its findings
      and enter an order requiring such person, and any other person
      that is, was, or would be a cause of the violation, due to an act
      or omission the person knew or should have known would contribute
      to such violation, to cease and desist from committing or causing
      such violation and any future violation of the same provision,
      rule, or regulation. Such order may, in addition to requiring a
      person to cease and desist from committing or causing a
      violation, require such person to comply, or to take steps to
      effect compliance, with such provision, rule, or regulation, upon
      such terms and conditions and within such time as the Commission
      may specify in such order. Any such order may, as the Commission
      deems appropriate, require future compliance or steps to effect
      future compliance, either permanently or for such period of time
      as the Commission may specify, with such provision, rule, or
      regulation with respect to any security, any issuer, or any other
      person.
      (2) Hearing
        The notice instituting proceedings pursuant to paragraph (1)
      shall fix a hearing date not earlier than 30 days nor later than
      60 days after service of the notice unless an earlier or a later
      date is set by the Commission with the consent of any respondent
      so served.
      (3) Temporary order
        (A) In general
          Whenever the Commission determines that the alleged violation
        or threatened violation specified in the notice instituting
        proceedings pursuant to paragraph (1), or the continuation
        thereof, is likely to result in significant dissipation or
        conversion of assets, significant harm to investors, or
        substantial harm to the public interest, including, but not
        limited to, losses to the Securities Investor Protection
        Corporation, prior to the completion of the proceedings, the
        Commission may enter a temporary order requiring the respondent
        to cease and desist from the violation or threatened violation
        and to take such action to prevent the violation or threatened
        violation and to prevent dissipation or conversion of assets,
        significant harm to investors, or substantial harm to the
        public interest as the Commission deems appropriate pending
        completion of such proceedings. Such an order shall be entered
        only after notice and opportunity for a hearing, unless the
        Commission, notwithstanding section 80b-11(c) of this title,
        determines that notice and hearing prior to entry would be
        impracticable or contrary to the public interest. A temporary
        order shall become effective upon service upon the respondent
        and, unless set aside, limited, or suspended by the Commission
        or a court of competent jurisdiction, shall remain effective
        and enforceable pending the completion of the proceedings.
        (B) Applicability
          This paragraph shall apply only to a respondent that acts,
        or, at the time of the alleged misconduct acted, as a broker,
        dealer, investment adviser, investment company, municipal
        securities dealer, government securities broker, government
        securities dealer, or transfer agent, or is, or was at the time
        of the alleged misconduct, an associated person of, or a person
        seeking to become associated with, any of the foregoing.
      (4) Review of temporary orders
        (A) Commission review
          At any time after the respondent has been served with a
        temporary cease-and-desist order pursuant to paragraph (3), the
        respondent may apply to the Commission to have the order set
        aside, limited, or suspended. If the respondent has been served
        with a temporary cease-and-desist order entered without a prior
        Commission hearing, the respondent may, within 10 days after
        the date on which the order was served, request a hearing on
        such application and the Commission shall hold a hearing and
        render a decision on such application at the earliest possible
        time.
        (B) Judicial review
          Within - 
            (i) 10 days after the date the respondent was served with a
          temporary cease-and-desist order entered with a prior
          Commission hearing, or
            (ii) 10 days after the Commission renders a decision on an
          application and hearing under subparagraph (A), with respect
          to any temporary cease-and-desist order entered without a
          prior Commission hearing,

        the respondent may apply to the United States district court
        for the district in which the respondent resides or has its
        principal place of business, or for the District of Columbia,
        for an order setting aside, limiting, or suspending the
        effectiveness or enforcement of the order, and the court shall
        have jurisdiction to enter such an order. A respondent served
        with a temporary cease-and-desist order entered without a prior
        Commission hearing may not apply to the court except after
        hearing and decision by the Commission on the respondent's
        application under subparagraph (A) of this paragraph.
        (C) No automatic stay of temporary order
          The commencement of proceedings under subparagraph (B) of
        this paragraph shall not, unless specifically ordered by the
        court, operate as a stay of the Commission's order.
        (D) Exclusive review
          Section 80b-13 of this title shall not apply to a temporary
        order entered pursuant to this section.
      (5) Authority to enter order requiring accounting and
        disgorgement
        In any cease-and-desist proceeding under paragraph (1), the
      Commission may enter an order requiring accounting and
      disgorgement, including reasonable interest. The Commission is
      authorized to adopt rules, regulations, and orders concerning
      payments to investors, rates of interest, periods of accrual, and
      such other matters as it deems appropriate to implement this
      subsection.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 203, 54 Stat. 850; Pub. L.
    86-750, Secs. 2-5, Sept. 13, 1960, 74 Stat. 885, 886; Pub. L. 91-
    547, Sec. 24, Dec. 14, 1970, 84 Stat. 1430; Pub. L. 94-29, Sec.
    29(1)-(4), June 4, 1975, 89 Stat. 166-169; Pub. L. 96-477, title
    II, Sec. 202, Oct. 21, 1980, 94 Stat. 2290; Pub. L. 99-571, title
    I, Sec. 102(m), Oct. 28, 1986, 100 Stat. 3220; Pub. L. 100-181,
    title VII, Sec. 702, Dec. 4, 1987, 101 Stat. 1263; Pub. L. 101-429,
    title IV, Sec. 401, Oct. 15, 1990, 104 Stat. 946; Pub. L. 101-550,
    title II, Sec. 205(b), (c), Nov. 15, 1990, 104 Stat. 2719, 2720;
    Pub. L. 104-62, Sec. 5, Dec. 8, 1995, 109 Stat. 685; Pub. L. 104-
    290, title III, Secs. 303(b), (d), 305, title V, Sec. 508(d), Oct.
    11, 1996, 110 Stat. 3438, 3439, 3448; Pub. L. 105-353, title III,
    Sec. 301(d)(1), Nov. 3, 1998, 112 Stat. 3237; Pub. L. 106-554, Sec.
    1(a)(5) [title II, Sec. 209(b)], Dec. 21, 2000, 114 Stat. 2763,
    2763A-436; Pub. L. 107-204, title VI, Sec. 604(b), (c)(2), July 30,
    2002, 116 Stat. 796; Pub. L. 109-291, Sec. 4(b)(3)(C), Sept. 29,
    2006, 120 Stat. 1337.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Commodity Exchange Act, referred to in subsec. (e)(2)(B), (4)-
    (6), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, as amended,
    which is classified generally to chapter 1 (Sec. 1 et seq.) of
    Title 7, Agriculture. For complete classification of this Act to
    the Code, see section 1 of Title 7 and Tables.
      The Securities Act of 1933, referred to in subsecs. (e)(5), (6)
    and (i)(1)(A), is act May 27, 1933, ch. 38, title I, 48 Stat. 74,
    as amended, which is classified generally to subchapter I (Sec. 77a
    et seq.) of chapter 2A of this title. For complete classification
    of this Act to the Code, see section 77a of this title and Tables.
      The Securities Exchange Act of 1934, referred to in subsecs.
    (e)(5), (6) and (i)(1)(A), is act June 6, 1934, ch. 404, 48 Stat.
    881, as amended, which is classified generally to chapter 2B (Sec.
    78a et seq.) of this title. For complete classification of this Act
    to the Code, see section 78a of this title and Tables.
      The Investment Company Act of 1940, referred to in subsec.
    (e)(5), (6), is title I of act Aug. 22, 1940, ch. 686, 54 Stat.
    789, as amended, which is classified generally to subchapter I
    (Sec. 80a-1 et seq.) of this chapter. For complete classification
    of this Act to the Code, see section 80a-51 of this title and
    Tables.


-MISC1-
                                AMENDMENTS                            
      2006 - Subsec. (e)(2)(B), (4). Pub. L. 109-291 inserted "credit
    rating agency," after "transfer agent,".
      2002 - Subsec. (e)(7). Pub. L. 107-204, Sec. 604(b)(1), added
    par. (7) and struck out former par. (7) which read as follows: "is
    subject to an order of the Commission entered pursuant to
    subsection (f) of this section barring or suspending the right of
    such person to be associated with an investment adviser which order
    is in effect with respect to such person."
      Subsec. (e)(9). Pub. L. 107-204, Sec. 604(b)(2), (3), added par.
    (9).
      Subsec. (f). Pub. L. 107-204, Sec. 604(c)(2), substituted "(8),
    or (9)" for "or (8)" and inserted "or (3)" after "paragraph (2)".
      2000 - Subsec. (b)(6). Pub. L. 106-554 added par. (6).
      1998 - Subsec. (e)(8)(B). Pub. L. 105-353 inserted "or" after
    semicolon at end.
      1996 - Subsec. (a). Pub. L. 104-290, Sec. 303(d), which directed
    substitution of "subsection (b) of this section and section 80b-3a
    of this title" for "subsection (b) of this section", was executed
    by making the substitution for "subsection (b)" to reflect the
    probable intent of Congress.
      Subsec. (b)(5). Pub. L. 104-290, Sec. 508(d), added par. (5).
      Subsec. (c)(2). Pub. L. 104-290, Sec. 303(b)(1), inserted "and
    that the applicant is not prohibited from registering as an
    investment adviser under section 80b-3a of this title" after
    "satisfied" in closing provisions.
      Subsec. (e)(3) to (5). Pub. L. 104-290, Sec. 305(a), added par.
    (3) and redesignated former pars. (3) and (4) as (4) and (5),
    respectively. Former par. (5) redesignated (6).
      Subsec. (e)(6). Pub. L. 104-290, Sec. 305(b)(1), substituted
    "this paragraph" for "this paragraph (5)".
      Pub. L. 104-290, Sec. 305(a)(1), redesignated par. (5) as (6).
    Former par. (6) redesignated (7).
      Subsec. (e)(7), (8). Pub. L. 104-290, Sec. 305(a)(1),
    redesignated pars. (6) and (7) as (7) and (8), respectively.
      Subsec. (f). Pub. L. 104-290, Sec. 305(b)(2), substituted
    "paragraph (1), (5), (6), or (8) of subsection (e) of this section"
    for "paragraph (1), (4), (5), or (7) of subsection (e) of this
    section" and "paragraph (4)" for "paragraph (3)" and substituted
    "subsection (e)" for "said subsection (e)" in two places.
      Subsec. (h). Pub. L. 104-290, Sec. 303(b)(2), substituted
    "existence," for "existence or" and inserted "or is prohibited from
    registering as an investment adviser under section 80b-3a of this
    title," after "investment adviser,".
      Subsec. (i)(1)(D). Pub. L. 104-290, Sec. 305(b)(3), substituted
    "subsection (e)(6) of this section" for "subsection (e)(5) of this
    section".
      1995 - Subsec. (b)(4). Pub. L. 104-62 added par. (4).
      1990 - Subsec. (e)(2). Pub. L. 101-550, Sec. 205(b)(1), inserted
    "or of a substantially equivalent crime by a foreign court of
    competent jurisdiction" after "misdemeanor".
      Subsec. (e)(2)(A). Pub. L. 101-550, Sec. 205(b)(2), inserted "any
    substantially equivalent activity however denominated by the laws
    of the relevant foreign government," after "burglary,".
      Subsec. (e)(2)(B). Pub. L. 101-550, Sec. 205(b)(3), inserted
    "foreign person performing a function substantially equivalent to
    any of the above," after "transfer agent," and "or any
    substantially equivalent statute or regulation" after "Commodity
    Exchange Act".
      Subsec. (e)(2)(C). Pub. L. 101-550, Sec. 205(b)(4), inserted "or
    substantially equivalent activity however denominated by the laws
    of the relevant foreign government" after "securities".
      Subsec. (e)(2)(D). Pub. L. 101-550, Sec. 205(b)(5), inserted ",
    or a violation of substantially equivalent foreign statute" after
    "title 18".
      Subsec. (e)(3). Pub. L. 101-550, Sec. 205(b)(3), (6), inserted
    "foreign person performing a function substantially equivalent to
    any of the above," after "transfer agent,", "or any substantially
    equivalent statute or regulation" after "Commodity Exchange Act"
    wherever appearing, ", including any foreign court of competent
    jurisdiction", and "foreign entity substantially equivalent to any
    of the above," after "insurance company,".
      Subsec. (e)(5). Pub. L. 101-550, Sec. 205(b)(7), inserted "the
    Commodity Exchange Act" after "this subchapter,".
      Subsec. (e)(7). Pub. L. 101-550, Sec. 205(b)(8), added par. (7).
      Subsec. (f). Pub. L. 101-550, Sec. 205(c), substituted "paragraph
    (1), (4), (5), or (7)" for "paragraph (1), (4), or (5)".
      Subsecs. (i) to (k). Pub. L. 101-429 added subsecs. (i) to (k).
      1987 - Subsec. (e)(2)(B). Pub. L. 100-181, Sec. 702(1), inserted
    "transfer agent," after "fiduciary,".
      Subsec. (e)(3). Pub. L. 100-181, Sec. 702(2), inserted "transfer
    agent," after "government securities dealer,".
      Subsec. (f). Pub. L. 100-181, Sec. 702(3), inserted ", seeking to
    become associated, or, at the time of the alleged misconduct,
    associated" before "or seeking to become associated".
      Subsec. (g). Pub. L. 100-181, Sec. 702(4), substituted
    "subsection (c) or subsection (e)" for "subsection (d)".
      1986 - Subsec. (e)(2)(B). Pub. L. 99-571, Sec. 102(m)(1),
    substituted "government securities broker, government securities
    dealer, fiduciary, or entity or person required to be registered
    under the Commodity Exchange Act" for "or fiduciary".
      Subsec. (e)(3). Pub. L. 99-571, Sec. 102(m)(2), inserted par. (3)
    and struck out former par. (3) which read as follows: "is
    permanently or temporarily enjoined by order, judgment, or decree
    of any court of competent jurisdiction from acting as an investment
    adviser, underwriter, broker, dealer, or municipal securities
    dealer, or as an affiliated person or employee of any investment
    company, bank, or insurance company, or from engaging in or
    continuing any conduct or practice in connection with any such
    activity, or in connection with the purchase or sale of any
    security."
      Subsec. (e)(4). Pub. L. 99-571, Sec. 102(m)(3), inserted
    reference to Commodity Exchange Act.
      1980 - Subsec. (b)(3). Pub. L. 96-477 required investment
    advisers to business development companies to register under this
    section and provided that for purposes of determining the number of
    clients of an investment adviser under par. (3), no shareholders,
    partners, or beneficial owners of business development companies
    were to be deemed to be clients of an investment adviser unless
    such person qualified as a client apart from his status in
    connection with the business development company.
      1975 - Subsec. (c). Pub. L. 94-29, Sec. 29(1), inserted provision
    authorizing the Commission to require a balance sheet certified by
    an independent public accountant and other financial statements
    which, as the Commission specifies, may be certified, and
    substituted provisions directing the Commission either to grant the
    registration within forty-five days or institute proceedings to
    determine whether registration should be denied, directing the
    Commission to grant registration if it finds that the requirements
    of this section are satisfied, and requiring the Commission to deny
    registration if it does not make such a finding or finds that if
    the applicant were registered its registration would be subject to
    suspension or revocation for provisions directing that registration
    be effective thirty days after receipt of the application by the
    Commission except as otherwise provided and making allowances for
    amendment of the application.
      Subsec. (e). Pub. L. 94-29, Sec. 29(2), added the placing of
    limitations on the activities of investment advisers to the
    enumeration of sanctions available to the Commission as set out in
    the provisions preceding par. (1), inserted references in par.
    (2)(A) to the taking of a false oath, the making of a false report,
    bribery, perjury, burglary, and conspiracy to commit such offenses,
    expanded par. (2)(B) to include municipal securities dealers,
    banks, insurance companies, and fiduciaries, inserted references in
    par. (2)(C) to larceny, theft, robbery, extortion, forgery,
    counterfeiting, and fraudulent concealment, inserted references in
    par. (2)(D) to section 152 and chapters 25 and 47 of title 18, and
    inserted reference to the rules of the Municipal Securities
    Rulemaking Board in pars. (4) and (5).
      Subsec. (f). Pub. L. 94-29, Sec. 29(3), added the placing of
    limitations on the activities of persons associated or seeking to
    become associated with an investment adviser to the enumeration of
    sanctions available to the Commission.
      Subsecs. (g), (h). Pub. L. 94-29, Sec. 29(4), redesignated
    subsecs. (h) and (i) as (g) and (h), respectively. Former subsec.
    (g), covering the postponement of the effective day of registration
    by the commencement of a proceeding to deny registration, was
    struck out.
      1970 - Subsec. (b). Pub. L. 91-547, Sec. 24(a), struck out
    "investment companies and" before "insurance companies" in par. (2)
    and struck out "does not hold" after "clients and who" and inserted
    "neither hold" and "nor acts as an investment adviser to any
    investment company registered under subchapter I of this chapter"
    in par. (3).
      Subsec. (c)(1)(F). Pub. L. 91-547, Sec. 24(b), substituted "any
    person associated with such investment adviser" for "any partner,
    officer, director thereof, or any person performing similar
    functions, or any person directly or indirectly controlling or
    controlled by such investment adviser" and reference to subsec.
    "(e)" for "(d)".
      Subsecs. (d), (e). Pub. L. 91-547, Sec. 24(c), (d), added subsec.
    (d), redesignated former subsec. (d) as (e), and in amending its
    provisions, inserted reference to "censure" in two places and
    substituted "such investment adviser or any person associated with
    such investment adviser" for "(1) such investment adviser, whether
    prior or subsequent to becoming such, or (2) any partner, officer,
    or director thereof, or any person performing similar functions, or
    (3) any person directly or indirectly controlling or controlled by
    such investment adviser, whether prior or subsequent to becoming
    such," in introductory text preceding par. (1), formerly cl. (A),
    redesignated as pars. (1) to (5) former cls. (A) to (E),
    redesignated as items (A) to (D) of par. (2) former items (i) to
    (iv), striking out ", as heretofore or hereafter amended" after
    "Title 18", substituted in par. (3) "an affiliated person" for "as
    an affiliated person", in par. (4) included reference to subchapter
    I of this chapter and struck out "as any of such statutes
    heretofore have been or hereafter may be amended" after "this
    subchapter", in par. (5) included reference to subchapter I of this
    chapter, struck out "as any of such statutes heretofore have been
    or hereafter may be amended" after "this subchapter", inserted
    provision respecting disciplining an investment adviser for failure
    reasonably to supervise, with a view to preventing violations of
    statutes, rules, and regulations, another person who commits such a
    violation if such other person is subject to his supervision,
    including subpars. (A) and (B) respecting failure to supervise a
    person, and inserted par. (6). Former subsec. (e) redesignated (g).
      Subsec. (f). Pub. L. 91-547, Sec. 24(e), inserted subsec. (f).
    Former subsec. (f) redesignated (h).
      Subsec. (g). Pub. L. 91-547, Sec. 24(c), redesignated former
    subsec. (e) as (g). Former subsec. (g) redesignated (i).
      Subsecs. (h), (i). Pub. L. 91-547, Sec. 24(e), redesignated
    former subsecs. (f) and (g) as (h) and (i), respectively.
      1960 - Subsec. (c)(1)(F). Pub. L. 86-750, Sec. 2, substituted "or
    any person performing similar functions, or any person directly or
    indirectly controlling or controlled by such investment adviser, is
    subject to any disqualification which would be a basis for denial,
    suspension, or revocation of registration of such investment
    adviser under the provisions of subsection (d)" for "person
    performing similar function or controlling person thereof (i)
    within ten years of the filing of such application has been
    convicted of any felony or misdemeanor of the character described
    in paragraph (1) of subsection (d) of this section, or (ii) is
    permanently or temporarily enjoined by an order, judgment or decree
    of the character described in paragraph (2) of said subsection (d)
    and in each case the facts relating to such conviction or
    injunction".
      Subsec. (c)(2). Pub. L. 86-750, Sec. 3(a), substituted "a
    statement as to whether the principal business of such investment
    adviser consists or is to consist of acting as investment adviser
    and a statement as to whether a substantial part of the business of
    such investment adviser consists or is to consist of rendering
    investment supervisory services" for "a statement as to whether
    such investment adviser is engaged or is to engage primarily in the
    business of rendering investment supervisory services".
      Subsec. (d). Pub. L. 86-750, Sec. 3(b), among other changes,
    limited the period of suspension to twelve months, included people
    controlled by the adviser, provided that the ten year period within
    which convictions are counted be measured from the filing of the
    application or after specified felonies or misdemeanors, increased
    the number of offenses by including willful, false or misleading
    statements as to any material fact, or omissions thereof, in any
    application for registration or report filed with the Commission,
    embezzlement, fraudulent conversion, and misappropriation of funds
    or securities, violations of sections 1341, 1342 or 1343 of title
    18, willful violations of, or aiding, abetting, counseling,
    commanding, inducing or procuring the violation of the Securities
    Act of 1933, or of the Securities Exchange Act of 1934, or of this
    title, and any amendment or rule or regulation thereunder.
      Subsec. (e). Pub. L. 86-750, Sec. 4, substituted provisions
    postponing the effective date of registration for ninety days at
    commencement of a proceeding to deny registration, or until final
    determination whether such registration should be denied, whichever
    was first, and authorizing the Commission after notice and
    opportunity for hearing, to postpone said effective date beyond the
    ninety-day period or final determination, provided that upon
    request of any interested party, made more than ninety days after
    such postponement, the Commission shall consider the postponement's
    continuation, for provisions prohibiting postponement of the
    effective date of registration upon a proceeding to deny
    registration, unless the Commission found it in the public interest
    to do so, and which limited said postponement to three months.
      Subsec. (g). Pub. L. 86-750, Sec. 5, substituted "existence" for
    "business".

                     EFFECTIVE DATE OF 1996 AMENDMENT                 
      Amendment by sections 303(b), (d) and 305 of Pub. L. 104-290
    effective 270 days after Oct. 11, 1996, see section 308(a) of Pub.
    L. 104-290, as amended, set out as a note under section 80b-2 of
    this title.

                     EFFECTIVE DATE OF 1995 AMENDMENT                 
      Amendment by Pub. L. 104-62 applicable as defense to any claim in
    administrative and judicial actions pending on or commenced after
    Dec. 8, 1995, that any person, security, interest, or participation
    of type described in Pub. L. 104-62 is subject to the Securities
    Act of 1933, the Securities Exchange Act of 1934, the Investment
    Company Act of 1940, the Investment Advisers Act of 1940, or any
    State statute or regulation preempted as provided in section 80a-3a
    of this title, except as specifically provided in such statutes,
    see section 7 of Pub. L. 104-62, set out as a note under section
    77c of this title.

                     EFFECTIVE DATE OF 1990 AMENDMENT                 
      Amendment by Pub. L. 101-429 effective Oct. 15, 1990, with
    provisions relating to civil penalties and accounting and
    disgorgement, see section 1(c)(1), (2) of Pub. L. 101-429, set out
    in a note under section 77g of this title.

                     EFFECTIVE DATE OF 1986 AMENDMENT                 
      Amendment by Pub. L. 99-571 effective 270 days after Oct. 28,
    1986, see section 401 of Pub. L. 99-571, set out as an Effective
    Date note under section 78o-5 of this title.

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective Dec. 14, 1970, except that
    amendment by section 24(a) of Pub. L. 91-547 effective on
    expiration of one year after Dec. 14, 1970, see section 30
    (introductory text and par. (1)) of Pub. L. 91-547, set out as a
    note under section 80a-52 of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-FOOTNOTE-
    (!1) So in original. Probably should be "of a".

    (!2) So in original. Probably should be "financial".


-End-



-CITE-
    15 USC Sec. 80b-3a                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-3a. State and Federal responsibilities

-STATUTE-
    (a) Advisers subject to State authorities
      (1) In general
        No investment adviser that is regulated or required to be
      regulated as an investment adviser in the State in which it
      maintains its principal office and place of business shall
      register under section 80b-3 of this title, unless the investment
      adviser - 
          (A) has assets under management of not less than $25,000,000,
        or such higher amount as the Commission may, by rule, deem
        appropriate in accordance with the purposes of this subchapter;
        or
          (B) is an adviser to an investment company registered under
        subchapter I of this chapter.
      (2) "Assets under management" defined
        For purposes of this subsection, the term "assets under
      management" means the securities portfolios with respect to which
      an investment adviser provides continuous and regular supervisory
      or management services.
    (b) Advisers subject to Commission authority
      (1) In general
        No law of any State or political subdivision thereof requiring
      the registration, licensing, or qualification as an investment
      adviser or supervised person of an investment adviser shall apply
      to any person - 
          (A) that is registered under section 80b-3 of this title as
        an investment adviser, or that is a supervised person of such
        person, except that a State may license, register, or otherwise
        qualify any investment adviser representative who has a place
        of business located within that State; or
          (B) that is not registered under section 80b-3 of this title
        because that person is excepted from the definition of an
        investment adviser under section 80b-2(a)(11) of this title.
      (2) Limitation
        Nothing in this subsection shall prohibit the securities
      commission (or any agency or office performing like functions) of
      any State from investigating and bringing enforcement actions
      with respect to fraud or deceit against an investment adviser or
      person associated with an investment adviser.
    (c) Exemptions
      Notwithstanding subsection (a) of this section, the Commission,
    by rule or regulation upon its own motion, or by order upon
    application, may permit the registration with the Commission of any
    person or class of persons to which the application of subsection
    (a) of this section would be unfair, a burden on interstate
    commerce, or otherwise inconsistent with the purposes of this
    section.
    (d) State assistance
      Upon request of the securities commissioner (or any agency or
    officer performing like functions) of any State, the Commission may
    provide such training, technical assistance, or other reasonable
    assistance in connection with the regulation of investment advisers
    by the State.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 203A, as added Pub. L. 104-
    290, title III, Sec. 303(a), Oct. 11, 1996, 110 Stat. 3437;
    amended Pub. L. 109-290, Sec. 7(b)(1), Sept. 29, 2006, 120 Stat.
    1321.)


-MISC1-
                                AMENDMENTS                            
      2006 - Subsecs. (d), (e). Pub. L. 109-290 redesignated subsec.
    (e) as (d) and struck out heading and text of former subsec. (d).
    Text read as follows: "The Commission may, by rule, require an
    investment adviser - 
        "(1) to file with the Commission any fee, application, report,
      or notice required by this subchapter or by the rules issued
      under this subchapter through any entity designated by the
      Commission for that purpose; and
        "(2) to pay the reasonable costs associated with such filing."

                              EFFECTIVE DATE                          
      Section effective 270 days after Oct. 11, 1996, see section
    308(a) of Pub. L. 104-290, as amended, set out as an Effective Date
    of 1996 Amendment note under section 80b-2 of this title.

                         CONTINUED STATE AUTHORITY                     
      Section 307 of title III of Pub. L. 104-290 provided that:
      "(a) Preservation of Filing Requirements. - Nothing in this title
    [see Short Title of 1996 Amendment note set out under section 80b-
    20 of this title] or any amendment made by this title prohibits
    the securities commission (or any agency or office performing like
    functions) of any State from requiring the filing of any documents
    filed with the Commission pursuant to the securities laws solely
    for notice purposes, together with a consent to service of process
    and any required fee.
      "(b) Preservation of Fees. - Until otherwise provided by law,
    rule, regulation, or order, or other administrative action of any
    State, or any political subdivision thereof, adopted after the date
    of enactment of this Act [Oct. 11, 1996], filing, registration, or
    licensing fees shall, notwithstanding the amendments made by this
    title, continue to be paid in amounts determined pursuant to the
    law, rule, regulation, or order, or other administrative action as
    in effect on the day before such date of enactment.
      "(c) Availability of Preemption Contingent on Payment of Fees. - 
        "(1) In general. - During the period beginning on the date of
      enactment of this Act [Oct. 11, 1996] and ending 3 years after
      that date of enactment, the securities commission (or any agency
      or office performing like functions) of any State may require
      registration of any investment adviser that fails or refuses to
      pay the fees required by subsection (b) in or to such State,
      notwithstanding the limitations on the laws, rules, regulations,
      or orders, or other administrative actions of any State, or any
      political subdivision thereof, contained in subsection (a), if
      the laws of such State require registration of investment
      advisers.
        "(2) Delays. - For purposes of this subsection, delays in
      payment of fees or underpayments of fees that are promptly
      remedied in accordance with the applicable laws, rules,
      regulations, or orders, or other administrative actions of the
      relevant State shall not constitute a failure or refusal to pay
      fees."

-End-



-CITE-
    15 USC Sec. 80b-4                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-4. Reports by investment advisers

-STATUTE-
    (a) In general
      Every investment adviser who makes use of the mails or of any
    means or instrumentality of interstate commerce in connection with
    his or its business as an investment adviser (other than one
    specifically exempted from registration pursuant to section 80b-
    3(b) of this title), shall make and keep for prescribed periods
    such records (as defined in section 78c(a)(37) of this title),
    furnish such copies thereof, and make and disseminate such reports
    as the Commission, by rule, may prescribe as necessary or
    appropriate in the public interest or for the protection of
    investors. All records (as so defined) of such investment advisers
    are subject at any time, or from time to time, to such reasonable
    periodic, special, or other examinations by representatives of the
    Commission as the Commission deems necessary or appropriate in the
    public interest or for the protection of investors.
    (b) Filing depositories
      The Commission may, by rule, require an investment adviser - 
        (1) to file with the Commission any fee, application, report,
      or notice required to be filed by this subchapter or the rules
      issued under this subchapter through any entity designated by the
      Commission for that purpose; and
        (2) to pay the reasonable costs associated with such filing and
      the establishment and maintenance of the systems required by
      subsection (c).
    (c) Access to disciplinary and other information
      (1) Maintenance of system to respond to inquiries
        (A) In general
          The Commission shall require the entity designated by the
        Commission under subsection (b)(1) to establish and maintain a
        toll-free telephone listing, or a readily accessible electronic
        or other process, to receive and promptly respond to inquiries
        regarding registration information (including disciplinary
        actions, regulatory, judicial, and arbitration proceedings, and
        other information required by law or rule to be reported)
        involving investment advisers and persons associated with
        investment advisers.
        (B) Applicability
          This subsection shall apply to any investment adviser (and
        the persons associated with that adviser), whether the
        investment adviser is registered with the Commission under
        section 80b-3 of this title or regulated solely by a State, as
        described in section 80b-3a of this title.
      (2) Recovery of costs
        An entity designated by the Commission under subsection (b)(1)
      may charge persons making inquiries, other than individual
      investors, reasonable fees for responses to inquiries described
      in paragraph (1).
      (3) Limitation on liability
        An entity designated by the Commission under subsection (b)(1)
      shall not have any liability to any person for any actions taken
      or omitted in good faith under this subsection.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 204, 54 Stat. 852; Pub. L.
    86-750, Sec. 6, Sept. 13, 1960, 74 Stat. 886; Pub. L. 94-29, Sec.
    29(5), June 4, 1975, 89 Stat. 169; Pub. L. 109-290, Sec. 7(a),
    Sept. 29, 2006, 120 Stat. 1321.)


-MISC1-
                                AMENDMENTS                            
      2006 - Pub. L. 109-290 designated existing provisions as subsec.
    (a), inserted heading, and added subsecs. (b) and (c).
      1975 - Pub. L. 94-29 substituted "make and keep for prescribed
    periods such records (as defined in section 78c(a)(37) of this
    title), furnish such copies thereof, and make and disseminate such
    reports as the Commission, by rule, may prescribe as necessary or
    appropriate in the public interest or for the protection of
    investors. All records (as so defined) of such investment advisers
    are subject at any time, or from time to time, to such reasonable
    periodic, special, or other examinations by representatives of the
    Commission as the Commission deems necessary or appropriate in the
    public interest or for the protection of investors" for "make,
    keep, and preserve for such periods, such accounts, correspondence,
    memorandums, papers, books, and other records, and make such
    reports, as the Commission by its rules and regulations may
    prescribe as necessary or appropriate in the public interest or for
    the protection of investors. Such accounts, correspondence,
    memorandums, papers, books, and other records shall be subject at
    any time or from time to time to such reasonable periodic, special,
    or other examinations by examiners or other representatives of the
    Commission as the Commission may deem necessary or appropriate in
    the public interest or for the protection of investors".
      1960 - Pub. L. 86-750 substituted provisions requiring investment
    advisers who make business use of the mails or any instrument of
    interstate commerce, unless exempted from registration by section
    80b-3(b) of this title, to keep and preserve accounts,
    correspondence, memorandums, papers, books, and records, and make
    such reports as the Commission requires by its rules and
    regulations, and that these accounts, correspondence, memorandums,
    papers, books and records shall be subject to examination by
    representatives of the Commission, for provisions requiring
    investment advisers registered under section 80b-3 of this title to
    file annual and special reports in such form as the Commission
    prescribed by its rules and regulations to keep current the
    information contained in the registration application.

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-4a                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-4a. Prevention of misuse of nonpublic information

-STATUTE-
      Every investment adviser subject to section 80b-4 of this title
    shall establish, maintain, and enforce written policies and
    procedures reasonably designed, taking into consideration the
    nature of such investment adviser's business, to prevent the misuse
    in violation of this chapter or the Securities Exchange Act of 1934
    [15 U.S.C. 78a et seq.], or the rules or regulations thereunder, of
    material, nonpublic information by such investment adviser or any
    person associated with such investment adviser. The Commission, as
    it deems necessary or appropriate in the public interest or for the
    protection of investors, shall adopt rules or regulations to
    require specific policies or procedures reasonably designed to
    prevent misuse in violation of this chapter or the Securities
    Exchange Act of 1934 (or the rules or regulations thereunder) of
    material, nonpublic information.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 204A, as added Pub. L. 100-
    704, Sec. 3(b)(2), Nov. 19, 1988, 102 Stat. 4680.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Exchange Act of 1934, referred to in text, is act
    June 6, 1934, ch. 404, 48 Stat. 881, as amended, which is
    classified generally to chapter 2B (Sec. 78a et seq.) of this
    title. For complete classification of this Act to the Code, see
    section 78a of this title and Tables.


-MISC1-
                              EFFECTIVE DATE                          
      Section not applicable to actions occurring before Nov. 19, 1988,
    see section 9 of Pub. L. 100-704 set out as an Effective Date of
    1988 Amendment note under section 78o of this title.

-End-



-CITE-
    15 USC Sec. 80b-5                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-5. Investment advisory contracts

-STATUTE-
    (a) Compensation, assignment, and partnership-membership provisions
      No investment adviser, unless exempt from registration pursuant
    to section 80b-3(b) of this title, shall make use of the mails or
    any means or instrumentality of interstate commerce, directly or
    indirectly, to enter into, extend, or renew any investment advisory
    contract, or in any way to perform any investment advisory contract
    entered into, extended, or renewed on or after November 1, 1940, if
    such contract - 
        (1) provides for compensation to the investment adviser on the
      basis of a share of capital gains upon or capital appreciation of
      the funds or any portion of the funds of the client;
        (2) fails to provide, in substance, that no assignment of such
      contract shall be made by the investment adviser without the
      consent of the other party to the contract; or
        (3) fails to provide, in substance, that the investment
      adviser, if a partnership, will notify the other party to the
      contract of any change in the membership of such partnership
      within a reasonable time after such change.
    (b) Compensation prohibition inapplicable to certain compensation
      computations
      Paragraph (1) of subsection (a) of this section shall not - 
        (1) be construed to prohibit an investment advisory contract
      which provides for compensation based upon the total value of a
      fund averaged over a definite period, or as of definite dates, or
      taken as of a definite date;
        (2) apply to an investment advisory contract with - 
          (A) an investment company registered under subchapter I of
        this chapter, or
          (B) any other person (except a trust, governmental plan,
        collective trust fund, or separate account referred to in
        section 80a-3(c)(11) of this title), provided that the contract
        relates to the investment of assets in excess of $1 million,

      if the contract provides for compensation based on the asset
      value of the company or fund under management averaged over a
      specified period and increasing and decreasing proportionately
      with the investment performance of the company or fund over a
      specified period in relation to the investment record of an
      appropriate index of securities prices or such other measure of
      investment performance as the Commission by rule, regulation, or
      order may specify;
        (3) apply with respect to any investment advisory contract
      between an investment adviser and a business development company,
      as defined in this subchapter, if (A) the compensation provided
      for in such contract does not exceed 20 per centum of the
      realized capital gains upon the funds of the business development
      company over a specified period or as of definite dates, computed
      net of all realized capital losses and unrealized capital
      depreciation, and the condition of section 80a-60(a)(3)(B)(iii)
      of this title is satisfied, and (B) the business development
      company does not have outstanding any option, warrant, or right
      issued pursuant to section 80a-60(a)(3)(B) of this title and does
      not have a profit-sharing plan described in section 80a-56(n) of
      this title;
        (4) apply to an investment advisory contract with a company
      excepted from the definition of an investment company under
      section 80a-3(c)(7) of this title; or
        (5) apply to an investment advisory contract with a person who
      is not a resident of the United States.
    (c) Measurement of changes in compensation
      For purposes of paragraph (2) of subsection (b) of this section,
    the point from which increases and decreases in compensation are
    measured shall be the fee which is paid or earned when the
    investment performance of such company or fund is equivalent to
    that of the index or other measure of performance, and an index of
    securities prices shall be deemed appropriate unless the Commission
    by order shall determine otherwise.
    (d) "Investment advisory contract" defined
      As used in paragraphs (2) and (3) of subsection (a) of this
    section, "investment advisory contract" means any contract or
    agreement whereby a person agrees to act as investment adviser to
    or to manage any investment or trading account of another person
    other than an investment company registered under subchapter I of
    this chapter.
    (e) Exempt persons and transactions
      The Commission, by rule or regulation, upon its own motion, or by
    order upon application, may conditionally or unconditionally exempt
    any person or transaction, or any class or classes of persons or
    transactions, from subsection (a)(1) of this section, if and to the
    extent that the exemption relates to an investment advisory
    contract with any person that the Commission determines does not
    need the protections of subsection (a)(1) of this section, on the
    basis of such factors as financial sophistication, net worth,
    knowledge of and experience in financial matters, amount of assets
    under management, relationship with a registered investment
    adviser, and such other factors as the Commission determines are
    consistent with this section.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 205, 54 Stat. 852; Pub. L.
    86-750, Sec. 7, Sept. 13, 1960, 74 Stat. 887; Pub. L. 91-547, Sec.
    25, Dec. 14, 1970, 84 Stat. 1432; Pub. L. 96-477, title II, Sec.
    203, Oct. 21, 1980, 94 Stat. 2290; Pub. L. 100-181, title VII, Sec.
    703, Dec. 4, 1987, 101 Stat. 1263; Pub. L. 104-290, title II, Sec.
    210, Oct. 11, 1996, 110 Stat. 3436.)


-MISC1-
                                AMENDMENTS                            
      1996 - Subsec. (b)(4), (5). Pub. L. 104-290, Sec. 210(1), added
    pars. (4) and (5).
      Subsec. (e). Pub. L. 104-290, Sec. 210(2), added subsec. (e).
      1987 - Pub. L. 100-181 completely revised and expanded provisions
    on investment advisory contracts, changing structure of section
    from a single unlettered paragraph to one consisting of four
    subsections lettered (a) to (d).
      1980 - Pub. L. 96-477 provided that par. (1) of this section was
    not to apply with respect to any investment advisory contract
    between an investment adviser and a business development company so
    long as the compensation provided for in such contract did not
    exceed 20 per cent of the realized capital gains upon the funds of
    the business development company and such business development
    company did not have outstanding any option, warrant, or right
    issued pursuant to section 80a-60(a)(3)(B) of this title and did
    not have a profit-sharing plan.
      1970 - Pub. L. 91-547 substituted reference to section "80b-3(b)"
    for "80b-3" of this title in first sentence, redesignated as second
    sentence former third sentence, designating existing provisions as
    cl. (A) and adding cl. (B) and items (i) and (ii) and provision
    respecting compensation based on asset value of company or fund
    under management averaged over a specified period in relation to
    investment record of an index of securities or such other measure
    of investment performance specified by Commission rules,
    regulations, or orders, inserted third sentence provision
    respecting point from which compensation is to be measured,
    substituted in fourth, formerly third, sentence "paragraphs (2) and
    (3) of this section" for "this section" and in definition of
    "investment advisory contract" the words "account of another person
    other than an investment company registered under subchapter I of
    this chapter" for "account for a person other than an investment
    company".
      1960 - Pub. L. 86-750 substituted "unless exempt from
    registration pursuant to" for "registered under".

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-547 effective on expiration of one year
    after Dec. 14, 1970, see section 30(1) of Pub. L. 91-547, set out
    as a note under section 80a-52 of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-6                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-6. Prohibited transactions by investment advisers

-STATUTE-
      It shall be unlawful for any investment adviser by use of the
    mails or any means or instrumentality of interstate commerce,
    directly or indirectly - 
        (1) to employ any device, scheme, or artifice to defraud any
      client or prospective client;
        (2) to engage in any transaction, practice, or course of
      business which operates as a fraud or deceit upon any client or
      prospective client;
        (3) acting as principal for his own account, knowingly to sell
      any security to or purchase any security from a client, or acting
      as broker for a person other than such client, knowingly to
      effect any sale or purchase of any security for the account of
      such client, without disclosing to such client in writing before
      the completion of such transaction the capacity in which he is
      acting and obtaining the consent of the client to such
      transaction. The prohibitions of this paragraph shall not apply
      to any transaction with a customer of a broker or dealer if such
      broker or dealer is not acting as an investment adviser in
      relation to such transaction.
        (4) to engage in any act, practice, or course of business which
      is fraudulent, deceptive, or manipulative. The Commission shall,
      for the purposes of this paragraph (4) by rules and regulations
      define, and prescribe means reasonably designed to prevent, such
      acts, practices, and courses of business as are fraudulent,
      deceptive, or manipulative.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 206, 54 Stat. 852; Pub. L.
    86-750, Secs. 8, 9, Sept. 13, 1960, 74 Stat. 887.)


-MISC1-
                                AMENDMENTS                            
      1960 - Pub. L. 86-750, Sec. 8, struck out "registered under
    section 80b-3 of this title" from introductory text.
      Par. (4). Pub. L. 86-750, Sec. 9, added par. (4).

-End-



-CITE-
    15 USC Sec. 80b-6a                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-6a. Exemptions

-STATUTE-
      The Commission, by rules and regulations, upon its own motion, or
    by order upon application, may conditionally or unconditionally
    exempt any person or transaction, or any class or classes of
    persons, or transactions, from any provision or provisions of this
    subchapter or of any rule or regulation thereunder, if and to the
    extent that such exemption is necessary or appropriate in the
    public interest and consistent with the protection of investors and
    the purposes fairly intended by the policy and provisions of this
    subchapter.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 206A, as added Pub. L. 91-
    547, Sec. 26, Dec. 14, 1970, 84 Stat. 1433.)


-MISC1-
                              EFFECTIVE DATE                          
      Section effective Dec. 14, 1970, see section 30 of Pub. L. 91-
    547, set out as a note under section 80a-2 of this title.

-End-



-CITE-
    15 USC Sec. 80b-7                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-7. Material misstatements

-STATUTE-
      It shall be unlawful for any person willfully to make any untrue
    statement of a material fact in any registration application or
    report filed with the Commission under section 80b-3 or 80b-4 of
    this title, or willfully to omit to state in any such application
    or report any material fact which is required to be stated therein.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 207, 54 Stat. 853.)


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-8                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-8. General prohibitions

-STATUTE-
    (a) Representations of sponsorship by United States or agency
      thereof
      It shall be unlawful for any person registered under section 80b-
    3 of this title to represent or imply in any manner whatsoever
    that such person has been sponsored, recommended, or approved, or
    that his abilities or qualifications have in any respect been
    passed upon by the United States or any agency or any officer
    thereof.
    (b) Statement of registration under Securities Exchange Act of 1934
      provisions
      No provision of subsection (a) of this section shall be construed
    to prohibit a statement that a person is registered under this
    subchapter or under the Securities Exchange Act of 1934 [15 U.S.C.
    78a et seq.], if such statement is true in fact and if the effect
    of such registration is not misrepresented.
    (c) Use of name "investment counsel" as descriptive of business
      It shall be unlawful for any person registered under section 80b-
    3 of this title to represent that he is an investment counsel or
    to use the name "investment counsel" as descriptive of his business
    unless (1) his or its principal business consists of acting as
    investment adviser, and (2) a substantial part of his or its
    business consists of rendering investment supervisory services.
    (d) Use of indirect means to do prohibited act
      It shall be unlawful for any person indirectly, or through or by
    any other person, to do any act or thing which it would be unlawful
    for such person to do directly under the provisions of this
    subchapter or any rule or regulation thereunder.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 208, 54 Stat. 853; Pub. L.
    86-750, Secs. 10, 11, Sept. 13, 1960, 74 Stat. 887.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Securities Exchange Act of 1934, referred to in subsec. (b),
    is act June 6, 1934, ch. 404, 48 Stat. 881, as amended, which is
    classified generally to chapter 2B (Sec. 78a et seq.) of this
    title. For complete classification of this Act to the Code, see
    section 78a of this title and Tables.


-MISC1-
                                AMENDMENTS                            
      1960 - Pub. L. 86-750, Sec. 10, substituted "General
    prohibitions" for "Unlawful representations" in section catchline.
      Subsec. (c). Pub. L. 86-750, Sec. 11(a), authorized
    representation as an investment counsel if person's principal
    business consisted of acting as investment adviser, and a
    substantial part of the business was rendering investment
    supervisory services, and struck out the requirements that the
    person be primarily engaged in rendering investment supervisory
    services, or that his registration application state that the
    person is, or is about to become engaged primarily in rendering
    investment advisory services.
      Subsec. (d). Pub. L. 86-750, Sec. 11(b), added subsec. (d).


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-9                                           01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-9. Enforcement of subchapter

-STATUTE-
    (a) Investigation
      Whenever it shall appear to the Commission, either upon complaint
    or otherwise, that the provisions of this subchapter or of any rule
    or regulation prescribed under the authority thereof, have been or
    are about to be violated by any person, it may in its discretion
    require, and in any event shall permit, such person to file with it
    a statement in writing, under oath or otherwise, as to all the
    facts and circumstances relevant to such violation, and may
    otherwise investigate all such facts and circumstances.
    (b) Administration of oaths and affirmations, subpena of witnesses,
      etc.
      For the purposes of any investigation or any proceeding under
    this subchapter, any member of the Commission or any officer
    thereof designated by it is empowered to administer oaths and
    affirmations, subpena witnesses, compel their attendance, take
    evidence, and require the production of any books, papers,
    correspondence, memoranda, contracts, agreements, or other records
    which are relevant or material to the inquiry. Such attendance of
    witnesses and the production of any such records may be required
    from any place in any State or in any Territory or other place
    subject to the jurisdiction of the United States at any designated
    place of hearing.
    (c) Jurisdiction of courts of United States
      In case of contumacy by, or refusal to obey a subpena issued to,
    any person, the Commission may invoke the aid of any court of the
    United States within the jurisdiction of which such investigation
    or proceeding is carried on, or where such person resides or
    carries on business, in requiring the attendance and testimony of
    witnesses and the production of books, papers, correspondence,
    memoranda, contracts, agreements, and other records. And such court
    may issue an order requiring such person to appear before the
    Commission or member or officer designated by the Commission, there
    to produce records, if so ordered, or to give testimony touching
    the matter under investigation or in question; and any failure to
    obey such order of the court may be punished by such court as a
    contempt thereof. All process in any such case may be served in the
    judicial district whereof such person is an inhabitant or wherever
    he may be found. Any person who without just cause shall fail or
    refuse to attend and testify or to answer any lawful inquiry or to
    produce books, papers, correspondence, memoranda, contracts,
    agreements, or other records, if in his or its power so to do, in
    obedience to the subpena of the Commission, shall be guilty of a
    misdemeanor, and upon conviction shall be subject to a fine of not
    more than $1,000 or to imprisonment for a term of not more than one
    year, or both.
    (d) Action for injunction
      Whenever it shall appear to the Commission that any person has
    engaged, is engaged, or is about to engage in any act or practice
    constituting a violation of any provision of this subchapter, or of
    any rule, regulation, or order hereunder, or that any person has
    aided, abetted, counseled, commanded, induced, or procured, is
    aiding, abetting, counseling, commanding, inducing, or procuring,
    or is about to aid, abet, counsel, command, induce, or procure such
    a violation, it may in its discretion bring an action in the proper
    district court of the United States, or the proper United States
    court of any Territory or other place subject to the jurisdiction
    of the United States, to enjoin such acts or practices and to
    enforce compliance with this subchapter or any rule, regulation, or
    order hereunder. Upon a showing that such person has engaged, is
    engaged, or is about to engage in any such act or practice, or in
    aiding, abetting, counseling, commanding, inducing, or procuring
    any such act or practice, a permanent or temporary injunction or
    decree or restraining order shall be granted without bond. The
    Commission may transmit such evidence as may be available
    concerning any violation of the provisions of this subchapter, or
    of any rule, regulation, or order thereunder, to the Attorney
    General, who, in his discretion, may institute the appropriate
    criminal proceedings under this subchapter.
    (e) Money penalties in civil actions
      (1) Authority of Commission
        Whenever it shall appear to the Commission that any person has
      violated any provision of this subchapter, the rules or
      regulations thereunder, or a cease-and-desist order entered by
      the Commission pursuant to section 80b-3(k) of this title, the
      Commission may bring an action in a United States district court
      to seek, and the court shall have jurisdiction to impose, upon a
      proper showing, a civil penalty to be paid by the person who
      committed such violation.
      (2) Amount of penalty
        (A) First tier
          The amount of the penalty shall be determined by the court in
        light of the facts and circumstances. For each violation, the
        amount of the penalty shall not exceed the greater of (i)
        $5,000 for a natural person or $50,000 for any other person, or
        (ii) the gross amount of pecuniary gain to such defendant as a
        result of the violation.
        (B) Second tier
          Notwithstanding subparagraph (A), the amount of penalty for
        each such violation shall not exceed the greater of (i) $50,000
        for a natural person or $250,000 for any other person, or (ii)
        the gross amount of pecuniary gain to such defendant as a
        result of the violation, if the violation described in
        paragraph (1) involved fraud, deceit, manipulation, or
        deliberate or reckless disregard of a regulatory requirement.
        (C) Third tier
          Notwithstanding subparagraphs (A) and (B), the amount of
        penalty for each such violation shall not exceed the greater of
        (i) $100,000 for a natural person or $500,000 for any other
        person, or (ii) the gross amount of pecuniary gain to such
        defendant as a result of the violation, if - 
            (I) the violation described in paragraph (1) involved
          fraud, deceit, manipulation, or deliberate or reckless
          disregard of a regulatory requirement; and
            (II) such violation directly or indirectly resulted in
          substantial losses or created a significant risk of
          substantial losses to other persons.
      (3) Procedures for collection
        (A) Payment of penalty to Treasury
          A penalty imposed under this section shall be payable into
        the Treasury of the United States, except as otherwise provided
        in section 7246 of this title.
        (B) Collection of penalties
          If a person upon whom such a penalty is imposed shall fail to
        pay such penalty within the time prescribed in the court's
        order, the Commission may refer the matter to the Attorney
        General who shall recover such penalty by action in the
        appropriate United States district court.
        (C) Remedy not exclusive
          The actions authorized by this subsection may be brought in
        addition to any other action that the Commission or the
        Attorney General is entitled to bring.
        (D) Jurisdiction and venue
          For purposes of section 80b-14 of this title, actions under
        this paragraph shall be actions to enforce a liability or a
        duty created by this subchapter.
      (4) Special provisions relating to violation of cease-and-desist
        order
        In an action to enforce a cease-and-desist order entered by the
      Commission pursuant to section 80b-3(k) of this title, each
      separate violation of such order shall be a separate offense,
      except that in the case of a violation through a continuing
      failure to comply with the order, each day of the failure to
      comply shall be deemed a separate offense.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 209, 54 Stat. 853; Pub. L.
    86-750, Sec. 12, Sept. 13, 1960, 74 Stat. 887; Pub. L. 91-452,
    title II, Sec. 216, Oct. 15, 1970, 84 Stat. 929; Pub. L. 100-181,
    title VII, Sec. 704, Dec. 4, 1987, 101 Stat. 1264; Pub. L. 101-429,
    title IV, Sec. 402, Oct. 15, 1990, 104 Stat. 949; Pub. L. 107-204,
    title III, Sec. 308(d)(5), July 30, 2002, 116 Stat. 785.)


-MISC1-
                                AMENDMENTS                            
      2002 - Subsec. (e)(3)(A). Pub. L. 107-204 inserted ", except as
    otherwise provided in section 7246 of this title" before period at
    end.
      1990 - Subsec. (e). Pub. L. 101-429 added subsec. (e).
      1987 - Subsecs. (d), (e). Pub. L. 100-181 redesignated subsec.
    (e) as (d).
      1970 - Subsec. (d). Pub. L. 91-452 struck out subsec. (d) which
    related to immunity from prosecution of any individual compelled to
    testify or produce evidence, documentary or otherwise, after
    claiming his privilege against self-incrimination.
      1960 - Subsec. (e). Pub. L. 86-750 inserted ", is engaged," after
    "has engaged" wherever appearing, and inserted provisions relating
    to aiders and abettors.

                     EFFECTIVE DATE OF 1990 AMENDMENT                 
      Amendment by Pub. L. 101-429 effective Oct. 15, 1990, with
    provisions relating to civil penalties and accounting and
    disgorgement, see section 1(c)(1), (2) of Pub. L. 101-429, set out
    in a note under section 77g of this title.

                     EFFECTIVE DATE OF 1970 AMENDMENT                 
      Amendment by Pub. L. 91-452 effective on sixtieth day following
    Oct. 15, 1970, see section 260 of Pub. L. 91-452, set out as an
    Effective Date; Savings Provision note under section 6001 of Title
    18, Crimes and Criminal Procedure.

                             SAVINGS PROVISION                         
      Amendment by Pub. L. 91-452 not to affect any immunity to which
    any individual is entitled under this section by reason of any
    testimony given before the sixtieth day following Oct. 15, 1970,
    see section 260 of Pub. L. 91-452, set out as an Effective Date;
    Savings Provision note under section 6001 of Title 18, Crimes and
    Criminal Procedure.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-10                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-10. Disclosure of information by Commission

-STATUTE-
    (a) Information available to public
      The information contained in any registration application or
    report or amendment thereto filed with the Commission pursuant to
    any provision of this subchapter shall be made available to the
    public, unless and except insofar as the Commission, by rules and
    regulations upon its own motion, or by order upon application,
    finds that public disclosure is neither necessary nor appropriate
    in the public interest or for the protection of investors.
    Photostatic or other copies of information contained in documents
    filed with the Commission under this subchapter and made available
    to the public shall be furnished to any person at such reasonable
    charge and under such reasonable limitations as the Commission
    shall prescribe.
    (b) Disclosure of fact of examination or investigation; exceptions
      Subject to the provisions of subsections (c) and (d) of section
    80b-9 of this title and section 78x(c) of this title, the
    Commission, or any member, officer, or employee thereof, shall not
    make public the fact that any examination or investigation under
    this subchapter is being conducted, or the results of or any facts
    ascertained during any such examination or investigation; and no
    member, officer, or employee of the Commission shall disclose to
    any person other than a member, officer, or employee of the
    Commission any information obtained as a result of any such
    examination or investigation except with the approval of the
    Commission. The provisions of this subsection shall not apply - 
        (1) in the case of any hearing which is public under the
      provisions of section 80b-12 of this title; or
        (2) in the case of a resolution or request from either House of
      Congress.
    (c) Disclosure by investment adviser of identity of clients
      No provision of this subchapter shall be construed to require, or
    to authorize the Commission to require any investment adviser
    engaged in rendering investment supervisory services to disclose
    the identity, investments, or affairs of any client of such
    investment adviser, except insofar as such disclosure may be
    necessary or appropriate in a particular proceeding or
    investigation having as its object the enforcement of a provision
    or provisions of this subchapter.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 210, 54 Stat. 854; Pub. L.
    86-750, Sec. 13, Sept. 13, 1960, 74 Stat. 887; Pub. L. 101-550,
    title II, Sec. 202(b)(2), Nov. 15, 1990, 104 Stat. 2715.)


-MISC1-
                                AMENDMENTS                            
      1990 - Subsec. (b). Pub. L. 101-550 substituted "subsections (c)
    and (d) of section 80b-9 of this title and section 78x(c) of this
    title" for "subsections (c) and (e) of section 80b-9 of this
    title".
      1960 - Subsec. (b). Pub. L. 86-750 inserted ", or any member,
    officer, or employee thereof," after "the Commission", and inserted
    proscription against disclosing information to any person not a
    member, officer, or employee of the Commission.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.


-MISC2-
                      INVESTOR ACCESS TO INFORMATION                  
      Pub. L. 104-290, title III, Sec. 306, Oct. 11, 1996, 110 Stat.
    3439, required the Securities and Exchange Commission to provide
    for investor access to information concerning disciplinary actions
    involving investment advisers, prior to repeal by Pub. L. 109-290,
    Sec. 7(b)(2), Sept. 29, 2006, 120 Stat. 1321.

-End-



-CITE-
    15 USC Sec. 80b-10a                                         01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-10a. Consultation

-STATUTE-
    (a) Examination results and other information
      (1) The appropriate Federal banking agency shall provide the
    Commission upon request the results of any examination, reports,
    records, or other information to which such agency may have access -
     
        (A) with respect to the investment advisory activities of any -
      
          (i) bank holding company or savings and loan holding company;
          (ii) bank; or
          (iii) separately identifiable department or division of a
        bank,

      that is registered under section 80b-3 of this title; and
        (B) in the case of a bank holding company or savings and loan
      holding company or bank that has a subsidiary or a separately
      identifiable department or division registered under that
      section, with respect to the investment advisory activities of
      such bank or bank holding company or savings and loan holding
      company.

      (2) The Commission shall provide to the appropriate Federal
    banking agency upon request the results of any examination,
    reports, records, or other information with respect to the
    investment advisory activities of any bank holding company or
    savings and loan holding company, bank, or separately identifiable
    department or division of a bank, which is registered under section
    80b-3 of this title.
      (3) Notwithstanding any other provision of law, the Commission
    and the appropriate Federal banking agencies shall not be compelled
    to disclose any information provided under paragraph (1) or (2).
    Nothing in this paragraph shall authorize the Commission or such
    agencies to withhold information from Congress, or prevent the
    Commission or such agencies from complying with a request for
    information from any other Federal department or agency or any self-
    regulatory organization requesting the information for purposes
    within the scope of its jurisdiction, or complying with an order of
    a court of the United States in an action brought by the United
    States, the Commission, or such agencies. For purposes of section
    552 of title 5, this paragraph shall be considered a statute
    described in subsection (b)(3)(B) of such section 552.
    (b) Effect on other authority
      Nothing in this section shall limit in any respect the authority
    of the appropriate Federal banking agency with respect to such bank
    holding company or savings and loan holding company (or affiliates
    or subsidiaries thereof), bank, or subsidiary, department, or
    division or a bank under any other provision of law.
    (c) Definition
      For purposes of this section, the term "appropriate Federal
    banking agency" shall have the same meaning as given in section
    1813 of title 12.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 210A, as added Pub. L. 106-
    102, title II, Sec. 220, Nov. 12, 1999, 113 Stat. 1400; Pub. L.
    109-351, title IV, Sec. 401(b)(2), Oct. 13, 2006, 120 Stat. 1973.)


-MISC1-
                                AMENDMENTS                            
      2006 - Subsecs. (a), (b). Pub. L. 109-351 substituted "bank
    holding company or savings and loan holding company" for "bank
    holding company" wherever appearing.

                              EFFECTIVE DATE                          
      Section effective 18 months after Nov. 12, 1999, see section 225
    of Pub. L. 106-102, set out as an Effective Date of 1999 Amendment
    note under section 77c of this title.

-End-



-CITE-
    15 USC Sec. 80b-11                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-11. Rules, regulations, and orders of Commission

-STATUTE-
    (a) Power of Commission
      The Commission shall have authority from time to time to make,
    issue, amend, and rescind such rules and regulations and such
    orders as are necessary or appropriate to the exercise of the
    functions and powers conferred upon the Commission elsewhere in
    this subchapter. For the purposes of its rules or regulations the
    Commission may classify persons and matters within its jurisdiction
    and prescribe different requirements for different classes of
    persons or matters.
    (b) Effective date of regulations
      Subject to the provisions of chapter 15 of title 44 and
    regulations prescribed under the authority thereof, the rules and
    regulations of the Commission under this subchapter, and amendments
    thereof, shall be effective upon publication in the manner which
    the Commission shall prescribe, or upon such later date as may be
    provided in such rules and regulations.
    (c) Orders of Commission after notice and hearing; type of notice
      Orders of the Commission under this subchapter shall be issued
    only after appropriate notice and opportunity for hearing. Notice
    to the parties to a proceeding before the Commission shall be given
    by personal service upon each party or by registered mail or
    certified mail or confirmed telegraphic notice to the party's last
    known business address. Notice to interested persons, if any, other
    than parties may be given in the same manner or by publication in
    the Federal Register.
    (d) Good faith compliance with rules and regulations
      No provision of this subchapter imposing any liability shall
    apply to any act done or omitted in good faith in conformity with
    any rule, regulation, or order of the Commission, notwithstanding
    that such rule, regulation, or order may, after such act or
    omission, be amended or rescinded or be determined by judicial or
    other authority to be invalid for any reason.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 211, 54 Stat. 855; Pub. L.
    86-507, Sec. 1(16), June 11, 1960, 74 Stat. 201; Pub. L. 86-750,
    Sec. 14, Sept. 13, 1960, 74 Stat. 888; Pub. L. 100-181, title VII,
    Sec. 705, Dec. 4, 1987, 101 Stat. 1264.)


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (b). Pub. L. 100-181 substituted "chapter 15 of
    title 44" for "the Federal Register Act".
      1960 - Subsec. (a). Pub. L. 86-750 inserted "functions and".
      Subsec. (c). Pub. L. 86-507 inserted "or certified mail" after
    "registered mail".


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-12                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-12. Hearings

-STATUTE-
      Hearings may be public and may be held before the Commission, any
    member or members thereof, or any officer or officers of the
    Commission designated by it, and appropriate records thereof shall
    be kept.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 212, 54 Stat. 855.)


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-13                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-13. Court review of orders

-STATUTE-
    (a) Petition; jurisdiction; findings of Commission; additional
      evidence; finality
      Any person or party aggrieved by an order issued by the
    Commission under this subchapter may obtain a review of such order
    in the United States court of appeals within any circuit wherein
    such person resides or has his principal place of business, or in
    the United States Court of Appeals for the District of Columbia, by
    filing in such court, within sixty days after the entry of such
    order, a written petition praying that the order of the Commission
    be modified or set aside in whole or in part. A copy of such
    petition shall be forthwith transmitted by the clerk of the court
    to any member of the Commission, or any officer thereof designated
    by the Commission for that purpose, and thereupon the Commission
    shall file in the court the record upon which the order complained
    of was entered, as provided in section 2112 of title 28. Upon the
    filing of such petition such court shall have jurisdiction, which
    upon the filing of the record shall be exclusive, to affirm,
    modify, or set aside such order, in whole or in part. No objection
    to the order of the Commission shall be considered by the court
    unless such objection shall have been urged before the Commission
    or unless there were reasonable grounds for failure so to do. The
    findings of the Commission as to the facts, if supported by
    substantial evidence, shall be conclusive. If application is made
    to the court for leave to adduce additional evidence, and it is
    shown to the satisfaction of the court that such additional
    evidence is material and that there were reasonable grounds for
    failure to adduce such evidence in the proceeding before the
    Commission, the court may order such additional evidence to be
    taken before the Commission and to be adduced upon the hearing in
    such manner and upon such terms and conditions as to the court may
    seem proper. The Commission may modify its findings as to the facts
    by reason of the additional evidence so taken, and it shall file
    with the court such modified or new findings, which, if supported
    by substantial evidence, shall be conclusive, and its
    recommendation, if any, for the modification or setting aside of
    the original order. The judgment and decree of the court affirming,
    modifying, or setting aside, in whole or in part, any such order of
    the Commission shall be final, subject to review by the Supreme
    Court of the United States upon certiorari or certification as
    provided in section 1254 of title 28.
    (b) Stay of Commission's order
      The commencement of proceedings under subsection (a) of this
    section shall not, unless specifically ordered by the court,
    operate as a stay of the Commission's order.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 213, 54 Stat. 855; June 25,
    1948, ch. 646, Sec. 32(a), 62 Stat. 991; May 24, 1949, ch. 139,
    Sec. 127, 63 Stat. 107; Pub. L. 85-791, Sec. 26, Aug. 28, 1958, 72
    Stat. 949; Pub. L. 100-181, title VII, Sec. 706, Dec. 4, 1987, 101
    Stat. 1264.)


-MISC1-
                                AMENDMENTS                            
      1987 - Subsec. (a). Pub. L. 100-181 substituted "section 1254 of
    title 28" for "sections 239 and 240 of the Judicial Code, as
    amended".
      1958 - Subsec. (a). Pub. L. 85-791, in second sentence,
    substituted "transmitted by the clerk of the court to any member of
    the Commission, or" for "served upon any member of the Commission,
    or upon", substituted "file in the court" for "certify and file in
    the court a transcript of", and inserted "as provided in section
    2112 of title 28", and which, in third sentence, substituted
    "petition" for "transcript", and "jurisdiction, which upon the
    filing of the record shall be exclusive" for "exclusive
    jurisdiction".

-CHANGE-
                              CHANGE OF NAME                          
      Act June 25, 1948, eff. Sept. 1, 1948, as amended by act May 24,
    1949, substituted "court of appeals" for "circuit court of
    appeals".


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-14                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-14. Jurisdiction of offenses and suits

-STATUTE-
      The district courts of the United States and the United States
    courts of any Territory or other place subject to the jurisdiction
    of the United States shall have jurisdiction of violations of this
    subchapter or the rules, regulations, or orders thereunder, and,
    concurrently with State and Territorial courts, of all suits in
    equity and actions at law brought to enforce any liability or duty
    created by, or to enjoin any violation of this subchapter or the
    rules, regulations, or orders thereunder. Any criminal proceeding
    may be brought in the district wherein any act or transaction
    constituting the violation occurred. Any suit or action to enforce
    any liability or duty created by, or to enjoin any violation of
    this subchapter or rules, regulations, or orders thereunder, may be
    brought in any such district or in the district wherein the
    defendant is an inhabitant or transacts business, and process in
    such cases may be served in any district of which the defendant is
    an inhabitant or transacts business or wherever the defendant may
    be found. Judgments and decrees so rendered shall be subject to
    review as provided in sections 1254, 1291, 1292, and 1294 of title
    28. No costs shall be assessed for or against the Commission in any
    proceeding under this subchapter brought by or against the
    Commission in any court.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 214, 54 Stat. 856; Pub. L.
    100-181, title VII, Sec. 707, Dec. 4, 1987, 101 Stat. 1264; Pub. L.
    101-429, title IV, Sec. 403, Oct. 15, 1990, 104 Stat. 951.)


-MISC1-
                                AMENDMENTS                            
      1990 - Pub. L. 101-429 inserted "and actions at law brought to
    enforce any liability or duty created by, or" after "all suits in
    equity" and "to enforce any liability or duty created by, or" after
    "Any suit or action".
      1987 - Pub. L. 100-181 substituted "sections 1254, 1291, 1292,
    and 1294 of title 28" for "sections 128 and 240 of the Judicial
    Code, as amended, and section 7, as amended, of the Act entitled
    'An Act to establish a court of appeals for the District of
    Columbia', approved February 9, 1893".

                     EFFECTIVE DATE OF 1990 AMENDMENT                 
      Amendment by Pub. L. 101-429 effective Oct. 15, 1990, with
    provisions relating to civil penalties and accounting and
    disgorgement, see section 1(c)(1), (2) of Pub. L. 101-429, set out
    in a note under section 77g of this title.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-15                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-15. Validity of contracts

-STATUTE-
    (a) Waiver of compliance as void
      Any condition, stipulation, or provision binding any person to
    waive compliance with any provision of this subchapter or with any
    rule, regulation, or order thereunder shall be void.
    (b) Rights affected by invalidity
      Every contract made in violation of any provision of this
    subchapter and every contract heretofore or hereafter made, the
    performance of which involves the violation of, or the continuance
    of any relationship or practice in violation of any provision of
    this subchapter, or any rule, regulation, or order thereunder,
    shall be void (1) as regards the rights of any person who, in
    violation of any such provision, rule, regulation, or order, shall
    have made or engaged in the performance of any such contract, and
    (2) as regards the rights of any person who, not being a party to
    such contract, shall have acquired any right thereunder with actual
    knowledge of the facts by reason of which the making or performance
    of such contract was in violation of any such provision.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 215, 54 Stat. 856.)


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-16                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-16. Omitted

-COD-
                               CODIFICATION                           
      Section, act Aug. 22, 1940, ch. 686, title II, Sec. 216, 54 Stat.
    857, which required the Securities and Exchange Commission to
    submit an annual report to Congress on the work of the Commission,
    terminated, effective May 15, 2000, pursuant to section 3003 of
    Pub. L. 104-66, as amended, set out as a note under section 1113 of
    Title 31, Money and Finance. See, also, page 191 of House Document
    No. 103-7.

-End-



-CITE-
    15 USC Sec. 80b-17                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-17. Penalties

-STATUTE-
      Any person who willfully violates any provision of this
    subchapter, or any rule, regulation, or order promulgated by the
    Commission under authority thereof, shall, upon conviction, be
    fined not more than $10,000, imprisoned for not more than five
    years, or both.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 217, 54 Stat. 857; Pub. L.
    86-750, Sec. 15, Sept. 13, 1960, 74 Stat. 888; Pub. L. 94-29, Sec.
    27(f), June 4, 1975, 89 Stat. 163.)


-MISC1-
                                AMENDMENTS                            
      1975 - Pub. L. 94-29 substituted "imprisoned for not more than
    five years" for "imprisoned for not more than two years".
      1960 - Pub. L. 86-750 inserted ", or any rule, regulation or
    order promulgated by the Commission under authority thereof,".

                     EFFECTIVE DATE OF 1975 AMENDMENT                 
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this
    title.

-End-



-CITE-
    15 USC Sec. 80b-18                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-18. Hiring and leasing authority of Commission

-STATUTE-
      The provisions of section 78d(b) of this title shall be
    applicable with respect to the power of the Commission - 
        (1) to appoint and fix the compensation of such other employees
      as may be necessary for carrying out its functions under this
      subchapter, and
        (2) to lease and allocate such real property as may be
      necessary for carrying out its functions under this subchapter.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 218, 54 Stat. 857; Oct. 28,
    1949, ch. 782, title XI, Sec. 1106(a), 63 Stat. 972; Pub. L. 101-
    550, title I, Sec. 104(d), Nov. 15, 1990, 104 Stat. 2714.)


-MISC1-
                                AMENDMENTS                            
      1990 - Pub. L. 101-550 amended section generally. Prior to
    amendment, section related to appointment and compensation of
    employees.
      1949 - Act Oct. 28, 1949, substituted "Classification Act of
    1949" for "Classification Act of 1923".

                                  REPEALS                              
      Act Oct. 28, 1949, ch. 782, cited as a credit to this section,
    was repealed (subject to a savings clause) by Pub. L. 89-554, Sept.
    6, 1966, Sec. 8, 80 Stat. 632, 655.


-TRANS-
                           TRANSFER OF FUNCTIONS                       
      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.

-End-



-CITE-
    15 USC Sec. 80b-18a                                         01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-18a. State regulation of investment advisers

-STATUTE-
    (a) Jurisdiction of State regulators
      Nothing in this subchapter shall affect the jurisdiction of the
    securities commissioner (or any agency or officer performing like
    functions) of any State over any security or any person insofar as
    it does not conflict with the provisions of this subchapter or the
    rules and regulations thereunder.
    (b) Dual compliance purposes
      No State may enforce any law or regulation that would require an
    investment adviser to maintain any books or records in addition to
    those required under the laws of the State in which it maintains
    its principal place of business, if the investment adviser - 
        (1) is registered or licensed as such in the State in which it
      maintains its principal place of business; and
        (2) is in compliance with the applicable books and records
      requirements of the State in which it maintains its principal
      place of business.
    (c) Limitation on capital and bond requirements
      No State may enforce any law or regulation that would require an
    investment adviser to maintain a higher minimum net capital or to
    post any bond in addition to any that is required under the laws of
    the State in which it maintains its principal place of business, if
    the investment adviser - 
        (1) is registered or licensed as such in the State in which it
      maintains its principal place of business; and
        (2) is in compliance with the applicable net capital or bonding
      requirements of the State in which it maintains its principal
      place of business.
    (d) National de minimis standard
      No law of any State or political subdivision thereof requiring
    the registration, licensing, or qualification as an investment
    adviser shall require an investment adviser to register with the
    securities commissioner of the State (or any agency or officer
    performing like functions) or to comply with such law (other than
    any provision thereof prohibiting fraudulent conduct) if the
    investment adviser - 
        (1) does not have a place of business located within the State;
      and
        (2) during the preceding 12-month period, has had fewer than 6
      clients who are residents of that State.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 222, as added Pub. L. 86-
    750, Sec. 16, Sept. 13, 1960, 74 Stat. 888; amended Pub. L. 104-
    290, title III, Sec. 304, Oct. 11, 1996, 110 Stat. 3438; Pub. L.
    105-353, title III, Sec. 301(d)(2), Nov. 3, 1998, 112 Stat. 3237.)


-MISC1-
                                AMENDMENTS                            
      1998 - Subsec. (b)(2). Pub. L. 105-353 substituted "principal"
    for "principle".
      1996 - Pub. L. 104-290 substituted "regulation" for "control" in
    section catchline and amended text generally, designating existing
    provisions as subsec. (a), inserting heading, and adding subsecs.
    (b) to (d).

                     EFFECTIVE DATE OF 1996 AMENDMENT                 
      Amendment by Pub. L. 104-290 effective 270 days after Oct. 11,
    1996, see section 308(a) of Pub. L. 104-290, as amended, set out as
    a note under section 80b-2 of this title.

-End-



-CITE-
    15 USC Sec. 80b-19                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-19. Separability

-STATUTE-
      If any provision of this subchapter or the application of such
    provision to any person or circumstances shall be held invalid, the
    remainder of the subchapter and the application of such provision
    to persons or circumstances other than those as to which it is held
    invalid shall not be affected thereby.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 219, 54 Stat. 857.)

-End-



-CITE-
    15 USC Sec. 80b-20                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-20. Short title

-STATUTE-
      This subchapter may be cited as the "Investment Advisers Act of
    1940".

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 220, 54 Stat. 857.)


-MISC1-
                       SHORT TITLE OF 1996 AMENDMENT                   
      Pub. L. 104-290, title III, Sec. 301, Oct. 11, 1996, 110 Stat.
    3436, provided that: "This title [enacting section 80b-3a of this
    title, amending sections 80b-2, 80b-3, and 80b-18a of this title
    and section 1002 of Title 29, Labor, and enacting provisions set
    out as notes under sections 80b-2, 80b-3a, and 80b-10 of this title
    and section 1002 of Title 29] may be cited as the 'Investment
    Advisers Supervision Coordination Act'."

-End-



-CITE-
    15 USC Sec. 80b-21                                          01/03/2007

-EXPCITE-
    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

-HEAD-
    Sec. 80b-21. Effective date

-STATUTE-
      This subchapter shall become effective on November 1, 1940.

-SOURCE-
    (Aug. 22, 1940, ch. 686, title II, Sec. 221, 54 Stat. 857.)

-End-