Source: http://www.law.uc.edu/sites/default/files/CCL/InvCoAct/sec10.html
Timestamp: 2013-12-13 02:14:21
Document Index: 311412090

Matched Legal Cases: ['§ 80', '§ 1841', '§ 80', '§ 80', '§ 80', '§ 80', '§ 10', '§ 5', '§ 28', '§ 213', '§ 401']

Section 10 -- Affiliations or Interest of Directors, Officers, and Employees
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.
Employment and use of directors, officers, etc., as regular broker, principal underwriter, or investment banker. No registered investment company shall--
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 12(d)(3)(A) and (B) [15 USCS § 80a-12(d)(3)(A), (B)].
Officers, directors, or employees of one bank 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 2 of the Bank Holding Company Act of 1956 [12 USCS § 1841]), or any one savings and loan holding company, together with its affiliates and subsidiaries (as such terms are defined in section 10 of the Home Owners' Loan Act), 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.
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--
such investment adviser is registered under title II of this Act [15 USCS § § 80b-1 et seq.] and is engaged principally in the business of rendering investment supervisory services as defined in title II [15 USCS § § 80b-1 et seq.];
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;
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 15(f)(1) [15 USCS § 80a-15(f)(1)] 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--
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 12(d)(3)(A) and (B) [15 USCS § 80a-12(d)(3)(A) and (B)]) 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.
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.
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:
the provisions of subsection (a), as modified by subsection (e), shall apply to the board of directors of the depositor of such company;
the provisions of subsections (b) and (c), as modified by subsection (e), shall apply to the board of directors of the depositor and of every investment adviser of such company; and
the provisions of subsection (f) 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.
Aug. 22, 1940, ch 686, Title I, § 10, 54 Stat. 806; Dec. 14, 1970, P.L. 91-547, § 5, 84 Stat. 1416; June 4, 1975, P.L. 94-29, § 28(5), 89 Stat. 165; Nov. 12, 1999, P.L. 106-102, Title II, Subtitle B, § 213(c), 113 Stat. 1398; Oct. 13, 2006, P.L 109-351, Title IV, § 401 (c), 120 Stat. 1973. Return to top