reglab/statecodes huggingface dataset:
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 662 - Definition of investment companies, types thereof, and security holders thereof

(a) When used in this chapter, “investment company” means any issuer which is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities and owns or proposes to acquire investment securities having a value exceeding 90 per centum of the total value of the balance of the assets of the said investment company remaining after deducting the securities of the Government of the United States, the Commonwealth of Puerto Rico, and the political subdivisions, organizations, agencies or instrumentalities thereof held by it, and cash items. As used in this section, “investment securities” includes all securities except those of the Government of the United States, the Commonwealth of Puerto Rico, and the political subdivisions, organizations, agencies or instrumentalities thereof.
(b) Investment companies shall be classified as diversified and nondiversified. An investment company is diversified, and shall be so designated when it invests in securities of another issuer not more than 5 per centum of the value of its total assets and owns not more than 20 per centum of the outstanding voting securities of such other issuer. An investment company which does not meet the requirements shall be classified as nondiversified but it shall not invest more than 25 per centum of the value of its total assets in securities of any other issuer, nor shall own more than 75 per centum of the outstanding voting securities of any other issuer.
(c) Investment companies may not at any time have less than eleven stockholders entitled to vote. Not more than 50 per centum of their voting securities may be in any amount controlled by less than six of the holders of such securities.
The Puerto Rico Industrial Development Company is hereby authorized to organize investment companies or participate in their organization and to own securities issued by them; Provided, That in these cases, the Governor of Puerto Rico may, when he deems it convenient to the public interest and to the investors, exempt investment companies from compliance with the requirements of the preceding paragraph of this subsection.
Every investment company shall offer its securities to the general public when its outstanding securities (other than short-term debentures) are owned for the benefit of more than 100 persons.
History —Oct. 19, 1954, No. 6, p. 220, § 2, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 663 - Exemptions

The Secretary, 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 chapter 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 chapter.
The Puerto Rico Education and Rehabilitation Society (SER de Puerto Rico) and the Housing and Human Development Trust of Puerto Rico, as it has been created and is operated pursuant to Public Deed No. 135 of May 7, 2004, executed before Notary José Orlando Mercado-Gely, are hereby exempt from the application of this Chapter.
If, in connection with any rule, regulation, or order under this section exempting any investment company from any provision of § 664 of this title, the Secretary deems it necessary or appropriate in the public interest or for the protection of investors that certain specified provisions of this chapter 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.
Any municipal license levied tax under §§ 651 et seq. of Title 21, on every investment company that operates under the provisions of this chapter shall be limited to said company’s nondistributed taxable net income. This provision does not alter the right to impose municipal licenses tax as established in clause (B) of paragraph (7) of subsection (a) of Section (3) of Act No. 113 of July 10, 1974, as amended, on commercial activities of brokerage firms or similar businesses generating the purchase and sale of stock or other investment instruments issued by said companies that operate under the provisions of this chapter.
The Housing and Human Development Trust of Puerto Rico, as it has been created and is operated pursuant to Public Deed No. 135 of May 7, 2004, executed before Notary José Orlando Mercado Gely, is hereby exempted from this section.
History —Oct. 19, 1954, No. 6, p. 220, § 3; Jan. 20, 1995, No. 18, § 1; Sept. 27, 2003, No. 278, § 1; Sept. 21, 2004, No. 391, § 1; Aug. 16, 2012, No. 179, § 7.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 664 - Transactions by unregistered investment companies

No investment company organized or otherwise created under the laws of the Commonwealth of Puerto Rico, and no promoter or underwriter of such investment company, unless registered under § 665 of this title, shall directly or indirectly:
(1) Offer for sale, sell, or deliver after sale, in the Commonwealth of Puerto Rico, any security or any interest in a security whose issuer is such investment company; or offer for sale, sell, or deliver after sale any such security or interest, when there is reason to believe that such security or interest will be offered for sale, sold or delivered in the Commonwealth of Puerto Rico;
(2) control any investment company which does any of the acts enumerated in subsection (1);
(3) engage in any business in the Commonwealth of Puerto Rico, or
(4) control any company which is engaged in any business in the Commonwealth of Puerto Rico.
The provisions of this section shall not apply to transactions of an investment company which are merely incidental to its dissolution.
History —Oct. 19, 1954, No. 6, p. 220, § 4, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 666 - Requirements for registered investment companies

Every registered investment company shall meet all of the following requirements:
(a) Its principal office shall be maintained in Puerto Rico;
(b) its annual meeting of stockholders shall be held in Puerto Rico;
(c) at least two directors shall be residents of Puerto Rico;
(d) its chairman of the board, or the president, or a vice-president, and its secretary or assistant secretary, shall be residents of Puerto Rico, and
(e) invest at least sixty-seven percent (67%) of its total assets, less cash, in the Puerto Rican securities determined by the Commissioner of Financial Institutions through regulations issued by him/her to that effect within one year as of the date of registration, and at all times thereafter. In the case that it would be impossible for any registered investment company to comply with this requirement because of a proven shortage of such securities, the Commissioner of Financial Institutions, by request of the interested party, could authorize said company, through an administrative resolution, to limit its investment in such securities to not less than fifty percent (50%) of its total assets value, less cash, for the term of one year from the date of approval of said administrative resolution, if it were determined that it is necessary and convenient for the public interest.
(f) Within six (6) months as of the date or registration, and at all times henceforth, invest at least twenty percent (20%) of the value of its total assets in any of the following:
(1) Stocks, bonds or obligations of a corporation or domestic corporation, or of a foreign corporation or partnership so that not less than eighty percent (80%) of its gross income derived during the last three (3) years constitutes income related to the exploitation of a business in Puerto Rico. Any instrument issued by a corporation registered in the Puerto Rico capital stock index of the Government Development Bank for Puerto Rico is hereby included.
(2) Mortgage loans or shares in mortgage loans on residential properties located in Puerto Rico.
(3) Anything else that the Commissioner of Financial Institutions may determine after consulting with the Secretary of the Treasury.
This subsection shall only apply to those investment companies that invest solely and exclusively in securities taxable under the Puerto Rico Internal Revenue Code of 1994. Those investment companies that comply with this subsection shall not have to comply with subsection (e) of this section.
History —Oct. 19, 1954, No. 6, p. 220, § 6; Jan. 20, 1995, No. 18, § 2; Aug. 11, 2000, No. 158, § 1.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 667 - Ineligibility of certain affiliated persons and underwriters

(a) It shall be unlawful for any of the following persons to serve or act in the capacity of officer or director of any registered investment company:
(1) Any person who within the last 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 or dealer, 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 a competent court from acting as an underwriter, broker or dealer, 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.
(b) No registered investment company shall purchase or otherwise acquire any security (except securities issued by it) issued or owned by, or under the control of, a private corporation or partnership, knowing that an officer, director, member of an advisory board, investment advisor, or employee of such investment company effectively controls such corporation or partnership, either directly, or through an affiliated person, or through, or jointly with, members of his immediate family, in his capacity as trustee, or as managing partner. The Secretary may, by rules and regulations, conditionally or unconditionally exempt any transaction or types of transactions from the provisions of this subsection, when he deems it convenient to the public interest and provided such exemption is consistent with the protection of investors.
History —Oct. 19, 1954, No. 6, p. 220, § 7, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 668 - Changes in investment policy

No registered investment company shall, unless authorized by a majority of the voting outstanding securities and by the Secretary, deviate from any fundamental policy recited in its registration statement, or change the nature of its business so as to cease to be an investment company.
Whenever the Secretary, on his own motion or upon application, finds that a registered investment company has ceased to be an investment company, he shall so declare by order and upon the taking effect of such order the registration of such company shall cease to be in effect. The Secretary shall cause said order to be published in a newspaper of general circulation in Puerto Rico.
History —Oct. 19, 1954, No. 6, p. 220, § 8, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 669 - Size of investment companies

No investment company shall be registered or, if registered, make a public offering of securities of which such company is the issuer, unless:
(1) Such company has a net worth of at least [one hundred thousand dollars] $100,000, or
(2) provision is made in connection with and as a condition of the registration of such company which in the opinion of the Secretary 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 such security until firm agreements have been made with such company by not more than twenty-five (25) 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 [one hundred thousand dollars] $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 (25), and
(C) that arrangements will be made whereby any proceeds so paid in, as well as any sales commissions, 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’s having a net worth of at least [one hundred thousand dollars] $100,000 within ninety (90) days after the certificate of registration is issued.
At any time after the occurrence of the event specified in clause (C) of subsection (2) of this section the Secretary may suspend or revoke the registration of such company under this chapter.
History —Oct. 19, 1954, No. 6, p. 220, § 9, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 670 - Loans

It shall be unlawful for any registered investment company, except with express permission of the Secretary, to lend money or property to any person, directly or indirectly, if such person controls or is under common control with such registered company.
History —Oct. 19, 1954, No. 6, p. 220, § 10, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 672 - Accounts, books and records

(a) Every registered investment company, and every underwriter, broker, dealer, or investment advisor which is a majority-owned subsidiary of such a company, shall maintain and preserve in Puerto Rico, as the Secretary 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 this chapter, and of the auditor’s certificates relating thereto.
(b) All accounts, books, and other records, required to be maintained and preserved by every person pursuant to subsection (a), shall be subject at any time and from time to time to such reasonable periodic, special, and other examinations by the Secretary, or any representative thereof, as the Secretary may prescribe. Any such person shall furnish to the Secretary, within such reasonable time as the Secretary may prescribe, copies of or extracts from such records which may be prepared without undue effort, expense, or delay, as the Secretary may by order require.
History —Oct. 19, 1954, No. 6, p. 220, § 12, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 673 - Destruction and falsification of reports and records

(a) It shall be unlawful for any person, except as permitted by rule, regulation, or order of the Secretary, willfully to destroy, mutilate, or alter any account, book, or other document the preservation of which is required pursuant to § 672(a) of this title.
(b) It shall be unlawful for any person to make any untrue statement of a material fact in any application for registration, application, report, account, record, or other document filed or transmitted pursuant to this chapter or the keeping of which is required pursuant to § 672(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 both by such accountant or auditor, as well as by the person filing, transmitting or keeping the complete document.
History —Oct. 19, 1954, No. 6, p. 220, § 13, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 674 - Unlawful representation and names

(a) 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 Commonwealth of Puerto Rico or any agency or officer thereof.
(b) It shall be unlawful for any person registered under this chapter to represent or imply in any manner whatsoever that such person has been sponsored, recommended, or approved, or that his capacity or capability has in any respect been passed upon by the Commonwealth of Puerto Rico or any agency or officer thereof.
(c) No provision of subsection (a) or (b) shall be construed to prohibit a statement that a person or security is registered under this chapter, or that they have been guaranteed, sponsored, recommended or approved by the Puerto Rico Industrial Development Company, if such statement is true in fact and if the effect of such registration is not misrepresented.
History —Oct. 19, 1954, No. 6, p. 220, § 14, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 675 - Legal action against gross abuse

The Secretary is hereby authorized to bring an action in the Court of First Instance of Puerto Rico alleging that a person has been guilty of gross misconduct or gross abuse of trust as officer or director of any registered investment company. Such action shall be filed within five years from the date of the commission of any of the acts charged. If the Secretary’s allegations of such gross misconduct or gross abuse of trust are established, the court shall enjoin such person from acting in such capacity either permanently or for such period of time as in its discretion the court shall deem appropriate.
History —Oct. 19, 1954, No. 6, p. 220, § 15, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 676 - Rules, regulations, and orders; general powers of Secretary

The Secretary 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 Secretary elsewhere in this chapter. Such rules and regulations shall have the force of law upon their approval by the Governor of Puerto Rico and as of the date of their publication in one (1) or more newspapers of general circulation in Puerto Rico and at no time shall they have retroactive effect.
History —Oct. 19, 1954, No. 6, p. 220, § 16, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 677 - Orders; procedure for issuance

Orders of the Secretary under this chapter shall be issued only after appropriate notice and opportunity for hearing. Notice to the parties to a proceeding before the Secretary shall be given by personal service upon each party or by registered 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 a newspaper of general circulation in Puerto Rico.
History —Oct. 19, 1954, No. 6, p. 220, § 17, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 678 - Judicial review of orders

(a) Any person or party aggrieved by an order of the Secretary under this chapter may obtain the review thereof by the Court of First Instance of Puerto Rico by filing in said court, within the thirty (30) days following notice of said order, a written petition requesting that the said Secretary’s order be modified or revoked either in whole or in part. Upon his being notified with [a] copy of such petition, the Secretary shall certify and transmit to the court a transcript of the record on the basis of which the challenged order was issued. The Secretary’s findings of fact shall, if supported by the evidence, be final. The judgment of the court affirming, modifying or revoking, in whole or in part, any order from the Secretary, shall be final, subject to review through certiorari by the Supreme Court of Puerto Rico.
(b) The filing of the remedy provided in subsection (a) shall not stay the effectiveness and execution of the order appealed from unless the court shall specifically so order.
History —Oct. 19, 1954, No. 6, p. 220, § 18, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 679 - Information filed in Secretary’s office

(a) The information contained in any registration statement, petition, report, or other document filed in the Secretary’s Office pursuant to the provisions of this chapter or of any rule or regulation thereunder (as distinguished from any other information or document transmitted to the Secretary) shall be made available to the public, unless and except insofar as the Secretary, by rules and regulations upon his own motion, or by order upon application, finds that public disclosure is neither necessary nor convenient to the public interest or for the protection of investors. It shall be unlawful for any member, officer, or employee of the Office of the Secretary to use for personal benefit, or to disclose to any person other than an officer or employee of the United States or of the Commonwealth of Puerto Rico, for official use, or for any such officer 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 copies or other copies of information contained in documents filed in the Secretary’s Office under this chapter and made available to the public shall be furnished any person at such reasonable charge and under such reasonable limitations as the Secretary shall prescribe.
History —Oct. 19, 1954, No. 6, p. 220, § 19, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 680 - Liability of controlling persons preventing compliance with this chapter

(a) 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 chapter or any rule, regulation, or order thereunder.
(b) 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 provision of this chapter or any rule, regulation, or order thereunder.
History —Oct. 19, 1954, No. 6, p. 220, § 20, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 681 - Penalties

Any person who willfully violates any provision of this chapter 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 chapter or the keeping of which is required pursuant to § 672(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 be guilty of misdemeanor, and upon conviction shall be fined not less than one thousand dollars ($1,000) nor more than ten thousand dollars ($10,000) or imprisoned for not more than two (2) years, or shall be imposed both penalties, in the discretion of the court. The Court of First Instance of Puerto Rico shall have original jurisdiction to take cognizance of these cases.
History —Oct. 19, 1954, No. 6, p. 220, § 21, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 682 - Effect upon existing laws

Any provisions in the Private Corporations Act, Subtitle 1 of Title 14, which may prevent a corporation from organizing for the purpose of engaging in the business of an investment company or from issuing warrants or other rights to subscribe to its securities, are hereby declared inapplicable to investment companies as defined in this chapter.
History —Oct. 19, 1954, No. 6, p. 220, § 22, eff. Jan. 1, 1955.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33 - Investment Companies (§§ 661 — 683) › § 683 - Registration fees

Any investment company registered pursuant to this chapter shall pay to the Secretary a registration fee at the rate of 3 / 1 0 0 percent (0.03%) of the total dollar value of the capital stock issued or intended to be issued by the investment company. Said dollar value shall be the par value or the subscription price of such capital stock, whichever of the two is greater. In case of additional stock issues an additional registration fee computed on the basis of the same rate shall be paid in advance.
History —Oct. 19, 1954, No. 6, p. 220, § 23; Aug. 11, 2000, No. 158, § 2.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691b - Registration requirement

No investment company organized or created under the laws of the Commonwealth of Puerto Rico and no promoter or underwriter of such investment company, unless registered in accordance with § 691c of this title or pursuant to the provisions of §§ 661 et seq. of this title, shall directly or indirectly:
(a) Offer for sale, sell, or deliver after sale, in the Commonwealth of Puerto Rico, any security or any interest in a security when there is reason to believe that such security or interest will be offered for sale, sold or delivered in the Commonwealth of Puerto Rico.
(b) Control any investment company which performs any of the acts listed in subsection (a) of this section.
(c) Engage in any business in the Commonwealth of Puerto Rico.
(d) Control any company which is engaged in any business in the in the Commonwealth of Puerto Rico.
History —July 30, 2013, No. 93, § 5, eff. 120 days after July 30, 2013.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691c - Registration process

Any investment company organized or created under the laws of the Commonwealth of Puerto Rico shall register, for purposes of this chapter, and file with the Commissioner a notification of registration, in such form as the Commission shall prescribe by regulations. The registrant shall file, in such form and containing such information as provided by the Commissioner through regulations, a notification of registration containing the following:
(a) A recital of the policy of the registrant in respect of each characteristic of the investment company within the categories established in § 691a of this title.
(b) A recital of all investment policies of the registrant, including a statement that it shall concentrate present or future investments in a particular industry or group of industries.
(c) A detailed recital of all policies of the registrant related to the issue of preferred stocks and the leverage.
(d) A recital of any other policy of the registrant which the registrant deems matters of fundamental policy.
(e) The name and address of each affiliated person of the registrant; the name and address of every company of which each such affiliated person is an officer, director, partner or employee; a brief statement of the business experience for the preceding five (5) years of each officer and director of the registrant.
(f) Any other information that the Commissioner may prescribe by regulations.
The Commissioner shall issue a certificate of registration (license) to the registrant if, after conducting the appropriate investigation and examination from the best information sources available, he/she verifies that the reputation, responsibility, and general suitability of the persons mentioned in the notification justify such recognition and ensure the likelihood that the businesses to be conducted by the registrant shall be done honestly and efficiently in accordance with the purposes of this chapter, and that the public need and convenience warrant the issuance of such license.
If it appears to the Commissioner that a registered investment company has failed to file the information required by this section or any other report required under this chapter or any regulations, or has filed such information, but omitted therefrom material facts required to be stated therein, the Commissioner shall notify to such company of such violation and fix a date prior to which the registrant or company must meet such requirement. Failure to meet these obligations may result in the revocation of the registration of the investment company.
History —July 30, 2013, No. 93, § 6; Nov. 27, 2013, No. 137, § 3.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691d - Ineligibility of certain persons

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, principal underwriter, or depositor for any registered investment company:
(a) Any person who within 10 years has been convicted of aggravated robbery, fraud, identity theft, as defined in the Puerto Rico Penal Code of 2012, §§ 5001 et seq. of Title 33, any offense involving the purchase or sale of any security or arising out of such person’s conduct as an underwriter, broker, investment adviser, or any other financial activity; or as an affiliated person, salesman, employee, official, or director of any investment company, bank, insurance company, or any other financial entity.
(b) 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, investment adviser, or any other financial activity; or as an affiliated person, salesman, employee, official, or director of any investment company, bank, insurance company, or any other financial entity; 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) A company any affiliated person of which is ineligible, by reason of subsections (a) and (b) of this section.
(d) Any person whose license to practice a profession duly regulated by law has been revoked or suspended, provided that the fault that led to the license revocation or suspension was related to an ethical fault.
History —July 30, 2013, No. 93, § 7, eff. 120 days after July 30, 2013.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691e - Sanctions against ineligible persons

The Commissioner shall, after due notice and opportunity for an adjudicative hearing, by order prohibit, conditionally or unconditionally, either permanently or for such period of time, as he/she in his/her discretion may 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 as an affiliated person of any investment adviser, depositor, or principal underwriter. The Commissioner is also authorized to impose fines for noncompliance with the rules of this section of up to fifty thousand dollars ($50,000) to natural persons, and up to two hundred and fifty thousand dollars ($250,000) to juridical persons, for each violation. Determinations under this section shall be made in accordance with the following guidelines:
(a) If the action or omission involved fraud, deceit, manipulation, or wanton or reckless disregard of a regulatory requirement.
(b) The harm to third parties either directly or indirectly.
(c) The extent to which any person was unjustly enriched, taking into account any restitution made to persons injured by such behavior.
(d) Recidivism in this or any other jurisdiction.
(e) The need to deter such person and other persons from committing such acts.
(f) The ability to pay of the natural or juridical person under investigation.
(g) Such other matters as justice may require.
(h) It shall be grounds for issuing an order to prohibit from serving, to issue a fine, or impose both penalties:
(1) To willfully make or cause to be made in any notification of registration, application, or report filed with the Commissioner under this chapter any statement which, at the time and in the light of the circumstances under which it was made, was false or misleading with respect to any material fact.
(2) To willfully omit or cause to omit a material fact in any notification of registration, application, or report to the Commissioner.
History —July 30, 2013, No. 93, § 8; Nov. 27, 2013, No. 137, § 4.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691f - Exemption for ineligible persons

Any person who is ineligible, by reason of §§ 691d and 691e of this title, to serve in the capacities enumerated in such Sections, may file with the Commissioner an application for an exemption from the provisions of such sections. The Commissioner shall by order grant such application, including conditions if he/she deems appropriate, if it is established that the application of §§ 691d and 691e of this title is disproportionately severe or that the conduct of such person has been such as not to make it against the public interest to exempt him/her from the application of §§ 691d and 691e of this title.
History —July 30, 2013, No. 93, § 9, eff. 120 days after July 30, 2013.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691g - Orders

The Commissioner may also enter an order requiring disgorgement, including reasonable interest for violations of this chapter. Likewise, the Commissioner may enter cease and desist orders when the requirements established in the regulations approved in accordance with this chapter are violated, have been violated, or are about to be violated. The Commissioner is also authorized to enter interim orders. The Commissioner is authorized to prescribe the necessary adjudicative procedure by regulations. Furthermore, the Commissioner is hereby authorized to charge reasonable registration fees at the time of the registration of the investment company, whose registration fees shall be at least 3/100 percent (0.03%) of the total dollar value of the capital stock issued or intended to be issued by the investment company and for any other request for action filed before the Commissioner.
History —July 30, 2013, No. 93, § 10; Nov. 27, 2013, No. 137, § 5.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691h-1 - Code of Ethics

The Commissioner may prescribe by regulations a Code of Ethics which shall apply to officers, members of a board of directors and advisory boards, and investment advisers of registered investment companies. The boards of directors of the registered investment companies may, in turn, adopt Code of Ethics that shall be binding for their members, officers, employees, and contractors.
History —July 30, 2013, No. 93, added as § 11–A on Nov. 27, 2013, No. 137, § 7.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691h-2 - Buying on margin

As of the effective date of this act, no person may grant or cause loans to be granted, or extend other type of credit to buy securities issued by a registered investment company under this chapter when such loans or credit are, in turn, backed by such securities. Loans granted or other type of credit extended to buy securities of any issuer in accordance with the applicable rules provided in Regulation T issued by the Board of Governors of the Federal Reserve System, or any other federal regulations superseding it, shall be exempt from this prohibition.
History —July 30, 2013, No. 93, added as § 11–B on Nov. 27, 2013, No. 137, § 7[bis]
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691i - Offers to investors

It shall be unlawful for any registered open-end company or redeemable at will or the 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 registered company to acquire or exchange his/her common stock in the same or another such company 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 been approved by the Commissioner or are in accordance with requirements that the Commissioner may prescribe by regulations with regard to such type of transactions.
History —July 30, 2013, No. 93, § 12, eff. 120 days after July 30, 2013.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691j - Authorization of changes

No registered investment company shall, unless authorized by the vote of a majority of its issued voting securities, and notifies the Commission after carrying out such affirmative vote:
(a) Change its subclassification under § 691a of this title.
(b) Deviate from its investments objectives or from any fundamental policy recited in its registration statement pursuant to § 691c of this title.
(c) Change the nature of its business so as to cease to be an investment company as defined in § 691 of this title.
(d) Change its option to pay taxes as a corporation or partnership as provided in § 30041(a)(34) of Title 13, known as the “Internal Revenue Code for a New Puerto Rico”.
(e) Issue preferred stocks convertible into common stocks as provided in subsection L of Section 12[sic].
History —July 30, 2013, No. 93, § 13; Nov. 27, 2013, No. 137, § 8.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691k - Requirements of capital

No investment company shall be registered or, if registered, make a public offering of securities of which such company is the issuer, unless:
(a) Such company has a net worth of at least one hundred thousand dollars ($100,000), or
(b) 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 one hundred thousand dollars ($100,000), or
(c) The Commissioner has expressly exempted it from the initial net worth requirement.
History —July 30, 2013, No. 93, § 14, eff. 120 days after July 30, 2013.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691l - Investment advisers

It shall be unlawful for any person to act as investment adviser of a registered investment company, except pursuant to a written contract, with such registered company or with an investment adviser of such registered company, which shall be approved by a majority of members of the board of directors (including a majority of members that are other than interested persons of the registered company or investment adviser) and that:
(a) Precisely describes all compensation to be paid thereunder.
(b) Shall continue in effect for a period of less than or equal to two (2) years from the date of its execution; provided, that such continuance is specifically approved annually by a majority of the board of directors and directors that are other than interested persons.
(c) Provides that the contract may be terminated at any time by a majority of the board of directors of such registered company within not more than sixty (60) days” written notice of such termination.
(d) Provides that the contract may not be alienated, transferred, or assigned to third parties.
History —July 30, 2013, No. 93, § 15, eff. 120 days after July 30, 2013.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691m - Principal underwriters

It shall be unlawful for any principal underwriter for a registered open-end company to sell or deliver after selling any security of which such company is the issuer, except pursuant to a written contract with such company, which:
(a) Shall continue in effect for a period of less than or equal to two (2) years from the date of its execution, provided that such continuance is specifically approved annually by a majority of the board of directors or directors that are other than interested persons.
(b) Provides that the contract may not be alienated, transferred, or assigned to third parties.
History —July 30, 2013, No. 93, § 16, eff. 120 days after July 30, 2013.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691n - Directors

No person shall serve as a director of a registered investment company unless elected to that office by the holders of the issued and outstanding voting securities of such company; provided, however, that vacancies in the board of directors may be filled temporarily as provided in the bylaws of the corporation and the certificate of incorporation of the registered investment company, until the next annual meeting of holders of the securities of such company; Provided, That after filling any such vacancy at least two-thirds (2/3) of the directors then holding office shall have been elected to such office by the holders of the securities of the company at such an annual or special meeting held for such purposes. The foregoing shall not be construed to preclude a registered investment company from dividing its directors into classes if its certificate of incorporation, bylaws, or the law under which it is organized, so requires or provides; provided, that no class shall be elected for a shorter period than one (1) year or for a longer period than five (5) years and the term of office of at least one class shall expire each year.
History —July 30, 2013, No. 93, § 17, eff. 120 days after July 30, 2013.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691p - Distribution of dividends

It shall be unlawful, unless the notification requirement under this Section is met, 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:
(a) 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;
(b) Such company’s net income so determined for the current or preceding fiscal year.
If such dividend does not originate from the sources listed in this section, the payment shall be accompanied by a written statement which adequately discloses the source or sources of such payment. The Commissioner is hereby authorized to prescribe the form of such statement by regulations taking into account the public interest as defined in § 691 of this title.
History —July 30, 2013, No. 93, § 19, eff. 120 days after July 30, 2013.
2023 Laws of Puerto Rico › TITLE TEN - Commerce (§§ 1 — 4196) › Subtitle 1 - Regulation of Business Generally (§§ 1 — 998q) › Chapter 33A - Puerto Rico Investment Companies Act of 2013 (§§ 691 — 692o) › § 691q - Other distributions

It shall be unlawful for any registered investment company to distribute long-term capital gains, as defined in the Internal Revenue Code, more often than once every twelve months. Provided, That by regulations or administrative order, the Commissioner may exempt registered investment company from this requirement if he/she deems it convenient, taking into account the public interest as defined in § 691 of this title.
History —July 30, 2013, No. 93, § 20, eff. 120 days after July 30, 2013.