Investment Company Act of 1940

The Investment Company Act of 1940 regulates the organization of companies who primarily engage in investing, reinvesting, and securities trading, and who offer their own securities to the public. The purpose of the Act is to minimize conflicts of interest that may occur during these operations. The Act does not permit the SEC to directly supervise the companies’ activities or investment decisions or judge the merits of their investments.

The Act brings numerous financial institutions under the SEC’s pervue. Because these financial institutions are regulated by the Investment Company Act of 1940, the have to abide by the SEC’s rules and regulations.

Section 31 of the Investment Company Act of 1940 requires all registered investment companies, and all underwriter, broker, dealer, or investment advisers who are a majority-owned subsidiary of an investment company to maintain records, as defined in Section 3(a)(37) of the Securities Exchange Act of 1934, for a period defined by the SEC or its rules and regulations.

Link to Regulation: http://legcounsel.house.gov/Comps/Investment%20Company%20Act%20Of%201940.pdf
Helpful Link: https://www.sec.gov/answers/about-lawsshtml.html

Smarsh, Inc. assumes no liability for the accuracy or completeness of this information. Please consult with an attorney for specific information on specific rules and regulations and how they apply to your business.

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