Who is subject to the Investment Company Act of 1940?
The Investment Company Act applies to all investment companies, but exempts several types of investment companies from the act’s coverage. The most common exemptions are found in Sections 3(c)(1) and 3(c)(7) of the act and include hedge funds.
Which of the following funds would be required to invest at least 80% of its assets in a particular type of security?
Index funds, for example, generally would be expected to invest more than 80% of their assets in investments connoted by the applicable index.
What does the Investment Company Act of 1940 do?
Considered one of the most important pieces of regulation governing the US stock market, the Investment Company Act of 1940 is a law that Congress passed to define and regulate mutual funds and closed-end funds as well as hedge funds, private equity funds and holding companies.
When was n 1A adopted?
adopted the three-part version of Form N-1A in 1998, the Division of Investment Management published Guidelines for Form N-1A, which provide specific comments about the disclosure requirements of a number of items of the previous version of the form.
Are hedge funds registered under the Investment Company Act of 1940?
With the exception of anti-fraud regulations, hedge funds are generally exempt from regulation by the Securities and Exchange Commission (SEC) or any other entity. Specifically, hedge funds are not required to register with the SEC as investment companies under the Investment Company Act of 1940.
How did the Investment Company Act of 1940 change the investment scene?
The Act impacted the registration and requirements of many investment companies and made financial regulation tighter, giving the SEC more power to oversee the financial markets. It created rules that protected investors and required investment companies to disclose certain information.
What is form NQ?
Form N-Q is a combined reporting form that is to be used for reports of registered management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), under Section 30(b) of the Investment Company Act of 1940 (the “Act”) and Section 13(a) or 15(d …
Can prospectus be emailed?
Investor Consent Rule 154 permits delivery of one prospectus on behalf of two or more investors at a shared address who have given written consent to householding. The investors need not be related, and the shared address can be a residential, commercial, or electronic address.
What is the difference between mutual funds and hedge funds?
Mutual funds are regulated investment products offered to the public and available for daily trading. Hedge funds are private investments that are only available to accredited investors. Hedge funds are known for using higher risk investing strategies with the goal of achieving higher returns for their investors.
What is the Investment Company Act of 1940?
One of the strongest is the Investment Company Act of 1940. It was this piece of regulation that helped set forth the modern mutual fund, hedge fund, and exchange traded fund (ETF) industries. And yet, most investors have no idea about it or how it functions. It should not be overlooked, as the Investment Company Act of 1940 really is
What is the Mutual Fund Act of 1940?
The act also specifically defined what a mutual fund was – something that hadn’t actually been done prior to 1940. Ultimately, the bill was designed “to mitigate and eliminate the conditions which adversely affect the national public interest and the interest of investors.” It does this in several ways.
What is Dodd-Frank Act of 2010?
After the Great Recession and Credit Crisis of 2008/2009, the Dodd-Frank Act of 2010 added some extra ammunition to the original Investment Company Act of 1940. Most of the new regulations focus on hedge fund oversight as well as provisions for financial advisers recommending mutual and hedge funds.