15 U.S. Code § 80a–3 - Definition of investment company

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.

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 (b) Exemption from provisions Notwithstanding paragraph (1)(C) of subsection (a), none of the following persons is an (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.

Any issuer all the outstanding securities of which (other than short-term paper and directors’ qualifying shares) are directly or indirectly owned by a (c) Further exemptions Notwithstanding subsection (a), none of the following persons is an (1) Any issuer whose outstanding securities (other than short-term paper) are beneficially owned by not more than one hundredventure capital fund, 250section 80a–12(d)(1) of this title governing the purchase or other acquisition by such (A)

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 theCommission 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.

The term “qualifying venture capital fund” means a venture capital fund that has not more than $10,000,000 in aggregate capital contributions and uncalled committed capital, with such dollar amount to be indexed for inflation once every 5 years by the (ii)

The term “ venture capital fund” has the meaning given the term in section 275.203(l)–1 of title 17, Code of Federal Regulations, or any successor regulation.

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.

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;

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

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 (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—

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

Any person substantially all of whose business is confined to making small loans, industrial banking, or similar businesses.

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.

Any issuer, the outstanding securities of which are owned exclusively byCommission 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 (I)

such persons acquired any portion of the securities of such issuer on or before September 1, 1996 ; and

at the time at which such persons initially acquired the securities of such issuer, the issuer was excepted by paragraph (1); and

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

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.

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’s share in assets of the issuer. If the issuer elects to provide such (D)

An issuer that is excepted under this paragraph shall nonetheless be deemed to be an section 80a–12(d)(1) of this title relating to the purchase or other acquisition by such (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 (8)

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.

no part of the net earnings of which inures to the benefit of any private shareholder or individual; or

(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:

assets contributed to a charitable organization in exchange for the issuance of charitable gift annuities;

assets of a charitable remainder trust or of any other trust, the remainder interests of which are irrevocably dedicated to any charitable organization;

(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—

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

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

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 December 8, 1995 , but only if—

such assets are commingled in the fund with assets described in one or more of clauses (i) through (vi) and (viii) of subparagraph (B).

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;

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;

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;

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

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 asection 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.

Any voting trust the assets of which consist exclusively of securities of a single issuer which is not an (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 (A)

established by a person that is eligible to establish and maintain such a plan under section 414(e) of title 26; and

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

2018—Subsec. (c)(1). Pub. L. 115–174, § 504(1), inserted “(or, in the case of a qualifying venture capital fund, 250Pub. L. 115–174, § 504(2), added subpar. (C).

2010—Subsec. (c)(8). Pub. L. 111–203 substituted “[Repealed]” for text of par. (8) which read as follows: “AnyPublic Utility Holding Company Act of 1935.”

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 anCongress .

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, § 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, § 209(c)(6), substituted “which (i) are” for “which are” and added cl. (ii).

Subsec. (c)(1). Pub. L. 104–290, § 209(a)(1), inserted after first sentence “Suchsection 80a–12(d)(1) of this title governing the purchase or other acquisition by suchPub. L. 104–290, § 209(a)(2), inserted “and is or, but for the exception provided for in this paragraph or paragraph (7), would be ansection 80a–12(d)(1) of this title” after “(other thanPub. L. 104–290, § 209(a)(3), designated existing provisions as subpar. (A), substituted “acting asPub. L. 104–290, § 209(a)(4), added par. (7) and struck out former par. (7) “Reserved.”

1995—Subsec. (c)(10). Pub. L. 104–62 amended par. (10) generally. Prior to amendment, par. (10) read as follows: “AnyPub. L. 100–181, § 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 byPub. L. 100–181, § 605, substituted “Reserved.” for “Anysection 314 of title 49, except that this exception shall not apply to asection 314 of title 49.”

Subsec. (c)(11). Pub. L. 100–181, § 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, § 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, § 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 ofsection 80a–12(d)(1) of this title, and added subpar. (B).

Subsec. (c)(11). Pub. L. 96–477, § 703, excluded from consideration as ansection 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 controlledPub. L. 91–547, § 3(a), inserted “in good faith” after “paragraph” in second sentence.

Subsec. (c). Pub. L. 91–547, § 3(b)(1), struck out reference to subsec. (b) in introductory text.

Subsec. (c)(4). Pub. L. 91–547, § 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, § 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, § 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, § 3(b)(2), redesignated par. (9) as (7). Former par. (7) redesignated (6).

Subsec. (c)(8). Pub. L. 91–547, § 3(b)(2), (4), redesignated par. (10) as (8), substituted “subject to regulation” for “with a registration in effect as a holdingPub. L. 91–547, § 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, § 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 anPub. L. 91–547, § 3(b)(2), redesignated pars. (14) and (15) as (12) and (13), respectively. Former pars. (12) and (13) redesignated (10) and (11).

Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010 , except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, 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.

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.

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 anyPub. 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 anysection 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.

The amendment made by subsection (b) of this section [amending section 78m of this title] shall not apply to any report by anyFeb. 5, 1976 ].

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 ]”.

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.

Act Oct. 21, 1942, ch. 619, title I, § 162(d), 56 Stat. 866 (Revenue Act of 1942), as amended by act Dec. 17, 1943, ch. 346, § 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 ,

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 .

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—

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

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.

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.”

“Not later than 1 year after the date of enactment of this Act [ Oct. 11, 1996 ], theInvestment Company Act of 1940 (15 U.S.C. 80a–3(c)(1)(B)), as amended by this section.”

“Not later than 1 year after the date of enactment of this Act [ Oct. 11, 1996 ], theInvestment Company Act of 1940 [15 U.S.C. 80a–6] to permit the ownership of securities by knowledgeable employees of the15 U.S.C. 80a–3(c)] from treatment as an15 U.S.C. 80a–1 et seq.].”

“Not later than 180 days after the date of enactment of this Act [ Oct. 11, 1996 ], theInvestment Company Act of 1940 [15 U.S.C. 80a–3(c)(7)(B)], as amended by this Act.”

Any security issued by or any interest or participation in any church plan, Investment Company Act of 1940 [15 U.S.C. 80a–3(c)(14)], as added by subsection (a) of this section, and any offer, “(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)], noInternal Revenue Code of 1986 [26 U.S.C. 1 et seq.], noInvestment Company Act of 1940 [15 U.S.C. 80a–3(c)(14)], as added by subsection (a) of this section, and no trustee,Investment Company Act of 1940, as added by subsection (a) of this section.”

For transfer of functions of Securities and Exchange Commission , with certain exceptions, to Chairman of suchMay 24, 1950 , 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.