Unregistered securities scams are often advertised as private offerings and take advantage of both qualified and nonqualified investors, often. Investment company act of 1940 1940 act the 1940 act regulates open and closedend investment companies, as well. United states securities and exchange commission washington, d. Securities and exchange commission the sec under the investment company act of 1940 the 1940 act, as an openend management investment company and the offering of the funds shares is registered under the securities act of 1933, as amended the securities act. The depository trust company dtc, new york, ny, will act as securities depository for the securities the securities. Rule 17f4 under the investment company act permits a registered. The fund is classified as a nondiversified investment company under the 1940 act. Securities maintained as electronic records rather than in paper form. We have examined managements assertion, included in the accompanying management statement regarding compliance with certain provisions of the investment company act of 1940, that oha investment corporation the company complied with the requirements of subsections b and c of rule 17f2 under the investment company act of 1940 the act as of may 31, 2019. Certificate of accounting of securities and similar. Investment company act status of nonus issuers cleary gottlieb. Updated commentary on bookentry deposit procedures under section. Securities and exchange commission staffs response to.
A federal reserve bank or other person authorized to operate the federal book entry system described in. Securities by computerized book entry, except that with respect to securities i issued by institutions organized or existing under the laws of a foreign country, ii used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business. Registration of securities under securities act of 1933. The bond of indemnity states the specific amount of the penalty. Dtcs partnership nominee or such other name as may be requested by an authorized representative of dtc. See also new developments in procedures for book entry deposit of rule 144a securities by 3c7 issuers, the investment lawyer march 2003. The timeline highlights significant developments in the history of financial regulation against u. Describing book entryonly issuance prepared by dtcbracketed material may be applicable only to certain issues 1. Eastern time on the date the securities are priced and that are sold by an issuer to an underwriter pursuant to a firm commitment underwritten offering registered under the securities act of 1933, 15 u.
Among the closing opinions often requested in connection with lending transactions and securities issuances are those regarding the status of the borrower or issuer under the investment company act of 1940 and the absence of violations with the federal reserve boards margin regulations administered by the securities and exchange commission as a result of the borrowers or issuers. The focus of the book, however, remains its timeless guidance and advicethat careful analysis of balance sheets is the primary road to investment success, with all other considerations little more than distractions. Memorandum and revised procedures for bookentry deposit sifma. The investment company act of 1940 is an act of congress which regulates investment funds. Federal book entry system shall mean the book entry system referred to in rule 17f4c6ii under the 1940 act for united states and federal agency securities i. Legacy treasury direct book entry securities system legacy treasury direct. The investment company act of 1940 the investment adviser act of 1940. Securities that are unavailable for sale due to restrictions placed. Under section 3a1c of the act, an issuer may become an investment company if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire, investment securities having a value exceeding 40 percent of the value of its total assets, exclusive of. Section 7d of the investment company act of 1940, as amended the investment company. In addition, a number of the most important institutional participants in the world financial markets are organized as investment funds advised by investment managers exempt from registration under the investment advisers act of 1940 the investment advisers act typically because of the small number of clients that they advise. Investment company act of 1940, as amended the investment company act face. The classic 1940 edition marks the return of this longoutofprint work to the investment canon.
Depository shall include the book entry system, the depository trust company, euroclear, clearstream banking s. In the case of book entry form securities, payment may be made only when the custodians account at the federal reserve bank is credited for the purchased securities. Regulation of custodial practices under the investment. A nondiversified classification means that the fund is not limited by the 1940 act with regard to the percentage of its total assets that may be invested in the securities of a single issuer. Investment company act of 1940, as amended the investment company act face significant. A bond of indemnity is a document that obligates one or more parties to perform a certain act or pay a penalty. Custody of investment company assets with a securities depository. Securities and exchange commission responsibility for creating a composite quotation system and for promoting the. The securities act of 1933 was also passed in response to the crash, but. Nonus issuers of transferable securities that wish to rely on section 3c7 therefore.
The truth in securities act was enacted to provide full and fair disclosure of the. Securities and exchange commission staffs response. Illinois compiled statutes illinois general assembly. The name given to securities whereby ownership is registered with the issuing company or their agent. The investment company act of 1940 is an act of congress. Act of 1940, as amended the investment company act, are frequently. Restrictions on sale of book entry securities designated qibqp or 3c7 the investment company act of 1940, as amended the investment company act requires that all holders of the outstanding securities of an issuer relying on section 3 c 7 or, in the case of a nonu.
The law concerning central securities depository and book entry transfer of stock certificates and other securities csd law was passed, and later enforced in november 1984. Fdic law, regulations, related acts rules and regulations. How to avoid registration under the investment company act. The act also lays out the steps an investment company is required to take during this registration. How to avoid registration under the investment company act of 1940. Created by congress, the investment company act of 1940. Section 3c 7 of the investment company act of 1940 the investment company act. There is not, however, a similar rule for private resales of restricted securities. B securities, for purposes of repurchase under this subdivision, means securities of the same issuer, description, issue date, and maturity. The investment company act of 1940 investment company act requires that. Eligible debt securities legal definition of eligible.
Affiliated foreign government securities brokerdealers. Bookentry deposit procedures for certain offerings by non. Beneficial interests in any book entry securities represented by a global security will be shown on, and transfers thereof will be effected only through, records main tained by dtc and its. Company act of 1940, as amended investment company act to access the us capital markets more efficiently, and were especially.
The sdc is presently the only entity that operates a central system for handling securities and the book entry settlement of trades executed on the set. The transfer of underlying securities to the counterparty banks customer book entry account may be used for book entry delivery. Eligible debt securities means cash or book entry securities, negotiable instruments, or other securities of entities not affiliated with hei or the company represented by instruments in registered form which evidence any of the following. Introduction section 3c7 of the investment company act of 1940 the investment company act excludes from regulation under the investment company act entities whose outstanding securities are owned exclusively by persons who are, at the time they acquire the. Along with the securities exchange act of 1934 and investment advisers act of 1940, and extensive rules issued by the securities and exchange commission, it forms the backbone. The book entry form of ownership allows you to own securities without a certificate. The securities industry essentials sie exam assesses a candidates basic knowledge of the securities industry. Section 3c7 of the investment company act of 1940 the investment company act. Investment company act of 1940 definition investopedia. Your letter of august 31, 2001 requests our concurrence with your view that the government securities clearing corporation gscc acts as a securities depository for purposes of rule 17f4 under the investment company act of 1940 the 1940 act, in connection with gsccs clearance and settlement of u. Generally, companies inadvertently become investment companies by virtue of their investments in certain securities which trigger the acts 40. Investment company act of 1940, as amended the investment company act. A local agency purchasing or obtaining any securities prescribed in this section, in a negotiable, bearer, registered, or nonregistered format, shall require delivery of the securities to the local agency, including those purchased for the agency by financial advisers, consultants, or managers using the agencys funds, by book entry, physical. The words public funds, as used in this act, mean current operating funds, special funds, interest and sinking funds, and funds of any kind or character belonging to or in the custody of any public agency.
1489 691 715 728 1421 82 1460 173 241 1238 1379 134 108 361 230 913 299 865 852 372 458 1331 33 1023 1245 890 887 141 272 456 875 422 247 1146 908 1413 206 799