CITE

    15 USC Sec. 80a-20                                          01/05/2009

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

HEAD

    Sec. 80a-20. Proxies; voting trusts; circular ownership

STATUTE

    (a) Prohibition on use of means of interstate commerce for
      solicitation of proxies
      It shall be unlawful for any person, by use of the mails or any
    means or instrumentality of interstate commerce or otherwise, to
    solicit or to permit the use of his name to solicit any proxy or
    consent or authorization in respect of any security of which a
    registered investment company is the issuer in contravention of
    such rules and regulations as the Commission may prescribe as
    necessary or appropriate in the public interest or for the
    protection of investors.
    (b) Prohibition on use of means of interstate commerce for sale of
      voting-trust certificates
      It shall be unlawful for any registered investment company or
    affiliated person thereof, any issuer of a voting-trust certificate
    relating to any security of a registered investment company, or any
    underwriter of such a certificate, by use of the mails or any means
    or instrumentality of interstate commerce, or otherwise, to offer
    for sale, sell, or deliver after sale, in connection with a public
    offering, any such voting-trust certificate.
    (c) Prohibition on purchase of securities knowingly resulting in
      cross-ownership or circular ownership
      No registered investment company shall purchase any voting
    security if, to the knowledge of such registered company, cross-
    ownership or circular ownership exists, or after such acquisition
    will exist, between such registered company and the issuer of such
    security. Cross-ownership shall be deemed to exist between two
    companies when each of such companies beneficially owns more than 3
    per centum of the outstanding voting securities of the other
    company. Circular ownership shall be deemed to exist between two
    companies if such companies are included within a group of three or
    more companies, each of which -
        (1) beneficially owns more than 3 per centum of the outstanding
      voting securities of one or more other companies of the group;
      and
        (2) has more than 3 per centum of its own outstanding voting
      securities beneficially owned by another company, or by each of
      two or more other companies, of the group.
    (d) Duty to eliminate existing cross-ownership or circular
      ownership
      If cross-ownership or circular ownership between a registered
    investment company and any other company or companies comes into
    existence upon the purchase by a registered investment company of
    the securities of another company, it shall be the duty of such
    registered company, within one year after it first knows of the
    existence of such cross-ownership or circular ownership, to
    eliminate the same.

SOURCE

    (Aug. 22, 1940, ch. 686, title I, Sec. 20, 54 Stat. 822; Pub. L.
    100-181, title VI, Sec. 614, Dec. 4, 1987, 101 Stat. 1262.)

AMENDMENTS

      1987 - Subsec. (b). Pub. L. 100-181, Sec. 614(1), struck out at
    end "The prohibitions of this subsection shall not apply to a class
    of voting-trust certificates, if any certificate of such class was
    made the subject of a public offering by the issuer or by or
    through an underwriter prior to March 15, 1940."
      Subsec. (d). Pub. L. 100-181, Sec. 614(2), (3), struck out first
    sentence "If on the effective date of this subchapter cross-
    ownership or circular ownership exists between a registered
    investment company and any other company or companies, it shall be
    the duty of such registered company, within five years after such
    effective date, to eliminate such cross-ownership or circular
    ownership." and "at any time after the effective date of this
    subchapter" after "If" in second sentence.

TRANSFER OF FUNCTIONS

      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.