CITE

    15 USC Sec. 80a-22                                          01/05/2009

EXPCITE

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

HEAD

    Sec. 80a-22. Distribution, redemption, and repurchase of
      securities; regulations by securities associations

STATUTE

    (a) Rules relating to minimum and maximum prices for purchase and
      sale of securities from investment company; time for resale and
      redemption
      A securities association registered under section 78o-3 of this
    title may prescribe, by rules adopted and in effect in accordance
    with said section and subject to all provisions of said section
    applicable to the rules of such an association -
        (1) a method or methods for computing the minimum price at
      which a member thereof may purchase from any investment company
      any redeemable security issued by such company and the maximum
      price at which a member may sell to such company any redeemable
      security issued by it or which he may receive for such security
      upon redemption, so that the price in each case will bear such
      relation to the current net asset value of such security computed
      as of such time as the rules may prescribe; and
        (2) a minimum period of time which must elapse after the sale
      or issue of such security before any resale to such company by a
      member or its redemption upon surrender by a member;
    in each case for the purpose of eliminating or reducing so far as
    reasonably practicable any dilution of the value of other
    outstanding securities of such company or any other result of such
    purchase, redemption, or sale which is unfair to holders of such
    other outstanding securities; and said rules may prohibit the
    members of the association from purchasing, selling, or
    surrendering for redemption any such redeemable securities in
    contravention of said rules.
    (b) Rules relating to purchase of securities by members from issuer
      investment company
      (1) Such a securities association may also, by rules adopted and
    in effect in accordance with section 78o-3 of this title, and
    notwithstanding the provisions of subsection (b)(6) thereof but
    subject to all other provisions of said section applicable to the
    rules of such an association, prohibit its members from purchasing,
    in connection with a primary distribution of redeemable securities
    of which any registered investment company is the issuer, any such
    security from the issuer or from any principal underwriter except
    at a price equal to the price at which such security is then
    offered to the public less a commission, discount, or spread which
    is computed in conformity with a method or methods, and within such
    limitations as to the relation thereof to said public offering
    price, as such rules may prescribe in order that the price at which
    such security is offered or sold to the public shall not include an
    excessive sales load but shall allow for reasonable compensation
    for sales personnel, broker-dealers, and underwriters, and for
    reasonable sales loads to investors. The Commission shall on
    application or otherwise, if it appears that smaller companies are
    subject to relatively higher operating costs, make due allowance
    therefor by granting any such company or class of companies
    appropriate qualified exemptions from the provisions of this
    section.
      (2) At any time after the expiration of eighteen months from
    December 14, 1970 (or, if earlier, after a securities association
    has adopted for purposes of paragraph (1) any rule respecting
    excessive sales loads), the Commission may alter or supplement the
    rules of any securities association as may be necessary to
    effectuate the purposes of this subsection in the manner provided
    by section 78s(c) of this title.
      (3) If any provision of this subsection is in conflict with any
    provision of any law of the United States in effect on December 14,
    1970, the provisions of this subsection shall prevail.
    (c) Conflicting rules of Commission and associations
      The Commission may make rules and regulations applicable to
    registered investment companies and to principal underwriters of,
    and dealers in, the redeemable securities of any registered
    investment company, whether or not members of any securities
    association, to the same extent, covering the same subject matter,
    and for the accomplishment of the same ends as are prescribed in
    subsection (a) of this section in respect of the rules which may be
    made by a registered securities association governing its members.
    Any rules and regulations so made by the Commission, to the extent
    that they may be inconsistent with the rules of any such
    association, shall so long as they remain in force supersede the
    rules of the association and be binding upon its members as well as
    all other underwriters and dealers to whom they may be applicable.
    (d) Sale of securities except to or through principal underwriter;
      price of securities
      No registered investment company shall sell any redeemable
    security issued by it to any person except either to or through a
    principal underwriter for distribution or at a current public
    offering price described in the prospectus, and, if such class of
    security is being currently offered to the public by or through an
    underwriter, no principal underwriter of such security and no
    dealer shall sell any such security to any person except a dealer,
    a principal underwriter, or the issuer, except at a current public
    offering price described in the prospectus. Nothing in this
    subsection shall prevent a sale made (i) pursuant to an offer of
    exchange permitted by section 80a-11 of this title including any
    offer made pursuant to section 80a-11(b) of this title; (ii)
    pursuant to an offer made solely to all registered holders of the
    securities, or of a particular class or series of securities issued
    by the company proportionate to their holdings or proportionate to
    any cash distribution made to them by the company (subject to
    appropriate qualifications designed solely to avoid issuance of
    fractional securities); or (iii) in accordance with rules and
    regulations of the Commission made pursuant to subsection (b) of
    section 80a-12 of this title.
    (e) Suspension of right of redemption or postponement of date of
      payment
      No registered investment company shall suspend the right of
    redemption, or postpone the date of payment or satisfaction upon
    redemption of any redeemable security in accordance with its terms
    for more than seven days after the tender of such security to the
    company or its agent designated for that purpose for redemption,
    except -
        (1) for any period (A) during which the New York Stock Exchange
      is closed other than customary week-end and holiday closings or
      (B) during which trading on the New York Stock Exchange is
      restricted;
        (2) for any period during which an emergency exists as a result
      of which (A) disposal by the company of securities owned by it is
      not reasonably practicable or (B) it is not reasonably
      practicable for such company fairly to determine the value of its
      net assets; or
        (3) for such other periods as the Commission may by order
      permit for the protection of security holders of the company.
    The Commission shall by rules and regulations determine the
    conditions under which (i) trading shall be deemed to be restricted
    and (ii) an emergency shall be deemed to exist within the meaning
    of this subsection.
    (f) Restrictions on transferability or negotiability of securities
      No registered open-end company shall restrict the transferability
    or negotiability of any security of which it is the issuer except
    in conformity with the statements with respect thereto contained in
    its registration statement nor in contravention of such rules and
    regulations as the Commission may prescribe in the interests of the
    holders of all of the outstanding securities of such investment
    company.
    (g) Issuance of securities for services or property other than cash
      No registered open-end company shall issue any of its securities
    (1) for services; or (2) for property other than cash or securities
    (including securities of which such registered company is the
    issuer), except as a dividend or distribution to its security
    holders or in connection with a reorganization.

SOURCE

    (Aug. 22, 1940, ch. 686, title I, Sec. 22, 54 Stat. 823; Pub. L. 91-
    547, Sec. 12, Dec. 14, 1970, 84 Stat. 1422; Pub. L. 100-181, title
    VI, Sec. 616, Dec. 4, 1987, 101 Stat. 1262.)

AMENDMENTS

      1987 - Subsec. (b). Pub. L. 100-181, Sec. 616(1), substituted
    "subsection (b)(6)" for "subsection (b)(8)" in par. (1).
      Pub. L. 100-181, Sec. 616(2), (3), redesignated par. (3) as (2)
    and substituted "section 78s(c)" for "section 78o-3(k)(2)",
    redesignated par. (4) as (3), and struck out former par. (2) which
    read as follows: "At any time after the expiration of eighteen
    months from December 14, 1970, or after a securities association
    has adopted rules as contemplated by this subsection, the
    Commission may make such rules and regulations pursuant to section
    78o(b)(10) of this title as are appropriate to effectuate the
    purpose of this subsection with respect to sales of shares of a
    registered investment company by broker-dealers subject to
    regulation under section 78o(b)(8) of this title: Provided, That
    the underwriter of such shares may file with the Commission at any
    time a notice of election to comply with the rules prescribed
    pursuant to this subsection by a national securities association
    specified in such notice, and thereafter the sales load shall not
    exceed that prescribed by such rules of such association, and the
    rules of the Commission as hereinabove authorized shall thereafter
    be inapplicable to such sales."
      Subsec. (e). Pub. L. 100-181, Sec. 616(4), (5), in introductory
    provisions, substituted "redemption, or postpone" for "redemption
    or postpone" and "redemption, except" for "redemption except", and,
    in closing provisions, struck out "Any company which, as of March
    15, 1940, was required by provision of its charter, certificate of
    incorporation, articles of association, or trust indenture, or of a
    bylaw or regulation duly adopted thereunder, to postpone the date
    of payment or satisfaction upon redemption of redeemable securities
    issued by it, shall be exempt from the requirements of this
    subsection; but such exemption shall terminate upon the expiration
    of one year from the effective date of this subchapter, or upon the
    repeal or amendment of such provision, or upon the sale by such
    company after March 15, 1940, of any security (other than short-
    term paper) of which it is the issuer, whichever first occurs."
      1970 - Subsec. (b). Pub. L. 91-547, Sec. 12(a), designated
    existing provisions as par. (1), inserted "notwithstanding the
    provisions of subsection (b)(8) thereof but", and "other" in phrase
    "all other provisions", substituted exclusion of "excessive sales
    load" for "unconscionable or grossly excessive sales load",
    provided for allowance for reasonable compensation for sales
    personnel, broker-dealers, and underwriters, and for reasonable
    sales loads to investors, and for grant by Commission of
    appropriate qualified exemptions from provisions of this section
    where on application or otherwise it appears that smaller companies
    are subject to relatively higher operating costs, and added pars.
    (2) to (4).
      Subsec. (c). Pub. L. 91-547, Sec. 12(b), provided for application
    of rules and regulations to registered investment companies, struck
    out introductory phrase "After one year from the effective date of
    this chapter", "registered" before "securities association" where
    first appearing, and substituted "prescribed in subsection (a) of
    this section" for "prescribed in subsections (a) and (b) of this
    section" and ". Any rules and regulations" for "; and any rules and
    regulations".
      Subsec. (d). Pub. L. 91-547, Sec. 12(c), substituted "public
    offering price described in the prospectus. Nothing in this
    subsection" for "public offering price described in the prospectus:
    Provided, however, That nothing in this subsection" and struck out
    "clause (1) or (2) of" before "section 80a-11(b) of this title".
                     EFFECTIVE DATE OF 1970 AMENDMENT
      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.

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.
Customized queries of TRAC's data TRAC FBI Web Site TRAC DEA Web Site TRAC Immigration Web Site TRAC DHS Web Site TRAC IRS Web Site TRAC ATF Web Site TRAC Reports Web Site
Transactional Records Access Clearinghouse, Syracuse University
Copyright 2010
TRAC Web Site