CITE

    15 USC Sec. 80a-26                                          01/05/2009

EXPCITE

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

HEAD

    Sec. 80a-26. Unit investment trusts

STATUTE

    (a) Custody and sale of securities
      No principal underwriter for or depositor of a registered unit
    investment trust shall sell, except by surrender to the trustee for
    redemption, any security of which such trust is the issuer (other
    than short-term paper), unless the trust indenture, agreement of
    custodianship, or other instrument pursuant to which such security
    is issued -
        (1) designates one or more trustees or custodians, each of
      which is a bank, and provides that each such trustee or custodian
      shall have at all times an aggregate capital, surplus, and
      undivided profits of a specified minimum amount, which shall not
      be less than $500,000 (but may also provide, if such trustee or
      custodian publishes reports of condition at least annually,
      pursuant to law or to the requirements of its supervising or
      examining authority, that for the purposes of this paragraph the
      aggregate capital, surplus, and undivided profits of such trustee
      or custodian shall be deemed to be its aggregate capital,
      surplus, and undivided profits as set forth in its most recent
      report of condition so published);
        (2) provides, in substance, (A) that during the life of the
      trust the trustee or custodian, if not otherwise remunerated, may
      charge against and collect from the income of the trust, and from
      the corpus thereof if no income is available, such fees for its
      services and such reimbursement for its expenses as are provided
      for in such instrument; (B) that no such charge or collection
      shall be made except for services theretofore performed or
      expenses theretofore incurred; (C) that no payment to the
      depositor of or a principal underwriter for such trust, or to any
      affiliated person or agent of such depositor or underwriter,
      shall be allowed the trustee or custodian as an expense (except
      that provision may be made for the payment to any such person of
      a fee, not exceeding such reasonable amount as the Commission may
      prescribe as compensation for performing bookkeeping and other
      administrative services, of a character normally performed by the
      trustee or custodian itself); and (D) that the trustee or
      custodian shall have possession of all securities and other
      property in which the funds of the trust are invested, all funds
      held for such investment, all equalization, redemption, and other
      special funds of the trust, and all income upon, accretions to,
      and proceeds of such property and funds, and shall segregate and
      hold the same in trust (subject only to the charges and
      collections allowed under clauses (A), (B), and (C) of this
      paragraph) until distribution thereof to the security holders of
      the trust;
        (3) provides, in substance, that the trustee or custodian shall
      not resign until either (A) the trust has been completely
      liquidated and the proceeds of the liquidation distributed to the
      security holders of the trust, or (B) a successor trustee or
      custodian, having the qualifications prescribed in paragraph (1)
      of this subsection, has been designated and has accepted such
      trusteeship or custodianship; and
        (4) provides, in substance, (A) that a record will be kept by
      the depositor or an agent of the depositor of the name and
      address of, and the shares issued by the trust and held by, every
      holder of any security issued pursuant to such instrument,
      insofar as such information is known to the depositor or agent;
      and (B) that whenever a security is deposited with the trustee in
      substitution for any security in which such security holder has
      an undivided interest, the depositor or the agent of the
      depositor will, within five days after such substitution, either
      deliver or mail to such security holder a notice of substitution,
      including an identification of the securities eliminated and the
      securities substituted, and a specification of the shares of such
      security holder affected by the substitution.
    (b) Bank or affiliated person of bank as trustee or custodian
      The Commission may, after consultation with and taking into
    consideration the views of the Federal banking agencies (as defined
    in section 1813 of title 12), adopt rules and regulations, and
    issue orders, consistent with the protection of investors,
    prescribing the conditions under which a bank, or an affiliated
    person of a bank, either of which is an affiliated person of a
    principal underwriter for, or depositor of, a registered unit
    investment trust, may serve as trustee or custodian under
    subsection (a)(1) of this section.
    (c) Substitution of securities
      It shall be unlawful for any depositor or trustee of a registered
    unit investment trust holding the security of a single issuer to
    substitute another security for such security unless the Commission
    shall have approved such substitution. The Commission shall issue
    an order approving such substitution if the evidence establishes
    that it is consistent with the protection of investors and the
    purposes fairly intended by the policy and provisions of this
    subchapter.
    (d) Binding contract or agreement embodying applicable provisions
      deemed to qualify non-complying instrument by which securities
      were issued
      In the event that a trust indenture, agreement of custodianship,
    or other instrument pursuant to which securities of a registered
    unit investment trust are issued does not comply with the
    requirements of subsection (a) of this section, such instrument
    will be deemed to meet such requirements if a written contract or
    agreement binding on the parties and embodying such requirements
    has been executed by the depositor on the one part and the trustee
    or custodian on the other part, and three copies of such contract
    or agreement have been filed with the Commission.
    (e) Liquidation of unit investment trust
      Whenever the Commission has reason to believe that a unit
    investment trust is inactive and that its liquidation is in the
    interest of the security holders of such trust, the Commission may
    file a complaint seeking the liquidation of such trust in the
    district court of the United States in any district wherein any
    trustee of such trust resides or has its principal place of
    business. A copy of such complaint shall be served on every trustee
    of such trust, and notice of the proceeding shall be given such
    other interested persons in such manner and at such times as the
    court may direct. If the court determines that such liquidation is
    in the interest of the security holders of such trust, the court
    shall order such liquidation and, after payment of necessary
    expenses, the distribution of the proceeds to the security holders
    of the trust in such manner and on such terms as may to the court
    appear equitable.
    (f) Exemption
      (1) In general
        Subsection (a) of this section does not apply to any registered
      separate account funding variable insurance contracts, or to the
      sponsoring insurance company and principal underwriter of such
      account.
      (2) Limitation on sales
        It shall be unlawful for any registered separate account
      funding variable insurance contracts, or for the sponsoring
      insurance company of such account, to sell any such contract -
          (A) unless the fees and charges deducted under the contract,
        in the aggregate, are reasonable in relation to the services
        rendered, the expenses expected to be incurred, and the risks
        assumed by the insurance company, and, beginning on the earlier
        of August 1, 1997, or the earliest effective date of any
        registration statement or amendment thereto for such contract
        following October 11, 1996, the insurance company so represents
        in the registration statement for the contract; and
          (B) unless the insurance company -
            (i) complies with all other applicable provisions of this
          section, as if it were a trustee or custodian of the
          registered separate account;
            (ii) files with the insurance regulatory authority of the
          State which is the domiciliary State of the insurance
          company, an annual statement of its financial condition,
          which most recent statement indicates that the insurance
          company has a combined capital and surplus, if a stock
          company, or an unassigned surplus, if a mutual company, of
          not less than $1,000,000, or such other amount as the
          Commission may from time to time prescribe by rule, as
          necessary or appropriate in the public interest or for the
          protection of investors; and
            (iii) together with its registered separate accounts, is
          supervised and examined periodically by the insurance
          authority of such State.
      (3) Fees and charges
        For purposes of paragraph (2), the fees and charges deducted
      under the contract shall include all fees and charges imposed for
      any purpose and in any manner.
      (4) Regulatory authority
        The Commission may issue such rules and regulations to carry
      out paragraph (2)(A) as it determines are necessary or
      appropriate in the public interest or for the protection of
      investors.

SOURCE

    (Aug. 22, 1940, ch. 686, title I, Sec. 26, 54 Stat. 827; Pub. L. 91-
    547, Sec. 15, Dec. 14, 1970, 84 Stat. 1424; Pub. L. 100-181, title
    VI, Secs. 618, 619, Dec. 4, 1987, 101 Stat. 1262; Pub. L. 104-290,
    title II, Sec. 205(a), Oct. 11, 1996, 110 Stat. 3429; Pub. L. 106-
    102, title II, Sec. 211(b), Nov. 12, 1999, 113 Stat. 1396.)

AMENDMENTS

      1999 - Subsecs. (b) to (f). Pub. L. 106-102 added subsec. (b) and
    redesignated former subsecs. (b) to (e) as (c) to (f),
    respectively.
      1996 - Subsec. (e). Pub. L. 104-290 added subsec. (e).
      1987 - Subsec. (b). Pub. L. 100-181, Sec. 618, substituted
    "intended" for "intend".
      Subsec. (c). Pub. L. 100-181, Sec. 619, substituted "contract or
    agreement" for "contract of agreement".
      1970 - Subsecs. (b) to (d). Pub. L. 91-547 added subsec. (b),
    redesignated former subsec. (b) as (c), struck out "at the
    effective date of this subchapter" before "comply", substituted
    "contract of agreement" for "contract or agreement", and
    redesignated former subsec. (c) as (d).
                     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.
                     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