CITE

    15 USC Sec. 80a-6                                           01/05/2009

EXPCITE

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

HEAD

    Sec. 80a-6. Exemptions

STATUTE

    (a) Exemption of specified investment companies
      The following investment companies are exempt from the provisions
    of this subchapter:
        (1) Any company organized or otherwise created under the laws
      of and having its principal office and place of business in
      Puerto Rico, the Virgin Islands, or any other possession of the
      United States; but such exemption shall terminate if any security
      of which such company is the issuer is offered for sale or sold
      after the effective date of this subchapter, by such company or
      an underwriter therefor, to a resident of any State other than
      the State in which such company is organized.
        (2) Any company which since the effective date of this
      subchapter or within five years prior to such date has been
      reorganized under the supervision of a court of competent
      jurisdiction, if (A) such company was not an investment company
      at the commencement of such reorganization proceedings, (B) at
      the conclusion of such proceedings all outstanding securities of
      such company were owned by creditors of such company or by
      persons to whom such securities were issued on account of
      creditors' claims, and (C) more than 50 per centum of the voting
      securities of such company, and securities representing more than
      50 per centum of the net asset value of such company, are
      currently owned beneficially by not more than twenty-five
      persons; but such exemption shall terminate if any security of
      which such company is the issuer is offered for sale or sold to
      the public after the conclusion of such proceedings by the issuer
      or by or through any underwriter. For the purposes of this
      paragraph, any new company organized as part of the
      reorganization shall be deemed the same company as its
      predecessor; and beneficial ownership shall be determined in the
      manner provided in section 80a-3(c)(1) of this title.
        (3) Any issuer as to which there is outstanding a writing filed
      with the Commission by the Federal Savings and Loan Insurance
      Corporation stating that exemption of such issuer from the
      provisions of this subchapter is consistent with the public
      interest and the protection of investors and is necessary or
      appropriate by reason of the fact that such issuer holds or
      proposes to acquire any assets or any product of any assets which
      have been segregated (A) from assets of any company which at the
      filing of such writing is an insured institution within the
      meaning of section 1724(a) (!1) of title 12, or (B) as a part of
      or in connection with any plan for or condition to the insurance
      of accounts of any company by said corporation or the conversion
      of any company into a Federal savings and loan association. Any
      such writing shall expire when canceled by a writing similarly
      filed or at the expiration of two years after the date of its
      filing, whichever first occurs; but said corporation may,
      nevertheless, before, at, or after the expiration of any such
      writing file another writing or writings with respect to such
      issuer.
        (4) Any company which prior to March 15, 1940, was and now is a
      wholly-owned subsidiary of a registered face-amount certificate
      company and was prior to said date and now is organized and
      operating under the insurance laws of any State and subject to
      supervision and examination by the insurance commissioner
      thereof, and which prior to March 15, 1940, was and now is
      engaged, subject to such laws, in business substantially all of
      which consists of issuing and selling only to residents of such
      State and investing the proceeds from, securities providing for
      or representing participations or interests in intangible assets
      consisting of mortgages or other liens on real estate or notes or
      bonds secured thereby or in a fund or deposit of mortgages or
      other liens on real estate or notes or bonds secured thereby or
      having outstanding such securities so issued and sold.
        (5)(A) Any company that is not engaged in the business of
      issuing redeemable securities, the operations of which are
      subject to regulation by the State in which the company is
      organized under a statute governing entities that provide
      financial or managerial assistance to enterprises doing business,
      or proposing to do business, in that State if -
          (i) the organizational documents of the company state that
        the activities of the company are limited to the promotion of
        economic, business, or industrial development in the State
        through the provision of financial or managerial assistance to
        enterprises doing business, or proposing to do business, in
        that State, and such other activities that are incidental or
        necessary to carry out that purpose;
          (ii) immediately following each sale of the securities of the
        company by the company or any underwriter for the company, not
        less than 80 percent of the securities of the company being
        offered in such sale, on a class-by-class basis, are held by
        persons who reside or who have a substantial business presence
        in that State;
          (iii) the securities of the company are sold, or proposed to
        be sold, by the company or by any underwriter for the company,
        solely to accredited investors, as that term is defined in
        section 77b(a)(15) of this title, or to such other persons that
        the Commission, as necessary or appropriate in the public
        interest and consistent with the protection of investors, may
        permit by rule, regulation, or order; and
          (iv) the company does not purchase any security issued by an
        investment company or by any company that would be an
        investment company except for the exclusions from the
        definition of the term "investment company" under paragraph (1)
        or (7) of section 80a-3(c) of this title, other than -
            (I) any debt security that is rated investment grade by not
          less than 1 nationally recognized statistical rating
          organization; or
            (II) any security issued by a registered open-end
          investment company that is required by its investment
          policies to invest not less than 65 percent of its total
          assets in securities described in subclause (I) or securities
          that are determined by such registered open-end investment
          company to be comparable in quality to securities described
          in subclause (I).
        (B) Notwithstanding the exemption provided by this paragraph,
      section 80a-9 of this title (and, to the extent necessary to
      enforce section 80a-9 of this title, sections 80a-37 through 80a-
      50 of this title) shall apply to a company described in this
      paragraph as if the company were an investment company registered
      under this subchapter.
        (C) Any company proposing to rely on the exemption provided by
      this paragraph shall file with the Commission a notification
      stating that the company intends to do so, in such form and
      manner as the Commission may prescribe by rule.
        (D) Any company meeting the requirements of this paragraph may
      rely on the exemption provided by this paragraph upon filing with
      the Commission the notification required by subparagraph (C),
      until such time as the Commission determines by order that such
      reliance is not in the public interest or is not consistent with
      the protection of investors.
        (E) The exemption provided by this paragraph may be subject to
      such additional terms and conditions as the Commission may by
      rule, regulation, or order determine are necessary or appropriate
      in the public interest or for the protection of investors.
    (b) Exemption of employees' security company upon application;
      matters considered
      Upon application by any employees' security company, the
    Commission shall by order exempt such company from the provisions
    of this subchapter and of the rules and regulations hereunder, if
    and to the extent that such exemption is consistent with the
    protection of investors. In determining the provisions to which
    such an order of exemption shall apply, the Commission shall give
    due weight, among other things, to the form of organization and the
    capital structure of such company, the persons by whom its voting
    securities, evidences of indebtedness, and other securities are
    owned and controlled, the prices at which securities issued by such
    company are sold and the sales load thereon, the disposition of the
    proceeds of such sales, the character of the securities in which
    such proceeds are invested, and any relationship between such
    company and the issuer of any such security.
    (c) Exemption of persons, securities or any class or classes of
      persons as necessary and appropriate in public interest
      The Commission, by rules and regulations upon its own motion, or
    by order upon application, may conditionally or unconditionally
    exempt any person, security, or transaction, or any class or
    classes of persons, securities, or transactions, from any provision
    or provisions of this subchapter or of any rule or regulation
    thereunder, if and to the extent that such exemption is 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.
    (d) Exemption of closed-end investment companies
      The Commission, by rules and regulations or order, shall exempt a
    closed-end investment company from any or all provisions of this
    subchapter, but subject to such terms and conditions as may be
    necessary or appropriate in the public interest or for the
    protection of investors, if -
        (1) the aggregate sums received by such company from the sale
      of all its outstanding securities, plus the aggregate offering
      price of all securities of which such company is the issuer and
      which it proposes to offer for sale, do not exceed $10,000,000,
      or such other amount as the Commission may set by rule,
      regulation, or order;
        (2) no security of which such company is the issuer has been or
      is proposed to be sold by such company or any underwriter
      therefor, in connection with a public offering, to any person who
      is not a resident of the State under the laws of which such
      company is organized or otherwise created; and
        (3) such exemption is not contrary to the public interest or
      inconsistent with the protection of investors.
    (e) Application of certain specified provisions of subchapter to
      otherwise exempt companies
      If, in connection with any rule, regulation, or order under this
    section exempting any investment company from any provision of
    section 80a-7 of this title, the Commission deems it necessary or
    appropriate in the public interest or for the protection of
    investors that certain specified provisions of this subchapter
    pertaining to registered investment companies shall be applicable
    in respect of such company, the provisions so specified shall apply
    to such company, and to other persons in their transactions and
    relations with such company, as though such company were a
    registered investment company.
    (f) Exemption of closed-end company treated as business development
      company
      Any closed-end company which -
        (1) elects to be treated as a business development company
      pursuant to section 80a-53 of this title; or
        (2) would be excluded from the definition of an investment
      company by section 80a-3(c)(1) of this title, except that it
      presently proposes to make a public offering of its securities as
      a business development company, and has notified the Commission,
      in a form and manner which the Commission may, by rule,
      prescribe, that it intends in good faith to file, within 90 days,
      a notification of election to become subject to the provisions of
      sections 80a-54 through 80a-64 of this title,
    shall be exempt from sections 80a-1 through 80a-52 of this title,
    except to the extent provided in sections 80a-58 through 80a-64 of
    this title.

SOURCE

    (Aug. 22, 1940, ch. 686, title I, Sec. 6, 54 Stat. 800; Proc. No.
    2695, eff. July 4, 1946, 11 F.R. 7517, 60 Stat. 1352; Pub. L. 86-
    70, Sec. 12(e), June 25, 1959, 73 Stat. 143; Pub. L. 86-624, Sec.
    7(c), July 12, 1960, 74 Stat. 412; Pub. L. 95-598, title III, Sec.
    310(b), Nov. 6, 1978, 92 Stat. 2676; Pub. L. 96-477, title I, Sec.
    103, Oct. 21, 1980, 94 Stat. 2277; Pub. L. 100-181, title VI, Sec.
    608, Dec. 4, 1987, 101 Stat. 1261; Pub. L. 104-290, title V, Secs.
    501, 502, Oct. 11, 1996, 110 Stat. 3444, 3445.)

REFERENCES IN TEXT

      For the effective date of this subchapter, referred to in subsec.
    (a)(2), see section 80a-52 of this title.
      Section 1724 of title 12, referred to in subsec. (a)(3), was
    repealed by Pub. L. 101-73, title IV, Sec. 407, Aug. 9, 1989, 103
    Stat. 363.

CODIFICATION

      Words "Philippine Islands" deleted from subsec. (a)(1) after
    "Puerto Rico" under the authority of Proc. No. 2695, granting
    independence to the Philippine Islands, which was issued pursuant
    to section 1394 of Title 22, Foreign Relations and Intercourse, and
    is set out as a note under that section.

AMENDMENTS

      1996 - Subsec. (a)(5). Pub. L. 104-290, Sec. 501, added par. (5).
      Subsec. (d)(1). Pub. L. 104-290, Sec. 502, substituted
    "$10,000,000, or such other amount as the Commission may set by
    rule, regulation, or order" for "$100,000".
      1987 - Subsec. (a)(1). Pub. L. 100-181, Sec. 608(1), struck out
    reference to Canal Zone.
      Subsec. (a)(2) to (5). Pub. L. 100-181, Sec. 608(2), redesignated
    former pars. (3) to (5) as (2) to (4), and struck out former par.
    (2) which read as follows: "Any company for which, in a proceeding
    in any court of the United States or of a State, a receiver,
    trustee in a case under title 11, or similar officer had been
    appointed or elected prior to the effective date of this
    subchapter, and every such officer so appointed or elected prior to
    the effective date of this subchapter; but such exemption shall
    continue only so long as (A) the conduct of such company's business
    remains subject to the supervision of such court or officer
    thereof, and (B) such company does not sell exclusively for cash
    any security of which it is the issuer, except short-term paper and
    ordinary receiver's or trustee's certificates."
      1980 - Subsec. (f). Pub. L. 96-477 added subsec. (f).
      1978 - Subsec. (a)(2). Pub. L. 95-598 substituted "a case under
    title 11" for "bankruptcy".
      1960 - Subsec. (a)(1). Pub. L. 86-624 struck out reference to
    Hawaii.
      1959 - Subsec. (a)(1). Pub. L. 86-70 struck out reference to
    Alaska.
                     EFFECTIVE DATE OF 1978 AMENDMENT
      Amendment by Pub. L. 95-598 effective Oct. 1, 1979, see section
    402(a) of Pub. L. 95-598, set out as an Effective Date note
    preceding section 101 of Title 11, Bankruptcy.

TRANSFER OF FUNCTIONS

      Federal Savings and Loan Insurance Corporation abolished and
    functions transferred, see sections 401 to 406 of Pub. L. 101-73,
    set out as a note under section 1437 of Title 12, Banks and
    Banking.
      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.

INVESTMENT COMPANY PROVISIONS INAPPLICABLE TO CERTAIN LIFE

             INSURANCE BENEFITS ISSUED PRIOR TO MARCH 23, 1959
      Subchapter inapplicable to certain life insurance benefits issued
    prior to Mar. 23, 1959, under certain conditions, see section 29 of
    Pub. L. 91-547, Dec. 14, 1970, 84 Stat. 1436, set out as a note
    under section 77c of this title.

FOOTNOTE

    (!1) See References in Text note below.