CITE

    15 USC Sec. 80a-14                                          01/05/2009

EXPCITE

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

HEAD

    Sec. 80a-14. Size of investment companies

STATUTE

    (a) Public offerings
      No registered investment company organized after August 22, 1940,
    and no principal underwriter for such a company, shall make a
    public offering of securities of which such company is the issuer,
    unless -
        (1) such company has a net worth of at least $100,000;
        (2) such company has previously made a public offering of its
      securities, and at the time of such offering had a net worth of
      at least $100,000; or
        (3) provision is made in connection with and as a condition of
      the registration of such securities under the Securities Act of
      1933 [15 U.S.C. 77a et seq.] which in the opinion of the
      Commission adequately insures (A) that after the effective date
      of such registration statement such company will not issue any
      security or receive any proceeds of any subscription for any
      security until firm agreements have been made with such company
      by not more than twenty-five responsible persons to purchase from
      it securities to be issued by it for an aggregate net amount
      which plus the then net worth of the company, if any, will equal
      at least $100,000; (B) that said aggregate net amount will be
      paid in to such company before any subscriptions for such
      securities will be accepted from any persons in excess of twenty-
      five; (C) that arrangements will be made whereby any proceeds so
      paid in, as well as any sales load, will be refunded to any
      subscriber on demand without any deduction, in the event that the
      net proceeds so received by the company do not result in the
      company having a net worth of at least $100,000 within ninety
      days after such registration statement becomes effective.
    At any time after the occurrence of the event specified in clause
    (C) of paragraph (3) of this subsection the Commission may issue a
    stop order suspending the effectiveness of the registration
    statement of such securities under the Securities Act of 1933 [15
    U.S.C. 77a et seq.] and may suspend or revoke the registration of
    such company under this subchapter.
    (b) Study on effects of size
      The Commission is authorized, at such times as it deems that any
    substantial further increase in size of investment companies
    creates any problem involving the protection of investors or the
    public interest, to make a study and investigation of the effects
    of size on the investment policy of investment companies and on
    security markets, on concentration of control of wealth and
    industry, and on companies in which investment companies are
    interested, and from time to time to report the results of its
    studies and investigations and its recommendations to the Congress.

SOURCE

    (Aug. 22, 1940, ch. 686, title I, Sec. 14, 54 Stat. 811.)

REFERENCES IN TEXT

      The Securities Act of 1933, referred to in subsec. (a), is act
    May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is
    classified generally to subchapter I (Sec. 77a et seq.) of chapter
    2A of this title. For complete classification of this Act to the
    Code, see section 77a of this title and Tables.

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.