15 USC Sec. 80a-20 01/05/2009
TITLE 15 - COMMERCE AND TRADE
CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
SUBCHAPTER I - INVESTMENT COMPANIES
Sec. 80a-20. Proxies; voting trusts; circular ownership
(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
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;
(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
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.
(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.)
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.