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.