Who does the Investment Company Act of 1940 apply to?

all investment companies
The Investment Company Act applies to all investment companies, but exempts several types of investment companies from the act’s coverage. The most common exemptions are found in Sections 3(c)(1) and 3(c)(7) of the act and include hedge funds.

What is investment advice under Advisers Act?

Definition of Investment Adviser. Section 202(a)(11) of the Act defines an investment adviser as any person or firm that:  for compensation;  is engaged in the business of;  providing advice to others or issuing reports or analyses regarding securities.

Who does the Investment Advisers Act apply to?

Generally only larger advisers that have $25 million or more of assets under management or that provide advice to investment company clients are permitted to register with the Commission. Smaller advisers register under state law with state securities authorities.

What does the Investment Advisers Act of 1940 require?

The act stipulates that anyone providing advice or making a recommendation on securities (as opposed to another type of investment) is considered an advisor. Individuals whose advice is merely incidental to their line of business may not be considered an advisor, however.

How did the Investment Company Act of 1940 change the investment scene?

The Act impacted the registration and requirements of many investment companies and made financial regulation tighter, giving the SEC more power to oversee the financial markets. It created rules that protected investors and required investment companies to disclose certain information.

What is the purpose of the Securities Act of 1933?

The Securities Act serves the dual purpose of ensuring that issuers selling securities to the public disclose material information, and that any securities transactions are not based on fraudulent information or practices.

What is Section 203 of the Investment Advisers Act of 1940?

(a) Except as provided in subsection (b) and section 203A, it shall be unlawful for any investment adviser, unless registered under this section, to make use of the mails or any means or instrumentality of interstate commerce in connection with his or its business as an investment adviser.

What are the effects of the 40 Act?