Which Of The Following Is Not Registered With The Sec Under The Investment Company Act Of 1940?
Generally, an "investment company" is a visitor (corporation, concern trust, partnership, or limited liability company) that issues securities and is primarily engaged in the business of investing in securities.
An investment company invests the money it receives from investors on a collective basis, and each investor shares in the profits and losses in proportion to the investor's interest in the investment company. The performance of the investment visitor will be based on (just information technology won't be identical to) the performance of the securities and other assets that the investment company owns.
The federal securities laws categorize investment companies into iii bones types:
- Mutual funds (legally known every bit open up-end companies);
- Closed-end funds (legally known as closed-end companies);
- UITs (legally known every bit unit investment trusts).
Each type has its ain unique features. For instance, mutual fund and UIT shares are "redeemable" (meaning that when investors want to sell their shares, they sell them back to the fund or trust, or to a broker acting for the fund or trust, at their approximate net nugget value). Closed-terminate fund shares, on the other mitt, generally are not redeemable. Instead, when closed-end fund investors desire to sell their shares, they generally sell them to other investors on the secondary market, at a toll determined by the market. In addition, there are variations within each type of investment company, such as stock funds, bail funds, money marketplace funds, alphabetize funds, interval funds, and exchange-traded funds (ETFs).
Some types of companies that might initially announced to exist investment companies may actually be excluded nether the federal securities laws. For case, private investment funds with no more than 100 investors and individual investment funds whose investors each take a substantial amount of investment avails are non considered to be investment companies—even though they issue securities and are primarily engaged in the concern of investing in securities. This may be because of the individual nature of their offerings or the financial means and composure of their investors. For additional information on these types of private investment funds, please refer to Hedge Funds in our Fast Answers databank.
Before purchasing shares of an investment company, you should carefully read all of a fund's available information, including its prospectus and most contempo shareholder report.
Investment companies are regulated primarily under the Investment Company Deed of 1940 and the rules and registration forms adopted under that Deed. Investment companies are besides subject to the Securities Act of 1933 and the Securities Commutation Act of 1934. For the definition of "investment company," you should refer to Section 3 of the Investment Company Human action of 1940 and the rules under that section.
Which Of The Following Is Not Registered With The Sec Under The Investment Company Act Of 1940?,
Source: https://www.sec.gov/fast-answers/answersmfinvcohtm.html
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