©2005 Investment Company Institute. All rights reserved. Information may be abridged and therefore incomplete.
Communications from the Institute do not constitute, and should not be considered a substitute for, legal advice.
[19060]
September 8, 2005
TO: CHIEF COMPLIANCE OFFICER COMMITTEE No. 57-05
CLOSED-END INVESTMENT COMPANY COMMITTEE No. 30-05
COMPLIANCE ADVISORY COMMITTEE No. 50-05
INVESTMENT ADVISERS COMMITTEE No. 8-05
SEC RULES COMMITTEE No. 50-05
SMALL FUNDS COMMITTEE No. 27-05
UNIT INVESTMENT TRUST COMMITTEE No. 14-05
RE: UPDATED SUMMARY OF NON-1940 ACT INVESTMENT RESTRICTIONS
The Institute has updated its Summary of Non-1940 Act Investment Restrictions. The
Summary describes various federal and state laws and regulations that may restrict investments
by registered investment companies and registered investment advisers in, for example, certain
regulated industries. Members can access the updated Summary at
http://members.ici.org/non40.do.
The Summary covers 16 subject matter areas. For each area, there is a brief narrative
description of the relevant laws followed by a chart. As explained in greater detail in the
Explanation of Legends Used in the Following Charts (see Tab 1), the charts provide
information regarding: (1) relevant investment thresholds; (2) the reporting or approval
requirements that may apply once an investment threshold is met; (3) the potential
consequences for failing to comply with these requirements; (4) the extent to which securities
owned by affiliated companies or accounts should be aggregated for these purposes; (5) the
treatment of derivative securities (such as warrants and options) in calculating ownership
positions; and (6) the potential impact of “buy-backs” of securities that increase the proportion
of remaining securities owned by existing shareholders. As noted in the Explanation, in many
circumstances, clear guidance is not available, particularly with respect to aggregation,
derivative securities and buy-back situations.
A brief description of the significant updates to the Summary is attached.
Frances M. Stadler
Deputy Senior Counsel
Attachment (in .pdf format)