17 CFR 270.12d3-1 - Exemption of acquisitions of securities issued by persons engaged in securities related businesses.

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§ 270.12d3-1 Exemption of acquisitions of securities issued by persons engaged in securities related businesses.
(a) Notwithstanding section 12(d)(3) of the Act, a registered investment company, or any company or companies controlled by such registered investment company (“acquiring company”) may acquire any security issued by any person that, in its most recent fiscal year, derived 15 percent or less of its gross revenues from securities related activities unless the acquiring company would control such person after the acquisition.
(b) Notwithstanding section 12(d)(3) of the Act, an acquiring company may acquire any security issued by a person that, in its most recent fiscal year, derived more than 15 percent of its gross revenues from securities related activities, provided that:
(1) Immediately after the acquisition of any equity security, the acquiring company owns not more than five percent of the outstanding securities of that class of the issuer's equity securities;
(2) Immediately after the acquisition of any debt security, the acquiring company owns not more than ten percent of the outstanding principal amount of the issuer's debt securities; and
(3) Immediately after any such acquisition, the acquiring company has invested not more than five percent of the value of its total assets in the securities of the issuer.
(c) Notwithstanding paragraphs (a) and (b) of this section, this section does not exempt the acquisition of:
(1) A general partnership interest; or
(2) A security issued by the acquiring company's promoter, principal underwriter, or any affiliated person of such promoter, or principal underwriter; or
(3) A security issued by the acquiring company's investment adviser, or an affiliated person of the acquiring company's investment adviser, other than a security issued by a subadviser or an affiliated person of a subadviser of the acquiring company provided that:
(i) Prohibited relationships. The subadviser that is (or whose affiliated person is) the issuer is not, and is not an affiliated person of, an investment adviser responsible for providing advice with respect to the portion of the acquiring company that is acquiring the securities, or of any promoter, underwriter, officer, director, member of an advisory board, or employee of the acquiring company;
(ii) Advisory contract. The advisory contracts of the Subadviser that is (or whose affiliated person is) the issuer, and any Subadviser that is advising the portion of the acquiring company that is purchasing the securities:
(A) Prohibit them from consulting with each other concerning transactions of the acquiring company in securities or other assets, other than for purposes of complying with the conditions of paragraphs (a) and (b) of this section; and
(B) Limit their responsibility in providing advice to providing advice with respect to a discrete portion of the acquiring company's portfolio.
(d) For purposes of this section:
(1) Securities related activities are a person's activities as a broker, a dealer, an underwriter, an investment adviser registered under the Investment Advisers Act of 1940, as amended, or as an investment adviser to a registered investment company.
(2) An issuer's gross revenues from its own securities related activities and from its ratable share of the securities related activities of enterprises of which it owns 20 percent or more of the voting or equity interest should be considered in determining the degree to which an issuer is engaged in securities related activities. Such information may be obtained from the issuer's annual report to shareholders, the issuer's annual reports or registration statement filed with the Commission, or the issuer's chief financial officer.
(3) Equity security is as defined in § 240.3a-11 of this chapter.
(4) Debt security includes all securities other than equity securities.
(5) Determination of the percentage of an acquiring company's ownership of any class of outstanding equity securities of an issuer shall be made in accordance with the procedures described in the rules under § 240.16 of this chapter.
(6) Where an acquiring company is considering acquiring or has acquired options, warrants, rights, or convertible securities of a securities related business, the determination required by paragraph (b) of this section shall be made as though such options, warrants, rights, or conversion privileges had been exercised.
(7) The following transactions will not be deemed to be an acquisition of securities of a securities related business:
(i) Receipt of stock dividends on securities acquired in compliance with this section;
(ii) Receipt of securities arising from a stock-for-stock split on securities acquired in compliance with this section;
(iii) Exercise of options, warrants, or rights acquired in compliance with this section;
(iv) Conversion of convertible securities acquired in compliance with this section; and
(v) Acquisition of Demand Features or Guarantees, as these terms are defined in §§ 270.2a-7(a)(8) and 270.2a-7(a)(15) respectively, provided that, immediately after the acquisition of any Demand Feature or Guarantee, the company will not, with respect to 75 percent of the total value of its assets, have invested more than ten percent of the total value of its assets in securities underlying Demand Features or Guarantees from the same institution. For the purposes of this section, a Demand Feature or Guarantee will be considered to be from the party to whom the company will look for a payment of the exercise price.
(8) Any class or series of an investment company that issues two or more classes or series of preferred or special stock, each of which is preferred over all other classes or series with respect to assets specifically allocated to that class or series, shall be treated as if it is a registered investment company.
(9) Subadviser means an investment adviser as defined in section 2(a)(20)(B) of the Act (15 U.S.C. 80a-2(a)(20)(B)).
[58 FR 49427, Sept. 23, 1993, as amended at 61 FR 13982, Mar. 28, 1996; 62 FR 64986, Dec. 9, 1997; 66 FR 36162, July 11, 2001; 68 FR 3152, Jan. 22, 2003]

Title 17 published on 2013-04-01

The following are only the Rules published in the Federal Register after the published date of Title 17.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-01-08; vol. 79 # 5 - Wednesday, January 8, 2014
    1. 79 FR 1316 - Removal of Certain References to Credit Ratings Under the Investment Company Act
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      SECURITIES AND EXCHANGE COMMISSION
      Final rule.
      Effective Date: February 7, 2014; Compliance Date: July 7, 2014.
      17 CFR Parts 239, 270, and 274

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.


United States Code
U.S. Code: Title 15 - COMMERCE AND TRADE

§ 30 - Repealed.

§ 37 - Immunity from antitrust laws

§ 77f - Registration of securities

§ 77g - Information required in registration statement

§ 77h - Taking effect of registration statements and amendments thereto

§ 77j - Information required in prospectus

§ 77q - Fraudulent interstate transactions

§ 77s - Special powers of Commission

§ 77eee - Securities required to be registered under Securities Act

§ 77ggg - Qualification of indentures covering securities not required to be registered

§ 77nnn - Reports by obligor; evidence of compliance with indenture provisions

§ 77sss - Rules, regulations, and orders

§ 78c - Definitions and application

§ 78d - Securities and Exchange Commission

15 U.S. Code § -

§ 78m - Periodical and other reports

§ 78n - Proxies

15 U.S. Code § -

§ 78w - Rules, regulations, and orders; annual reports

§ 78bb - Effect on existing law

§ 78ee - Transaction fees

§ 79c

§ 79t

15 U.S. Code § 80a–1 - Findings and declaration of policy

15 U.S. Code § 80a–2 - Definitions; applicability; rulemaking considerations

15 U.S. Code § 80a–3 - Definition of investment company

15 U.S. Code § 80a–3a - Protection of philanthropy under State law

15 U.S. Code § 80a–4 - Classification of investment companies

15 U.S. Code § 80a–5 - Subclassification of management companies

15 U.S. Code § 80a–6 - Exemptions

15 U.S. Code § 80a–7 - Transactions by unregistered investment companies

15 U.S. Code § 80a–8 - Registration of investment companies

15 U.S. Code § 80a–9 - Ineligibility of certain affiliated persons and underwriters

15 U.S. Code § 80a–10 - Affiliations or interest of directors, officers, and employees

15 U.S. Code § 80a–11 - Offers to exchange securities

15 U.S. Code § 80a–12 - Functions and activities of investment companies

15 U.S. Code § 80a–13 - Changes in investment policy

15 U.S. Code § 80a–14 - Size of investment companies

15 U.S. Code § 80a–15 - Contracts of advisers and underwriters

15 U.S. Code § 80a–16 - Board of directors

15 U.S. Code § 80a–17 - Transactions of certain affiliated persons and underwriters

15 U.S. Code § 80a–18 - Capital structure of investment companies

15 U.S. Code § 80a–19 - Payments or distributions

15 U.S. Code § 80a–20 - Proxies; voting trusts; circular ownership

15 U.S. Code § 80a–21 - Loans by management companies

15 U.S. Code § 80a–22 - Distribution, redemption, and repurchase of securities; regulations by securities associations

15 U.S. Code § 80a–23 - Closed-end companies

15 U.S. Code § 80a–24 - Registration of securities under Securities Act of 1933

15 U.S. Code § 80a–25 - Reorganization plans; reports by Commission

15 U.S. Code § 80a–26 - Unit investment trusts

15 U.S. Code § 80a–27 - Periodic payment plans

15 U.S. Code § 80a–28 - Face-amount certificate companies

15 U.S. Code § 80a–29 - Reports and financial statements of investment companies and affiliated persons

15 U.S. Code § 80a–30 - Accounts and records

15 U.S. Code § 80a–31 - Accountants and auditors

15 U.S. Code § 80a–32 - Filing of documents with Commission in civil actions

15 U.S. Code § 80a–33 - Destruction and falsification of reports and records

15 U.S. Code § 80a–34 - Unlawful representations and names

15 U.S. Code § 80a–35 - Breach of fiduciary duty

15 U.S. Code § 80a–36 - Larceny and embezzlement

15 U.S. Code § 80a–37 - Rules, regulations, and orders

15 U.S. Code § 80a–38 - Procedure for issuance of rules and regulations

15 U.S. Code § 80a–39 - Procedure for issuance of orders

15 U.S. Code § 80a–40 - Hearings by Commission

15 U.S. Code § 80a–41 - Enforcement of subchapter

15 U.S. Code § 80a–42 - Court review of orders

15 U.S. Code § 80a–43 - Jurisdiction of offenses and suits

15 U.S. Code § 80a–44 - Disclosure of information filed with Commission; copies

15 U.S. Code § 80a–45 - Reports by Commission; hiring and leasing authority

15 U.S. Code § 80a–46 - Validity of contracts

15 U.S. Code § 80a–47 - Liability of controlling persons; preventing compliance with subchapter

15 U.S. Code § 80a–48 - Penalties

15 U.S. Code § 80a–49 - Construction with other laws

15 U.S. Code § 80a–50 - Separability

15 U.S. Code § 80a–51 - Short title

15 U.S. Code § 80a–52 - Effective date

15 U.S. Code § 80a–53 - Election to be regulated as business development company

15 U.S. Code § 80a–54 - Acquisition of assets by business development companies

15 U.S. Code § 80a–55 - Qualifications of directors

15 U.S. Code § 80a–56 - Transactions with certain affiliates

15 U.S. Code § 80a–57 - Changes in investment policy

15 U.S. Code § 80a–58 - Incorporation of subchapter provisions

15 U.S. Code § 80a–59 - Functions and activities of business development companies

15 U.S. Code § 80a–60 - Capital structure

15 U.S. Code § 80a–61 - Loans

15 U.S. Code § 80a–62 - Distribution and repurchase of securities

15 U.S. Code § 80a–63 - Accounts and records

15 U.S. Code § 80a–64 - Preventing compliance with subchapter; liability of controlling persons

15 U.S. Code § 80b–3 - Registration of investment advisers

15 U.S. Code § 80b–4 - Reports by investment advisers

15 U.S. Code § 80b–11 - Rules, regulations, and orders of Commission

15 U.S. Code § 79 to 79z–6 - Repealed.

15 U.S. Code § 79 to 79z–6 - Repealed.

15 U.S. Code § 79 to 79z–6 - Repealed.

Title 17 published on 2013-04-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 17 CFR 270 after this date.

  • 2014-01-08; vol. 79 # 5 - Wednesday, January 8, 2014
    1. 79 FR 1316 - Removal of Certain References to Credit Ratings Under the Investment Company Act
      GPO FDSys XML | Text
      SECURITIES AND EXCHANGE COMMISSION
      Final rule.
      Effective Date: February 7, 2014; Compliance Date: July 7, 2014.
      17 CFR Parts 239, 270, and 274