Introduction to US 1940 Act

The Investment Company Act of 1940 (the 1940 Act) regulates mutual funds (as well as other companies).

The 1940 Act has undergone many changes.

Recent key changes include:

  • Dodd-Frank Act of 2010 (introducing stricter regulation on hedge funds, derivatives, and credit ratings)

  • Rule 2a-7 into the act (governing the structure and operation of money market funds).

In addition, there is significant cross referencing to the IRC (Internal Revenue Code) section 851, which provides the legal definition of a regulated investment company under subchapter M, and details any limitations that could lead to a determination of status.

  • The Securities Act of 1933

  • The Securities Exchange Act of 1934

Resources
UCITS e-Learning Hub
Investment Compliance Quick Q&A