Investment Company Act of 1940

The Investment Company Act of 1940 is designed to minimize conflicts of interest that arise in the events of a companies’ organization, including mutual funds engaging in investing, reinvesting, and trading in securities, which also offers its own securities offered to the investing public. Requiring companies to disclose their financial condition and investment policies, other companies avoid product obligations and requirements of the Act may be eligible for an exemption. The Investment Company Act of 1940 also provides transaction regulations to certain affiliated persons and underwriters, accounting methodologies, recordkeeping requirements, and auditing requirements. It also allows various kinds of classified investment companies, and involves provisions regarding the rules of companies' operating products, including unit investment trusts, open-end mutual funds, closed-end mutual funds, and more.