Series 7: 18.1.3 Investment Company Act Of 1940

Taken from our Series 7 Top-off Online Guide

18.1.3 Investment Company Act of 1940

An investment company is a company that is primarily engaged in the business of issuing and investing securities. A mutual fund company, for example, issues securities funds and manages the purchase and sale of securities within that fund. The Investment Company Act of 1940 protects those who invest in investment company securities by requiring that all investment companies:

• Register with the SEC
• Prepare a prospectus stating the company’s investment objectives and financial conditions
• Submit annual reports to the SEC and semiannual reports to shareholders (the reports must include a balance sheet, an income statement, a list of securities owned, and a statement of recent changes in

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