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ABSTRACT
Request for Comments on Reform of the Regulation of Investment Companies, Invetment Company Act Release No. 17534 (June 15, 1990)
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SUMMARY: The Commission is soliciting comments on reform of the regulation of investment companies under the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Securities Act of 1933, and the Securities Exchange Act of 1934. Developments in the financial markets require reexamination of how pooled investment vehicles are regulated, particularly since the laws governing investment companies have not been amended significantly since 1970. Accordingly, the Commission is requesting comment from investors, investment companies, investment advisers, the financial services industry generally, regulators, and the public generally on a number of specific issues summarized in this release and on any other issues that commenters believe relevant.
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II. The Existing Regulatory Structure
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At the time of enactment, Congress and the Commission believed that most companies not appropriately subject to the Investment Company Act would be excepted from its provisions or otherwise excluded from the definition of investment company. However, to protect against the possibility that some companies would inadvertently be subject to its provisions, the Investment Company Act provides a procedure for a company to demonstrate that it is primarily engaged in a business other than that of being an investment company. [FN7] Additional flexibility is provided by section 6(c) of the Investment Company Act 15 U.S.C. 80a-6(c) , which authorizes the Commission by rule or order to exempt persons conditionally or unconditionally from any or all provisions of the Act if the exemption is "in the public interest" and " consistent with the protection of investors" and the Act's purposes. The Commission requests comment on whether additional flexibility is needed, whether further or different exemptive procedures are needed, [FN8] and whether more specific exemptive standards are needed.
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