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Chapter 1—monopolies and combinations in restraint of trade (§§ 1 – 38) chapter 2—federal trade commission; promotion of export trade and prevention of unfair methods of competition (§§ 41 – 77). Recent News - View All Have a Happy Easter Holiday March 28, 2015. The Easter holidays are fast approaching, kids would be on holiday having a break from school while workers look forward to the weekend away from work.
Final Rule: Investment Company Mergers Final Rule:Investment Company Mergers SECURITIES AND EXCHANGE COMMISSION17 CFR Part 270Release No. IC-25666; File No. S7-21-01RIN 3235-AH81Investment Company MergersAGENCY: Securities and Exchange Commission.ACTION: Final rule.SUMMARY: The Securities and Exchange Commission ('Commission') is adopting amendments to the rule under the Investment Company Act of 1940 that permits mergers and other business combinations between certain affiliated investment companies. The amendments expand the types of business combinations permitted by the rule and make the rule available for mergers between registered investment companies and certain unregistered entities. The amendments are designed to reduce burdens on investment companies by eliminating the need to obtain Commission approval for mergers that present little risk of overreaching.DATES: Effective Date: July 26, 2002.Compliance Date: October 25, 2002.
Section II of this document contains more information on transition prior to the compliance date.FOR FURTHER INFORMATION CONTACT: Robert S. Kim, Attorney, at (202) 942-7961, or Martha B. Peterson, Special Counsel, at (202) 942-0690, Office of Regulatory Policy, Division of Investment Management, Securities and Exchange Commission, 450 5th Street, NW, Washington, DC.SUPPLEMENTARY INFORMATION: The Commission today is adopting amendments to rule 17a-8 17 CFR 270.17a-8 under the Investment Company Act of 1940 15 U.S.C. 80a ('Investment Company Act' or 'Act').TABLE OF CONTENTS.EXECUTIVE SUMMARYThe Commission is adopting amendments to rule 17a-8 under the Investment Company Act, the rule that permits mergers of registered investment companies ('funds') with certain of their affiliated persons. The amendments expand the availability of the rule in two ways: first, the rule permits funds to merge with other affiliated funds without regard to the reason for their affiliation; and second, the rule permits funds to merge with unregistered bank common trust funds, bank collective trust funds, and unregistered insurance company separate accounts. The amendments subject the exemption to certain additional conditions designed to protect investors.I.
DISCUSSIONSection 17 of the Investment Company Act prohibits certain transactions between funds and their affiliated persons unless the Commission issues an order after finding that (i) the terms of the proposed transaction are reasonable and fair and do not involve overreaching on the part of any person concerned, (ii) the proposed transaction is consistent with the policy of each fund, and (iii) the proposed transaction is consistent with the general purposes of the Act. This section operates to prohibit mergers of investment companies that are affiliated persons of each other, which typically include funds that are in the same fund complex. Since 1980, our rule 17a-8 has permitted mergers of funds that are affiliated solely because they have common investment advisers, officers and/or directors. We have considered other fund mergers on a case-by-case basis, and since 1980 we have issued more than 150 orders granting exemptions for fund mergers that did not qualify for relief under rule 17a-8.In November 2001, we proposed to codify the terms of our exemptive orders and expand the availability of rule 17a-8 to permit affiliated mergers regardless of the reasons for the funds' affiliation, and to permit funds to merge with unregistered bank common and collective trust funds. We received eight comments on the proposed amendments to rule 17a-8. Commenters supported the proposed broadening of the rule, but suggested changes.
Today we are adopting the amendments to rule 17a-8, with several changes that respond to issues raised by commenters. The amended rule, which we describe below, will permit most mergers of registered investment companies to proceed without the need for exemptive relief.A. Mergers between Registered Investment CompaniesThe Commission is adopting, as proposed, an amendment to rule 17a-8 to permit affiliated fund mergers regardless of the reasons for the funds' affiliation. The rule will continue to require that each fund's board (including a majority of disinterested directors) determine that the merger is in the best interests of the fund and will not dilute the interests of shareholders. These are critical determinations boards must carefully consider, particularly when the merger involves significant conflicts of interest. Directors must request and evaluate any information reasonably necessary to their determinations, and consider and give appropriate weight to all pertinent factors in making their findings under the rule, and in fulfilling the overall duty of care they owe to the fund's shareholders.