§ 80a-31. — Accountants and auditors.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC80a-31]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2D--INVESTMENT COMPANIES AND ADVISERS
SUBCHAPTER I--INVESTMENT COMPANIES
Sec. 80a-31. Accountants and auditors
(a) Selection of accountant
It shall be unlawful for any registered management company or
registered face-amount certificate company to file with the Commission
any financial statement signed or certified by an independent public
accountant, unless--
(1) such accountant shall have been selected at a meeting held
within thirty days before or after the beginning of the fiscal year
or before the annual meeting of stockholders in that year by the
vote, cast in person, of a majority of those members of the board of
directors who are not interested persons of such registered company;
(2) such selection shall have been submitted for ratification or
rejection at the next succeeding annual meeting of stockholders if
such meeting be held, except that any vacancy occurring between
annual meetings, due to the death or resignation of the accountant,
may be filled by the vote of a majority of those members of the
board of directors who are not interested persons of such registered
company, cast in person at a meeting called for the purpose of
voting on such action;
(3) the employment of such accountant shall have been
conditioned upon the right of the company by vote of a majority of
the outstanding voting securities at any meeting called for the
purpose to terminate such employment forthwith without any penalty;
and
(4) such certificate or report of such accountant shall be
addressed both to the board of directors of such registered company
and to the security holders thereof.
If the selection of an accountant has been rejected pursuant to
paragraph (2) or his employment terminated pursuant to paragraph (3),
the vacancy so occurring may be filled by a vote of a majority of the
outstanding voting securities, either at the meeting at which the
rejection or termination occurred or, if not so filled, at a subsequent
meeting which shall be called for the purpose. In the case of a common-
law trust of the character described in section 80a-16(c) of this title,
no ratification of the employment of such accountant shall be required
but such employment may be terminated and such accountant removed by
action of the holders of record of a majority of the outstanding shares
of beneficial interest in such trust in the same manner as is provided
in section 80a-16(c) of this title in respect of the removal of a
trustee, and all the provisions therein contained as to the calling of a
meeting shall be applicable. In the event of such termination and
removal, the vacancy so occurring may be filled by action of the holders
of record of a majority of the shares of beneficial interest either at
the meeting, if any, at which such termination and removal occurs, or by
instruments in writing filed with the custodian, or if not so filed
within a reasonable time then at a subsequent meeting which shall be
called by the trustees for the purpose. The provisions of paragraph (42)
of section 80a-2(a) of this title as to a majority shall be applicable
to the vote cast at any meeting of the shareholders of such a trust held
pursuant to this subsection.
(b) Selection of controller or other principal accounting officer
No registered management company or registered face-amount
certificate company shall file with the Commission any financial
statement in the preparation of which the controller or other principal
accounting officer or employee of such company participated, unless such
controller, officer or employee was selected, either by vote of the
holders of such company's voting securities at the last annual meeting
of such security holders, or by the board of directors of such company.
(c) Reports of accountants and auditors
The Commission is authorized, by rules and regulations or order in
the public interest or for the protection of investors, to require
accountants and auditors to keep reports, work sheets, and other
documents and papers relating to registered investment companies for
such period or periods as the Commission may prescribe, and to make the
same available for inspection by the Commission or any member or
representative thereof.
(Aug. 22, 1940, ch. 686, title I, Sec. 32, 54 Stat. 838; Pub. L. 91-547,
Sec. 18, Dec. 14, 1970, 84 Stat. 1427; Pub. L. 94-29, Sec. 28(4), June
4, 1975, 89 Stat. 165.)
Amendments
1975--Subsec. (a). Pub. L. 94-29 substituted ``section 80a-16(c) of
this title'' for ``section 80a-16(b) of this title''.
1970--Subsec. (a). Pub. L. 91-547 struck out introductory text
``After one year from the effective date of this subchapter,'' and
substituted ``It'' for ``it''; inserted ``the vote, cast in person, of''
before ``a majority'' and substituted ``interested persons of'' for
``investment advisers of, or affiliated persons of an investment adviser
of, or officers or employees of,'' in par. (1); inserted ``the vote of a
majority of those members of'' before ``the board of directors'' and
``who are not interested persons of such registered company, cast in
person at a meeting called for the purpose of voting on such action''
after ``the board of directors'' in par. (2); substituted period for
colon in par. (4); and in text after par. (4), substituted ``if not so
filled,'' for ``if not so filled then'' and ``if not so filed'' for ``if
not so filled'', and substituted reference to par. (42) for par. (40) of
section 80a-2(a) of this title.
Effective Date of 1975 Amendment
Amendment by Pub. L. 94-29 effective June 4, 1975, see section 31(a)
of Pub. L. 94-29, set out as a note under section 78b of this title.
Effective Date of 1970 Amendment
Amendment by Pub. L. 91-547 effective on expiration of one year
after Dec. 14, 1970, see section 30(1) of Pub. L. 91-547, set out as a
note under section 80a-52 of this title.
Transfer of Functions
For transfer of functions of Securities and Exchange Commission,
with certain exceptions, to Chairman of such Commission, see Reorg. Plan
No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat.
1265, set out under section 78d of this title.
Section Referred to in Other Sections
This section is referred to in sections 80a-6, 80a-33, 80a-58 of
this title.
