§ 80b-2. — Definitions.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC80b-2]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2D--INVESTMENT COMPANIES AND ADVISERS
SUBCHAPTER II--INVESTMENT ADVISERS
Sec. 80b-2. Definitions
(a) In general
When used in this subchapter, unless the context otherwise requires,
the following definitions shall apply:
(1) ``Assignment'' includes any direct or indirect transfer or
hypothecation of an investment advisory contract by the assignor or
of a controlling block of the assignor's outstanding voting
securities by a security holder of the assignor; but if the
investment adviser is a partnership, no assignment of an investment
advisory contract shall be deemed to result from the death or
withdrawal of a minority of the members of the investment adviser
having only a minority interest in the business of the investment
adviser, or from the admission to the investment adviser of one or
more members who, after such admission, shall be only a minority of
the members and shall have only a minority interest in the business.
(2) ``Bank'' means (A) a banking institution organized under the
laws of the United States, (B) a member bank of the Federal Reserve
System, (C) any other banking institution or trust company, whether
incorporated or not, doing business under the laws of any State or
of the United States, a substantial portion of the business of which
consists of receiving deposits or exercising fiduciary powers
similar to those permitted to national banks under the authority of
the Comptroller of the Currency, and which is supervised and
examined by State or Federal authority having supervision over
banks, and which is not operated for the purpose of evading the
provisions of this subchapter, and (D) a receiver, conservator, or
other liquidating agent of any institution or firm included in
clauses (A), (B), or (C) of this paragraph.
(3) The term ``broker'' has the same meaning as given in section
3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c].
(4) ``Commission'' means the Securities and Exchange Commission.
(5) ``Company'' means a corporation, a partnership, an
association, a joint-stock company, a trust, or any organized group
of persons, whether incorporated or not; or any receiver, trustee in
a case under title 11, or similar official, or any liquidating agent
for any of the foregoing, in his capacity as such.
(6) ``Convicted'' includes a verdict, judgment, or plea of
guilty, or a finding of guilt on a plea of nolo contendere, if such
verdict, judgment, plea, or finding has not been reversed, set
aside, or withdrawn, whether or not sentence has been imposed.
(7) The term ``dealer'' has the same meaning as given in section
3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c], but does
not include an insurance company or investment company.
(8) ``Director'' means any director of a corporation or any
person performing similar functions with respect to any
organization, whether incorporated or unincorporated.
(9) ``Exchange'' means any organization, association, or group
of persons, whether incorporated or unincorporated, which
constitutes, maintains, or provides a market place or facilities for
bringing together purchasers and sellers of securities or for
otherwise performing with respect to securities the functions
commonly performed by a stock exchange as that term is generally
understood, and includes the market place and the market facilities
maintained by such exchange.
(10) ``Interstate commerce'' means trade, commerce,
transportation, or communication among the several States, or
between any foreign country and any State, or between any State and
any place or ship outside thereof.
(11) ``Investment adviser'' means any person who, for
compensation, engages in the business of advising others, either
directly or through publications or writings, as to the value of
securities or as to the advisability of investing in, purchasing, or
selling securities, or who, for compensation and as part of a
regular business, issues or promulgates analyses or reports
concerning securities; but does not include (A) a bank, or any bank
holding company as defined in the Bank Holding Company Act of 1956
[12 U.S.C. 1841 et seq.] which is not an investment company, except
that the term ``investment adviser'' includes any bank or bank
holding company to the extent that such bank or bank holding company
serves or acts as an investment adviser to a registered investment
company, but if, in the case of a bank, such services or actions are
performed through a separately identifiable department or division,
the department or division, and not the bank itself, shall be deemed
to be the investment adviser; (B) any lawyer, accountant, engineer,
or teacher whose performance of such services is solely incidental
to the practice of his profession; (C) any broker or dealer whose
performance of such services is solely incidental to the conduct of
his business as a broker or dealer and who receives no special
compensation therefor; (D) the publisher of any bona fide newspaper,
news magazine or business or financial publication of general and
regular circulation; (E) any person whose advice, analyses or
reports relate to no securities other than securities which are
direct obligations of or obligations guaranteed as to principal or
interest by the United States, or securities issued or guaranteed by
corporations in which the United States has a direct or indirect
interest which shall have been designated by the Secretary of the
Treasury, pursuant to section 3(a)(12) of the Securities Exchange
Act of 1934 [15 U.S.C. 78c(a)(12)], as exempted securities for the
purposes of that Act [15 U.S.C. 78a et seq.]; or (F) such other
persons not within the intent of this paragraph, as the Commission
may designate by rules and regulations or order.
(12) ``Investment company'', affiliated person, and ``insurance
company'' have the same meanings as in the Investment Company Act of
1940 [15 U.S.C. 80a-1 et seq.]. ``Control'' means the power to
exercise a controlling influence over the management or policies of
a company, unless such power is solely the result of an official
position with such company.
(13) ``Investment supervisory services'' means the giving of
continuous advice as to the investment of funds on the basis of the
individual needs of each client.
(14) ``Means or instrumentality of interstate commerce''
includes any facility of a national securities exchange.
(15) ``National securities exchange'' means an exchange
registered under section 6 of the Securities Exchange Act of 1934
[15 U.S.C. 78f].
(16) ``Person'' means a natural person or a company.
(17) The term ``person associated with an investment adviser''
means any partner, officer, or director of such investment adviser
(or any person performing similar functions), or any person directly
or indirectly controlling or controlled by such investment adviser,
including any employee of such investment adviser, except that for
the purposes of section 80b-3 of this title (other than subsection
(f) thereof), persons associated with an investment adviser whose
functions are clerical or ministerial shall not be included in the
meaning of such term. The Commission may by rules and regulations
classify, for the purposes of any portion of portions of this
subchapter, persons, including employees controlled by an investment
adviser.
(18) ``Security'' means any note, stock, treasury stock,
security future, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, preorganization certificate
or subscription, transferable share, investment contract, voting-
trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put,
call, straddle, option, or privilege on any security (including a
certificate of deposit) or on any group or index of securities
(including any interest therein or based on the value thereof), or
any put, call, straddle, option, or privilege entered into on a
national securities exchange relating to foreign currency, or, in
general, any interest or instrument commonly known as a
``security'', or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, guaranty of, or
warrant or right to subscribe to or purchase any of the foregoing.
(19) ``State'' means any State of the United States, the
District of Columbia, Puerto Rico, the Virgin Islands, or any other
possession of the United States.
(20) ``Underwriter'' means any person who has purchased from an
issuer with a view to, or sells for an issuer in connection with,
the distribution of any security, or participates or has a direct or
indirect participation in any such undertaking, or participates or
has a participation in the direct or indirect underwriting of any
such undertaking; but such term shall not include a person whose
interest is limited to a commission from an underwriter or dealer
not in excess of the usual and customary distributor's or seller's
commission. As used in this paragraph the term ``issuer'' shall
include in addition to an issuer, any person directly or indirectly
controlling or controlled by the issuer, or any person under direct
or indirect common control with the issuer.
(21) ``Securities Act of 1933'' [15 U.S.C. 77a et seq.],
``Securities Exchange Act of 1934'' [15 U.S.C. 78a et seq.],
``Public Utility Holding Company Act of 1935'' [15 U.S.C. 79 et
seq.], and ``Trust Indenture Act of 1939'' [15 U.S.C. 77aaa et
seq.], mean those Acts, respectively, as heretofore or hereafter
amended.
(22) ``Business development company'' means any company which is
a business development company as defined in section 80a-2(a)(48) of
this title and which complies with section 80a-54 of this title,
except that--
(A) the 70 per centum of the value of the total assets
condition referred to in sections 80a-2(a)(48) and 80a-54 of
this title shall be 60 per centum for purposes of determining
compliance therewith;
(B) such company need not be a closed-end company and need
not elect to be subject to the provisions of sections 80a-54
through 80a-64 of this title; and
(C) the securities which may be purchased pursuant to
section 80a-54(a) of this title may be purchased from any
person.
For purposes of this paragraph, all terms in sections 80a-2(a)(48)
and 80a-54 of this title shall have the same meaning set forth in
subchapter I of this chapter as if such company were a registered
closed-end investment company, except that the value of the assets
of a business development company which is not subject to the
provisions of sections 80a-54 through 80a-64 of this title shall be
determined as of the date of the most recent financial statements
which it furnished to all holders of its securities, and shall be
determined no less frequently than annually.
(23) ``Foreign securities authority'' means any foreign
government, or any governmental body or regulatory organization
empowered by a foreign government to administer or enforce its laws
as they relate to securities matters.
(24) ``Foreign financial regulatory authority'' means any (A)
foreign securities authority, (B) other governmental body or foreign
equivalent of a self-regulatory organization empowered by a foreign
government to administer or enforce its laws relating to the
regulation of fiduciaries, trusts, commercial lending, insurance,
trading in contracts of sale of a commodity for future delivery, or
other instruments traded on or subject to the rules of a contract
market, board of trade or foreign equivalent, or other financial
activities, or (C) membership organization a function of which is to
regulate the participation of its members in activities listed
above.
(25) ``Supervised person'' means any partner, officer, director
(or other person occupying a similar status or performing similar
functions), or employee of an investment adviser, or other person
who provides investment advice on behalf of the investment adviser
and is subject to the supervision and control of the investment
adviser.
(26) The term ``separately identifiable department or division''
of a bank means a unit--
(A) that is under the direct supervision of an officer or
officers designated by the board of directors of the bank as
responsible for the day-to-day conduct of the bank's investment
adviser activities for one or more investment companies,
including the supervision of all bank employees engaged in the
performance of such activities; and
(B) for which all of the records relating to its investment
adviser activities are separately maintained in or extractable
from such unit's own facilities or the facilities of the bank,
and such records are so maintained or otherwise accessible as to
permit independent examination and enforcement by the Commission
of this subchapter or the Investment Company Act of 1940 [15
U.S.C. 80a-1 et seq.] and rules and regulations promulgated
under this subchapter or the Investment Company Act of 1940.
(27) The terms ``security future'' and ``narrow-based security
index'' have the same meanings as provided in section 3(a)(55) of
the Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(55)].
(b) Applicability to Federal or State government, agency, or
instrumentality, or to officers, agents, or employees thereof
No provision in this subchapter shall apply to, or be deemed to
include, the United States, a State, or any political subdivision of a
State, or any agency, authority, or instrumentality of any one or more
of the foregoing, or any corporation which is wholly owned directly or
indirectly by any one or more of the foregoing, or any officer, agent,
or employee of any of the foregoing acting as such in the course of his
official duty, unless such provision makes specific reference thereto.
(c) Consideration of promotion of efficiency, competition, and capital
formation
Whenever pursuant to this subchapter the Commission is engaged in
rulemaking and is required to consider or determine whether an action is
necessary or appropriate in the public interest, the Commission shall
also consider, in addition to the protection of investors, whether the
action will promote efficiency, competition, and capital formation.
(Aug. 22, 1940, ch. 686, title II, Sec. 202, 54 Stat. 847; Pub. L. 86-
70, Sec. 12(c), June 25, 1959, 73 Stat. 143; Pub. L. 86-624, Sec. 7(d),
July 12, 1960, 74 Stat. 412; Pub. L. 86-750, Sec. 1, Sept. 13, 1960, 74
Stat. 885; Pub. L. 89-485, Sec. 13(j), July 1, 1966, 80 Stat. 243; Pub.
L. 91-547, Sec. 23, Dec. 14, 1970, 84 Stat. 1430; Pub. L. 95-598, title
III, Sec. 311, Nov. 6, 1978, 92 Stat. 2676; Pub. L. 96-477, title II,
Sec. 201, Oct. 21, 1980, 94 Stat. 2289; Pub. L. 97-303, Sec. 6, Oct. 13,
1982, 96 Stat. 1410; Pub. L. 100-181, title VII, Sec. 701, Dec. 4, 1987,
101 Stat. 1263; Pub. L. 101-550, title II, Sec. 206(b), Nov. 15, 1990,
104 Stat. 2720; Pub. L. 104-290, title III, Sec. 303(c), Oct. 11, 1996,
110 Stat. 3438; Pub. L. 106-102, title II, Secs. 217-219, 224, Nov. 12,
1999, 113 Stat. 1399, 1400, 1402; Pub. L. 106-554, Sec. 1(a)(5) [title
II, Sec. 209(a)(2), (4)], Dec. 21, 2000, 114 Stat. 2763, 2763A-435,
2763A-436.)
References in Text
The Bank Holding Company Act of 1956, referred to in subsec.
(a)(11)(A), is act May 9, 1956, ch. 240, 70 Stat. 133, as amended, which
is classified principally to chapter 17 (Sec. 1841 et seq.) of Title 12,
Banks and Banking. For complete classification of this Act to the Code,
see Short Title note set out under section 1841 of Title 12 and Tables.
The Investment Company Act of 1940, referred to in subsec. (a)(12),
(26)(B), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, as
amended, which is classified generally to subchapter I (Sec. 80a-1 et
seq.) of this chapter. For complete classification of this Act to the
Code, see section 80a-51 of this title and Tables.
The Securities Act of 1933, referred to in subsec. (a)(21), is act
May 27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is
classified generally to subchapter I (Sec. 77a et seq.) of chapter 2A of
this title. For complete classification of this Act to the Code, see
section 77a of this title and Tables.
The Securities Exchange Act of 1934, referred to in subsec. (a)(21),
is act June 6, 1934, ch. 404, 48 Stat. 881, as amended, which is
classified generally to chapter 2B (Sec. 78a et seq.) of this title. For
complete classification of this Act to the Code, see section 78a of this
title and Tables.
The Public Utility Holding Company Act of 1935, referred to in
subsec. (a)(21), is act Aug. 26, 1935, ch. 687, title I, 49 Stat. 838,
as amended, which is classified generally to chapter 2C (Sec. 79 et
seq.) of this title. For complete classification of this Act to the
Code, see section 79 of this title and Tables.
The Trust Indenture Act of 1939, referred to in subsec. (a)(21), is
title III of act May 27, 1933, ch. 38, as added Aug. 3, 1939, ch. 411,
53 Stat. 1149, and amended, which is classified generally to subchapter
III (Sec. 77aaa et seq.) of chapter 2A of this title. For complete
classification of this Act to the Code, see section 77aaa of this title
and Tables.
This subchapter, referred to in subsec. (a)(26)(B), was in the
original ``this Act'' and was translated as reading ``this title'',
meaning title II of act Aug. 22, 1940, ch. 686, known as the Investment
Advisers Act of 1940, to reflect the probable intent of Congress.
Amendments
2000--Subsec. (a)(18). Pub. L. 106-554, Sec. 1(a)(5) [title II,
Sec. 209(a)(2)], inserted ``security future,'' after ``treasury
stock,''.
Subsec. (a)(27). Pub. L. 106-554, Sec. 1(a)(5) [title II,
Sec. 209(a)(4)], added par. (27).
1999--Subsec. (a)(3). Pub. L. 106-102, Sec. 218, amended par. (3)
generally. Prior to amendment, par. (3) read as follows: `` `Broker'
means any person engaged in the business of effecting transactions in
securities for the account of others, but does not include a bank.''
Subsec. (a)(7). Pub. L. 106-102, Sec. 219, amended par. (7)
generally. Prior to amendment, par. (7) read as follows: `` `Dealer'
means any person regularly engaged in the business of buying and selling
securities for his own account, through a broker or otherwise, but does
not include a bank, insurance company, or investment company, or any
person insofar as he is engaged in investing, reinvesting or trading in
securities, or in owning or holding securities, for his own account,
either individually or in some fiduciary capacity, but not as a part of
a regular business.''
Subsec. (a)(11)(A). Pub. L. 106-102, Sec. 217(a), substituted
``investment company, except that the term `investment adviser' includes
any bank or bank holding company to the extent that such bank or bank
holding company serves or acts as an investment adviser to a registered
investment company, but if, in the case of a bank, such services or
actions are performed through a separately identifiable department or
division, the department or division, and not the bank itself, shall be
deemed to be the investment adviser'' for ``investment company''.
Subsec. (a)(26). Pub. L. 106-102, Sec. 217(b), added par. (26).
Subsec. (c). Pub. L. 106-102, Sec. 224, added subsec. (c).
1996--Subsec. (a). Pub. L. 104-290, Sec. 303(c)(1), substituted
``requires, the following definitions shall apply:'' for ``requires--''
in introductory provisions.
Subsec. (a)(25). Pub. L. 104-290, Sec. 303(c)(2), added par. (25).
1990--Subsec. (a)(23), (24). Pub. L. 101-550 added pars. (23) and
(24).
1987--Subsec. (a)(19). Pub. L. 100-181 struck out reference to Canal
Zone.
1982--Subsec. (a)(18). Pub. L. 97-303 inserted ``any put, call,
straddle, option, or privilege on any security (including a certificate
of deposit) or on any group or index of securities (including any
interest therein or based on the value thereof), or any put, call,
straddle, option, or privilege entered into on a national securities
exchange relating to foreign currency,'' after ``mineral rights,''.
1980--Subsec. (a)(22). Pub. L. 96-477 added par. (22).
1978--Subsec. (a)(5). Pub. L. 95-598 substituted ``a case under
title 11'' for ``bankruptcy''.
1970--Subsec. (a)(2). Pub. L. 91-547, Sec. 23(1), substituted
``under the authority of the Comptroller of the Currency'' for ``under
section 248(k) of Title 12''.
Subsec. (a)(17) to (21). Pub. L. 91-547, Sec. 23(2), added par. (17)
and redesignated former pars. (17) to (20) as (18) to (21),
respectively.
1966--Subsec. (a)(11)(A). Pub. L. 89-485 substituted ``bank holding
company as defined in the Bank Holding Company Act of 1956'' for
``holding company affiliate, as defined in the Banking Act of 1933''.
1960--Subsec. (a)(12). Pub. L. 86-750, Sec. 1(a), substituted
definition of ``control'' as ``the power to exercise a controlling
influence over the management or policies of a company, unless such
power is solely the result of an official position with such company''
for its prior definition which was the same as in the Investment Company
Act of 1940.
Subsec. (a)(18). Pub. L. 86-750, Sec. 1(b), struck out reference to
Philippine Islands, which change was previously executed in the
codification of this section pursuant to Proc. No. 2695 that granted
independence to the Philippine Islands.
Pub. L. 86-624 struck out reference to Hawaii.
1959--Subsec. (a)(18). Pub. L. 86-70 struck out reference to Alaska.
Effective Date of 1999 Amendment
Amendment by Pub. L. 106-102 effective 18 months after Nov. 12,
1999, see section 225 of Pub. L. 106-102, set out as a note under
section 77c of this title.
Effective Date of 1996 Amendment
Section 308(a) of title III of Pub. L. 104-290, as amended by Pub.
L. 105-8, Sec. 1, Mar. 31, 1997, 111 Stat. 15, provided that: ``This
title [enacting section 80b-3a of this title, amending this section,
sections 80b-3 and 80b-18a of this title, and section 1002 of Title 29,
Labor, and enacting provisions set out as notes under sections 80b-3a,
80b-10, and 80b-20 of this title and section 1002 of Title 29] and the
amendments made by this title shall take effect 270 days after the date
of enactment of this Act [Oct. 11, 1996].''
Effective Date of 1978 Amendment
Amendment by Pub. L. 95-598 effective Oct. 1, 1979, see section
402(a) of Pub. L. 95-598, set out as an Effective Date note preceding
section 101 of Title 11, Bankruptcy.
Effective Date of 1970 Amendment
Amendment by Pub. L. 91-547 effective Dec. 14, 1970, see section 30
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 80b-3, 80b-3a, 6102, 6827 of
this title; title 5 section 8438; title 7 section 2; title 10 sections
4357, 6975, 9356.
