
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC80a-15]

 
                      TITLE 15--COMMERCE AND TRADE
 
              CHAPTER 2D--INVESTMENT COMPANIES AND ADVISERS
 
                   SUBCHAPTER I--INVESTMENT COMPANIES
 
Sec. 80a-15. Contracts of advisers and underwriters


(a) Written contract to serve or act as investment adviser; contents

    It shall be unlawful for any person to serve or act as investment 
adviser of a registered investment company, except pursuant to a written 
contract, which contract, whether with such registered company or with 
an investment adviser of such registered company, has been approved by 
the vote of a majority of the outstanding voting securities of such 
registered company, and--
        (1) precisely describes all compensation to be paid thereunder;
        (2) shall continue in effect for a period more than two years 
    from the date of its execution, only so long as such continuance is 
    specifically approved at least annually by the board of directors or 
    by vote of a majority of the outstanding voting securities of such 
    company;
        (3) provides, in substance, that it may be terminated at any 
    time, without the payment of any penalty, by the board of directors 
    of such registered company or by vote of a majority of the 
    outstanding voting securities of such company on not more than sixty 
    days' written notice to the investment adviser; and
        (4) provides, in substance, for its automatic termination in the 
    event of its assignment.

(b) Written contract with company for sale by principal underwriter of 
        security of which company is issuer; contents

    It shall be unlawful for any principal underwriter for a registered 
open-end company to offer for sale, sell, or deliver after sale any 
security of which such company is the issuer, except pursuant to a 
written contract with such company, which contract--
        (1) shall continue in effect for a period more than two years 
    from the date of its execution, only so long as such continuance is 
    specifically approved at least annually by the board of directors or 
    by vote of a majority of the outstanding voting securities of such 
    company; and
        (2) provides, in substance, for its automatic termination in the 
    event of its assignment.

(c) Approval of contract to undertake service as investment adviser or 
        principal underwriter by majority of noninterested directors

    In addition to the requirements of subsections (a) and (b) of this 
section, it shall be unlawful for any registered investment company 
having a board of directors to enter into, renew, or perform any 
contract or agreement, written or oral, whereby a person undertakes 
regularly to serve or act as investment adviser of or principal 
underwriter for such company, unless the terms of such contract or 
agreement and any renewal thereof have been approved by the vote of a 
majority of directors, who are not parties to such contract or agreement 
or interested persons of any such party, cast in person at a meeting 
called for the purpose of voting on such approval. It shall be the duty 
of the directors of a registered investment company to request and 
evaluate, and the duty of an investment adviser to such company to 
furnish, such information as may reasonably be necessary to evaluate the 
terms of any contract whereby a person undertakes regularly to serve or 
act as investment adviser of such company. It shall be unlawful for the 
directors of a registered investment company, in connection with their 
evaluation of the terms of any contract whereby a person undertakes 
regularly to serve or act as investment adviser of such company, to take 
into account the purchase price or other consideration any person may 
have paid in connection with a transaction of the type referred to in 
paragraph (1), (3), or (4) of subsection (f) of this section.

(d) Equivalent of vote of majority of outstanding voting securities in 
        case of common-law trust

    In the case of a common-law trust of the character described in 
section 80a-16(c) of this title, either written approval by holders of a 
majority of the outstanding shares of beneficial interest or the vote of 
a majority of such outstanding shares cast in person or by proxy at a 
meeting called for the purpose shall for the purposes of this section be 
deemed the equivalent of the vote of a majority of the outstanding 
voting securities, and 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 such a meeting.

(e) Exemption of advisory boards or members from provisions of this 
        section

    Nothing contained in this section shall be deemed to require or 
contemplate any action by an advisory board of any registered company or 
by any of the members of such a board.

(f) Receipt of benefits by investment adviser from sale of securities or 
        other interest in such investment adviser resulting in 
        assignment of investment advisory contract

    (1) An investment adviser, or a corporate trustee performing the 
functions of an investment adviser, of a registered investment company 
or an affiliated person of such investment adviser or corporate trustee 
may receive any amount or benefit in connection with a sale of 
securities of, or a sale of any other interest in, such investment 
adviser or corporate trustee which results in an assignment of an 
investment advisory contract with such company or the change in control 
of or identity of such corporate trustee, if--
        (A) for a period of three years after the time of such action, 
    at least 75 per centum of the members of the board of directors of 
    such registered company or such corporate trustee (or successor 
    thereto, by reorganization or otherwise) are not (i) interested 
    persons of the investment adviser of such company or such corporate 
    trustee, or (ii) interested persons of the predecessor investment 
    adviser or such corporate trustee; and
        (B) there is not imposed an unfair burden on such company as a 
    result of such transaction or any express or implied terms, 
    conditions, or understandings applicable thereto.

    (2)(A) For the purpose of paragraph (1)(A) of this subsection, 
interested persons of a corporate trustee shall be determined in 
accordance with section 80a-2(a)(19)(B) of this title: Provided, That no 
person shall be deemed to be an interested person of a corporate trustee 
solely by reason of (i) his being a member of its board of directors or 
advisory board or (ii) his membership in the immediate family of any 
person specified in clause (i) of this subparagraph.
    (B) For the purpose of paragraph (1)(B) of this subsection, an 
unfair burden on a registered investment company includes any 
arrangement, during the two-year period after the date on which any such 
transaction occurs, whereby the investment adviser or corporate trustee 
or predecessor or successor investment advisers or corporate trustee or 
any interested person of any such adviser or any such corporate trustee 
receives or is entitled to receive any compensation directly or 
indirectly (i) from any person in connection with the purchase or sale 
of securities or other property to, from, or on behalf of such company, 
other than bona fide ordinary compensation as principal underwriter for 
such company, or (ii) from such company or its security holders for 
other than bona fide investment advisory or other services.
    (3) If--
        (A) an assignment of an investment advisory contract with a 
    registered investment company results in a successor investment 
    adviser to such company, or if there is a change in control of or 
    identity of a corporate trustee of a registered investment company, 
    and such adviser or trustee is then an investment adviser or 
    corporate trustee with respect to other assets substantially greater 
    in amount than the amount of assets of such company, or
        (B) as a result of a merger of, or a sale of substantially all 
    the assets by, a registered investment company with or to another 
    registered investment company with assets substantially greater in 
    amount, a transaction occurs which would be subject to paragraph 
    (1)(A) of this subsection,

such discrepancy in size of assets shall be considered by the Commission 
in determining whether or to what extent an application under section 
80a-6(c) of this title for exemption from the provisions of paragraph 
(1)(A) of this subsection should be granted.
    (4) Paragraph (1)(A) of this subsection shall not apply to a 
transaction in which a controlling block of outstanding voting 
securities of an investment adviser to a registered investment company 
or of a corporate trustee performing the functions of an investment 
adviser to a registered investment company is--
        (A) distributed to the public and in which there is, in fact, no 
    change in the identity of the persons who control such investment 
    adviser or corporate trustee, or
        (B) transferred to the investment adviser or the corporate 
    trustee, or an affiliated person or persons of such investment 
    adviser or corporate trustee, or is transferred from the investment 
    adviser or corporate trustee to an affiliated person or persons of 
    the investment adviser or corporate trustee: Provided, That (i) each 
    transferee (other than such adviser or trustee) is a natural person 
    and (ii) the transferees (other than such adviser or trustee) owned 
    in the aggregate more than 25 per centum of such voting securities 
    for a period of at least six months prior to such transfer.

(Aug. 22, 1940, ch. 686, title I, Sec. 15, 54 Stat. 812; Pub. L. 91-547, 
Sec. 8, Dec. 14, 1970, 84 Stat. 1419; Pub. L. 94-29, Sec. 28(1), (2), 
(4), June 4, 1975, 89 Stat. 164, 165; Pub. L. 100-181, title VI, 
Sec. 611, Dec. 4, 1987, 101 Stat. 1261.)


                               Amendments

    1987--Subsec. (d). Pub. L. 100-181, Sec. 611(1), substituted 
``paragraph (42)'' for ``paragraph (40)''.
    Subsec. (f)(3)(B). Pub. L. 100-181, Sec. 611(2), substituted a comma 
for the period at end.
    1975--Subsec. (c). Pub. L. 94-29, Sec. 28(2), inserted provisions 
making it unlawful for the directors of a registered investment company, 
in connection with their evaluation of the terms of any contract whereby 
a person undertakes regularly to serve or act as investment adviser of 
such company, to take into account the purchase price or other 
consideration any person may have paid in connection with a transaction 
of the type referred to in paragraph (1), (3), or (4) of subsec. (f).
    Subsec. (d). Pub. L. 94-29, Sec. 28(4), substituted ``section 80a-
16(c) of this title'' for ``subsection (b) of section 80a-16 of this 
title''.
    Subsec. (f). Pub. L. 94-29, Sec. 28(1), added subsec. (f).
    1970--Subsec. (a). Pub. L. 91-547, Sec. 8(a), struck out 
introductory phrase ``After one year from the effective date of this 
subchapter'' and ``unless in effect prior to March 15, 1940,'' before 
``has been approved'', and ``by the investment adviser'' after 
``assignment'' in item (4), and substituted ``It'' for ``it''.
    Subsec. (b). Pub. L. 91-547, Sec. 8(b), struck out introductory 
phrase ``After one year from the effective date of this subchapter,'' 
and concluding phrase ``, unless in effect prior to March 15, 1940'' 
after ``which contract'' before item (1), struck out ``by such 
underwriter'' after ``assignment'' in item (2), and substituted ``It'' 
for ``it''.
    Subsec. (c). Pub. L. 91-547, Sec. 8(c), made it the duty of the 
directors of a registered investment company to request and evaluate, 
and the duty of an investment adviser to such company to furnish, such 
information as may reasonably be necessary to evaluate the terms of any 
contract whereby a person undertakes regularly to serve or act as 
investment adviser of such company, substituted ``interested persons'' 
for ``affiliated persons'', and struck out ``except a written agreement 
which was in effect prior to March 15, 1940,'' after ``written or 
oral,'', item (1) designation following ``have been approved'' and item 
``or (2) by the vote of a majority of the outstanding voting securities 
of such company'' after ``any such party,'', and inserted ``the vote'' 
in phrase ``by the vote of a majority'', and provision respecting voting 
``cast in person at a meeting called for the purpose of voting on such 
approval''.
    Subsecs. (d) to (f). Pub. L. 91-547, Sec. 8(d), redesignated 
subsecs. (e) and (f) as (d) and (e), respectively, and struck out former 
subsec. (d) which prohibited any person after March 15, 1945, from 
acting as investment adviser to, or principal underwriter for, any 
registered investment company pursuant to a written contract in effect 
prior to March 15, 1940, unless such contract was renewed prior to March 
15, 1945, in such form as to make it comply with subsecs. (a) or (b).


                    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.

                  Section Referred to in Other Sections

    This section is referred to in sections 80a-6, 80a-10, 80a-16, 80a-
55, 80a-58 of this title.
