
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-20]

 
                      TITLE 15--COMMERCE AND TRADE
 
              CHAPTER 2D--INVESTMENT COMPANIES AND ADVISERS
 
                   SUBCHAPTER I--INVESTMENT COMPANIES
 
Sec. 80a-20. Proxies; voting trusts; circular ownership


(a) Prohibition on use of means of interstate commerce for solicitation 
        of proxies

    It shall be unlawful for any person, by use of the mails or any 
means or instrumentality of interstate commerce or otherwise, to solicit 
or to permit the use of his name to solicit any proxy or consent or 
authorization in respect of any security of which a registered 
investment company is the issuer in contravention of such rules and 
regulations as the Commission may prescribe as necessary or appropriate 
in the public interest or for the protection of investors.

(b) Prohibition on use of means of interstate commerce for sale of 
        voting-trust certificates

    It shall be unlawful for any registered investment company or 
affiliated person thereof, any issuer of a voting-trust certificate 
relating to any security of a registered investment company, or any 
underwriter of such a certificate, by use of the mails or any means or 
instrumentality of interstate commerce, or otherwise, to offer for sale, 
sell, or deliver after sale, in connection with a public offering, any 
such voting-trust certificate.

(c) Prohibition on purchase of securities knowingly resulting in cross-
        ownership or circular ownership

    No registered investment company shall purchase any voting security 
if, to the knowledge of such registered company, cross-ownership or 
circular ownership exists, or after such acquisition will exist, between 
such registered company and the issuer of such security. Cross-ownership 
shall be deemed to exist between two companies when each of such 
companies beneficially owns more than 3 per centum of the outstanding 
voting securities of the other company. Circular ownership shall be 
deemed to exist between two companies if such companies are included 
within a group of three or more companies, each of which--
        (1) beneficially owns more than 3 per centum of the outstanding 
    voting securities of one or more other companies of the group; and
        (2) has more than 3 per centum of its own outstanding voting 
    securities beneficially owned by another company, or by each of two 
    or more other companies, of the group.

(d) Duty to eliminate existing cross-ownership or circular ownership

    If cross-ownership or circular ownership between a registered 
investment company and any other company or companies comes into 
existence upon the purchase by a registered investment company of the 
securities of another company, it shall be the duty of such registered 
company, within one year after it first knows of the existence of such 
cross-ownership or circular ownership, to eliminate the same.

(Aug. 22, 1940, ch. 686, title I, Sec. 20, 54 Stat. 822; Pub. L. 100-
181, title VI, Sec. 614, Dec. 4, 1987, 101 Stat. 1262.)


                               Amendments

    1987--Subsec. (b). Pub. L. 100-181, Sec. 614(1), struck out at end 
``The prohibitions of this subsection shall not apply to a class of 
voting-trust certificates, if any certificate of such class was made the 
subject of a public offering by the issuer or by or through an 
underwriter prior to March 15, 1940.''
    Subsec. (d). Pub. L. 100-181, Sec. 614(2), (3), struck out first 
sentence ``If on the effective date of this subchapter cross-ownership 
or circular ownership exists between a registered investment company and 
any other company or companies, it shall be the duty of such registered 
company, within five years after such effective date, to eliminate such 
cross-ownership or circular ownership.'' and ``at any time after the 
effective date of this subchapter'' after ``If'' in second sentence.

                          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-16, 80a-58 of 
this title.
