
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC80b-2]

 
                      TITLE 15--COMMERCE AND TRADE
 
              CHAPTER 2D--INVESTMENT COMPANIES AND ADVISERS
 
                   SUBCHAPTER II--INVESTMENT ADVISERS
 
Sec. 80b-2. Definitions

    (a) 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) ``Broker'' means any person engaged in the business of 
    effecting transactions in securities for the account of others, but 
    does not include a bank.
        (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) ``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.
        (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; (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) 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.

(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.)

                          Amendment of Section

        Pub. L. 106-102, title II, Secs. 217(a), 218, 219, 224, 225, 
    Nov. 12, 1999, 113 Stat. 1399, 1400, 1402, provided that, effective 
    18 months after Nov. 12, 1999--
        (1) Subsection (a)(3) of this section is amended to read as 
    follows:

    (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].

        (2) Subsection (a)(7) of this section is amended to read as 
    follows:

    (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.

        (3) Subsection (a)(11)(A) of this section is amended by striking 
    ``investment company'' and inserting ``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''.
        (4) This section is amended by adding at the end the following 
    new subsection:

(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.

                       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.


                               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)(26). Pub. L. 106-102, Sec. 217(b), added par. 
(26).
    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.
