Page:United States Statutes at Large Volume 54 Part 1.djvu/863

 54STAT.] 7T0H CONG., 3D SESS.-CH. 686 -AUG. 22, 1940 PERIODIC PAYMENT PLANS SEC. 27. (a) It shall be unlawful for any registered investment company issuing periodic payment plan certificates, or for any depositor of or underwriter for such company, to sell any such certificate, if- (1) the sales load on such certificate exceeds 9 per centum of the total payments to be made thereon; (2) more than one-half of any of the first twelve monthly payments thereon, or their equivalent, is deducted for sales load; (3) the amount of sales load deducted from any one of such first payments exceeds proportionately the amount deducted from any other such payment, or the amount deducted from any subsequent payment exceeds proportionately the amount deducted from any other subsequent payment; (4) the first payment on such certificate is less than $20, or any subsequent payment is less than $10; (5) if such registered company is a management company, the proceeds of such certificate or the securities in which such proceeds are invested are subject to management fees (other than fees for administrative services of the character described in clause (C), paragraph (2), of section 26 (a)) exceeding such reasonable amount as the Commission may prescribe, whether such fees are payable to such company or to investment advisers thereof; or (6) if such registered company is a unit investment trust the assets of which are securities issued by a management company, the depositor of or principal underwriter for such trust, or any affiliated person of such depositor or underwriter, is to receive from such management company or any affiliated person thereof any fee or payment on account of payments on such certificate exceeding such reasonable amount as the Commission may prescribe. (b) If it appears to the Commission, upon application or other- wise, that smaller companies are subjected to relatively higher oper- ating costs and that in order to make due allowance therefor it is necessary or appropriate in the public interest and consistent with the protection of investors that a provision or provisions of para- graph (1), (2), or (3) of subsection (a) relative to sales load be relaxed in the case of certain registered investment companies issuing periodic payment plan certificates, or certain specified classes of such companies, the Commission is authorized by rules and regulations or order to grant any such company or class of companies appropriate qualified exemptions from the provisions of said paragraphs. (c) It shall be unlawful for any registered investment company issuing periodic payment plan certificates, or for any depositor of or underwriter for such company, to sell any such certificate, unless- 1) such certificate is a redeemable security; and (2 the proceeds of all payments on such certificate (except such amounts as are deducted for sales load) are deposited with a trustee or custodian having the qualifications prescribed in paragraph (1) of section 26 (a) for the trustees of unit invest- ment trusts, and are held by such trustee or custodian under an indenture or agreement containing, in substance, the provisions required by paragraphs (2) and (3) of section 26 (a) for the trust indentures of unit investment trusts. FACE-AMOUNT CERTIFICATE COMPANIES SEC. 28. (a) It shall be unlawful for any registered face-amount certificate company to issue or sell any face-amount certificate, or to 829 Sale of periodic pay- ment plan certificates, restrictions. Exemptions. Sale of periodlic pay- ment plan certificates, requirements. Issuance or sale of face-amount certifl- cates

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