Page:United States Statutes at Large Volume 84 Part 2.djvu/92

 1422

Long-term capital gains, distribution, limitation. 54 Stat. 821.

68A Stat. 3. 26 USC 1. Redeemable securities, excessive sales load, prohibition. 52 Stat. 1070; 78 Stat. 574. 15 USC 780-3.

Exemption.

Regulations. Ante, p. 1413. 78 Stat. 573. IS u s e 780. eompliance notice.

Rules changes.

PUBLIC LAW 91-547-DEC. 14, 1970

[84 STAT.

Stock of such compaiiv, the Commission may by rule, regulation, or order direct that any matter required to be submitted to the holders of the outstanding voting securities of such company shall not be deemed to have been effectively acted upon unless approved by the holders of such percentage (not exceeding a majority) of the outstanding voting securities of each class or series of stock affected by such matter as shall be prescribed in such rule, regulation, or order." SEC. 11. Section 19 of the Investment Company Act of 1940 (15 U.S.C. 80a-19) is amended by inserting " (a) " after "SEC, 19.", and by adding at the end thereof a new subsection as follows: ""(b) It shall be unlawful in contravention of such rules, regulations, or orders as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors for any registered investment company to distribute long-term capital gains, as defined in the Internal Revenue Code of 1954, more often than once every twelve months." SEC. 12. (a) Section 22(b) of the Investment Company Act of 1940 (15 U.S.C. 80a-22 (b)) is amended to read as follows: "(b)(1) Such a securities association may also, by rules adopted and in effect in accordance with said section 15A, and notwithstanding the iDrovisions of subsection (b)(8) thereof but subject to all other provisions of said section applicable to the rules of such an association, prohibit its members from purchasing, in connection with a primary distribution of redeemable securities of which any registered investment company is the issuer, any such security from the issuer or from any principal underwriter except at a price equal to the price at which such security is then offered to the public less a commission, discount, or spread which is computed in conformity with a method or methods, and within such limitations as to the relation thereof to said public offering price, as such rules may prescribe in order that the price at which such security is offered or sold to the public shall not include an excessive sales load but shall allow for reasonable compensation for sales personnel, broker-dealers, and underwriters, and for reasonable sales loads to investors. The Commission shall on application or otherwise, if it appears that smaller companies are subject to relatively higher operating costs, make due allowance therefor by granting any such company or class of companies appropriate qualified exemptions from the provisions of this section. "(2) At any time after the expiration of eighteen months from the date of enactment of the Investment Company Amendments Act of 1970, or after a securities association has adopted rules as contemplated by this subsection, the Commission may make such rules and regulations pursuant to section 15(b) (10) of the Securities Exchange Act of 1934 as are appropriate to effectuate the purpose of this subsection with respect to sales of shares of a registered investment company by broker-dealers subject to regulation under section 15(b)(8) of that Act: Provided, That the underwriter of such shares may file with the Commission at any time a notice of election to comply with the rules prescribed pursuant to this subsection by a national securities association specified in such notice, and thereafter the sales load shall not exceed that prescribed by such rules of such association, and the rules of the Commission as hereinabove authorized shall thereafter be inapplicable to such sales. "(3) At any time after the expiration of eighteen months from the date of enactment of the Investment Company Amendments Act of 1970 (or, if earlier, after a securities association has adopted for purposes of paragraph (1) any rule respecting excessive sales loads), the Commission may alter or supplement the rules of any securities association as may be necessary to effectuate the purposes of this subsection

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