Page:United States Statutes at Large Volume 54 Part 1.djvu/842

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[54 STAT. PUBLIC LAWS-CH. 686-AUG. 22, 1940 Unincorporated management com- panies. the same restrictions as to its membership as are imposed upon a board of directors by this section. (h) In the case of a registered management company which is an unincorporated company not having a board of directors, the provi- sions of this section shall apply as follows: (1) the provisions of subsection (a), as modified by subsection (e), shall apply to the board of directors of the depositor of such company; (2) the provisions of subsections (b) and (c), as modified by subsection (e), shall apply to the board of directors of the deposi- tor and of every investment adviser of such company; and (3) the provisions of subsection (f) shall apply to purchases and other acquisitions for the account of such company of securi- ties a principal underwriter of which is the depositor or an investment adviser of such company, or an affiliated person of such depositor or investment adviser. OFFERS OF EXCHANGE Exchange offers o SEC. 11 . (a) It shall be unlawful for any registered open-end com- open-end companies. pany or any principal underwriter for such a company to make or cause to be made an offer to the holder of a security of such company or of any other open-end investment company to exchange his security for a security in the same or another such company on any basis other than the relative net asset values of the respective securities to be exchanged, unless the terms of the offer have first been submitted to and approved by the Commission or are in accordance with such rules and regulations as the Commission may have prescribed in respect Terms defined. Of such offers which are in effect at the time such offer is made. For the purposes of this section, (A) an offer by a principal underwriter means an offer communicated to holders of securities of a class or series but does not include an offer made by such principal under- writer to an individual investor in the course of a retail business conducted by such principal underwriter, and (B) the net asset value means the net asset value which is in effect for the purpose of deter- mining the price at which the securities, or class or series of securities involved, are offered for sale to the public either (1) at the time of the receipt by the offeror of the acceptance of the offer or (2) at such later times as is specified in the offer. ttonand rht of coa- (b) Tle provislons of this section shall not apply to any offer made version. pursuant to (1) any plan of reorganization, which is submitted to and requires the approval of the holders of at least a majority of the outstanding shares of the class or series to which the security owned by the offeree belongs; or (2) the right of conversion, at the option of the holder, from one class or series into another class or series of securities issued by the same company upon such terms as are specified in the charter, certificate of incorporation, articles of association by-laws, or trust indenture subject to which the securities to be con- verted were issued or are to be issued. Applcation of pro- () The provisions of subsection (a) shall be applicable, irrespec- tive of the basis of exchange, (1) to any offer of exchange of any secu- rity of a registered open-end company for a security of a registered unit investment trust or registered face-amount certificate company; and (2) to any type of offer of exchange of the securities of registered unit investment trusts or registered face-amount certificate companies for the securities of any other investment company. Unlawful activities. FUNCTIONS AND ACTIVITIES OF INVESTMENT COMPANIES SEC. 12. (a) It shall be unlawful for any registered investment company, in contravention of such rules and regulations or orders as 808