PUBLIC LAWS-CH. 6S6-AUG. 22 , 1940 ACCOUNTS AND RECORDS Maintenance and SEO. 31. (a) Every registered investment company, and every preservation underwriter, broker, dealer, or investment adviser which is a major- ity-owned subsidiary of such a company, shall maintain and preserve for such period or periods as the Commission may prescribe by rules and regulations, such accounts, books, and other documents as con- stitute the record forming the basis for financial statements required to be filed pursuant to section 30 of this title, and of the auditor's Investment advis- certificates relating thereto. Every investment adviser not a major- ers, etc. ity-owned subsidiary of, and every depositor of any registered investment company, and every principal underwriter for any regis- tered investment company other than a closed-end company, shall maintain and preserve for such period or periods as the Commission shall prescribe by rules and regulations, such accounts, books, and other documents as are necessary or appropriate to record such per- son's transactions with such registered company. Eainations. (b) All accounts, books, and other records, required to be main- tained and preserved by any person pursuant to subsection (a), shall be subject at any time and from time to time to such reasonable periodic, special, and other examinations by the Commission, or any member or representative thereof, as the Commission may prescribe. Any such person shall furnish to the Commission, within such rea- sonable time as the Commission may prescribe, copies of or extracts from such records which may be prepared without undue effort, expense, or delay, as the Commission may by order require. Uniformity in ac- (C) The Commission may, in the public interest or for the pro- g poe etc. tection of investors, issue rules and regulations providing for a reasonable degree of uniformity in the accounting policies and prin- ciples to be followed by registered investment companies in main- taining their accounting records and in preparing financial state- ments required pursuant to this title. Exemnptions. (d) The Commission, upon application made by any registered investment company, may by order exempt a specific transaction or transactions from the provisions of any rule or regulation made pur- suant to subsection (c), if the Commission finds that such rule or regulation should not reasonably be applied to such transaction. ACCOUNTANTS AND AUDITORS Independent public accountants, etc. Selection. Ratification or re- Jection. Right to terminate employment. SEC. 32. (a) After one year from the effective date of this title, it shall be unlawful for any registered management company or regis- tered face-amount certificate company to file with the Commission any financial statement signed or certified by an independent public accountant, unless- (1) such accountant shall have been selected at a meeting held within thirty days before or after the beginning of the fiscal year or before the annual meeting of stockholders in that year by a majority of those members of the board of directors who are not investment advisers of, or affiliated persons of an investment adviser of, or officers or employees of, such registered company; (2) such selection shall have been submitted for ratification or rejection at the next succeeding annual meeting of stockholders if such meeting be held, except that any vacancy occurring between anuual meetings, due to the death or resignation of the account- ant, may be filled by the board of directors; (3) the employment of such accountant shall have been con- ditioned upon the right of the company by vote of a majority of the outstanding voting securities at any meeting called for the purpose to terminate such employment forthwith without any penalty; and 838 [54 STAT.
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