§80a–1 Findings and declaration of policy

Summary

Says investment companies matter to the whole country and gives five reasons. Their securities make up a large part of what is sold to the public and are bought, sold, and redeemed across state lines using mail and other interstate methods, often on an ongoing basis. Their main work—buying, selling, and managing securities—uses interstate commerce and national exchanges. They often invest in and can influence companies that do business across states. They channel a big share of the nation’s savings into the capital markets. Because they operate in many states and have owners spread out, state rules alone often cannot handle them. Declares that investors and the public are harmed in eight situations: when investors lack clear and accurate information; when companies are run to benefit insiders or other special interests instead of all shareholders; when they issue unfair or discriminatory securities; when control is concentrated or managers are irresponsible; when they use bad accounting or lack independent checks; when they reorganize or change control without shareholder consent; when they borrow too much or issue too many senior securities making junior ones risky; and when they operate without enough assets or reserves.