15 U.S.C. § 80a–19: Payments or distributions

Summary

Makes it illegal for a registered investment company to pay a dividend or dividend-like distribution from any source except either (1) the company’s accumulated undistributed net income (figured by normal accounting and not counting gains or losses from selling securities or other property), or (2) the company’s net income for the current or prior fiscal year. Such a payment must be paired with a written statement that clearly says where the money came from. The Commission may set the form of that statement. A registered investment company may not pay out long-term capital gains more often than once every twelve months, subject to any rules the Commission adopts.

Title 15, §80a–19

Commerce and Trade, Source: USLM XML via OLRC

(a)Dividends; restriction; exception

It shall be unlawful for any registered investment company to pay any dividend, or to make any distribution in the nature of a dividend payment, wholly or partly from any source other than—

(1)such company’s accumulated undistributed net income, determined in accordance with good accounting practice and not including profits or losses realized upon the sale of securities or other properties; or

(2)such company’s net income so determined for the current or preceding fiscal year;

unless such payment is accompanied by a written statement which adequately discloses the source or sources of such payment. The Commission may prescribe the form of such statement by rules and regulations in the public interest and for the protection of investors.

(b)Long-term capital gains; limitation

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 title 26, more often than once every twelve months.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1986—Subsec. (b). Pub. L. 99–514 substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”, which for purposes of codification was translated as “title 26” thus requiring no change in text. 1970—Pub. L. 91–547 designated existing provisions as subsec. (a) and added subsec. (b).

Statutory Notes and Related Subsidiaries

Effective Date

of 1970 AmendmentAmendment by Pub. L. 91–547 effective on expiration of one year after Dec. 14, 1970, see section 30(1) of Pub. L. 91–547, set out as a note under section 80a–52 of this title.

Executive Documents

Transfer of Functions

For

Transfer of Functions

of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.

§80a–19 Payments or Distributions

Summary

Title 15, §80a–19

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Executive Documents

Transfer of Functions

Transfer of Functions

Citations & Metadata