PRIA, Government Policy, Made Personal

Summary

Securities or ownership interests in certain nonprofit pooled funds that are treated as not being "investment companies" are not subject to state rules that require registering those securities. Also, a charitable organization and its trustees, directors, officers, employees, or volunteers acting in their jobs do not have to register with a State as a dealer, broker, agent, or investment adviser when they buy, hold, sell, or trade securities for their own account as trustee or manager, or for (1) a charitable organization, (2) a fund excluded as above, or (3) certain trusts or similar gift arrangements or their settlors or beneficiaries. States had a three-year window starting December 8, 1995 (until December 8, 1998) to pass a law saying this federal rule would not override their state laws going forward. Definitions: "charitable organization" means groups listed in section 170(c)(1)–(5) or section 501(c)(3) of title 26; "security" means the same as in section 78c; "State" includes the 50 States, D.C., Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.

Title 15, §80a–3a

Commerce and Trade, Source: USLM XML via OLRC

(a)A security issued by or any interest or participation in any pooled income fund, collective trust fund, collective investment fund, or similar fund that is excluded from the definition of an investment company under section 80a–3(c)(10)(B) of this title, and the offer or sale thereof, shall be exempt from any statute or regulation of a State that requires registration or qualification of securities.

(b)No charitable organization, or any trustee, director, officer, employee, or volunteer of a charitable organization acting within the scope of such person’s employment or duties, shall be required to register as, or be subject to regulation as, a dealer, broker, agent, or investment adviser under the securities laws of any State because such organization or person buys, holds, sells, or trades in securities for its own account in its capacity as trustee or administrator of, or otherwise on behalf of or for the account of one or more of the following:

(1)a charitable organization;

(2)a fund that is excluded from the definition of an investment company under section 80a–3(c)(10)(B) of this title; or

(3)a trust or other donative instrument described in section 80a–3(c)(10)(B) of this title, or the settlors (or potential settlors) or beneficiaries of any such trusts or other instruments.

(c)Notwithstanding subsections (a) and (b), during the 3-year period beginning on December 8, 1995, a State may enact a statute that specifically refers to this section and provides prospectively that this section shall not preempt the laws of that State referred to in this section.

(d)For purposes of this section—

(1)the term “charitable organization” means an organization described in paragraphs (1) through (5) of section 170(c) or section 501(c)(3) of title 26;

(2)the term “security” has the same meaning as in section 78c of this title; and

(3)the term “State” means each of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.

Notes & Related Subsidiaries

Editorial Notes

Codification Section was enacted as part of the Philanthropy Protection Act of 1995, and not as part of the Investment Company Act of 1940 which comprises this subchapter.

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable as defense to any claim in administrative and judicial actions pending on or commenced after Dec. 8, 1995, that any person, security, interest, or participation of type described in Pub. L. 104–62 is subject to the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, or any State statute or regulation preempted as provided in this section, except as specifically provided in such statutes, see section 7 of Pub. L. 104–62, set out as an

Effective Date

of 1995 Amendment note under section 77c of this title.

§80a–3a Protection of Philanthropy Under State Law

Summary

Title 15, §80a–3a

Notes & Related Subsidiaries

Editorial Notes

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Citations & Metadata