§80a–11 Offers to Exchange Securities

Summary

Registered open-end investment companies (mutual funds) and their main underwriters must not offer to swap one fund share for another unless the swap is based on the funds’ relative net asset values or the offer has first been approved by the Commission or follows Commission rules in effect when the offer is made. A "principal underwriter" offer means one sent to all holders of a class or series, not an offer made to an individual customer during normal retail sales. The net asset value used must be the NAV that sets the public sale price either when the offer is accepted or at a later time the offer says. Offers made under a reorganization plan that must be approved by holders owning at least a majority of the outstanding shares of the affected class or series are not covered by this rule. The rule also applies no matter the basis of exchange when swapping shares between a registered open-end company and a registered unit investment trust or face-amount certificate company, and when swapping from those trusts or certificate companies to any other investment company.