PRIA Logo™
Title 15, Commerce and TradeRelease 119-73not60

§80a–5 Subclassification of Management Companies

Title 15 › Chapter 2D— INVESTMENT COMPANIES AND ADVISERS › Subchapter I— INVESTMENT COMPANIES › § 80a–5

Last updated Apr 3, 2026|Official source

Summary

Divides management companies into open-end and closed-end, and into diversified and non-diversified. An open-end company sells or has outstanding shares it will redeem. A closed-end company is any management company that is not open-end. A diversified company must have at least 75% of its assets in cash (and similar items), government securities, other investment-company securities, and other securities, with no one issuer counting for more than 5% of the company’s assets and no more than 10% of that issuer’s voting stock. Any company that does not meet this is non-diversified. A company that qualified as diversified keeps that status even if values later change, so long as any mismatch right after buying a security was not caused by that purchase.

Full Legal Text

Title 15, §80a–5

Commerce and Trade, Source: USLM XML via OLRC

(a)For the purposes of this subchapter, management companies are divided into open-end and closed-end companies, defined as follows:
(1)“Open-end company” means a management company which is offering for sale or has outstanding any redeemable security of which it is the issuer.
(2)“Closed-end company” means any management company other than an open-end company.
(b)Management companies are further divided into diversified companies and non-diversified companies, defined as follows:
(1)“Diversified company” means a management company which meets the following requirements: At least 75 per centum of the value of its total assets is represented by cash and cash items (including receivables), Government securities, securities of other investment companies, and other securities for the purposes of this calculation limited in respect of any one issuer to an amount not greater in value than 5 per centum of the value of the total assets of such management company and to not more than 10 per centum of the outstanding voting securities of such issuer.
(2)“Non-diversified company” means any management company other than a diversified company.
(c)A registered diversified company which at the time of its qualification as such meets the requirements of paragraph (1) of subsection (b) shall not lose its status as a diversified company because of any subsequent discrepancy between the value of its various investments and the requirements of said paragraph, so long as any such discrepancy existing immediately after its acquisition of any security or other property is neither wholly nor partly the result of such acquisition.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1987—Subsec. (a)(2). Pub. L. 100–181 substituted “Closed-end” for “Close-end”.

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.

Reference

Citations & Metadata

Citation

15 U.S.C. § 80a–5

Title 15, Commerce and Trade

Last Updated

Apr 3, 2026

Release point: 119-73not60