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Understanding the Publicly Offered Regulated Investment Company: A Comprehensive Guide
Definition & Meaning
A publicly offered regulated investment company is a type of investment company that sells its shares to the public. These shares must be:
Continuously offered through a public offering, as defined by the Securities Act of 1933.
Regularly traded on an established securities market.
Owned by at least 500 shareholders at all times during the taxable year.
The Secretary of the Treasury has the authority to reduce the minimum shareholder requirement in cases where companies experience a loss of shareholders due to net redemptions.
Table of content
Legal Use & context
This term is primarily used in the context of investment and securities law. Publicly offered regulated investment companies are subject to specific regulations under federal securities laws, including the Securities Act of 1933. Legal practitioners may encounter this term when dealing with investment funds, compliance issues, or tax-related matters. Users can manage related forms or procedures using tools like US Legal Forms, which provide templates drafted by attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A mutual fund that offers shares to the public and is traded on the New York Stock Exchange qualifies as a publicly offered regulated investment company.
Example 2: A closed-end fund that meets the trading and shareholder requirements but has seen a decline in shareholders may petition the Secretary to reduce the minimum requirement. (hypothetical example)
Relevant laws & statutes
The term is defined under 26 USCS § 67, which is part of the Internal Revenue Code. This section outlines the criteria for what constitutes a publicly offered regulated investment company.
Comparison with related terms
Term
Definition
Mutual Fund
A type of investment vehicle that pools money from many investors to purchase securities, which may or may not be publicly offered.
Closed-End Fund
An investment company that issues a fixed number of shares and is traded on a stock exchange, which may not meet the public offering criteria.
Common misunderstandings
What to do if this term applies to you
If you are considering investing in a publicly offered regulated investment company, ensure you understand the associated risks and regulations. You can explore ready-to-use legal form templates on US Legal Forms to assist with compliance and documentation. If your situation is complex, seeking advice from a legal professional is recommended.
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