Regulation & law · 17/09/1996

Technical Amendments to Rule Relating to Payments for the Distribution of Shares by a Registered Open-End Management Investment Company

The Securities and Exchange Commission (SEC) is adopting a technical amendment to the Investment Company Act of 1940, which governs how registered open-end management investment companies (funds) use their assets to pay for the distribution of fund shares. The amendment allows funds to adopt plans to use fund assets for distribution without shareholder approval prior to the fund's initial public offering, as investors effectively vote with their dollars when buying shares in the public offering.