15 U.S.C. § 80a-2 : US Code - Section 80A-2: Definitions; applicability; rulemaking considerations

Search 15 U.S.C. § 80a-2 : US Code - Section 80A-2: Definitions; applicability; rulemaking considerations

    (a) Definitions
      When used in this subchapter, unless the context otherwise
    requires - 
        (1) "Advisory board" means a board, whether elected or
      appointed, which is distinct from the board of directors or board
      of trustees, of an investment company, and which is composed
      solely of persons who do not serve such company in any other
      capacity, whether or not the functions of such board are such as
      to render its members "directors" within the definition of that
      term, which board has advisory functions as to investments but
      has no power to determine that any security or other investment
      shall be purchased or sold by such company.
        (2) "Affiliated company" means a company which is an affiliated
      person.
        (3) "Affiliated person" of another person means (A) any person
      directly or indirectly owning, controlling, or holding with power
      to vote, 5 per centum or more of the outstanding voting
      securities of such other person; (B) any person 5 per centum or
      more of whose outstanding voting securities are directly or
      indirectly owned, controlled, or held with power to vote, by such
      other person; (C) any person directly or indirectly controlling,
      controlled by, or under common control with, such other person;
      (D) any officer, director, partner, copartner, or employee of
      such other person; (E) if such other person is an investment
      company, any investment adviser thereof or any member of an
      advisory board thereof; and (F) if such other person is an
      unincorporated investment company not having a board of
      directors, the depositor thereof.
        (4) "Assignment" includes any direct or indirect transfer or
      hypothecation of a contract or chose in action by the assignor,
      or of a controlling block of the assignor's outstanding voting
      securities by a security holder of the assignor; but does not
      include an assignment of partnership interests incidental to the
      death or withdrawal of a minority of the members of the
      partnership having only a minority interest in the partnership
      business or to the admission to the partnership of one or more
      members who, after such admission, shall be only a minority of
      the members and shall have only a minority interest in the
      business.
        (5) "Bank" means (A) a depository institution (as defined in
      section 1813 of title 12) or a branch or agency of a foreign bank
      (as such terms are defined in section 3101 of title 12), (B) a
      member bank of the Federal Reserve System, (C) any other banking
      institution or trust company, whether incorporated or not, doing
      business under the laws of any State or of the United States, a
      substantial portion of the business of which consists of
      receiving deposits or exercising fiduciary powers similar to
      those permitted to national banks under the authority of the
      Comptroller of the Currency, and which is supervised and examined
      by State or Federal authority having supervision over banks, and
      which is not operated for the purpose of evading the provisions
      of this subchapter, and (D) a receiver, conservator, or other
      liquidating agent of any institution or firm included in clauses
      (A), (B), or (C) of this paragraph.
        (6) The term "broker" has the same meaning as given in section
      3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c], except
      that such term does not include any person solely by reason of
      the fact that such person is an underwriter for one or more
      investment companies.
        (7) "Commission" means the Securities and Exchange Commission.
        (8) "Company" means a corporation, a partnership, an
      association, a joint-stock company, a trust, a fund, or any
      organized group of persons whether incorporated or not; or any
      receiver, trustee in a case under title 11 or similar official or
      any liquidating agent for any of the foregoing, in his capacity
      as such.
        (9) "Control" means the power to exercise a controlling
      influence over the management or policies of a company, unless
      such power is solely the result of an official position with such
      company.
        Any person who owns beneficially, either directly or through
      one or more controlled companies, more than 25 per centum of the
      voting securities of a company shall be presumed to control such
      company. Any person who does not so own more than 25 per centum
      of the voting securities of any company shall be presumed not to
      control such company. A natural person shall be presumed not to
      be a controlled person within the meaning of this subchapter. Any
      such presumption may be rebutted by evidence, but except as
      hereinafter provided, shall continue until a determination to the
      contrary made by the Commission by order either on its own motion
      or on application by an interested person. If an application
      filed hereunder is not granted or denied by the Commission within
      sixty days after filing thereof, the determination sought by the
      application shall be deemed to have been temporarily granted
      pending final determination of the Commission thereon. The
      Commission, upon its own motion or upon application, may by order
      revoke or modify any order issued under this paragraph whenever
      it shall find that the determination embraced in such original
      order is no longer consistent with the facts.
        (10) "Convicted" includes a verdict, judgment, or plea of
      guilty, or a finding of guilt on a plea of nolo contendere, if
      such verdict, judgment, plea, or finding has not been reversed,
      set aside, or withdrawn, whether or not sentence has been
      imposed.
        (11) The term "dealer" has the same meaning as given in the
      Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], but does
      not include an insurance company or investment company.
        (12) "Director" means any director of a corporation or any
      person performing similar functions with respect to any
      organization, whether incorporated or unincorporated, including
      any natural person who is a member of a board of trustees of a
      management company created as a common-law trust.
        (13) "Employees' securities company" means any investment
      company or similar issuer all of the outstanding securities of
      which (other than short-term paper) are beneficially owned (A) by
      the employees or persons on retainer of a single employer or of
      two or more employers each of which is an affiliated company of
      the other, (B) by former employees of such employer or employers,
      (C) by members of the immediate family of such employees, persons
      on retainer, or former employees, (D) by any two or more of the
      foregoing classes of persons, or (E) by such employer or
      employers together with any one or more of the foregoing classes
      of persons.
        (14) "Exchange" means any organization, association, or group
      of persons, whether incorporated or unincorporated, which
      constitutes, maintains, or provides a market place or facilities
      for bringing together purchasers and sellers of securities or for
      otherwise performing with respect to securities the functions
      commonly performed by a stock exchange as that term is generally
      understood, and includes the market place and the market
      facilities maintained by such exchange.
        (15) "Face-amount certificate" means any certificate,
      investment contract, or other security which represents an
      obligation on the part of its issuer to pay a stated or
      determinable sum or sums at a fixed or determinable date or dates
      more than twenty-four months after the date of issuance, in
      consideration of the payment of periodic installments of a stated
      or determinable amount (which security shall be known as a face-
      amount certificate of the "installment type"); or any security
      which represents a similar obligation on the part of a face-
      amount certificate company, the consideration for which is the
      payment of a single lump sum (which security shall be known as a
      "fully paid" face-amount certificate).
        (16) "Government security" means any security issued or
      guaranteed as to principal or interest by the United States, or
      by a person controlled or supervised by and acting as an
      instrumentality of the Government of the United States pursuant
      to authority granted by the Congress of the United States; or any
      certificate of deposit for any of the foregoing.
        (17) "Insurance company" means a company which is organized as
      an insurance company, whose primary and predominant business
      activity is the writing of insurance or the reinsuring of risks
      underwritten by insurance companies, and which is subject to
      supervision by the insurance commissioner or a similar official
      or agency of a State; or any receiver or similar official or any
      liquidating agent for such a company, in his capacity as such.
        (18) "Interstate commerce" means trade, commerce,
      transportation, or communication among the several States, or
      between any foreign country and any State, or between any State
      and any place or ship outside thereof.
        (19) "Interested person" of another person means - 
          (A) when used with respect to an investment company - 
            (i) any affiliated person of such company,
            (ii) any member of the immediate family of any natural
          person who is an affiliated person of such company,
            (iii) any interested person of any investment adviser of or
          principal underwriter for such company,
            (iv) any person or partner or employee of any person who at
          any time since the beginning of the last two completed fiscal
          years of such company has acted as legal counsel for such
          company,
            (v) any person or any affiliated person of a person (other
          than a registered investment company) that, at any time
          during the 6-month period preceding the date of the
          determination of whether that person or affiliated person is
          an interested person, has executed any portfolio transactions
          for, engaged in any principal transactions with, or
          distributed shares for - 
              (I) the investment company;
              (II) any other investment company having the same
            investment adviser as such investment company or holding
            itself out to investors as a related company for purposes
            of investment or investor services; or
              (III) any account over which the investment company's
            investment adviser has brokerage placement discretion,

            (vi) any person or any affiliated person of a person (other
          than a registered investment company) that, at any time
          during the 6-month period preceding the date of the
          determination of whether that person or affiliated person is
          an interested person, has loaned money or other property to -
          
              (I) the investment company;
              (II) any other investment company having the same
            investment adviser as such investment company or holding
            itself out to investors as a related company for purposes
            of investment or investor services; or
              (III) any account for which the investment company's
            investment adviser has borrowing authority, and

            (vii) any natural person whom the Commission by order shall
          have determined to be an interested person by reason of
          having had, at any time since the beginning of the last two
          completed fiscal years of such company, a material business
          or professional relationship with such company or with the
          principal executive officer of such company or with any other
          investment company having the same investment adviser or
          principal underwriter or with the principal executive officer
          of such other investment company:

        Provided, That no person shall be deemed to be an interested
        person of an investment company solely by reason of (aa) his
        being a member of its board of directors or advisory board or
        an owner of its securities, or (bb) his membership in the
        immediate family of any person specified in clause (aa) of this
        proviso; and
          (B) when used with respect to an investment adviser of or
        principal underwriter for any investment company - 
            (i) any affiliated person of such investment adviser or
          principal underwriter,
            (ii) any member of the immediate family of any natural
          person who is an affiliated person of such investment adviser
          or principal underwriter,
            (iii) any person who knowingly has any direct or indirect
          beneficial interest in, or who is designated as trustee,
          executor, or guardian of any legal interest in, any security
          issued either by such investment adviser of principal
          underwriter or by a controlling person or such investment
          adviser or principal underwriter,
            (iv) any person or partner or employee of any person who at
          any time since the beginning of the last two completed fiscal
          years of such investment company has acted as legal counsel
          for such investment adviser or principal underwriter,
            (v) any person or any affiliated person of a person (other
          than a registered investment company) that, at any time
          during the 6-month period preceding the date of the
          determination of whether that person or affiliated person is
          an interested person, has executed any portfolio transactions
          for, engaged in any principal transactions with, or
          distributed shares for - 
              (I) any investment company for which the investment
            adviser or principal underwriter serves as such;
              (II) any investment company holding itself out to
            investors, for purposes of investment or investor services,
            as a company related to any investment company for which
            the investment adviser or principal underwriter serves as
            such; or
              (III) any account over which the investment adviser has
            brokerage placement discretion,

            (vi) any person or any affiliated person of a person (other
          than a registered investment company) that, at any time
          during the 6-month period preceding the date of the
          determination of whether that person or affiliated person is
          an interested person, has loaned money or other property to -
          
              (I) any investment company for which the investment
            adviser or principal underwriter serves as such;
              (II) any investment company holding itself out to
            investors, for purposes of investment or investor services,
            as a company related to any investment company for which
            the investment adviser or principal underwriter serves as
            such; or
              (III) any account for which the investment adviser has
            borrowing authority, and

            (vii) any natural person whom the Commission by order shall
          have determined to be an interested person by reason of
          having had at any time since the beginning of the last two
          completed fiscal years of such investment company a material
          business or professional relationship with such investment
          adviser or principal underwriter or with the principal
          executive officer or any controlling person of such
          investment adviser or principal underwriter.

      For the purposes of this paragraph (19), "member of the immediate
      family" means any parent, spouse of a parent, child, spouse of a
      child, spouse, brother, or sister, and includes step and adoptive
      relationships. The Commission may modify or revoke any order
      issued under clause (vii) of subparagraph (A) or (B) of this
      paragraph whenever it finds that such order is no longer
      consistent with the facts. No order issued pursuant to clause
      (vii) of subparagraph (A) or (B) of this paragraph shall become
      effective until at least sixty days after the entry thereof, and
      no such order shall affect the status of any person for the
      purposes of this subchapter or for any other purpose for any
      period prior to the effective date of such order.
        (20) "Investment adviser" of an investment company means (A)
      any person (other than a bona fide officer, director, trustee,
      member of an advisory board, or employee of such company, as
      such) who pursuant to contract with such company regularly
      furnishes advice to such company with respect to the desirability
      of investing in, purchasing or selling securities or other
      property, or is empowered to determine what securities or other
      property shall be purchased or sold by such company, and (B) any
      other person who pursuant to contract with a person described in
      clause (A) of this paragraph regularly performs substantially all
      of the duties undertaken by such person described in said clause
      (A); but does not include (i) a person whose advice is furnished
      solely through uniform publications distributed to subscribers
      thereto, (ii) a person who furnishes only statistical and other
      factual information, advice regarding economic factors and
      trends, or advice as to occasional transactions in specific
      securities, but without generally furnishing advice or making
      recommendations regarding the purchase or sale of securities,
      (iii) a company furnishing such services at cost to one or more
      investment companies, insurance companies, or other financial
      institutions, (iv) any person the character and amount of whose
      compensation for such services must be approved by a court, or
      (v) such other persons as the Commission may by rules and
      regulations or order determine not to be within the intent of
      this definition.
        (21) "Investment banker" means any person engaged in the
      business of underwriting securities issued by other persons, but
      does not include an investment company, any person who acts as an
      underwriter in isolated transactions but not as a part of a
      regular business, or any person solely by reason of the fact that
      such person is an underwriter for one or more investment
      companies.
        (22) "Issuer" means every person who issues or proposes to
      issue any security, or has outstanding any security which it has
      issued.
        (23) "Lend" includes a purchase coupled with an agreement by
      the vendor to repurchase; "borrow" includes a sale coupled with a
      similar agreement.
        (24) "Majority-owned subsidiary" of a person means a company 50
      per centum or more of the outstanding voting securities of which
      are owned by such person, or by a company which, within the
      meaning of this paragraph, is a majority-owned subsidiary of such
      person.
        (25) "Means or instrumentality of interstate commerce" includes
      any facility of a national securities exchange.
        (26) "National securities exchange" means an exchange
      registered under section 6 of the Securities Exchange Act of 1934
      [15 U.S.C. 78f].
        (27) "Periodic payment plan certificate" means (A) any
      certificate, investment contract, or other security providing for
      a series of periodic payments by the holder, and representing an
      undivided interest in certain specified securities or in a unit
      or fund of securities purchased wholly or partly with the
      proceeds of such payments, and (B) any security the issuer of
      which is also issuing securities of the character described in
      clause (A) of this paragraph and the holder of which has
      substantially the same rights and privileges as those which
      holders of securities of the character described in said clause
      (A) have upon completing the periodic payments for which such
      securities provide.
        (28) "Person" means a natural person or a company.
        (29) "Principal underwriter" of or for any investment company
      other than a closed-end company, or of any security issued by
      such a company, means any underwriter who as principal purchases
      from such company, or pursuant to contract has the right (whether
      absolute or conditional) from time to time to purchase from such
      company, any such security for distribution, or who as agent for
      such company sells or has the right to sell any such security to
      a dealer or to the public or both, but does not include a dealer
      who purchases from such company through a principal underwriter
      acting as agent for such company. "Principal underwriter" of or
      for a closed-end company or any issuer which is not an investment
      company, or of any security issued by such a company or issuer,
      means any underwriter who, in connection with a primary
      distribution of securities, (A) is in privity of contract with
      the issuer or an affiliated person of the issuer; (B) acting
      alone or in concert with one or more other persons, initiates or
      directs the formation of an underwriting syndicate; or (C) is
      allowed a rate of gross commission, spread, or other profit
      greater than the rate allowed another underwriter participating
      in the distribution.
        (30) "Promoter" of a company or a proposed company means a
      person who, acting alone or in concert with other persons, is
      initiating or directing, or has within one year initiated or
      directed, the organization of such company.
        (31) "Prospectus", as used in section 80a-22 of this title,
      means a written prospectus intended to meet the requirements of
      section 10(a) of the Securities Act of 1933 [15 U.S.C. 77j(a)]
      and currently in use. As used elsewhere, "prospectus" means a
      prospectus as defined in the Securities Act of 1933 [15 U.S.C.
      77a et seq.].
        (32) "Redeemable security" means any security, other than short-
      term paper, under the terms of which the holder, upon its
      presentation to the issuer or to a person designated by the
      issuer, is entitled (whether absolutely or only out of surplus)
      to receive approximately his proportionate share of the issuer's
      current net assets, or the cash equivalent thereof.
        (33) "Reorganization" means (A) a reorganization under the
      supervision of a court of competent jurisdiction; (B) a merger or
      consolidation; (C) a sale of 75 per centum or more in value of
      the assets of a company; (D) a restatement of the capital of a
      company, or an exchange of securities issued by a company for any
      of its own outstanding securities; (E) a voluntary dissolution or
      liquidation of a company; (F) a recapitalization or other
      procedure or transaction which has for its purpose the
      alteration, modification, or elimination of any of the rights,
      preferences, or privileges of any class of securities issued by a
      company, as provided in its charter or other instrument creating
      or defining such rights, preferences, and privileges; (G) an
      exchange of securities issued by a company for outstanding
      securities issued by another company or companies, preliminary to
      and for the purpose of effecting or consummating any of the
      foregoing; or (H) any exchange of securities by a company which
      is not an investment company for securities issued by a
      registered investment company.
        (34) "Sale", "sell", "offer to sell", or "offer for sale"
      includes every contract of sale or disposition of, attempt or
      offer to dispose of, or solicitation of an offer to buy, a
      security or interest in a security, for value. Any security given
      or delivered with, or as a bonus on account of, any purchase of
      securities or any other thing, shall be conclusively presumed to
      constitute a part of the subject of such purchase and to have
      been sold for value.
        (35) "Sales load" means the difference between the price of a
      security to the public and that portion of the proceeds from its
      sale which is received and invested or held for investment by the
      issuer (or in the case of a unit investment trust, by the
      depositor or trustee), less any portion of such difference
      deducted for trustee's or custodian's fees, insurance premiums,
      issue taxes, or administrative expenses or fees which are not
      properly chargeable to sales or promotional activities. In the
      case of a periodic payment plan certificate, "sales load"
      includes the sales load on any investment company securities in
      which the payments made on such certificate are invested, as well
      as the sales load on the certificate itself.
        (36) "Security" means any note, stock, treasury stock, security
      future, bond, debenture, evidence of indebtedness, certificate of
      interest or participation in any profit-sharing agreement,
      collateral-trust certificate, preorganization certificate or
      subscription, transferable share, investment contract, voting-
      trust certificate, certificate of deposit for a security,
      fractional undivided interest in oil, gas, or other mineral
      rights, any put, call, straddle, option, or privilege on any
      security (including a certificate of deposit) or on any group or
      index of securities (including any interest therein or based on
      the value thereof), or any put, call, straddle, option, or
      privilege entered into on a national securities exchange relating
      to foreign currency, or, in general, any interest or instrument
      commonly known as a "security", or any certificate of interest or
      participation in, temporary or interim certificate for, receipt
      for, guarantee of, or warrant or right to subscribe to or
      purchase, any of the foregoing.
        (37) "Separate account" means an account established and
      maintained by an insurance company pursuant to the laws of any
      State or territory of the United States, or of Canada or any
      province thereof, under which income, gains and losses, whether
      or not realized, from assets allocated to such account, are, in
      accordance with the applicable contract, credited to or charged
      against such account without regard to other income, gains, or
      losses of the insurance company.
        (38) "Short-term paper" means any note, draft, bill of
      exchange, or banker's acceptance payable on demand or having a
      maturity at the time of issuance of not exceeding nine months,
      exclusive of days of grace, or any renewal thereof payable on
      demand or having a maturity likewise limited; and such other
      classes of securities, of a commercial rather than an investment
      character, as the Commission may designate by rules and
      regulations.
        (39) "State" means any State of the United States, the District
      of Columbia, Puerto Rico, the Virgin Islands, or any other
      possession of the United States.
        (40) "Underwriter" means any person who has purchased from an
      issuer with a view to, or sells for an issuer in connection with,
      the distribution of any security, or participates or has a direct
      or indirect participation in any such undertaking, or
      participates or has a participation in the direct or indirect
      underwriting of any such undertaking; but such term shall not
      include a person whose interest is limited to a commission from
      an underwriter or dealer not in excess of the usual and customary
      distributor's or seller's commission. As used in this paragraph
      the term "issuer" shall include, in addition to an issuer, any
      person directly or indirectly controlling or controlled by the
      issuer, or any person under direct or indirect common control
      with the issuer. When the distribution of the securities in
      respect of which any person is an underwriter is completed such
      person shall cease to be an underwriter in respect of such
      securities or the issuer thereof.
        (41) "Value", with respect to assets of registered investment
      companies, except as provided in subsection (b) of section 80a-28
      of this title, means - 
          (A) as used in sections 80a-3, 80a-5, and 80a-12 of this
        title, (i) with respect to securities owned at the end of the
        last preceding fiscal quarter for which market quotations are
        readily available, the market value at the end of such quarter;
        (ii) with respect to other securities and assets owned at the
        end of the last preceding fiscal quarter, fair value at the end
        of such quarter, as determined in good faith by the board of
        directors; and (iii) with respect to securities and other
        assets acquired after the end of the last preceding fiscal
        quarter, the cost thereof; and
          (B) as used elsewhere in this subchapter, (i) with respect to
        securities for which market quotations are readily available,
        the market value of such securities; and (ii) with respect to
        other securities and assets, fair value as determined in good
        faith by the board of directors;

      in each case as of such time or times as determined pursuant to
      this subchapter, and the rules and regulations issued by the
      Commission hereunder. Notwithstanding the fact that market
      quotations for securities issued by controlled companies are
      available, the board of directors may in good faith determine the
      value of such securities: Provided, That the value so determined
      is not in excess of the higher of market value or asset value of
      such securities in the case of majority-owned subsidiaries, and
      is not in excess of market value in the case of other controlled
      companies.
        For purposes of the valuation of those assets of a registered
      diversified company which are not subject to the limitations
      provided for in section 80a-5(b)(1) of this title, the Commission
      may, by rules and regulations or orders, permit any security to
      be carried at cost, if it shall determine that such procedure is
      consistent with the general intent and purposes of this
      subchapter. For purposes of sections 80a-5 and 80a-12 of this
      title in lieu of values determined as provided in clause (A)
      above, the Commission shall by rules and regulations permit
      valuation of securities at cost or other basis in cases where it
      may be more convenient for such company to make its computations
      on such basis by reason of the necessity or desirability of
      complying with the provisions of any United States revenue laws
      or rules and regulations issued thereunder, or the laws or the
      rules and regulations issued thereunder of any State in which the
      securities of such company may be qualified for sale.
        The foregoing definition shall not derogate from the authority
      of the Commission with respect to the reports, information, and
      documents to be filed with the Commission by any registered
      company, or with respect to the accounting policies and
      principles to be followed by any such company, as provided in
      sections 80a-8, 80a-29, and 80a-30 of this title.
        (42) "Voting security" means any security presently entitling
      the owner or holder thereof to vote for the election of directors
      of a company. A specified percentage of the outstanding voting
      securities of a company means such amount of its outstanding
      voting securities as entitles the holder or holders thereof to
      cast said specified percentage of the aggregate votes which the
      holders of all the outstanding voting securities of such company
      are entitled to cast. The vote of a majority of the outstanding
      voting securities of a company means the vote, at the annual or a
      special meeting of the security holders of such company duly
      called, (A) of 67 per centum or more of the voting securities
      present at such meeting, if the holders of more than 50 per
      centum of the outstanding voting securities of such company are
      present or represented by proxy; or (B) of more than 50 per
      centum of the outstanding voting securities of such company,
      whichever is the less.
        (43) "Wholly-owned subsidiary" of a person means a company 95
      per centum or more of the outstanding voting securities of which
      are owned by such person, or by a company which, within the
      meaning of this paragraph, is a wholly-owned subsidiary of such
      person.
        (44) "Securities Act of 1933" [15 U.S.C. 77a et seq.],
      "Securities Exchange Act of 1934" [15 U.S.C. 78a et seq.], and
      "Trust Indenture Act of 1939" [15 U.S.C. 77aaa et seq.] mean
      those acts, respectively, as heretofore or hereafter amended.
        (45) "Savings and loan association" means a savings and loan
      association, building and loan association, cooperative bank,
      homestead association, or similar institution, which is
      supervised and examined by State or Federal authority having
      supervision over any such institution, and a receiver,
      conservator, or other liquidating agent of any such institution.
        (46) "Eligible portfolio company" means any issuer which - 
          (A) is organized under the laws of, and has its principal
        place of business in, any State or States;
          (B) is neither an investment company as defined in section
        80a-3 of this title (other than a small business investment
        company which is licensed by the Small Business Administration
        to operate under the Small Business Investment Act of 1958 [15
        U.S.C. 661 et seq.] and which is a wholly-owned subsidiary of
        the business development company) nor a company which would be
        an investment company except for the exclusion from the
        definition of investment company in section 80a-3(c) of this
        title; and
          (C) satisfies one of the following:
            (i) it does not have any class of securities with respect
          to which a member of a national securities exchange, broker,
          or dealer may extend or maintain credit to or for a customer
          pursuant to rules or regulations adopted by the Board of
          Governors of the Federal Reserve System under section 7 of
          the Securities Exchange Act of 1934 [15 U.S.C. 78g];
            (ii) it is controlled by a business development company,
          either alone or as part of a group acting together, and such
          business development company in fact exercises a controlling
          influence over the management or policies of such eligible
          portfolio company and, as a result of such control, has an
          affiliated person who is a director of such eligible
          portfolio company;
            (iii) it has total assets of not more than $4,000,000, and
          capital and surplus (shareholders' equity less retained
          earnings) of not less than $2,000,000, except that the
          Commission may adjust such amounts by rule, regulation, or
          order to reflect changes in 1 or more generally accepted
          indices or other indicators for small businesses; or
            (iv) it meets such other criteria as the Commission may, by
          rule, establish as consistent with the public interest, the
          protection of investors, and the purposes fairly intended by
          the policy and provisions of this subchapter.

        (47) "Making available significant managerial assistance" by a
      business development company means - 
          (A) any arrangement whereby a business development company,
        through its directors, officers, employees, or general
        partners, offers to provide, and, if accepted, does so provide,
        significant guidance and counsel concerning the management,
        operations, or business objectives and policies of a portfolio
        company;
          (B) the exercise by a business development company of a
        controlling influence over the management or policies of a
        portfolio company by the business development company acting
        individually or as part of a group acting together which
        controls such portfolio company; or
          (C) with respect to a small business investment company
        licensed by the Small Business Administration to operate under
        the Small Business Investment Act of 1958 [15 U.S.C. 661 et
        seq.], the making of loans to a portfolio company.

      For purposes of subparagraph (A), the requirement that a business
      development company make available significant managerial
      assistance shall be deemed to be satisfied with respect to any
      particular portfolio company where the business development
      company purchases securities of such portfolio company in
      conjunction with one or more other persons acting together, and
      at least one of the persons in the group makes available
      significant managerial assistance to such portfolio company,
      except that such requirement will not be deemed to be satisfied
      if the business development company, in all cases, makes
      available significant managerial assistance solely in the manner
      described in this sentence.
        (48) "Business development company" means any closed-end
      company which - 
          (A) is organized under the laws of, and has its principal
        place of business in, any State or States;
          (B) is operated for the purpose of making investments in
        securities described in paragraphs (1) through (3) of section
        80a-54(a) of this title, and makes available significant
        managerial assistance with respect to the issuers of such
        securities, provided that a business development company must
        make available significant managerial assistance only with
        respect to the companies which are treated by such business
        development company as satisfying the 70 per centum of the
        value of its total assets condition of section 80a-54 of this
        title; and provided further that a business development company
        need not make available significant managerial assistance with
        respect to any company described in paragraph (46)(C)(iii), or
        with respect to any other company that meets such criteria as
        the Commission may by rule, regulation, or order permit, as
        consistent with the public interest, the protection of
        investors, and the purposes of this subchapter; and
          (C) has elected pursuant to section 80a-53(a) of this title
        to be subject to the provisions of sections 80a-54 through 80a-
        64 of this title.

        (49) "Foreign securities authority" means any foreign
      government or any governmental body or regulatory organization
      empowered by a foreign government to administer or enforce its
      laws as they relate to securities matters.
        (50) "Foreign financial regulatory authority" means any (A)
      foreign securities authority, (B) other governmental body or
      foreign equivalent of a self-regulatory organization empowered by
      a foreign government to administer or enforce its laws relating
      to the regulation of fiduciaries, trusts, commercial lending,
      insurance, trading in contracts of sale of a commodity for future
      delivery, or other instruments traded on or subject to the rules
      of a contract market, board of trade or foreign equivalent, or
      other financial activities, or (C) membership organization a
      function of which is to regulate the participation of its members
      in activities listed above.
        (51)(A) "Qualified purchaser" means - 
          (i) any natural person (including any person who holds a
        joint, community property, or other similar shared ownership
        interest in an issuer that is excepted under section 80a-
        3(c)(7) of this title with that person's qualified purchaser
        spouse) who owns not less than $5,000,000 in investments, as
        defined by the Commission;
          (ii) any company that owns not less than $5,000,000 in
        investments and that is owned directly or indirectly by or for
        2 or more natural persons who are related as siblings or spouse
        (including former spouses), or direct lineal descendants by
        birth or adoption, spouses of such persons, the estates of such
        persons, or foundations, charitable organizations, or trusts
        established by or for the benefit of such persons;
          (iii) any trust that is not covered by clause (ii) and that
        was not formed for the specific purpose of acquiring the
        securities offered, as to which the trustee or other person
        authorized to make decisions with respect to the trust, and
        each settlor or other person who has contributed assets to the
        trust, is a person described in clause (i), (ii), or (iv); or
          (iv) any person, acting for its own account or the accounts
        of other qualified purchasers, who in the aggregate owns and
        invests on a discretionary basis, not less than $25,000,000 in
        investments.

        (B) The Commission may adopt such rules and regulations
      applicable to the persons and trusts specified in clauses (i)
      through (iv) of subparagraph (A) as it determines are necessary
      or appropriate in the public interest or for the protection of
      investors.
        (C) The term "qualified purchaser" does not include a company
      that, but for the exceptions provided for in paragraph (1) or (7)
      of section 80a-3(c) of this title, would be an investment company
      (hereafter in this paragraph referred to as an "excepted
      investment company"), unless all beneficial owners of its
      outstanding securities (other than short-term paper), determined
      in accordance with section 80a-3(c)(1)(A) of this title, that
      acquired such securities on or before April 30, 1996 (hereafter
      in this paragraph referred to as "pre-amendment beneficial
      owners"), and all pre-amendment beneficial owners of the
      outstanding securities (other than short-term paper) of any
      excepted investment company that, directly or indirectly, owns
      any outstanding securities of such excepted investment company,
      have consented to its treatment as a qualified purchaser.
      Unanimous consent of all trustees, directors, or general partners
      of a company or trust referred to in clause (ii) or (iii) of
      subparagraph (A) shall constitute consent for purposes of this
      subparagraph.
        (52) The terms "security future" and "narrow-based security
      index" have the same meanings as provided in section 3(a)(55) of
      the Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(55)].
        (53) The term "credit rating agency" has the same meaning as in
      section 3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c].
        (54) The terms "commodity pool", "commodity pool operator",
      "commodity trading advisor", "major swap participant", "swap",
      "swap dealer", and "swap execution facility" have the same
      meanings as in section 1a of title 7.
    (b) Applicability to government
      No provision in this subchapter shall apply to, or be deemed to
    include, the United States, a State, or any political subdivision
    of a State, or any agency, authority, or instrumentality of any one
    or more of the foregoing, or any corporation which is wholly owned
    directly or indirectly by any one or more of the foregoing, or any
    officer, agent, or employee of any of the foregoing acting as such
    in the course of his official duty, unless such provision makes
    specific reference thereto.
    (c) Consideration of promotion of efficiency, competition, and
      capital formation
      Whenever pursuant to this subchapter the Commission is engaged in
    rulemaking and is required to consider or determine whether an
    action is consistent with the public interest, the Commission shall
    also consider, in addition to the protection of investors, whether
    the action will promote efficiency, competition, and capital
    formation.