15 U.S.C. § 80a-5 : US Code - Section 80A-5: Subclassification of management companies

    (a) Open-end and closed-end companies
      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) Diversified and non-diversified companies
      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) Loss of status as diversified company
      A registered diversified company which at the time of its
    qualification as such meets the requirements of paragraph (1) of
    subsection (b) of this section 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.