(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.