Everything else Flashcards
With open-end investment companies, what sales charge is based on the NAV per share?
The Redemption Fee (not the POP)
How often must an investment company file reports with the SEC as required by the Investment Company Act of 1940?
Annually
who qualifies as a single person for a discount on mutual fund sales charges?
A husband and wife and all children under 21; corporations formed for a purpose other than obtaining a discount and employee benefit plans; directors, officers, partners, employees, and sales rep, its IA, or its principal UW.
Who has to approve a new 12b-1 charge on a mutual fund?
the distribution plan must be in writing and approved by a majority of the outstanding shares, as well as a majority of hte board of directs, including a majority of the directors classified as outside directors.
How are REITs taxed?
generally, dividends are taxed as ordinary income and capital gains distributions are treated as long-term capital gains.
How can an mutual fund change its investment policy?
With the approval/vote of the majority of oustanding shares.
What is the 3(c)(1) exemption for private equity funds?
A 3(c)(1) exemption limits the number of investors to 100.
What is a Section 3(c)(7) exemption?
A Section 3(c)(7) exemption has no limit to the number of investors but they all must be qualified (a much higher standard than accredited).
What is a private fund?
A private fund, like a hedge fund or a private equity fund, isexluded from the defintion of an investment company under the Investment Company Act of 1940. So they don’t register with the SEC. Although they’re generally sold as private placements under Reg D, there are many private placements that are not private funds
When investing in a unit investment trust, what do you purchase?
Trust units! Not bonds, shares, or participation interests
Who issues hedge funds?
Almost all hedge funds are issued as limited partnerships with the investment advisor (portfolio manager) having an investment in the fund.
