What is a '40 Act Fund?

A ’40 Act fund is a pooled investment vehicle offered by a registered investment company as defined in the 1940 Investment Companies Act (commonly referred to in the United States as the ’40 Act or, in some instances, the Investment Company Act (ICA). Such pooled investment vehicles fall into two broad categorizations: open-end and closed-end.

What are the '40 Act requirements?

The additional requirements dictated by the ’40 Act apply to the governance of the fund and focus on the activities of the board and its oversight of the compliance function of the investment adviser, the fund sponsor, the fund administrator and the transfer agent.

What is a '40 Act investment company?

Specifically, we define ’40 Act as an Investment Company registered under the 1940 Act that is a privately placed (e.g., non-listed) closed-end tender-offer fund that has elected to be taxed as a Regulated Investment Company. Additional definitions can be found in the glossary at the end of this primer.