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Investment Company Act of 1940

The Investment Company Act of 1940 was a key piece of legislation passed by Congress requiring regulation of investment companies by the Securities and Exchange Commission.

Expanded Definition

The law aims to minimize conflicts of interests by mandating transparency in the organization of trading and investing companies -- including mutual funds. It requires disclosure of mutual funds' financial condition and investment policies.

Click here for the law's full text. (Link provided by the SEC.)