Investment Company Act

The Investment Company Act of 1940 is a U.S. law that regulates investment companies, which pool money from many investors to invest in securities. The Act aims to protect investors by requiring these companies to disclose important information, such as their financial condition and investment strategies, and to adhere to specific operational standards. It also limits certain activities to minimize risks and conflicts of interest. Essentially, the Act ensures transparency and accountability in the investment industry, helping investors make informed decisions about where to put their money.