Investment Company Act of 1940

The Investment Company Act of 1940 is a U.S. law that regulates investment companies, which pool money from investors to buy securities. Its main purpose is to protect investors by ensuring transparency and fair practices. The Act requires these companies to register with the Securities and Exchange Commission (SEC), provide detailed information about their financial health, and disclose their investment strategies and risks. By promoting accountability and informed investing, the Act helps prevent fraud and mismanagement in the investment industry.