SEC Guidance on Holding Companies and the Application of Rule 3a-2 under the Investment Company Act

An operating company may find that, upon the occurrence of an extraordinary event, it meets the definition of an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), even though it intends to remain in such status only temporarily. Absent an exclusion or exemption from this definition, the operating company may be required to register under the 1940 Act and be subject to the 1940 Act’s requirements. Rule 3a-2 under the 1940 Act, however, provides a one-year safe harbor for such transient investment companies if certain conditions are satisfied. To read the full article from the SEC, click here.

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