A:

That depends. It is possible for you to buy a mutual fund issued in a country other than the United States; however, the mutual fund still needs to be registered with the SEC. This is the reason why many investors are turned away by foreign mutual funds. Typically, the foreign fund companies will choose not to market to the U.S. because they are able to sell enough of their mutual fund within domestic markets.

However, there is one exception to this registration requirement. If the mutual fund you are trying to purchase is privately issued to less than 100 people in the U.S. or is only issued to sophisticated investors who are considered qualified or accredited investors, then the registration requirement is waived.

It is also important to note that this mandatory registration extends to brokerage firms. If a foreign firm does not wish to register as a broker with the SEC, then that firm cannot legally do business with U.S. residents or U.S. residents living abroad. Once again, brokerages may decide not to register simply for business reasons, as marketing to U.S. clients may not be lucrative enough for the foreign firm to register with the SEC.

RELATED FAQS

  1. Are so-called self-offering and self-management covered by "Financial Instruments ...

    Learn a little bit about the regulation of Japanese securities, particularly as it pertains to self-offering for investments ...
  2. What types of companies benefit from reporting results utilizing constant currencies ...

    Understand constant currency figures, and explore some of the reasons why a company is likely to benefit from reporting using ...
  3. What are the differences between B-shares and H-shares traded on Chinese stock exchanges?

    Learn about B shares and H shares of publicly listed companies in mainland China and Hong Kong stock exchanges, and the differences ...
  4. What happens when I want to sell my A-shares of a mutual fund?

    Find out what it costs to sell A-shares of a mutual fund and learn what factors influence the overall costs of investing ...
RELATED TERMS
  1. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
  2. Dividend

    A distribution of a portion of a company's earnings, decided ...
  3. Sharpe Ratio

    A ratio developed by Nobel laureate William F. Sharpe to measure ...
  4. Historic Pricing

    A method for calculating the value of an asset using the last ...
  5. Welfare Capitalism

    Definition of welfare capitalism.
  6. Foreign remittance

You May Also Like

Related Articles
  1. Mutual Funds & ETFs

    4 Ways You Can Invest In Gold Without ...

  2. Retirement

    Top Tips for Rebalancing 401(k) Assets

  3. Mutual Funds & ETFs

    How to Find the Best Bets in Muni Bonds

  4. Stock Analysis

    Is Smaller Better When Investing Overseas?

  5. Fundamental Analysis

    Should You Hire an Advisor or DIY Your ...

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!