A portion of the Investment Company Act of 1940 that permits the exclusion of investment companies from standard registration requirements with the Securities and Exchange Commission (SEC) if all U.S. investors are considered to be "qualified purchasers" or "accredited investors."


This particular section is one of the policies used frequently by hedge fund companies to avoid certain SEC requirements.

  1. Hedge Fund

    An aggressively managed portfolio of investments that uses leveraged, ...
  2. Investment Company Act Of 1940

    Created in 1940 through an act of Congress, this piece of legislation ...
  3. 3C1

    A portion of the Investment Company Act of 1940 that permits ...
  4. Accredited Investor

    A term used by the Securities and Exchange Commission (SEC) under ...
  5. Hedge

    Making an investment to reduce the risk of adverse price movements ...
  6. Novation

    1.The act of replacing one participating member of a contract ...
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  1. Can hedge funds trade penny stocks?

    Hedge funds can trade penny stocks. In fact, hedge funds can trade in just about any type of security, including medium- ... Read Full Answer >>
  2. Are hedge funds regulated by FINRA?

    Alternative investment vehicles such as hedge funds offer investors a wider range of possibilities due to certain exceptions ... Read Full Answer >>
  3. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  4. Are UTMA accounts escheatable?

    Like most financial assets held by institutions such as banks and investment firms, UTMA accounts can be escheated by state ... Read Full Answer >>
  5. Can hedge fund returns be replicated?

    You can replicate hedge fund returns to a degree but not perfectly. Most replication strategies underperform hedge funds ... Read Full Answer >>
  6. Can foreign investors invest in US hedge funds?

    U.S. hedge funds are open to accredited investors. When they distribute profits to investors, those proceeds are taxed at ... Read Full Answer >>

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