DEFINITION of 'Fund Company'

A commonly used term to describe an investment company, which is a corporation or trust engaged in the business of investing the pooled capital of investors in financial securities. This is most often done either through a closed-end fund or an open-end fund (conventional mutual fund). In the U.S., most fund companies are registered and regulated by the Securities and Exchange Commission under the Investment Company Act of 1940.

Also known as a "fund sponsor" and an "open-end fund company".

BREAKING DOWN 'Fund Company'

Fund companies are business entities, both privately and publicly owned, that manage, sell and market closed-end and open-end funds to the public. They typically offer a variety of funds and investment services to investors, which include portfolio management, record keeping, custodial, legal, accounting and tax management services.

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