Securities Lawyer's Deskbook                          published by The University of Cincinnati College of Law

Section 13 -- Changes in Investment Policy

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1. No registered investment company shall, unless authorized by the vote of a majority of its outstanding voting securities--
   
   
   1. change its subclassification as defined in section 5(a)(1) and (2) of this title [15 USCS § 80a-5(a)(1), (2)] or its subclassification from a diversified to a non-diversified company;
      
      
   2. borrow money, issue senior securities, underwrite securities issued by other persons, purchase or sell real estate or commodities or make loans to other persons, except in each case in accordance with the recitals of policy contained in its registration statement in respect thereto;
      
      
   3. deviate from its policy in respect of concentration of investments in any particular industry or group of industries as recited in its registration statement, deviate from any investment policy which is changeable only if authorized by shareholder vote, or deviate from any policy recited in its registration statement pursuant to section 8(b)(3) [15 USCS § 80a-8(b)(3)];
      
      
   4. change the nature of its business so as to cease to be an investment company.
      
      
2. In the case of a common-law trust of the character described in section 16(c) [15 USCS § 80a-16(c)], either written approval by holders of a majority of the outstanding shares of beneficial interest or the vote of a majority of such outstanding shares cast in person or by proxy at a meeting called for the purpose shall for the purposes of subsection (a) be deemed the equivalent of the vote of a majority of the outstanding voting securities, and the provisions of paragraph (42) of section 2(a) [15 USCS § 80a-2(a)(42)] as to a majority shall be applicable to the vote cast as such a meeting.
   
   

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