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

Rule 3a-1 -- Certain Prima Facie Investment Companies

---

1. No more than 45 percent of the value (as defined in section 2(a)(41) of the Act) of such issuer's total assets (exclusive of Government securities and cash items) consists of, and no more than 45 percent of such issuer's net income after taxes (for the last four fiscal quarters combined) is derived from, securites other than:
   
   
   1. Government securities;
      
      
   2. Securities issued by employees' securities companies;
      
      
   3. Securities issued by majority-owned subsidiaries of the issuer (other than subsidiaries relying on the exclusion from the definition of investment company in section 3(b)(3) or section 3(c)(1) of the Act) which are not investment companies; and
      
      
   4. Securities issued by companies:
      
      
      1. Which are controlled primarily by such issuer;
         
         
      2. Through which such issuer engages in a business other than that of investing, reinvesting, owning, holding or trading in securities; and
         
         
      3. Which are not investment companies;
         
         
2. The issuer is not an investment company as defined in section 3(a)(1)(A) or 3(a)(1)(B) of the Act and is not a special situation investment company; and
   
   
3. The percentages described in paragraph (a) of this section are determined on an unconsolidated basis, except that the issuer shall consolidate its financial statements with the financial statements of any wholly-owned subsidiaries.

	Notice to Users: The Deskbook is made available with the understanding that the University of Cincinnati College of Law is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. See Terms and Conditions of Use.   © Copyright 1998-2008, University of Cincinnati, All Rights Reserved  Contact: joseph.hodnicki@uc.edu