Securities Lawyer's Deskbook
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Investment Company Act of 1940

Section 21 -- Loans by Management Companies

It shall be unlawful for any registered management company to lend money or property to any person, directly or indirectly, if--
  1. the investment policies of such registered company, as recited in its registration statement and reports filed under this title, do not permit such a loan; or

  2. such person controls or is under common control with such registered company; except that the provisions of this paragraph shall not apply to any loan from a registered company to a company which owns all of the outstanding securities of such registered company, except directors' qualifying shares.

Legislative History

Aug. 22, 1940, ch 686, Title I, § 21, 54 Stat. 822; Dec. 4, 1987, P.L. 100-181, Title VI, § 615, 101 Stat. 1262.

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