HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.
![handle is hein.congrecreports/crptxaaab0001 and id is 1 raw text is: AUTHENTICATEO
U.S. GOVERNMENT
INFORMATION
Gp
115TH CONGRESS REPORT
1st Session HOUSE OF REPRESENTATIVES 115-103
U.S. TERRITORIES INVESTOR PROTECTION ACT OF 2017
MAY 1, 2017.-Committed to the Committee of the Whole House on the State of the
Union and ordered to be printed
Mr. HENSARLING, from the Committee on Financial Services,
submitted the following
REPORT
[To accompany H.R. 1366]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 1366) to amend the Investment Company Act of 1940 to
terminate an exemption for companies located in Puerto Rico, the
Virgin Islands, and any other possession of the United States, hav-
ing considered the same, report favorably thereon without amend-
ment and recommend that the bill do pass.
PURPOSE AND SUMMARY
Introduced by Representative Nydia Velasquez on March 6, 2017,
H.R. 1366, the U.S. Territories Investor Protection Act of 2017,
amends Section 6(a)(1) of the Investment Company Act of 1940 to
terminate an exemption for investment companies located in Puer-
to Rico, the Virgin Islands, and any other possession of the United
States. Under current law, such companies are exempt from reg-
istration under the Act provided that their shares are sold solely
to the residents of the territory or possession in which they are lo-
cated. The bill provides an automatic three-year safe harbor for in-
vestment companies that currently enjoy this exemption. Addition-
ally, the bill authorizes the SEC to further delay the effective date
(or end of the exemption) for a maximum of three years following
the initial three year safe harbor.
BACKGROUND AND NEED FOR LEGISLATION
When Congress enacted the Investment Company Act of 1940, it
was prohibitively expensive and logistically difficult for SEC per-
sonnel to travel and inspect investment companies located in cer-
69-006](ViewImageLocal?handle=hein.congrecreports/crptxaaab0001&div=1&collection=&method=preview&ext=.png&size=3)