---
kind: "section"
citation: "15 U.S.C. § 80a–10"
title: "15"
title_heading: "Commerce and Trade"
number: "80a–10"
heading: "Affiliations or interest of directors, officers, and employees"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/80a-10"
units:
  - "Chapter 2D — Investment Companies and Advisers"
  - "Subchapter I — Investment Companies"
---

# §80a–10. Affiliations or interest of directors, officers, and employees

- (a) **Interested persons of company who may serve on board of directors—** No registered investment [company](/usc/15/80a–2.md?p=a-8) shall have a board of [directors](/usc/15/80a–2.md?p=a-12) more than 60 per centum of the members of which are [persons](/usc/15/80a–2.md?p=a-28) who are interested [persons](/usc/15/80a–2.md?p=a-28) of such registered [company](/usc/15/80a–2.md?p=a-8).
- (b) **Employment and use of directors, officers, etc., as regular broker, principal underwriter, or investment banker—** No registered investment [company](/usc/15/80a–2.md?p=a-8) shall—
  - (1) employ as regular [broker](/usc/15/80a–2.md?p=a-6) any [director](/usc/15/80a–2.md?p=a-12), officer, or employee of such registered [company](/usc/15/80a–2.md?p=a-8), or any [person](/usc/15/80a–2.md?p=a-28) of which any such [director](/usc/15/80a–2.md?p=a-12), officer, or employee is an affiliated [person](/usc/15/80a–2.md?p=a-28), unless a majority of the board of [directors](/usc/15/80a–2.md?p=a-12) of such registered [company](/usc/15/80a–2.md?p=a-8) shall be [persons](/usc/15/80a–2.md?p=a-28) who are not such [brokers](/usc/15/80a–2.md?p=a-6) or affiliated [persons](/usc/15/80a–2.md?p=a-28) of any of such [brokers](/usc/15/80a–2.md?p=a-6);
  - (2) use as a principal underwriter of [securities](/usc/15/80a–2.md?p=a-36) issued by it any [director](/usc/15/80a–2.md?p=a-12), officer, or employee of such registered [company](/usc/15/80a–2.md?p=a-8) or any [person](/usc/15/80a–2.md?p=a-28) of which any such [director](/usc/15/80a–2.md?p=a-12), officer, or employee is an interested [person](/usc/15/80a–2.md?p=a-28), unless a majority of the board of [directors](/usc/15/80a–2.md?p=a-12) of such registered [company](/usc/15/80a–2.md?p=a-8) shall be [persons](/usc/15/80a–2.md?p=a-28) who are not such principal underwriters or interested [persons](/usc/15/80a–2.md?p=a-28) of any of such principal underwriters; or
  - (3) have as [director](/usc/15/80a–2.md?p=a-12), officer, or employee any [investment banker](/usc/15/80a–2.md?p=a-21), or any affiliated [person](/usc/15/80a–2.md?p=a-28) of an [investment banker](/usc/15/80a–2.md?p=a-21), unless a majority of the board of [directors](/usc/15/80a–2.md?p=a-12) of such registered [company](/usc/15/80a–2.md?p=a-8) shall be [persons](/usc/15/80a–2.md?p=a-28) who are not [investment bankers](/usc/15/80a–2.md?p=a-21) or affiliated [persons](/usc/15/80a–2.md?p=a-28) of any [investment banker](/usc/15/80a–2.md?p=a-21). For the purposes of this paragraph, a [person](/usc/15/80a–2.md?p=a-28) shall not be deemed an affiliated [person](/usc/15/80a–2.md?p=a-28) of an [investment banker](/usc/15/80a–2.md?p=a-21) solely by reason of the fact that he is an affiliated [person](/usc/15/80a–2.md?p=a-28) of a [company](/usc/15/80a–2.md?p=a-8) of the character described in [section 80a–12(d)(3)(A)](/usc/15/80a–12.md) and (B) of this title.
- (c) **Officers, directors, or employees of one bank or bank holding company as majority of board of directors of company; exceptions—** No registered investment [company](/usc/15/80a–2.md?p=a-8) shall have a majority of its board of [directors](/usc/15/80a–2.md?p=a-12) consisting of [persons](/usc/15/80a–2.md?p=a-28) who are officers, [directors](/usc/15/80a–2.md?p=a-12), or employees of any one [bank](/usc/15/80a–2.md?p=a-5) (together with its affiliates and subsidiaries) or any one [bank](/usc/15/80a–2.md?p=a-5) holding [company](/usc/15/80a–2.md?p=a-8) (together with its affiliates and subsidiaries) (as such terms are defined in [section 1841 of title 12](/usc/12/1841.md)) or any one savings and loan holding [company](/usc/15/80a–2.md?p=a-8), together with its affiliates and subsidiaries (as such terms are defined in [section 1467a of title 12](/usc/12/1467a.md)),,[^1] except that, if on March 15, 1940, any registered investment [company](/usc/15/80a–2.md?p=a-8) had a majority of its [directors](/usc/15/80a–2.md?p=a-12) consisting of [persons](/usc/15/80a–2.md?p=a-28) who are [directors](/usc/15/80a–2.md?p=a-12), officers, or employees of any one [bank](/usc/15/80a–2.md?p=a-5), such [company](/usc/15/80a–2.md?p=a-8) may continue to have the same percentage of its board of [directors](/usc/15/80a–2.md?p=a-12) consisting of [persons](/usc/15/80a–2.md?p=a-28) who are [directors](/usc/15/80a–2.md?p=a-12), officers, or employees of such [bank](/usc/15/80a–2.md?p=a-5).
- (d) **Exception to limitation of number of interested persons who may serve on board of directors—** Notwithstanding subsections [(a)](#a) and [(b)(2)](#b-2) of this section, a registered investment [company](/usc/15/80a–2.md?p=a-8) may have a board of [directors](/usc/15/80a–2.md?p=a-12) all the members of which, except one, are interested [persons](/usc/15/80a–2.md?p=a-28) of the [investment adviser](/usc/15/80b–2.md?p=a-11) of such [company](/usc/15/80a–2.md?p=a-8), or are officers or employees of such [company](/usc/15/80a–2.md?p=a-8), if—
  - (1) such investment [company](/usc/15/80a–2.md?p=a-8) is an open-end [company](/usc/15/80a–2.md?p=a-8);
  - (2) such [investment adviser](/usc/15/80b–2.md?p=a-11) is registered under subchapter II of this chapter and is engaged principally in the business of rendering [investment supervisory services](/usc/15/80b–2.md?p=a-13) as defined in subchapter II;
  - (3) no [sales load](/usc/15/80a–2.md?p=a-35) is charged on [securities](/usc/15/80a–2.md?p=a-36) issued by such investment [company](/usc/15/80a–2.md?p=a-8);
  - (4) any premium over net asset value charged by such [company](/usc/15/80a–2.md?p=a-8) upon the issuance of any such [security](/usc/15/80a–2.md?p=a-36), plus any discount from net asset value charged on redemption thereof, shall not in the aggregate exceed 2 per centum;
  - (5) no sales or promotion expenses are incurred by such registered [company](/usc/15/80a–2.md?p=a-8); but expenses incurred in complying with laws regulating the issue or sale of [securities](/usc/15/80a–2.md?p=a-36) shall not be deemed sales or promotion expenses;
  - (6) such [investment adviser](/usc/15/80b–2.md?p=a-11) is the only [investment adviser](/usc/15/80b–2.md?p=a-11) to such investment [company](/usc/15/80a–2.md?p=a-8), and such [investment adviser](/usc/15/80b–2.md?p=a-11) does not receive a management fee exceeding 1 per centum per annum of the value of such [company](/usc/15/80a–2.md?p=a-8)’s net assets averaged over the year or taken as of a definite date or dates within the year;
  - (7) all executive salaries and executive expenses and office rent of such investment [company](/usc/15/80a–2.md?p=a-8) are paid by such [investment adviser](/usc/15/80b–2.md?p=a-11); and
  - (8) such investment [company](/usc/15/80a–2.md?p=a-8) has only one class of [securities](/usc/15/80a–2.md?p=a-36) outstanding, each unit of which has equal voting rights with every other unit.
- (e) **Death, disqualification, or resignation of directors as suspension of limitation provisions—** If by reason of the death, disqualification, or bona fide resignation of any [director](/usc/15/80a–2.md?p=a-12) or [directors](/usc/15/80a–2.md?p=a-12), the requirements of the foregoing provisions of this section or of [section 80a–15(f)(1) of this title](/usc/15/80a–15.md?p=f-1) in respect of [directors](/usc/15/80a–2.md?p=a-12) shall not be met by a registered investment [company](/usc/15/80a–2.md?p=a-8), the operation of such provision shall be suspended as to such registered [company](/usc/15/80a–2.md?p=a-8)—
  - (1) for a period of thirty days if the vacancy or vacancies may be filled by action of the board of [directors](/usc/15/80a–2.md?p=a-12);
  - (2) for a period of sixty days if a vote of stockholders is required to fill the vacancy or vacancies; or
  - (3) for such longer period as the [Commission](/usc/15/80a–2.md?p=a-7) may prescribe, by rules and regulations upon its own motion or by order upon application, as not inconsistent with the protection of investors.
- (f) **Officer, director, etc., of company acting as principal underwriter of security acquired by company—** No registered investment [company](/usc/15/80a–2.md?p=a-8) shall knowingly purchase or otherwise acquire, during the existence of any underwriting or selling syndicate, any [security](/usc/15/80a–2.md?p=a-36) (except a [security](/usc/15/80a–2.md?p=a-36) of which such [company](/usc/15/80a–2.md?p=a-8) is the [issuer](/usc/15/80a–2.md?p=a-22)) a principal underwriter of which is an officer, [director](/usc/15/80a–2.md?p=a-12), member of an [advisory board](/usc/15/80a–2.md?p=a-1), [investment adviser](/usc/15/80b–2.md?p=a-11), or employee of such registered [company](/usc/15/80a–2.md?p=a-8), or is a [person](/usc/15/80a–2.md?p=a-28) (other than a [company](/usc/15/80a–2.md?p=a-8) of the character described in [section 80a–12(d)(3)(A)](/usc/15/80a–12.md) and (B) of this title) of which any such officer, [director](/usc/15/80a–2.md?p=a-12), member of an [advisory board](/usc/15/80a–2.md?p=a-1), [investment adviser](/usc/15/80b–2.md?p=a-11), or employee is an affiliated [person](/usc/15/80a–2.md?p=a-28), unless in acquiring such [security](/usc/15/80a–2.md?p=a-36) such registered [company](/usc/15/80a–2.md?p=a-8) is itself acting as a principal underwriter for the [issuer](/usc/15/80a–2.md?p=a-22). The [Commission](/usc/15/80a–2.md?p=a-7), by rules and regulations upon its own motion or by order upon application, may conditionally or unconditionally exempt any transaction or classes of transactions from any of the provisions of this subsection, if and to the extent that such exemption is consistent with the protection of investors.
- (g) **Advisory boards; restrictions on membership—** In the case of a registered investment [company](/usc/15/80a–2.md?p=a-8) which has an [advisory board](/usc/15/80a–2.md?p=a-1), such board, as a distinct entity, shall be subject to the same restrictions as to its membership as are imposed upon a board of [directors](/usc/15/80a–2.md?p=a-12) by this section.
- (h) **Application of section to unincorporated registered management companies—** In the case of a registered management [company](/usc/15/80a–2.md?p=a-8) which is an unincorporated [company](/usc/15/80a–2.md?p=a-8) not having a board of [directors](/usc/15/80a–2.md?p=a-12), the provisions of this section shall apply as follows:
  - (1) the provisions of [subsection (a)](#a), as modified by [subsection (e)](#e), shall apply to the board of [directors](/usc/15/80a–2.md?p=a-12) of the depositor of such [company](/usc/15/80a–2.md?p=a-8);
  - (2) the provisions of subsections [(b)](#b) and [(c)](#c), as modified by [subsection (e)](#e), shall apply to the board of [directors](/usc/15/80a–2.md?p=a-12) of the depositor and of every [investment adviser](/usc/15/80b–2.md?p=a-11) of such [company](/usc/15/80a–2.md?p=a-8); and
  - (3) the provisions of [subsection (f)](#f) shall apply to purchases and other acquisitions for the account of such [company](/usc/15/80a–2.md?p=a-8) of [securities](/usc/15/80a–2.md?p=a-36) a principal underwriter of which is the depositor or an [investment adviser](/usc/15/80b–2.md?p=a-11) of such [company](/usc/15/80a–2.md?p=a-8), or an affiliated [person](/usc/15/80a–2.md?p=a-28) of such depositor or [investment adviser](/usc/15/80b–2.md?p=a-11).

## Footnotes

[^1]: So in original.

## Source credit

(Aug. 22, 1940, ch. 686, title I, § 10, 54 Stat. 806; Pub. L. 91–547, § 5, Dec. 14, 1970, 84 Stat. 1416; Pub. L. 94–29, § 28(5), June 4, 1975, 89 Stat. 165; Pub. L. 106–102, title II, § 213(c), Nov. 12, 1999, 113 Stat. 1398; Pub. L. 109–351, title IV, § 401(c), Oct. 13, 2006, 120 Stat. 1973.)

## Notes

### Editorial Notes

### Amendments

2006—Subsec. (c). Pub. L. 109–351 inserted “or any one savings and loan holding company, together with its affiliates and subsidiaries (as such terms are defined in section 1467a of title 12),” after “1841 of title 12)”.

1999—Subsec. (c). Pub. L. 106–102 substituted “bank (together with its affiliates and subsidiaries) or any one bank holding company (together with its affiliates and subsidiaries) (as such terms are defined in section 1841 of title 12), except” for “bank, except”.

1975—Subsec. (e). Pub. L. 94–29 inserted reference to provisions of section 80a–15(f)(1) of this title.

1970—Subsec. (a). Pub. L. 91–547, § 5(a), struck out introductory text “After one year from the effective date of this subchapter” and substituted “interested persons of such registered company” for “investment advisers of, affiliated persons of an investment adviser of, or officers or employees of, such registered company”.

Subsec. (b). Pub. L. 91–547, § 5(b)(1), struck out introductory text “After one year from the effective date of this subchapter,” and substituted “No” for “no”.

Subsec. (b)(2). Pub. L. 91–547, § 5(b)(2), substituted “interested” for “affiliated” in two places.

Subsec. (c). Pub. L. 91–547, § 5(c), struck out introductory text “After the effective date of this subchapter”, substituted “No”, “, except that”, “had a majority”, and “such company” for “no”, “: Provided, That”, “shall have had a majority”, and “such company”, respectively, and inserted reference to employees where first appearing.

Subsec. (d). Pub. L. 91–547, § 5(d), reenacted provisions except for substitution of “interested persons” for “affiliated persons” in introductory text, deletion of “such investment adviser” before “is engaged” in item (2), and substitution of “class of securities” for “class of stock” and “unit” for “share” in two places in item (8).

### Statutory Notes and Related Subsidiaries

### Effective Date of 1999 Amendment

Amendment by Pub. L. 106–102 effective 18 months after Nov. 12, 1999, see section 225 of Pub. L. 106–102, set out as a note under section 77c of this title.

### Effective Date of 1975 Amendment

Amendment by Pub. L. 94–29 effective June 4, 1975, see section 31(a) of Pub. L. 94–29, set out as a note under section 78b of this title.

### Effective Date of 1970 Amendment

For effective date of amendment by Pub. L. 91–547, see section 30 (introductory text and pars. (1) and (2)) of Pub. L. 91–547, set out as a note under section 80a–52 of this title.

### Executive Documents

### Transfer of Functions

For transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.