--- kind: "section" citation: "15 U.S.C. § 80a–20" title: "15" title_heading: "Commerce and Trade" number: "80a–20" heading: "Proxies; voting trusts; circular ownership" release: "119-102" date: "2026-07-12" url: "https://uscodex.org/usc/15/80a-20" units: - "Chapter 2D — Investment Companies and Advisers" - "Subchapter I — Investment Companies" --- # §80a–20. Proxies; voting trusts; circular ownership - (a) **Prohibition on use of means of interstate commerce for solicitation of proxies—** It shall be unlawful for any [person](/usc/15/80a–2.md?p=a-28), by use of the mails or any [means or instrumentality of interstate commerce](/usc/15/80a–2.md?p=a-25) or otherwise, to solicit or to permit the use of his name to solicit any proxy or consent or authorization in respect of any [security](/usc/15/80a–2.md?p=a-36) of which a registered investment [company](/usc/15/80a–2.md?p=a-8) is the [issuer](/usc/15/80a–2.md?p=a-22) in contravention of such rules and regulations as the [Commission](/usc/15/80a–2.md?p=a-7) may prescribe as necessary or appropriate in the public interest or for the protection of investors. - (b) **Prohibition on use of means of interstate commerce for sale of voting-trust certificates—** It shall be unlawful for any registered investment [company](/usc/15/80a–2.md?p=a-8) or affiliated [person](/usc/15/80a–2.md?p=a-28) thereof, any [issuer](/usc/15/80a–2.md?p=a-22) of a voting-trust certificate relating to any [security](/usc/15/80a–2.md?p=a-36) of a registered investment [company](/usc/15/80a–2.md?p=a-8), or any underwriter of such a certificate, by use of the mails or any [means or instrumentality of interstate commerce](/usc/15/80a–2.md?p=a-25), or otherwise, to offer for sale, sell, or deliver after sale, in connection with a public offering, any such voting-trust certificate. - (c) **Prohibition on purchase of securities knowingly resulting in cross-ownership or circular ownership—** No registered investment [company](/usc/15/80a–2.md?p=a-8) shall purchase any [voting security](/usc/15/80a–2.md?p=a-42) if, to the knowledge of such registered [company](/usc/15/80a–2.md?p=a-8), cross-ownership or circular ownership exists, or after such acquisition will exist, between such registered [company](/usc/15/80a–2.md?p=a-8) and the [issuer](/usc/15/80a–2.md?p=a-22) of such [security](/usc/15/80a–2.md?p=a-36). Cross-ownership shall be deemed to exist between two [companies](/usc/15/80a–2.md?p=a-8) when each of such [companies](/usc/15/80a–2.md?p=a-8) beneficially owns more than 3 per centum of the outstanding [voting securities](/usc/15/80a–2.md?p=a-42) of the other [company](/usc/15/80a–2.md?p=a-8). Circular ownership shall be deemed to exist between two [companies](/usc/15/80a–2.md?p=a-8) if such [companies](/usc/15/80a–2.md?p=a-8) are included within a group of three or more [companies](/usc/15/80a–2.md?p=a-8), each of which— - (1) beneficially owns more than 3 per centum of the outstanding [voting securities](/usc/15/80a–2.md?p=a-42) of one or more other [companies](/usc/15/80a–2.md?p=a-8) of the group; and - (2) has more than 3 per centum of its own outstanding [voting securities](/usc/15/80a–2.md?p=a-42) beneficially owned by another [company](/usc/15/80a–2.md?p=a-8), or by each of two or more other [companies](/usc/15/80a–2.md?p=a-8), of the group. - (d) **Duty to eliminate existing cross-ownership or circular ownership—** If cross-ownership or circular ownership between a registered investment [company](/usc/15/80a–2.md?p=a-8) and any other [company](/usc/15/80a–2.md?p=a-8) or [companies](/usc/15/80a–2.md?p=a-8) comes into existence upon the purchase by a registered investment [company](/usc/15/80a–2.md?p=a-8) of the [securities](/usc/15/80a–2.md?p=a-36) of another [company](/usc/15/80a–2.md?p=a-8), it shall be the duty of such registered [company](/usc/15/80a–2.md?p=a-8), within one year after it first knows of the existence of such cross-ownership or circular ownership, to eliminate the same. ## Source credit (Aug. 22, 1940, ch. 686, title I, § 20, 54 Stat. 822; Pub. L. 100–181, title VI, § 614, Dec. 4, 1987, 101 Stat. 1262.) ## Notes ### Editorial Notes ### Amendments 1987—Subsec. (b). Pub. L. 100–181, § 614(1), struck out at end “The prohibitions of this subsection shall not apply to a class of voting-trust certificates, if any certificate of such class was made the subject of a public offering by the issuer or by or through an underwriter prior to March 15, 1940.” Subsec. (d). Pub. L. 100–181, § 614(2), (3), struck out first sentence “If on the effective date of this subchapter cross-ownership or circular ownership exists between a registered investment company and any other company or companies, it shall be the duty of such registered company, within five years after such effective date, to eliminate such cross-ownership or circular ownership.” and “at any time after the effective date of this subchapter” after “If” in second sentence. ### 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.