---
kind: "section"
citation: "15 U.S.C. § 80a–26"
title: "15"
title_heading: "Commerce and Trade"
number: "80a–26"
heading: "Unit investment trusts"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/80a-26"
units:
  - "Chapter 2D — Investment Companies and Advisers"
  - "Subchapter I — Investment Companies"
---

# §80a–26. Unit investment trusts

- (a) **Custody and sale of securities—** No principal underwriter for or depositor of a registered unit investment trust shall sell, except by surrender to the trustee for redemption, any [security](/usc/15/80a–2.md?p=a-36) of which such trust is the [issuer](/usc/15/80a–2.md?p=a-22) (other than [short-term paper](/usc/15/80a–2.md?p=a-38)), unless the trust indenture, [agreement](/usc/15/7a.md?p=2) of custodianship, or other instrument pursuant to which such [security](/usc/15/80a–2.md?p=a-36) is issued—
  - (1) designates one or more trustees or custodians, each of which is a [bank](/usc/15/80a–2.md?p=a-5), and provides that each such trustee or custodian shall have at all times an aggregate capital, surplus, and undivided profits of a specified minimum amount, which shall not be less than $500,000 (but may also provide, if such trustee or custodian publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, that for the purposes of this paragraph the aggregate capital, surplus, and undivided profits of such trustee or custodian shall be deemed to be its aggregate capital, surplus, and undivided profits as set forth in its most recent report of condition so published);
  - (2) provides, in substance, (A) that during the life of the trust the trustee or custodian, if not otherwise remunerated, may charge against and collect from the income of the trust, and from the corpus thereof if no income is available, such fees for its services and such reimbursement for its expenses as are provided for in such instrument; (B) that no such charge or collection shall be made except for services theretofore performed or expenses theretofore incurred; (C) that no payment to the depositor of or a principal underwriter for such trust, or to any affiliated [person](/usc/15/80a–2.md?p=a-28) or agent of such depositor or underwriter, shall be allowed the trustee or custodian as an expense (except that provision may be made for the payment to any such [person](/usc/15/80a–2.md?p=a-28) of a fee, not exceeding such reasonable amount as the [Commission](/usc/15/80a–2.md?p=a-7) may prescribe as compensation for performing bookkeeping and other administrative services, of a character normally performed by the trustee or custodian itself); and (D) that the trustee or custodian shall have possession of all [securities](/usc/15/80a–2.md?p=a-36) and other property in which the funds of the trust are invested, all funds held for such investment, all equalization, redemption, and other special funds of the trust, and all income upon, accretions to, and proceeds of such property and funds, and shall segregate and hold the same in trust (subject only to the charges and collections allowed under clauses (A), (B), and (C) of this paragraph) until distribution thereof to the [security](/usc/15/80a–2.md?p=a-36) holders of the trust;
  - (3) provides, in substance, that the trustee or custodian shall not resign until either (A) the trust has been completely liquidated and the proceeds of the liquidation distributed to the [security](/usc/15/80a–2.md?p=a-36) holders of the trust, or (B) a successor trustee or custodian, having the qualifications prescribed in paragraph (1) of this subsection, has been designated and has accepted such trusteeship or custodianship; and
  - (4) provides, in substance, (A) that a record will be kept by the depositor or an agent of the depositor of the name and address of, and the shares issued by the trust and held by, every holder of any [security](/usc/15/80a–2.md?p=a-36) issued pursuant to such instrument, insofar as such information is known to the depositor or agent; and (B) that whenever a [security](/usc/15/80a–2.md?p=a-36) is deposited with the trustee in substitution for any [security](/usc/15/80a–2.md?p=a-36) in which such [security](/usc/15/80a–2.md?p=a-36) holder has an undivided interest, the depositor or the agent of the depositor will, within five days after such substitution, either deliver or mail to such [security](/usc/15/80a–2.md?p=a-36) holder a notice of substitution, including an identification of the [securities](/usc/15/80a–2.md?p=a-36) eliminated and the [securities](/usc/15/80a–2.md?p=a-36) substituted, and a specification of the shares of such [security](/usc/15/80a–2.md?p=a-36) holder affected by the substitution.
- (b) **Bank or affiliated person of bank as trustee or custodian—** The [Commission](/usc/15/80a–2.md?p=a-7) may, after consultation with and taking into consideration the views of the Federal banking agencies (as defined in [section 1813 of title 12](/usc/12/1813.md)), adopt rules and regulations, and issue orders, consistent with the protection of investors, prescribing the conditions under which a [bank](/usc/15/80a–2.md?p=a-5), or an affiliated [person](/usc/15/80a–2.md?p=a-28) of a [bank](/usc/15/80a–2.md?p=a-5), either of which is an affiliated [person](/usc/15/80a–2.md?p=a-28) of a principal underwriter for, or depositor of, a registered unit investment trust, may serve as trustee or custodian under [subsection (a)(1)](#a-1).
- (c) **Substitution of securities—** It shall be unlawful for any depositor or trustee of a registered unit investment trust holding the [security](/usc/15/80a–2.md?p=a-36) of a single [issuer](/usc/15/80a–2.md?p=a-22) to substitute another [security](/usc/15/80a–2.md?p=a-36) for such [security](/usc/15/80a–2.md?p=a-36) unless the [Commission](/usc/15/80a–2.md?p=a-7) shall have approved such substitution. The [Commission](/usc/15/80a–2.md?p=a-7) shall issue an order approving such substitution if the evidence establishes that it is consistent with the protection of investors and the purposes fairly intended by the policy and provisions of this subchapter.
- (d) **Binding contract or agreement embodying applicable provisions deemed to qualify non-complying instrument by which securities were issued—** In the event that a trust indenture, [agreement](/usc/15/7a.md?p=2) of custodianship, or other instrument pursuant to which [securities](/usc/15/80a–2.md?p=a-36) of a registered unit investment trust are issued does not comply with the requirements of [subsection (a)](#a), such instrument will be deemed to meet such requirements if a written contract or [agreement](/usc/15/7a.md?p=2) binding on the parties and embodying such requirements has been executed by the depositor on the one part and the trustee or custodian on the other part, and three copies of such contract or [agreement](/usc/15/7a.md?p=2) have been filed with the [Commission](/usc/15/80a–2.md?p=a-7).
- (e) **Liquidation of unit investment trust—** Whenever the [Commission](/usc/15/80a–2.md?p=a-7) has reason to believe that a unit investment trust is inactive and that its liquidation is in the interest of the [security](/usc/15/80a–2.md?p=a-36) holders of such trust, the [Commission](/usc/15/80a–2.md?p=a-7) may file a complaint seeking the liquidation of such trust in the district court of the United States in any district wherein any trustee of such trust resides or has its principal place of business. A copy of such complaint shall be served on every trustee of such trust, and notice of the proceeding shall be given such other interested [persons](/usc/15/80a–2.md?p=a-28) in such manner and at such times as the court may direct. If the court determines that such liquidation is in the interest of the [security](/usc/15/80a–2.md?p=a-36) holders of such trust, the court shall order such liquidation and, after payment of necessary expenses, the distribution of the proceeds to the [security](/usc/15/80a–2.md?p=a-36) holders of the trust in such manner and on such terms as may to the court appear equitable.
- (f) **Exemption—**
  - (1) **In general—** [Subsection (a)](#a) does not apply to any registered [separate account](/usc/15/80a–2.md?p=a-37) funding variable insurance contracts, or to the sponsoring [insurance company](/usc/15/80a–2.md?p=a-17) and principal underwriter of such account.
  - (2) **Limitation on sales—** It shall be unlawful for any registered [separate account](/usc/15/80a–2.md?p=a-37) funding variable insurance contracts, or for the sponsoring [insurance company](/usc/15/80a–2.md?p=a-17) of such account, to sell any such contract—
    - (A) unless the fees and charges deducted under the contract, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the [insurance company](/usc/15/80a–2.md?p=a-17), and, beginning on the earlier of August 1, 1997, or the earliest effective date of any registration statement or amendment thereto for such contract following October 11, 1996, the [insurance company](/usc/15/80a–2.md?p=a-17) so represents in the registration statement for the contract; and
    - (B) unless the [insurance company](/usc/15/80a–2.md?p=a-17)—
      - (i) complies with all other applicable provisions of this section, as if it were a trustee or custodian of the registered [separate account](/usc/15/80a–2.md?p=a-37);
      - (ii) files with the insurance regulatory authority of the [State](/usc/15/80a–2.md?p=a-39) which is the domiciliary [State](/usc/15/80a–2.md?p=a-39) of the [insurance company](/usc/15/80a–2.md?p=a-17), an annual statement of its financial condition, which most recent statement indicates that the [insurance company](/usc/15/80a–2.md?p=a-17) has a combined capital and surplus, if a stock [company](/usc/15/80a–2.md?p=a-8), or an unassigned surplus, if a mutual [company](/usc/15/80a–2.md?p=a-8), of not less than $1,000,000, or such other amount as the [Commission](/usc/15/80a–2.md?p=a-7) may from time to time prescribe by rule, as necessary or appropriate in the public interest or for the protection of investors; and
      - (iii) together with its registered [separate accounts](/usc/15/80a–2.md?p=a-37), is supervised and examined periodically by the insurance authority of such [State](/usc/15/80a–2.md?p=a-39).
  - (3) **Fees and charges—** For purposes of [paragraph (2)](#f-2), the fees and charges deducted under the contract shall include all fees and charges imposed for any purpose and in any manner.
  - (4) **Regulatory authority—** The [Commission](/usc/15/80a–2.md?p=a-7) may issue such rules and regulations to carry out [paragraph (2)(A)](#f-2-A) as it determines are necessary or appropriate in the public interest or for the protection of investors.

## Source credit

(Aug. 22, 1940, ch. 686, title I, § 26, 54 Stat. 827; Pub. L. 91–547, § 15, Dec. 14, 1970, 84 Stat. 1424; Pub. L. 100–181, title VI, §§ 618, 619, Dec. 4, 1987, 101 Stat. 1262; Pub. L. 104–290, title II, § 205(a), Oct. 11, 1996, 110 Stat. 3429; Pub. L. 106–102, title II, § 211(b), Nov. 12, 1999, 113 Stat. 1396.)

## Notes

### Editorial Notes

### Amendments

1999—Subsecs. (b) to (f). Pub. L. 106–102 added subsec. (b) and redesignated former subsecs. (b) to (e) as (c) to (f), respectively.

1996—Subsec. (e). Pub. L. 104–290 added subsec. (e).

1987—Subsec. (b). Pub. L. 100–181, § 618, substituted “intended” for “intend”.

Subsec. (c). Pub. L. 100–181, § 619, substituted “contract or agreement” for “contract of agreement”.

1970—Subsecs. (b) to (d). Pub. L. 91–547 added subsec. (b), redesignated former subsec. (b) as (c), struck out “at the effective date of this subchapter” before “comply”, substituted “contract of agreement” for “contract or agreement”, and redesignated former subsec. (c) as (d).

### 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 1970 Amendment

Amendment by Pub. L. 91–547 effective Dec. 14, 1970, see section 30 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.