---
kind: "section"
citation: "15 U.S.C. § 80a–27"
title: "15"
title_heading: "Commerce and Trade"
number: "80a–27"
heading: "Periodic payment plans"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/80a-27"
units:
  - "Chapter 2D — Investment Companies and Advisers"
  - "Subchapter I — Investment Companies"
---

# §80a–27. Periodic payment plans

- (a) **Sale of certificates; restrictions—** It shall be unlawful for any registered investment [company](/usc/15/80a–2.md?p=a-8) issuing [periodic payment plan certificates](/usc/15/80a–2.md?p=a-27), or for any depositor of or underwriter for such [company](/usc/15/80a–2.md?p=a-8), to sell any such certificate, if—
  - (1) the [sales load](/usc/15/80a–2.md?p=a-35) on such certificate exceeds 9 per centum of the total payments to be made thereon;
  - (2) more than one-half of any of the first twelve monthly payments thereon, or their equivalent, is deducted for [sales load](/usc/15/80a–2.md?p=a-35);
  - (3) the amount of [sales load](/usc/15/80a–2.md?p=a-35) deducted from any one of such first payments exceeds proportionately the amount deducted from any other such payment, or the amount deducted from any subsequent payment exceeds proportionately the amount deducted from any other subsequent payment;
  - (4) the first payment on such certificate is less than $20, or any subsequent payment is less than $10;
  - (5) if such registered [company](/usc/15/80a–2.md?p=a-8) is a management [company](/usc/15/80a–2.md?p=a-8), the proceeds of such certificate or the [securities](/usc/15/80a–2.md?p=a-36) in which such proceeds are invested are subject to management fees (other than fees for administrative services of the character described in clause (C), paragraph (2), of [section 80a–26(a) of this title](/usc/15/80a–26.md?p=a)) exceeding such reasonable amount as the [Commission](/usc/15/80a–2.md?p=a-7) may prescribe, whether such fees are payable to such [company](/usc/15/80a–2.md?p=a-8) or to [investment advisers](/usc/15/80b–2.md?p=a-11) thereof; or
  - (6) if such registered [company](/usc/15/80a–2.md?p=a-8) is a unit investment trust the assets of which are [securities](/usc/15/80a–2.md?p=a-36) issued by a management [company](/usc/15/80a–2.md?p=a-8), the depositor of or principal underwriter for such trust, or any affiliated [person](/usc/15/80a–2.md?p=a-28) of such depositor or underwriter, is to receive from such management [company](/usc/15/80a–2.md?p=a-8) or any affiliated [person](/usc/15/80a–2.md?p=a-28) thereof any fee or payment on account of payments on such certificate exceeding such reasonable amount as the [Commission](/usc/15/80a–2.md?p=a-7) may prescribe.
- (b) **Exemptions—** If it appears to the [Commission](/usc/15/80a–2.md?p=a-7), upon application or otherwise, that smaller [companies](/usc/15/80a–2.md?p=a-8) are subjected to relatively higher operating costs and that in order to make due allowance therefor it is necessary or appropriate in the public interest and consistent with the protection of investors that a provision or provisions of paragraph [(1)](#a-1), [(2)](#a-2), or [(3)](#a-3) of subsection (a) relative to [sales load](/usc/15/80a–2.md?p=a-35) be relaxed in the case of certain registered investment [companies](/usc/15/80a–2.md?p=a-8) issuing [periodic payment plan certificates](/usc/15/80a–2.md?p=a-27), or certain specified classes of such [companies](/usc/15/80a–2.md?p=a-8), the [Commission](/usc/15/80a–2.md?p=a-7) is authorized by rules and regulations or order to grant any such [company](/usc/15/80a–2.md?p=a-8) or class of [companies](/usc/15/80a–2.md?p=a-8) appropriate qualified exemptions from the provisions of said paragraphs.
- (c) **Sale of certificates; requirements—** It shall be unlawful for any registered investment [company](/usc/15/80a–2.md?p=a-8) issuing [periodic payment plan certificates](/usc/15/80a–2.md?p=a-27), or for any depositor of or underwriter for such [company](/usc/15/80a–2.md?p=a-8), to sell any such certificate, unless—
  - (1) such certificate is a [redeemable security](/usc/15/80a–2.md?p=a-32); and
  - (2) the proceeds of all payments on such certificate (except such amounts as are deducted for [sales load](/usc/15/80a–2.md?p=a-35)) are deposited with a trustee or custodian having the qualifications prescribed in paragraph (1) of [section 80a–26(a) of this title](/usc/15/80a–26.md?p=a) for the trustees of unit investment trusts, and are held by such trustee or custodian under an indenture or [agreement](/usc/15/7a.md?p=2) containing, in substance, the provisions required by paragraphs (2) and (3) of [section 80a–26(a) of this title](/usc/15/80a–26.md?p=a) for the trust indentures of unit investment trusts.
- (d) **Surrender of certificates; regulations—** Notwithstanding [subsection (a)](#a) of this section, it shall be unlawful for any registered investment [company](/usc/15/80a–2.md?p=a-8) issuing [periodic payment plan certificates](/usc/15/80a–2.md?p=a-27), or for any depositor of or underwriter for such [company](/usc/15/80a–2.md?p=a-8), to sell any such certificate unless the certificate provide that the holder thereof may surrender the certificate at any time within the first eighteen months after the issuance of the certificate and receive in payment thereof, in cash, the sum of (1) the value of his account, and (2) an amount, from such underwriter or depositor, equal to that part of the excess paid for sales loading which is over 15 per centum of the gross payments made by the certificate holder. The [Commission](/usc/15/80a–2.md?p=a-7) may make rules and regulations applicable to such underwriters and depositors specifying such reserve requirements as it deems necessary or appropriate in order for such underwriters and depositors to carry out the obligations to refund sales charges required by this subsection.
- (e) **Refund privileges; notice; rules—** With respect to any [periodic payment plan certificate](/usc/15/80a–2.md?p=a-27) sold subject to the provisions of [subsection (d)](#d) of this section, the registered investment [company](/usc/15/80a–2.md?p=a-8) issuing such [periodic payment plan certificate](/usc/15/80a–2.md?p=a-27), or any depositor of or underwriter for such [company](/usc/15/80a–2.md?p=a-8), shall in writing (1) inform each certificate holder who has missed three payments or more, within thirty days following the expiration of fifteen months after the issuance of the certificate, or, if any such holder has missed one payment or more after such period of fifteen months but prior to the expiration of eighteen months after the issuance of the certificate, at any time prior to the expiration of such eighteen-month period, of his right to surrender his certificate as specified in [subsection (d)](#d) of this section, and (2) inform the certificate holder of (A) the value of the holder’s account as of the time the written notice was given to such holder, and (B) the amount to which he is entitled as specified in [subsection (d)](#d) of this section. The [Commission](/usc/15/80a–2.md?p=a-7) may make rules specifying the method, form, and contents of the notice required by this subsection.
- (f) **Charges, statement; rules; surrender of certificates; regulations—** With respect to any periodic payment plan (other than a plan under which the amount of [sales load](/usc/15/80a–2.md?p=a-35) deducted from any payment thereon does not exceed 9 per centum of such payment), the custodian [bank](/usc/15/80a–2.md?p=a-5) for such plan shall mail to each certificate holder, within sixty days after the issuance of the certificate, a statement of charges to be deducted from the projected payments on the certificate and a notice of his right of withdrawal as specified in this section. The [Commission](/usc/15/80a–2.md?p=a-7) may make rules specifying the method, form, and contents of the notice required by this subsection. The certificate holder may within forty-five days of the mailing of the notice specified in this subsection surrender his certificate and receive in payment thereof, in cash, the sum of (1) the value of his account, and (2) an amount, from the underwriter or depositor, equal to the difference between the gross payments made and the net amount invested. The [Commission](/usc/15/80a–2.md?p=a-7) may make rules and regulations applicable to underwriters and depositors of [companies](/usc/15/80a–2.md?p=a-8) issuing any such certificate specifying such reserve requirements as it deems necessary or appropriate in order for such underwriters and depositors to carry out the obligations to refund sales charges required by this subsection.
- (g) **Governing provisions; election—** Notwithstanding the provisions of subsections [(a)](#a) and [(d)](#d), a registered investment [company](/usc/15/80a–2.md?p=a-8) issuing [periodic payment plan certificates](/usc/15/80a–2.md?p=a-27) may elect, by written notice to the [Commission](/usc/15/80a–2.md?p=a-7), to be governed by the provisions of [subsection (h)](#h) rather than the provisions of subsections [(a)](#a) and [(d)](#d) of this section.
- (h) **Sale of certificates; restrictions—** Upon making the election specified in [subsection (g)](#g), it shall be unlawful for any such electing registered investment [company](/usc/15/80a–2.md?p=a-8) issuing [periodic payment plan certificates](/usc/15/80a–2.md?p=a-27), or for any depositor of or underwriter for such [company](/usc/15/80a–2.md?p=a-8), to sell any such certificate, if—
  - (1) the [sales load](/usc/15/80a–2.md?p=a-35) on such certificate exceeds 9 per centum of the total payments to be made thereon;
  - (2) more than 20 per centum of any payment thereon is deducted for [sales load](/usc/15/80a–2.md?p=a-35), or an average of more than 16 per centum is deducted for [sales load](/usc/15/80a–2.md?p=a-35) from the first forty-eight monthly payments thereon, or their equivalent;
  - (3) the amount of [sales load](/usc/15/80a–2.md?p=a-35) deducted from any one of the first twelve monthly payments, the thirteenth through twenty-fourth monthly payments, the twenty-fifth through thirty-sixth monthly payments, or the thirty-seventh through forty-eighth monthly payments, or their equivalents, respectively, exceeds proportionately the amount deducted from any other such payment, or the amount deducted from any subsequent payment exceeds proportionately the amount deducted from any other subsequent payment;
  - (4) the deduction for [sales load](/usc/15/80a–2.md?p=a-35) on the excess of the payment or payments in any month over the minimum monthly payment, or its equivalent, to be made on the certificate exceeds the [sales load](/usc/15/80a–2.md?p=a-35) applicable to payments subsequent to the first forty-eight monthly payments or their equivalent;
  - (5) the first payment on such certificate is less than $20, or any subsequent payment is less than $10;
  - (6) if such registered [company](/usc/15/80a–2.md?p=a-8) is a management [company](/usc/15/80a–2.md?p=a-8), the proceeds of such certificate or the [securities](/usc/15/80a–2.md?p=a-36) in which such proceeds are invested are subject to management fees (other than fees for administrative services of the character described in clause (C) of paragraph (2) of [section 80a–26(a) of this title](/usc/15/80a–26.md?p=a)) exceeding such reasonable amount as the [Commission](/usc/15/80a–2.md?p=a-7) may prescribe, whether such fees are payable to such [company](/usc/15/80a–2.md?p=a-8) or to [investment advisers](/usc/15/80b–2.md?p=a-11) thereof; or
  - (7) if such registered [company](/usc/15/80a–2.md?p=a-8) is a unit investment trust the assets of which are [securities](/usc/15/80a–2.md?p=a-36) issued by a management [company](/usc/15/80a–2.md?p=a-8), the depositor of or principal underwriter for such trust, or any affiliated [person](/usc/15/80a–2.md?p=a-28) of such depositor or underwriter, is to receive from such management [company](/usc/15/80a–2.md?p=a-8) or any affiliated [person](/usc/15/80a–2.md?p=a-28) thereof any fee or payment on account of payments on such certificate exceeding such reasonable amount as the [Commission](/usc/15/80a–2.md?p=a-7) may prescribe.
- (i) **Applicability to registered separate account funding variable insurance contracts—**
  - (1) This section 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, except as provided in [paragraph (2)](#i-2).
  - (2) 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 unless—
    - (A) such contract is a [redeemable security](/usc/15/80a–2.md?p=a-32); and
    - (B) the [insurance company](/usc/15/80a–2.md?p=a-17) complies with [section 80a–26(f) of this title](/usc/15/80a–26.md?p=f) and any rules or regulations issued by the [Commission](/usc/15/80a–2.md?p=a-7) under [section 80a–26(f) of this title](/usc/15/80a–26.md?p=f).
- (j) **Termination of sales—**
  - (1) **Termination—** Effective 30 days after September 29, 2006, it shall be unlawful, subject to [subsection (i)](#i)—
    - (A) for any registered investment [company](/usc/15/80a–2.md?p=a-8) to issue any [periodic payment plan certificate](/usc/15/80a–2.md?p=a-27); or
    - (B) for such [company](/usc/15/80a–2.md?p=a-8), or any depositor of or underwriter for any such [company](/usc/15/80a–2.md?p=a-8), or any other [person](/usc/15/80a–2.md?p=a-28), to sell such a certificate.
  - (2) **No invalidation of existing certificates—** [Paragraph (1)](#j-1) shall not be construed to alter, invalidate, or otherwise affect any rights or obligations, including rights of redemption, under any [periodic payment plan certificate](/usc/15/80a–2.md?p=a-27) issued and sold before 30 days after September 29, 2006.

## Source credit

(Aug. 22, 1940, ch. 686, title I, § 27, 54 Stat. 829; Pub. L. 91–547, § 16, Dec. 14, 1970, 84 Stat. 1424; Pub. L. 92–165, Nov. 23, 1971, 85 Stat. 487; Pub. L. 104–290, title II, § 205(b), Oct. 11, 1996, 110 Stat. 3429; Pub. L. 109–290, § 4(a), (b), Sept. 29, 2006, 120 Stat. 1318, 1319.)

## Notes

### Editorial Notes

### Amendments

2006—Subsec. (i)(2)(B). Pub. L. 109–290, § 4(b), substituted “section 80a–26(f)” for “section 80a–26(e)” in two places.

Subsec. (j). Pub. L. 109–290, § 4(a), added subsec. (j).

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

1971—Subsec. (f). Pub. L. 92–165 inserted “(other than a plan under which the amount of sales load deducted from any payment thereon does not exceed 9 per centum of such payment)”.

1970—Subsecs. (d) to (h). Pub. L. 91–547 added subsecs. (d) to (h).

### Statutory Notes and Related Subsidiaries

### Effective Date of 1970 Amendment

Amendment by Pub. L. 91–547 effective on expiration of six months after Dec. 14, 1970, see section 30(3) 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.