---
kind: "section"
citation: "15 U.S.C. § 80a–5"
title: "15"
title_heading: "Commerce and Trade"
number: "80a–5"
heading: "Subclassification of management companies"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/80a-5"
units:
  - "Chapter 2D — Investment Companies and Advisers"
  - "Subchapter I — Investment Companies"
---

# §80a–5. Subclassification of management companies

- (a) **Open-end and closed-end companies—** For the purposes of this subchapter, management [companies](/usc/15/80a–2.md?p=a-8) are divided into open-end and closed-end [companies](/usc/15/80a–2.md?p=a-8), defined as follows:
  - (1) “Open-end [company](/usc/15/80a–2.md?p=a-8)” means a management [company](/usc/15/80a–2.md?p=a-8) which is offering for sale or has outstanding any [redeemable security](/usc/15/80a–2.md?p=a-32) of which it is the [issuer](/usc/15/80a–2.md?p=a-22).
  - (2) “Closed-end [company](/usc/15/80a–2.md?p=a-8)” means any management [company](/usc/15/80a–2.md?p=a-8) other than an open-end [company](/usc/15/80a–2.md?p=a-8).
- (b) **Diversified and non-diversified companies—** Management [companies](/usc/15/80a–2.md?p=a-8) are further divided into diversified [companies](/usc/15/80a–2.md?p=a-8) and non-diversified [companies](/usc/15/80a–2.md?p=a-8), defined as follows:
  - (1) “Diversified [company](/usc/15/80a–2.md?p=a-8)” means a management [company](/usc/15/80a–2.md?p=a-8) which meets the following requirements: At least 75 per centum of the value of its total assets is represented by cash and cash items (including receivables), [Government securities](/usc/15/80a–2.md?p=a-16), [securities](/usc/15/80a–2.md?p=a-36) of other investment [companies](/usc/15/80a–2.md?p=a-8), and other [securities](/usc/15/80a–2.md?p=a-36) for the purposes of this calculation limited in respect of any one [issuer](/usc/15/80a–2.md?p=a-22) to an amount not greater in value than 5 per centum of the value of the total assets of such management [company](/usc/15/80a–2.md?p=a-8) and to not more than 10 per centum of the outstanding [voting securities](/usc/15/80a–2.md?p=a-42) of such [issuer](/usc/15/80a–2.md?p=a-22).
  - (2) “Non-diversified [company](/usc/15/80a–2.md?p=a-8)” means any management [company](/usc/15/80a–2.md?p=a-8) other than a diversified [company](/usc/15/80a–2.md?p=a-8).
- (c) **Loss of status as diversified company—** A registered diversified [company](/usc/15/80a–2.md?p=a-8) which at the time of its qualification as such meets the requirements of [paragraph (1)](#b-1) of subsection (b) shall not lose its status as a diversified [company](/usc/15/80a–2.md?p=a-8) because of any subsequent discrepancy between the value of its various investments and the requirements of said paragraph, so long as any such discrepancy existing immediately after its acquisition of any [security](/usc/15/80a–2.md?p=a-36) or other property is neither wholly nor partly the result of such acquisition.

## Source credit

(Aug. 22, 1940, ch. 686, title I, § 5, 54 Stat. 800; Pub. L. 100–181, title VI, § 607, Dec. 4, 1987, 101 Stat. 1261.)

## Notes

### Editorial Notes

### Amendments

1987—Subsec. (a)(2). Pub. L. 100–181 substituted “Closed-end” for “Close-end”.

### 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.