When does an investment club have to register with the SEC as an investment company under the Investment Company Act of 1940?

When does an investment club have to register with the SEC as an investment company under the Investment Company Act of 1940?

An investment club must register with the SEC as an investment company under the Investment Company Act of 1940 if all of the following three conditions apply:

1. the club invests in securities,
    
2. The club issues membership interests that are securities (see above), and
    
3. The club is not able to rely on an exclusion from the definition of investment company.

For example, a "private investment company" may not need to register with the SEC. To qualify, an investment club

• must not make, nor propose to make, a public offering of its securities, and
   
• must not have more than 100 members.

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Investment Clubs and the SEC

What is an investment club?

Are investment clubs regulated by the SEC?

When does an investment club have to register the offer and sale of its membership interests with the SEC under the Securities Act of 1933?

When does an investment club have to register with the SEC as an investment company under the Investment Company Act of 1940?

How do you know if an investment club is making a public offering?

Do securities laws apply to a person who provides advice to an investment club?

Do states regulate investment clubs?