US Code

Public Law 119-73 (01/23/2026)

15 U.S.C. § 80a–15

Contracts of advisers and underwriters

(a)

Written contract to serve or act as investment adviser; contents

It shall be unlawful for any person to serve or act as investment adviser of a registered investment company, except pursuant to a written contract, which contract, whether with such registered company or with an investment adviser of such registered company, has been approved by the vote of a majority of the outstanding voting securities of such registered company, and—
(1)
precisely describes all compensation to be paid thereunder;
(2)
shall continue in effect for a period more than two years from the date of its execution, only so long as such continuance is specifically approved at least annually by the board of directors or by vote of a majority of the outstanding voting securities of such company;
(3)
provides, in substance, that it may be terminated at any time, without the payment of any penalty, by the board of directors of such registered company or by vote of a majority of the outstanding voting securities of such company on not more than sixty days’ written notice to the investment adviser; and
(4)
provides, in substance, for its automatic termination in the event of its assignment.
(b)

Written contract with company for sale by principal underwriter of security of which company is issuer; contents

It shall be unlawful for any principal underwriter for a registered open-end company to offer for sale, sell, or deliver after sale any security of which such company is the issuer, except pursuant to a written contract with such company, which contract—
(1)
shall continue in effect for a period more than two years from the date of its execution, only so long as such continuance is specifically approved at least annually by the board of directors or by vote of a majority of the outstanding voting securities of such company; and
(2)
provides, in substance, for its automatic termination in the event of its assignment.
(c)

Approval of contract to undertake service as investment adviser or principal underwriter by majority of noninterested directors

In addition to the requirements of subsections (a) and (b) of this section, it shall be unlawful for any registered investment company having a board of directors to enter into, renew, or perform any contract or agreement, written or oral, whereby a person undertakes regularly to serve or act as investment adviser of or principal underwriter for such company, unless the terms of such contract or agreement and any renewal thereof have been approved by the vote of a majority of directors, who are not parties to such contract or agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. It shall be the duty of the directors of a registered investment company to request and evaluate, and the duty of an investment adviser to such company to furnish, such information as may reasonably be necessary to evaluate the terms of any contract whereby a person undertakes regularly to serve or act as investment adviser of such company. It shall be unlawful for the directors of a registered investment company, in connection with their evaluation of the terms of any contract whereby a person undertakes regularly to serve or act as investment adviser of such company, to take into account the purchase price or other consideration any person may have paid in connection with a transaction of the type referred to in paragraph (1), (3), or (4) of subsection (f).

(d)

Equivalent of vote of majority of outstanding voting securities in case of common-law trust

section 80a–16(c) of this titlesection 80a–2(a) of this titleIn the case of a common-law trust of the character described in , either written approval by holders of a majority of the outstanding shares of beneficial interest or the vote of a majority of such outstanding shares cast in person or by proxy at a meeting called for the purpose shall for the purposes of this section be deemed the equivalent of the vote of a majority of the outstanding voting securities, and the provisions of paragraph (42) of as to a majority shall be applicable to the vote cast at such a meeting.

(e)

Exemption of advisory boards or members from provisions of this section

Nothing contained in this section shall be deemed to require or contemplate any action by an advisory board of any registered company or by any of the members of such a board.

(f)

Receipt of benefits by investment adviser from sale of securities or other interest in such investment adviser resulting in assignment of investment advisory contract

(1)
An investment adviser, or a corporate trustee performing the functions of an investment adviser, of a registered investment company or an affiliated person of such investment adviser or corporate trustee may receive any amount or benefit in connection with a sale of securities of, or a sale of any other interest in, such investment adviser or corporate trustee which results in an assignment of an investment advisory contract with such company or the change in control of or identity of such corporate trustee, if—
(A)
for a period of three years after the time of such action, at least 75 per centum of the members of the board of directors of such registered company or such corporate trustee (or successor thereto, by reorganization or otherwise) are not (i) interested persons of the investment adviser of such company or such corporate trustee, or (ii) interested persons of the predecessor investment adviser or such corporate trustee; and
(B)
there is not imposed an unfair burden on such company as a result of such transaction or any express or implied terms, conditions, or understandings applicable thereto.
(2)
(A)
section 80a–2(a)(19)(B) of this titleProvided For the purpose of paragraph (1)(A) of this subsection, interested persons of a corporate trustee shall be determined in accordance with : , That no person shall be deemed to be an interested person of a corporate trustee solely by reason of (i) his being a member of its board of directors or advisory board or (ii) his membership in the immediate family of any person specified in clause (i) of this subparagraph.
(B)
For the purpose of paragraph (1)(B) of this subsection, an unfair burden on a registered investment company includes any arrangement, during the two-year period after the date on which any such transaction occurs, whereby the investment adviser or corporate trustee or predecessor or successor investment advisers or corporate trustee or any interested person of any such adviser or any such corporate trustee receives or is entitled to receive any compensation directly or indirectly (i) from any person in connection with the purchase or sale of securities or other property to, from, or on behalf of such company, other than bona fide ordinary compensation as principal underwriter for such company, or (ii) from such company or its security holders for other than bona fide investment advisory or other services.
(3)
If—
(A)
an assignment of an investment advisory contract with a registered investment company results in a successor investment adviser to such company, or if there is a change in control of or identity of a corporate trustee of a registered investment company, and such adviser or trustee is then an investment adviser or corporate trustee with respect to other assets substantially greater in amount than the amount of assets of such company, or
(B)
as a result of a merger of, or a sale of substantially all the assets by, a registered investment company with or to another registered investment company with assets substantially greater in amount, a transaction occurs which would be subject to paragraph (1)(A) of this subsection,
section 80a–6(c) of this titlesuch discrepancy in size of assets shall be considered by the Commission in determining whether or to what extent an application under for exemption from the provisions of paragraph (1)(A) of this subsection should be granted.
(4)
Paragraph (1)(A) of this subsection shall not apply to a transaction in which a controlling block of outstanding voting securities of an investment adviser to a registered investment company or of a corporate trustee performing the functions of an investment adviser to a registered investment company is—
(A)
distributed to the public and in which there is, in fact, no change in the identity of the persons who control such investment adviser or corporate trustee, or
(B)
Provided transferred to the investment adviser or the corporate trustee, or an affiliated person or persons of such investment adviser or corporate trustee, or is transferred from the investment adviser or corporate trustee to an affiliated person or persons of the investment adviser or corporate trustee: , That (i) each transferee (other than such adviser or trustee) is a natural person and (ii) the transferees (other than such adviser or trustee) owned in the aggregate more than 25 per centum of such voting securities for a period of at least six months prior to such transfer.

Aug. 22, 1940, ch. 68654 Stat. 812Pub. L. 91–547, § 884 Stat. 1419Pub. L. 94–29, § 28(1)89 Stat. 164Pub. L. 100–181, title VI, § 611101 Stat. 1261(, title I, § 15, ; , , ; , (2), (4), , , 165; , , .)

Editorial Notes

Amendments

Pub. L. 100–181, § 611(1)1987—Subsec. (d). , substituted “paragraph (42)” for “paragraph (40)”.

Pub. L. 100–181, § 611(2)Subsec. (f)(3)(B). , substituted a comma for the period at end.

Pub. L. 94–29, § 28(2)1975—Subsec. (c). , inserted provisions making it unlawful for the directors of a registered investment company, in connection with their evaluation of the terms of any contract whereby a person undertakes regularly to serve or act as investment adviser of such company, to take into account the purchase price or other consideration any person may have paid in connection with a transaction of the type referred to in paragraph (1), (3), or (4) of subsec. (f).

Pub. L. 94–29, § 28(4)section 80a–16(c) of this titlesection 80a–16 of this titleSubsec. (d). , substituted “” for “subsection (b) of ”.

Pub. L. 94–29, § 28(1)Subsec. (f). , added subsec. (f).

Pub. L. 91–547, § 8(a)1970—Subsec. (a). , struck out introductory phrase “After one year from the effective date of this subchapter” and “unless in effect prior to ,” before “has been approved”, and “by the investment adviser” after “assignment” in item (4), and substituted “It” for “it”.

Pub. L. 91–547, § 8(b)Subsec. (b). , struck out introductory phrase “After one year from the effective date of this subchapter,” and concluding phrase “, unless in effect prior to ” after “which contract” before item (1), struck out “by such underwriter” after “assignment” in item (2), and substituted “It” for “it”.

Pub. L. 91–547, § 8(c)Subsec. (c). , made it the duty of the directors of a registered investment company to request and evaluate, and the duty of an investment adviser to such company to furnish, such information as may reasonably be necessary to evaluate the terms of any contract whereby a person undertakes regularly to serve or act as investment adviser of such company, substituted “interested persons” for “affiliated persons”, and struck out “except a written agreement which was in effect prior to ,” after “written or oral,”, item (1) designation following “have been approved” and item “or (2) by the vote of a majority of the outstanding voting securities of such company” after “any such party,”, and inserted “the vote” in phrase “by the vote of a majority”, and provision respecting voting “cast in person at a meeting called for the purpose of voting on such approval”.

Pub. L. 91–547, § 8(d)Subsecs. (d) to (f). , redesignated subsecs. (e) and (f) as (d) and (e), respectively, and struck out former subsec. (d) which prohibited any person after , from acting as investment adviser to, or principal underwriter for, any registered investment company pursuant to a written contract in effect prior to , unless such contract was renewed prior to , in such form as to make it comply with subsecs. (a) or (b).

Statutory Notes and Related Subsidiaries

Effective Date of 1975 Amendment

Pub. L. 94–29section 31(a) of Pub. L. 94–29section 78b of this titleAmendment by effective , see , set out as a note under .

Effective Date of 1970 Amendment

Pub. L. 91–547section 30(1) of Pub. L. 91–547section 80a–52 of this titleAmendment by effective on expiration of one year after , see , set out as a note under .