Investment Company Notice Filings
In 1996, Congress passed the National Securities Markets Improvement Act ("NSMIA"). NSMIA preempted the states from registering securities issued by investment companies registered under the federal Investment Company Act of 1940. The states, however, were permitted to require a notice filing and related fee. In addition, state authority to investigate fraudulent conduct was preserved as was state licensing authority over broker-dealers and others selling investment company products.
Types of Investment Companies
| Open-End Management Company (mutual fund) | Shares in the fund are issued freely, according to investor demand. The open-end management company stands ready at all times to buy back existing shares |
| Closed-End Management Company | Shares in the fund are readily transferable in the open market and bought and sold like any other shares. Unlike an open-end management company, a closed-end fund is only entitled to issue a finite number of shares. To buy or sell, a shareholder must therefore buy from or sell to another person rather than deal directly with the fund itself |
| Face-amount Certificate Company | Issues certificates whose face-value is payable at the end of an installment period. Principal and interest are guaranteed, and the certificates are usually backed by a specific asset such as real estate |
| Unit Investment Trust | An investment company that is organized under a trust indenture, contract of custodianship or agency, or similar instrument, does not have a board of directors, and issues only redeemable securities, each of which represents an undivided interest in a unit of specified securities. Examples: Tax-exempt or municipal bond funds |
When to File
Before an investment company may offer or sell securities in or from Connecticut, it must make a notice filing. There are two exceptions: 1) the issuer qualifies for the institutional buyer exemption in Section 36b-21(b)(9) of the Connecticut Uniform Securities Act for offers or sales to banks, credit unions, trust companies, savings and loan associations, insurance companies, investment companies, pension or profit-sharing trusts or broker-dealers; or 2) the issuer qualifies for the offers or sales to existing security holders exemption in Section 36b-21(b)(12) of the Connecticut Uniform Securities Act (Example : activity is limited to dividend reinvestments).
What to File
- Form NF Uniform Investment Company Notice Filing. File a notice for each series or portfolio. There is no limit on the number of shares or the aggregate amount covered by the notice filing.
- Nonrefundable filing fee payable to "Treasurer, State of Connecticut."
- Form U-2 (Consent to Service of Process)
How Long Is the Filing Valid?
| Open-End Management Company (mutual fund) | December 31st of the calendar year in which the notice was first filed |
| Closed-End Management Company | One year from the later of 1) the date the Division receives the filing or 2) its effective date with the Securities and Exchange Commission |
| Face-amount Certificate Company | One year from the date the offering is declared effective by the Securities and Exchange Commission |
| Unit Investment Trust | One year from the date the offering is declared effective by the Securities and Exchange Commission |
How to Renew
Open-End Management Company (mutual fund)
Renew on or before December 31st. During the last quarter of the year, we will be e-mailing each filing service a roster of those funds for which the filing service is responsible. We will also include instructions on renewal procedures as well as how to remit electronic payment of the filing fee. Note that, for calendar year 2013, it will no longer be necessary to file a paper Form NF when renewing a mutual fund notice filing.
Closed-End Management Company
May be renewed annually upon the expiration of the prior notice. Include a Form NF with amendments marked plus the nonrefundable filing fee.
Face-amount Certificate Company
Renew no earlier than 30 days nor later than 5 days before the date when the previously filed notice is slated to expire. Include a Form NF with amendments marked plus the nonrefundable renewal filing fee.
Unit Investment Trust
Renew no earlier than 30 days nor later than 5 days before the date when the previously filed notice is slated to expire. Include a Form NF with amendments marked plus the nonrefundable renewal filing fee.
Tips
- Connecticut File Number
Always include the Connecticut file number on correspondence and renewals. This helps us locate your notice filing more easily on our database. - Amendments to Form NF
Always amend your Form NF filing to reflect correspondent name changes, fund name changes, and a change in the fund's fiscal year. You do not have to amend your filing to show an increase in the dollar amount because notice filings for open-end management companies, unit investment trusts and face-amount certificate companies cover an unlimited dollar amount and an indeterminate number of shares.
- Sales Reports
You do not have to file a sales report unless we specifically ask for it. We may ask for a sales report, for example, if you have let your notice filing lapse and wish to refile.
- Reorganizations
Reorganizations should be reported in the "Other" box on Item 3 of Form NF. Use a supplemental sheet if necessary. Additional filings may also be required. Example: Following shareholder approval, Fund X transfers its assets to Fund Y and will no longer be selling shares to the public. If Fund X has notice filed, Fund X should check the "termination" box to terminate its Connecticut filing. If Fund Y plans to offer shares to the public in or from Connecticut, it should file Form NF if it has not done so already. In addition, if Fund Y changes its name as a result of the transaction and has previously filed a Form NF, the name change should be reported as an amendment.
- Prospectus, Statement of Additional Information, Sales Literature
None of these need to be filed
- Broker-dealer and Agent of Issuer Licensing
Keep in mind that broker-dealers and agents of issuer involved in fund sales should be registered with the department.
- Renewals
If you work for a filing service that forwards a significant number of renewals to the states, the department may be able to help you expedite your clients' renewals through the use of electronic fee payments. Contact our office for details.
Questions?
State of Connecticut
Department of Banking
Securities and Business Investments Division
260 Constitution Plaza
Hartford, CT 06103-1800
Telephone: (860) 240-8230 or toll-free 1-800-831-7225
Fax: 860-240-8295
E-mail: dob.sec-reg@ct.gov