Staff of the SEC's Division of Investment Management
released a no-action letter in response to Capital Group Companies
on Jan. 11. It said the restrictions outlined in Section 22(d) of
the Investment Company Act of 1940 do not apply to a broker
"when the broker acts as agent on behalf of its customers and
charges its customers commissions for effecting transactions in
Clean Shares" of a registered investment company. Staff added
Section 22(d) does not prohibit a principal underwriter of Clean
Shares from entering into a selling agreement with a broker under
these circumstances and that this position does not depend on
whether the broker sells Clean Shares to investors in retirement
accounts or non-retirement accounts.
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