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Exemptions from requirement to register under the Securities Act as an investment company | Exemptions from requirement to register under the Securities Act as an investment company | ||
====Rule 3a-7==== | ====Rule 3a-7==== | ||
[[Rule 3a-7]] of the [[Investment Company Act of 1940]] excludes issuers of [[asset-backed securities]] | [[Rule 3a-7]] of the [[Investment Company Act of 1940]] excludes issuers of [[asset-backed securities]] from the definition of “[[investment company]]” where their securities are either rated<ref>“In 1 of the 4 highest categories assigned to long-term debt, or an equivalent for short-term debt, by at least one nationally-recognised statistical rating agency.”</ref> or purchased exclusively by [[qualified purchaser]]s<ref>Or “[[accredited investor]]s” or “[[qualified institutional buyers]]”</ref> and who do not make public offerings of their securities. | ||
Rule 3a-7 | |||
Rule 3a-7 funds do not qualify for the Volcker “covered fund” exemption. | |||
[[Self-liquidating securities]] are securities that are backed by assets that generate cash flows to repay the securities. For example, mortgage-backed securities are self-liquidating because they are backed by mortgages that produce monthly payments. Tentatively emission allowances are not self-liquidating securities because they do not have a cashflow and do not automatically redeem | [[Self-liquidating securities]] are securities that are backed by assets that generate cash flows to repay the securities. For example, mortgage-backed securities are self-liquidating because they are backed by mortgages that produce monthly payments. Tentatively emission allowances are not self-liquidating securities because they do not have a cashflow and do not automatically redeem |