Investment Company Act of 1940
A key piece of US Legislation on the subject of Investment Management and a partner to the Investment Advisers Act, the 40 Act regulates the vehicles which can be used for investment management purposes.
Investment companies were still in their infancy in 1940. In order to instil investors' confidence in these companies and to protect the public interest from this new type of security, Congress passed the Investment Company Act. The new law set separate standards by which investment companies should be regulated. The act defined and regulated investment companies, including mutual funds (which were virtually undefined prior to 1940).