15 USC 80a-30(c): Investment Company Examination

          
Sec. 80a-30. Accounts and records
(a) Maintenance of records

                           (1) In general

        Each registered investment company, and each underwriter, 
    broker, dealer, or investment adviser that is a majority-owned 
    subsidiary of such a company, shall maintain and preserve such 
    records (as defined in section 78c(a)(37) of this title) for such 
    period or periods as the Commission, by rules and regulations, may 
    prescribe as necessary or appropriate in the public interest or for 
    the protection of investors. Each investment adviser that is not a 
    majority-owned subsidiary of, and each depositor of any registered 
    investment company, and each principal underwriter
    for any registered investment company other than a closed-end 
    company, shall maintain and preserve for such period or periods as 
    the Commission shall prescribe by rules and regulations, such 
    records as are necessary or appropriate to record such person's 
    transactions with such registered company.

                  (2) Minimizing compliance burden

        In exercising its authority under this subsection, the 
    Commission shall take such steps as it deems necessary or 
    appropriate, consistent with the public interest and for the 
    protection of investors, to avoid unnecessary recordkeeping by, and 
    minimize the compliance burden on, persons required to maintain 
    records under this subsection (hereafter in this section referred to 
    as ``subject persons''). Such steps shall include considering, and 
    requesting public comment on--
            (A) feasible alternatives that minimize the recordkeeping 
        burdens on subject persons;
            (B) the necessity of such records in view of the public 
        benefits derived from the independent scrutiny of such records 
        through Commission examination;
            (C) the costs associated with maintaining the information 
        that would be required to be reflected in such records; and
            (D) the effects that a proposed recordkeeping requirement 
        would have on internal compliance policies and procedures.

(b) Examinations of records

                           (1) In general

        All records required to be maintained and preserved in 
    accordance with subsection (a) of this section shall be subject at 
    any time and from time to time to such reasonable periodic, special, 
    and other examinations by the Commission, or any member or 
    representative thereof, as the Commission may prescribe.

                          (2) Availability

        For purposes of examinations referred to in paragraph (1), any 
    subject person shall make available to the Commission or its 
    representatives any copies or extracts from such records as may be 
    prepared without undue effort, expense, or delay as the Commission 
    or its representatives may reasonably request.

                        (3) Commission action

        The Commission shall exercise its authority under this 
    subsection with due regard for the benefits of internal compliance 
    policies and procedures and the effective implementation and 
    operation thereof.

        

            
 
          

(c) Limitations on disclosure by Commission

    Notwithstanding any other provision of law, the Commission shall not 
be compelled to disclose any internal compliance or audit records, or 
information contained therein, provided to the Commission under this 
section. Nothing in this subsection shall authorize the Commission to 
withhold information from the Congress or prevent the Commission from 
complying with a request for information from any other Federal 
department or agency requesting the information for purposes within the 
scope of the jurisdiction of that department or agency, or complying 
with an order of a court of the United States in an action brought by 
the United States or the Commission. For purposes of section 552 of 
title 5, this section shall be considered a statute described in 
subsection (b)(3)(B) of such section 552.

(d) Definitions

    For purposes of this section--
        (1) the term ``internal compliance policies and procedures'' 
    means policies and procedures designed by subject persons to promote 
    compliance with the Federal securities laws; and
        (2) the term ``internal compliance and audit record'' means any 
    record prepared by a subject person in accordance with internal 
    compliance policies and procedures.

(e) Regulatory authority

    The Commission may, in the public interest or for the protection of 
investors, issue rules and regulations providing for a reasonable degree 
of uniformity in the accounting policies and principles to be followed 
by registered investment companies in maintaining their accounting 
records and in preparing financial statements required pursuant to this 
subchapter.

(f) Exemption authority

    The Commission, upon application made by any registered investment 
company, may by order exempt a specific transaction or transactions from 
the provisions of any rule or regulation made pursuant to subsection (e) 
of this section, if the Commission finds that such rule or regulation 
should not reasonably be applied to such transaction.

(Aug. 22, 1940, ch. 686, title I, Sec. 31, 54 Stat. 838; Pub. L. 104-
290, title II, Sec. 207, Oct. 11, 1996, 110 Stat. 3430; Pub. L. 105-353, 
title III, Sec. 301(c)(6), Nov. 3, 1998, 112 Stat. 3237.)
                               Amendments

    1998--Subsec. (f). Pub. L. 105-353 substituted ``subsection (e)'' 
for ``subsection (c)''.
    1996--Subsecs. (a), (b). Pub. L. 104-290, Sec. 207(1), added 
subsecs. (a) and (b) and struck out former subsecs. (a) and (b) which 
read as follows:
    ``(a) Every registered investment company, and every underwriter, 
broker, dealer, or investment adviser which is a majority-owned 
subsidiary of such a company, shall maintain and preserve for such 
period or periods as the Commission may prescribe by rules and 
regulations, such accounts, books, and other documents as constitute the 
record forming the basis for financial statements required to be filed 
pursuant to section 80a-29 of this title, and of the auditor's 
certificates relating thereto. Every investment adviser not a majority-
owned subsidiary of, and every depositor of any registered investment 
company, and every principal underwriter for any registered investment 
company other than a closed-end company, shall maintain and preserve for 
such period or periods as the Commission shall prescribe by rules and 
regulations, such accounts, books, and other documents as are necessary 
or appropriate to record such person's transactions with such registered 
company.
    ``(b) All accounts, books, and other records, required to be 
maintained and preserved by any person pursuant to subsection (a) of 
this section, shall be subject at any time and from time to time to such 
reasonable periodic, special, and other examinations by the Commission, 
or any member or representative thereof, as the Commission may 
prescribe. Any such person shall fur
nish to the Commission, within such reasonable time as the Commission 
may prescribe, copies of or extracts from such records which may be 
prepared without undue effort, expense, or delay, as the Commission may 
by order require.''
    Subsecs. (c), (d). Pub. L. 104-290, Sec. 207(3), added subsecs. (c) 
and (d). Former subsecs. (c) and (d) redesignated (e) and (f), 
respectively.
    Subsec. (e). Pub. L. 104-290, Sec. 207(2), (4), redesignated subsec. 
(c) as (e) and inserted heading.
    Subsec. (f). Pub. L. 104-290, Sec. 207(2), (5), redesignated subsec. 
(d) as (f) and inserted heading.

                          Transfer of Functions

    For transfer of functions of Securities and Exchange Commission, 
with certain exceptions, to Chairman of such Commission, see Reorg. Plan 
No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 
Stat. 1265, set out under section 78d of this title.