Morley, John --- "Why do investment funds have special securities regulation?" [2018] ELECD 836; in Birdthistle, A. William; Morley, John (eds), "Research Handbook on the Regulation of Mutual Funds" (Edward Elgar Publishing, 2018) 9

Book Title: Research Handbook on the Regulation of Mutual Funds

Editor(s): Birdthistle, A. William; Morley, John

Publisher: Edward Elgar Publishing

ISBN: 9781784715045

Section: Chapter 1

Section Title: Why do investment funds have special securities regulation?

Author(s): Morley, John

Number of pages: 13

Abstract/Description:

Why are investment companies are regulated so differently from every other kind of company? The multitude of other companies across our diverse spectrum of business endeavors—from software design to clothing retail to food service, and so forth—are regulated by a generic body of securities regulations. What exactly makes an investment company so different from every other kind of company that it alone deserves special securities regulation? The chapter concludes that, whatever the historical rationales for investment company regulation, the most compelling rationale for investment company regulation today is an investment company’s unique organizational structure. An investment fund almost always has a separate legal existence and a separate set of owners from the managers who control it. A fund investor thus relates to her managers in a radically different way from an investor in every other kind of company.