View all text of Subchapter I [§ 80a-1 - § 80a-64]
§ 80a–27. Periodic payment plans
(a) Sale of certificates; restrictionsIt shall be unlawful for any registered investment company issuing periodic payment plan certificates, or for any depositor of or underwriter for such company, to sell any such certificate, if—
(1) the sales load on such certificate exceeds 9 per centum of the total payments to be made thereon;
(2) more than one-half of any of the first twelve monthly payments thereon, or their equivalent, is deducted for sales load;
(3) the amount of sales load deducted from any one of such first payments exceeds proportionately the amount deducted from any other such payment, or the amount deducted from any subsequent payment exceeds proportionately the amount deducted from any other subsequent payment;
(4) the first payment on such certificate is less than $20, or any subsequent payment is less than $10;
(5) if such registered company is a management company, the proceeds of such certificate or the securities in which such proceeds are invested are subject to management fees (other than fees for administrative services of the character described in clause (C), paragraph (2), of section 80a–26(a) of this title) exceeding such reasonable amount as the Commission may prescribe, whether such fees are payable to such company or to investment advisers thereof; or
(6) if such registered company is a unit investment trust the assets of which are securities issued by a management company, the depositor of or principal underwriter for such trust, or any affiliated person of such depositor or underwriter, is to receive from such management company or any affiliated person thereof any fee or payment on account of payments on such certificate exceeding such reasonable amount as the Commission may prescribe.
(b) Exemptions
(c) Sale of certificates; requirementsIt shall be unlawful for any registered investment company issuing periodic payment plan certificates, or for any depositor of or underwriter for such company, to sell any such certificate, unless—
(1) such certificate is a redeemable security; and
(2) the proceeds of all payments on such certificate (except such amounts as are deducted for sales load) are deposited with a trustee or custodian having the qualifications prescribed in paragraph (1) of section 80a–26(a) of this title for the trustees of unit investment trusts, and are held by such trustee or custodian under an indenture or agreement containing, in substance, the provisions required by paragraphs (2) and (3) of section 80a–26(a) of this title for the trust indentures of unit investment trusts.
(d) Surrender of certificates; regulations
(e) Refund privileges; notice; rules
(f) Charges, statement; rules; surrender of certificates; regulations
(g) Governing provisions; election
(h) Sale of certificates; restrictionsUpon making the election specified in subsection (g), it shall be unlawful for any such electing registered investment company issuing periodic payment plan certificates, or for any depositor of or underwriter for such company, to sell any such certificate, if—
(1) the sales load on such certificate exceeds 9 per centum of the total payments to be made thereon;
(2) more than 20 per centum of any payment thereon is deducted for sales load, or an average of more than 16 per centum is deducted for sales load from the first forty-eight monthly payments thereon, or their equivalent;
(3) the amount of sales load deducted from any one of the first twelve monthly payments, the thirteenth through twenty-fourth monthly payments, the twenty-fifth through thirty-sixth monthly payments, or the thirty-seventh through forty-eighth monthly payments, or their equivalents, respectively, exceeds proportionately the amount deducted from any other such payment, or the amount deducted from any subsequent payment exceeds proportionately the amount deducted from any other subsequent payment;
(4) the deduction for sales load on the excess of the payment or payments in any month over the minimum monthly payment, or its equivalent, to be made on the certificate exceeds the sales load applicable to payments subsequent to the first forty-eight monthly payments or their equivalent;
(5) the first payment on such certificate is less than $20, or any subsequent payment is less than $10;
(6) if such registered company is a management company, the proceeds of such certificate or the securities in which such proceeds are invested are subject to management fees (other than fees for administrative services of the character described in clause (C) of paragraph (2) of section 80a–26(a) of this title) exceeding such reasonable amount as the Commission may prescribe, whether such fees are payable to such company or to investment advisers thereof; or
(7) if such registered company is a unit investment trust the assets of which are securities issued by a management company, the depositor of or principal underwriter for such trust, or any affiliated person of such depositor or underwriter, is to receive from such management company or any affiliated person thereof any fee or payment on account of payments on such certificate exceeding such reasonable amount as the Commission may prescribe.
(i) Applicability to registered separate account funding variable insurance contracts
(1) This section does not apply to any registered separate account funding variable insurance contracts, or to the sponsoring insurance company and principal underwriter of such account, except as provided in paragraph (2).
(2) It shall be unlawful for any registered separate account funding variable insurance contracts, or for the sponsoring insurance company of such account, to sell any such contract unless—
(A) such contract is a redeemable security; and
(B) the insurance company complies with section 80a–26(f) of this title and any rules or regulations issued by the Commission under section 80a–26(f) of this title.
(j) Termination of sales
(1) TerminationEffective 30 days after September 29, 2006, it shall be unlawful, subject to subsection (i)—
(A) for any registered investment company to issue any periodic payment plan certificate; or
(B) for such company, or any depositor of or underwriter for any such company, or any other person, to sell such a certificate.
(2) No invalidation of existing certificates
(Aug. 22, 1940, ch. 686, title I, § 27, 54 Stat. 829; Pub. L. 91–547, § 16, Dec. 14, 1970, 84 Stat. 1424; Pub. L. 92–165, Nov. 23, 1971, 85 Stat. 487; Pub. L. 104–290, title II, § 205(b), Oct. 11, 1996, 110 Stat. 3429; Pub. L. 109–290, § 4(a), (b), Sept. 29, 2006, 120 Stat. 1318, 1319.)