15 U.S.C. § 80a–14 — Size of investment companies

(a) Public offerings. A registered investment company organized after August 22, 1940, and its principal underwriter, cannot publicly offer the company's own securities unless one of three things is true: (1) the company already has a net worth of at least $100,000; or (2) it has made a public offering before, and had a net worth of at least $100,000 at that time; or (3) as a condition of registering the securities under the Securities Act of 1933, arrangements are made — in a way the Commission finds adequate — to ensure: (A) after the registration statement takes effect, the company will not issue securities or accept subscription money until it has firm agreements with no more than twenty-five responsible buyers to purchase enough securities that, combined with any existing net worth, totals at least $100,000; (B) that full amount is paid in before the company accepts subscriptions from anyone beyond those twenty-five buyers; and (C) any money paid in, plus any sales charge, will be fully refunded to a subscriber on demand if the company's net worth does not reach $100,000 within ninety days after the registration statement becomes effective. If the condition in (C) is not met, the Commission may suspend the registration statement and suspend or revoke the company's registration under this law. (b) Study on effects of size. Whenever the Commission believes a large increase in the size of investment companies could create a problem for investors or the public interest, it may study how size affects investment companies' investment policies, the securities markets, the concentration of control of wealth and industry, and the companies that investment companies invest in — and report its findings and recommendations to Congress from time to time.