15 U.S.C. § 80a–5 — Subclassification of management companies

(a) Open-end and closed-end companies. (1) "Open-end company" — a management company that's offering for sale, or has outstanding, any redeemable security it issued. (2) "Closed-end company" — any management company that isn't an open-end company. (b) Diversified and non-diversified companies. (1) "Diversified company" — a management company where at least 75% of total asset value is cash and cash items (including receivables), government securities, other investment companies' securities, and other securities — except that for this calculation, no more than 5% of total assets, and no more than 10% of any one issuer's outstanding voting securities, can come from any single issuer. (2) "Non-diversified company" — any management company that isn't a diversified company. (c) Loss of status as diversified company. A registered diversified company that met the 75% test when it first qualified doesn't lose diversified status just because its investments later drift from that test, as long as the drift, right after it acquires the security or property that caused it, isn't wholly or partly the result of that acquisition.