History of Investment company in Timeline

By Popular Timelines Editorial Team · Updated: July 6, 2025

An investment company is a financial institution focused on holding, managing, and investing in securities. In the U.S., these companies are regulated by the SEC under the Investment Company Act of 1940. They operate by investing money on behalf of clients, who then share in the resulting profits and losses. The main activity is to manage the pooled funds of investors and provide returns based on the investment strategy pursued. The variety of investment companies ranges from mutual funds to hedge funds, each catering to different investment objectives and risk profiles.

1924: Introduction of the First Mutual Fund

In 1924, the first mutual fund, Massachusetts Investors Trust, was introduced in Boston. This fund introduced innovations such as continuous share offerings, share redemptions, and clear investment policies.

1929: Stock Market Crash

In 1929, the stock market crash and Great Depression temporarily hampered investment funds.

1933: Securities Act of 1933 Registration

In 1933, investment companies were required to register under the Securities Act of 1933.

1933: Securities Act of 1933

In 1933, the Securities Act of 1933 required public securities offerings, including of investment company shares, to be registered. It also mandated that investors receive a current prospectus describing the fund.

1934: Securities Exchange Act of 1934

In 1934, The Securities Exchange Act of 1934 regulated trading, buying and selling of securities including investment company shares.

1938: Creation of Self-Regulatory Organizations

In 1938, the Securities Exchange Act of 1934 authorized the creation of self-regulatory organizations like FINRA to oversee broker-dealers.

1940: Investment Company Act Regulation

In 1940, Investment companies in the United States became regulated by the U.S. Securities and Exchange Commission and must be registered under the Investment Company Act of 1940.

1940: Investment Advisers Act of 1940

In 1940, the Investment Advisers Act of 1940 regulated investment advisers to registered funds and other large advisers and established requirements for them.