History of Investment company in Timeline

An investment company is a financial institution that focuses on managing and investing in securities, essentially pooling money from clients to invest on their behalf. In return, clients share in the investment's profits and losses. In the United States, these companies are regulated by the Securities and Exchange Commission (SEC) and are required to register under the Investment Company Act of 1940.

1924: Introduction of the first mutual fund

In 1924, the first mutual fund, or open-end fund, was introduced in Boston by the Massachusetts Investors Trust. This fund introduced innovations like continuous share offerings, share redemptions, and clear investment policies.

1929: Stock Market Crash and Great Depression

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 Restored Investor Confidence

In the 1930s, new securities regulations such as the 1933 Securities Act restored investor confidence in investment funds.

1934: Securities Exchange Act of 1934 Regulation

In 1934, the Securities Exchange Act of 1934 regulated the trading, buying and selling of securities, including investment company shares, and governed broker-dealers who sell fund 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 of 1940 Registration

In 1940, investment companies that chose to register under the Investment Company Act of 1940, or any investment fund subject to similar regulation, were considered regulated funds, providing protections and oversight for investors.

1940: Investment Advisers Act of 1940 Regulations

In 1940, the Investment Advisers Act of 1940 regulated investment advisers to registered funds and other large advisers, establishing requirements for registration, record keeping, and reporting.

1940: Exemption from Investment Company Act 1940

In 1940, the Investment Company Act of 1940 did not cover private investment companies limited to under 250 investors and not regulated by the SEC, which are private companies investing in stocks or bonds.