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Regulation

Mutual funds are closely regulated under the Investment Company Act of 1940, which is widely regarded as a very successful piece of federal legislation.[3] Under this act, the SEC closely regulates mutual funds, which must file semiannual reports with the SEC.

[3] Mutual funds are also regulated under the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940.

Shareholders have specified voting rights, including the right to elect directors and the right to approve any material changes in the terms of a fund's investment advisory contract. Annual and semiannual shareholder reports are required.


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