Investment Company and. Variable Contracts Products Principals (Series 26) Practice Exam

Question: 1 / 400

If an investment company does not have $100,000 in net assets, when must it meet this requirement to register a public offering with the SEC?

30 days

45 days

60 days

90 days

For an investment company aiming to register a public offering with the SEC, maintaining a minimum of $100,000 in net assets is crucial. If the company currently falls short of this requirement, it is given a timeframe of 90 days to achieve this level of net assets. This regulation ensures that investment companies have a sufficient financial base to provide investors with a level of security and credibility in their offerings.

The 90-day period allows investment companies the necessary time to potentially raise capital, restructure their investments, or take other financial measures to reach the stipulated threshold. This requirement is designed to protect investors by ensuring that they are dealing with sufficiently capitalized entities that can effectively manage the risks and obligations associated with investment activities.

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