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PROPOSED RULE UNDER THE
INVESTMENT COMPANY ACT OF 1940
STATUS OF PORTFOLIO INVESTMENT PROGRAMS
An "investment company" for purposes of this title is deemed to include any group of persons that have purchased a pre-selected portfolio of securities from a program that has all of the following characteristics:
(a) The program offers a pre-selected portfolio of securities reflecting a model portfolio selected pursuant to the program according to stated investment objectives, policies, or criteria.
(b) The program periodically reviews the model portfolio to determine whether it needs to be changed to satisfy a stated investment objective or strategy and (1) adds and/or subtracts securities from the model portfolio or (2) changes the relative weighting of securities within the model portfolio.
(c) The program provides or arranges for a service through which investors may execute the transactions in securities necessary to purchase the pre-selected portfolios specified in paragraph (a) of this rule and to incorporate into their portfolios the periodic changes in the model portfolio specified in paragraph (b) of this rule.