This Article offers the first general examination of mutual fund capital structure regulation under the Investment Company Act of 1940. The Article reaches two conclusions: First, the regulation of mutual funds' capital structure is incoherent. Although we might imagine several purposes for this regulation, such as limiting risks to investors and the financial system and preventing investor confusion, the regulation is not actually consistent with these purposes. It does both too much and too little to achieve them. Second, although at present the only type of security mutual funds can issue is common stock, there is no compelling reason why they should not also be allowed to issue debt securities. Debt securities might benefit investors by offering a safer and more stable alternative to the common stock of money market funds. Unlike shares in money market funds, debt securities could offer fixed interest rates and the safety of senior priorities. Such a proposal is clearly feasible, because mutual funds already borrow from banks and derivative counterparties, and they formerly issued debt securities in the era before regulation.
The export option will allow you to export the current search results of the entered query to a file. Different
formats are available for download. To export the items, click on the button corresponding with the preferred download format.
By default, clicking on the export buttons will result in a download of the allowed maximum amount of items.
To select a subset of the search results, click "Selective Export" button and make a selection of the items you want to export.
The amount of items that can be exported at once is similarly restricted as the full export.
After making a selection, click one of the export format buttons. The amount of items that will be exported is indicated in the bubble next to export format.