1940 Act

Definition ∞ The 1940 Act is a United States federal law that regulates investment companies. This statute establishes a comprehensive framework for entities that pool money from investors and invest it in securities. It mandates registration, disclosure requirements, and operational standards to safeguard investor interests. Its provisions address aspects such as fund structure, governance, and conflicts of interest.
Context ∞ In the digital asset space, legal discourse frequently examines whether certain crypto investment vehicles or decentralized autonomous organizations (DAOs) fall under the purview of the 1940 Act. This classification carries significant implications for regulatory compliance, operational costs, and the scope of permissible activities for digital asset funds. The application of this act to novel financial structures remains a critical area of ongoing regulatory consideration.