When is the transient investment company exemption available to non-US issuers?
Rule 3a-2 under the Investment Company Act provides temporary relief from the registration requirements of the Investment Company Act to an issuer that, on a transient basis, is deemed to be an investment company because of an unusual business occurrence. A typical example is a start-up company that temporarily invests the proceeds of an offering or other capital raising exercise in securities during the period of time in which it is negotiating and finalising the purchase of assets. The transient investment company exemption may be relied upon for a period of up to one year by an issuer that can demonstrate a bona fide intent to be, as soon as is reasonably possible, engaged primarily in a business other than that of investing, reinvesting, owning, holding or trading in securities. An issuer may avail itself of this exemption only once in any three-year period.
Related Questions
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- How is the transient investment company exemption one-year period calculated?
