Securities Advisory: Safe Harbor From Definition of "Investment Company"
7/18/2003
On June 16, 2003, the Securities and Exchange Commission (SEC) adopted new Rule 3a-8 (the "Rule") under the Investment Company Act of 1940 (the "Act"). The Rule provides a non-exclusive safe harbor from the definition of an "investment company" under the Act for certain bona fide research and development companies. The Rule updates and codifies the analysis set forth in an order issued by the SEC to the ICOS Corporation in 1993. Numerous qualifiers must be met for a company to be eligible for reliance on a non-exclusive safe harbor from being defined as an investment company. This issue provides background on the Rule, details the qualifiers and includes the text of the Rule.
