Section 22(d) of the Investment Company Act of 1940: Its Original Purpose and Present Function

James V. Heffernan, James F. Jorden
1973 Duke law journal  
The implementation of section 22(d) of the Investment Company Act of 1940 has resulted in a form of retail price maintenance in the mutual fund industry. The justification for this anti-competitive situation has largely rested on the assumption that section 22(d) was intended to eliminate price discrimination as between general members of the purchasing public. In this article Messrs. Heffernan and Jorden carefully examine the legislative history of section 22(d) and conclude that the section
more » ... that the section was aimed, not at price discrimination in the above sense, but at value dilution abuses resulting from riskless trading on the part of dealers, distributors and mutual fund insiders. Finding that the specific abuses to which section 22(d) was initially addressed have been eliminated by other means, the authors suggest that considerations of the future role of 22(d) (whether in the context of an attempt to repeal or simply an application for exemption) should reflect this historical perspective.
doi:10.2307/1371735 fatcat:sa4ksjq6lndo3hzclb22unaer4