Sec. 218.740 Defined terms relating to the
sweep accounts exception from the
definition of ‘‘broker.’’
For purposes of section 3(a)(4)(B)(v) of
the Act (15 U.S.C. 78c(a)(4)(B)(v)), the
following terms shall have the meaning
provided:
(a) Deferred sales load has the same
meaning as in 17 CFR 270.6c–10.
(b) Money market fund means an
open-end company registered under the
Investment Company Act of 1940 (15
U.S.C. 80a–1 et seq.) that is regulated as
a money market fund pursuant to 17
CFR 270.2a–7.
(c)(1) No-load, in the context of an
investment company or the securities
issued by an investment company,
means, for securities of the class or
series in which a bank effects
transactions, that:
(i) That class or series is not subject
to a sales load or a deferred sales load;
and
(ii) Total charges against net assets of
that class or series of the investment
company’s securities for sales or sales
promotion expenses, for personal
service, or for the maintenance of
shareholder accounts do not exceed 0.25
of 1% of average net assets annually.
(2) For purposes of this definition,
charges for the following will not be
considered charges against net assets of
a class or series of an investment
company’s securities for sales or sales
promotion expenses, for personal
service, or for the maintenance of
shareholder accounts:
(i) Providing transfer agent or subtransfer
agent services for beneficial
owners of investment company shares;
(ii) Aggregating and processing
purchase and redemption orders for
investment company shares;
(iii) Providing beneficial owners with
account statements showing their
purchases, sales, and positions in the
investment company;
(iv) Processing dividend payments for
the investment company;
(v) Providing sub-accounting services
to the investment company for shares
held beneficially;
(vi) Forwarding communications from
the investment company to the
beneficial owners, including proxies,
shareholder reports, dividend and tax
notices, and updated prospectuses; or
(vii) Receiving, tabulating, and
transmitting proxies executed by
beneficial owners of investment
company shares.
(d) Open-end company has the same
meaning as in section 5(a)(1) of the
Investment Company Act of 1940 (15
U.S.C. 80a–5(a)(1)).
(e) Sales load has the same meaning
as in section 2(a)(35) of the Investment
Company Act of 1940 (15 U.S.C. 80a–
2(a)(35)).
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