Stock market trading – The act also attempts to provide protection for investment companies from theft and embezzlement by affiliated persons.

First, there is a requirement that the securities of registered management companies shall be placed in the custody of a bank or brokers who are members of a national securities exchange subject to the rules and regulations of the Commission. Second, there is a provision covering the bonding of persons connected with such companies who have access to securities and funds. Under state statutes, generally known as "blue sky laws/' investors also receive protection. Except in a few states, investment companies have had no special difficulties in meeting either registration requirements or regulations concerned with the sale of securities. After twenty years, what can be said of the administration of the Investment Company Act and the cooperation between Washington and Wall Street? The investment company has reached maturity; it occupies a more important position in American finance than ever before.

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