April 2012

It is well settled that loans (even if just a single loan) are securities under the Investment Company Act of 1940 (“ICA”) and that the definition of “security” under the ICA is much broader than that definition under the Securities Act of 1933 and the Securities and Exchange Act of 1934. Aside from treatises and no-action letters discussing the fact that promissory notes are securities for purposes of the ICA, below are some references that you can review regarding the subject:

1. Protecting Investors: A Half Century of Investment Company Regulation, a report prepared by the Division of Investment Management of the Securities and Exchange Commission (1992). Specifically, footnote 251 of Chapter 1 (page 67) which provides, in relevant part:

Continue Reading