Which statements are true about the regulation of mutual funds in the United States? Check all that apply: (1) The Investment Company Act of 1940 primarily regulates corporate equities, not mutual funds. (2) The National Association of Securities Dealers was tasked with supervising mutual fund distributions. (3) The SEC is the primary regulatory body overseeing mutual funds. (4) Mutual funds are exempt from the Securities Act of 1933. (5) The Securities Exchange Act of 1934 includes provisions against fraud in mutual fund transactions.

What you are being asked to identify

You need to match each statement to the correct U. S. securities law or regulator. Mutual funds are “investment companies,” so the key framework is the SEC plus the 1933, 1934, and 1940 Acts, along with self-regulatory organizations that oversee sales through broker-dealers.

Checking each statement

(1) Investment Company Act of 1940 primarily regulates corporate equities, not mutual funds

False. The Investment Company Act of 1940 is one of the main federal laws governing mutual funds and other registered investment companies. It sets rules on fund structure, governance, custody, fees, and conflicts of interest.

(2) NASD was tasked with supervising mutual fund distributions

True. The NASD (now FINRA) is a self-regulatory organization for broker-dealers, and it oversees how mutual funds are sold and distributed through broker-dealers, including sales practices and certain marketing and compensation rules.

(3) The SEC is the primary regulatory body overseeing mutual funds

True. The Securities and Exchange Commission administers and enforces the major federal securities laws that apply to mutual funds, including registration, disclosure, and conduct rules.

(4) Mutual funds are exempt from the Securities Act of 1933

False. Mutual funds that offer shares to the public generally must register those shares under the Securities Act of 1933 and provide a prospectus and ongoing disclosures (subject to specific exemptions that typically do not apply to standard retail mutual funds).

(5) The Securities Exchange Act of 1934 includes provisions against fraud in mutual fund transactions

True. The 1934 Act and related SEC rules include broad anti-fraud provisions (commonly associated with Rule $10b$-$5$ under the 1934 Act) that can apply to misstatements or deceptive conduct involving securities, including mutual fund shares.

Final selection

Correct choices: (2), (3), and (5).