P.R. Laws tit. 10, § 662
(a) When used in this chapter, “investment company” means any issuer which is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities and owns or proposes to acquire investment securities having a value exceeding 90 per centum of the total value of the balance of the assets of the said investment company remaining after deducting the securities of the Government of the United States, the Commonwealth of Puerto Rico, and the political subdivisions, organizations, agencies or instrumentalities thereof held by it, and cash items. As used in this section, “investment securities” includes all securities except those of the Government of the United States, the Commonwealth of Puerto Rico, and the political subdivisions, organizations, agencies or instrumentalities thereof.
(b) Investment companies shall be classified as diversified and nondiversified. An investment company is diversified, and shall be so designated when it invests in securities of another issuer not more than 5 per centum of the value of its total assets and owns not more than 20 per centum of the outstanding voting securities of such other issuer. An investment company which does not meet the requirements shall be classified as nondiversified but it shall not invest more than 25 per centum of the value of its total assets in securities of any other issuer, nor shall own more than 75 per centum of the outstanding voting securities of any other issuer.
(c) Investment companies may not at any time have less than eleven stockholders entitled to vote. Not more than 50 per centum of their voting securities may be in any amount controlled by less than six of the holders of such securities.
The Puerto Rico Industrial Development Company is hereby authorized to organize investment companies or participate in their organization and to own securities issued by them; Provided, That in these cases, the Governor of Puerto Rico may, when he deems it convenient to the public interest and to the investors, exempt investment companies from compliance with the requirements of the preceding paragraph of this subsection.
Every investment company shall offer its securities to the general public when its outstanding securities (other than short-term debentures) are owned for the benefit of more than 100 persons.
History —Oct. 19, 1954, No. 6, p. 220, § 2, eff. Jan. 1, 1955.