Applied Honest Company Multi Surface Cleaner Target is a public company that is in the business of developing, manufacturing, marketing and servicing integrated circuit fabrication equipment. Like many other technology-oriented companies, Applied Materials raised a substantial amount of capital for its current and future business operations.

The company sought to preserve its capital and maintain liquidity by investing in short-term investment grade and liquid fixed income and money market investments. In pursuing this strategy, Applied Materials inadvertently found itself within the statutory definition of "investment company" and potentially subject to the regulatory regime of the Act. Even if a company passively holds securities, as opposed to actively trading in them, it may be deemed an investment company.

The Act defines "investment securities" broadly to include virtually all securities except U. Thus, Applied Materials fits within the definition of investment company under Section 3 a 1 C of the Act. An issuer that meets the statutory definition of an investment company nevertheless may be deemed not to be an investment company under certain provisions of the Act.

Under Section 3 b 1 of the Act, an issuer is not an investment company if it is primarily engaged, directly or through wholly-owned subsidiaries, in a business other than that of investing, reinvesting, owning, holding or trading in securities. This provision is self-operating in that an issuer may decide to rely on it without seeking an order by the SEC.

An incorrect conclusion, however, could risk an enforcement action by the SEC against the issuer. In addition, law firms are typically reluctant to issue an opinion that a company is not an investment company in reliance on Section 3 b 1 because of the factual analysis required.

Although Applied Materials stated that it believes that it is exempt from the Act under Section 3 b 1it requested an order from the SEC because it could not consistently rely on other exemptions available under the Act and it wanted to remove any uncertainty regarding its status.

Applied Materials also conceded that it could not rely on this exemption because it experienced significant and unpredictable fluctuations in the ratio of Rule 3a 1 Investment Company Act from non-excepted securities relative to its net operating income due to the nature of the semiconductor industry.

Rule 3a-8 under the Act exempts an issuer that qualifies as a research and development company. Accordingly, Applied Materials sought relief under Section 3 b 2 of the Act. This Section authorizes the SEC, based on findings of facts applicable to an individual issuer, to grant an order declaring that the issuer is primarily engaged directly or through majority-owned subsidiaries or controlled companies conducting similar types of businesses in a business other than that of investing, reinvesting, owning, holding or trading in securities.

In Tonopah Mining Co. Historical Development. Applied Materials represented that it manufactures equipment used in the semiconductor integrated circuit fabrication process, and provides products and services that enhance manufacturing yields. Since its inception inApplied Materials claims that it has become the largest supplier of products and services to the Foreign Company Names semiconductor industry.

Public Representations of Policy. Applied Materials stated that it has never represented itself to be involved in any other business other than developing, manufacturing, marketing and services integrated circuit fabrication equipment. In its public reports and statements, Applied Materials styles itself as the largest supplier of products and services to the global semiconductor industry.

Activities of Officers and Directors. Other than the chief financial officer, only two out of 30 senior officers spent time monitoring cash balances and short-term investment securities. Nature of Assets. Applied Materials further stated that a significant portion of its assets consisted of intangible assets such as internally developed intellectual property that was not included in the value of its total assets for the purpose of determining its status under the Act.

Sources of Income and Revenue. In earlier periods, Applied Materials had operating Rule 3a 1 Investment Company Act while deriving net income from its investment securities. In obtaining the order, Applied Materials agreed to the following conditions: 1 it will continue to allocate and use its accumulated cash and investment securities for bona fide business purposes, and 2 it will refrain from investing or trading in securities for short-term speculative purposes. Section 3 b 2 orders are relatively rare.

Applied Materials, in obtaining an order declaring that it is primarily engaged in a business other Rule 3a 1 Investment Company Act that of investing, reinvesting, owning, holding or trading in securities, joins Yahoo!

Indeed, the SEC has been known to decline to issue orders by directing applicants to withdraw their applications. Further, Applied Materials stated that it had not Ford Motor Company Holiday Calendar 2019 any subsidiaries over 20 years. Consolidation, according to Applied Materials, would not result in the types of distortions that could result in including other types of subsidiaries.

Also, please note that our attorneys do not seek to practice law in any jurisdiction in which they are not properly authorized to do so. Client Alert. Keep up with the latest legal and industry insights, news, and events from MoFo Sign Up.

Applied Materials, an Inadvertent Investment Company Even if a company passively holds securities, as opposed to actively trading in them, it may be deemed an investment company. Exemptions from the Definition of Investment Company An issuer that meets the statutory Rule 3a 1 Investment Company Act of an investment company nevertheless may be deemed not to be an investment company under certain provisions of the Act. Summary Section 3 b 2 orders are relatively rare. Panagiotis C. Bayz Of Counsel.

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