Definition

An excepted investment fund is an investment fund that is:

1. “independently managed,”
2. “widely held,” and
3. either “publicly traded or available” or “widely diversified.”

Normally, you have to disclose all of the underlying holdings of an investment fund, but you do not have to list any of the underlying holdings of an excepted investment fund. Instead of listing the underlying holdings, select “Yes” for the “EIF” field.

Additional Information about Key Terms

• “independently managed”:  For purposes of the excepted investment fund definition, an investment fund is independently managed if you lack the ability to exercise control over the financial interests held by the fund.
• “widely held”:  An investment fund is widely held if the fund has at least 100 natural persons as direct or indirect investors.
• “publicly traded or available”:  An investment fund is publicly traded if it is listed on a national exchange (NYSE or NASDAQ) or a regional exchange in the United States.  An investment fund is publicly available if it is, or was, open to anyone who wants to become an investor.  A fund is not disqualified solely because it has net worth or income requirements or if an investor must be an “accredited investor.”
• “widely diversified”:  An investment fund is widely diversified if it does not have a stated policy of concentrating its investments in any industry, business, or single country other than the United States or bonds of a single state within the United States.

Note:  The fact that an investment fund qualifies as an excepted investment fund is not relevant to a determination as to whether the investment qualifies for an exemption to the criminal conflict of interest statute at 18 U.S.C. § 208(a), pursuant to 5 C.F.R. part 2640.  Some excepted investment funds qualify for exemptions pursuant to part 2640, while other excepted investment funds do not qualify for such exemptions.  If an employee holds an excepted investment fund that is not exempt from 18 U.S.C. § 208(a), the ethics official may need additional information from the employee to determine whether the holdings of the fund create a conflict of interest and should advise the employee to monitor the fund’s holdings for potential conflicts of interest.