Investment Management Firm An investment company is a financial institution principally engaged in investing in securities. The investment company pooled the money to invest in securities. These companies were regulated by the SEC and must be registered under the Investment Company Act of 1940. company whose main business is holding and managing securities for investment purposes. Investment companies invest money on behalf of their clients who, in return, share in the profits and losses. Investment companies are designed for long-term investment, not short-term trading. Investment companies do not include brokerage companies, insurance companies, or banks. In United States securities law, there are at least three types of investment companies:[1] Open-End Management Investment Companies (mutual funds) Face amount certificates companies: very rare. Management companies Closed-End Management Investment Companies (closed-end funds) UITs (unit investment trusts): only issue redeemable units. In general, each of these investment companies must register under the Securities Act of 1933 and the Investment Company Act of 1940.[2] A fourth and lesser-known type of investment company under the Investment Company Act of 1940 is a Face-Amount Certificate Company. A major type of company not covered under the Investment Company Act is private investment companies, which are simply private companies that make investments in stocks or bonds, but are limited to under 250 investors and are not regulated by the SEC.[3] These funds are often composed of very wealthy investors