Maryland law: continuing support for investment companies

For many years Maryland has been one of the most popular jurisdictions in which to organize an investment company. A large number of open-end investment companies registered under the Investment Company Act of 1940, as amended (the 1940 Act), have been incorporated in Maryland under the Maryland General Corporation Law (MGCL). Additionally, numerous closed-end investment companies registered under the 1940 Act and closed-end investment companies that elect to be treated as business development companies under the 1940 Act have been incorporated in Maryland. One reason for the appeal of Maryland is that many provisions of the MGCL (beginning in the early years with the unrestricted redeemability of common shares) have been specifically tailored to address particular issues arising from the structure and operations of mutual funds and closed-end investment companies.