Investment Company Act
What percentage of a mutual fund's board of directors must be independent (non-interested)?
Under the Investment Company Act of 1940, at least 40% of a mutual fund's board of directors must be independent.
Complete Analysis & Legal Rationale
Under the Investment Company Act of 1940, at least 40% of a mutual fund's board of directors must be independent.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Regulatory framework for investment companies including mutual funds (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.