SEC Says Google 'May Be Mutual Fund'

The search engine company Google could be classed as a mutual fund, according to the Securities and Exchange Commission (SEC), potentially causing a headache for the internet giant's executives. Under SEC rules, any company that has more than 40 per

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The search engine company Google could be classed as a mutual fund, according to the Securities and Exchange Commission (SEC), potentially causing a headache for the internet giant’s executives.

Under SEC rules, any company that has more than 40 per cent of its assets in securities can be deemed a mutual fund, making mutual fund industry regulations applicable. Now that $10 billion of Google’s assets are in securities, it is now in danger of being classed a mutual fund, a move that would prevent the company from investing its money in higher-yielding areas.

In an attempt to prevent this from happening, Google’s lawyers have asked the SEC to make an exception, saying that Google has never been “in the business of investing, reinvesting, or trading in securities”. It is not yet clear whether such an exemption will be granted, although the precedent has been set by Google’s rivals Microsoft, which successfully demonstrated that its core business was not in investments. Google is expected to argue that it will be unable to compete in the current internet market if it becomes subject to mutual fund regulations.

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