Section 32 of Act

SEC. 32. (80a–31)

(a) It shall be unlawful for any registered

management company or registered face-amount certificate company

to file with the Commission any financial statement signed or

certified by an independent public accountant, unless—

(1) such accountant shall have been selected at a meeting

held within thirty days before or after the beginning of the fiscal

year or before the annual meeting of stockholders in that

year by the vote, cast in person, of a majority of those members

of the board of directors who are not interested persons of such

registered company;

(2) such selection shall have been submitted for ratification

or rejection at the next succeeding annual meeting of stockholders

if such meeting be held, except that any vacancy occurring

between annual meetings, due to the death or resignation

of the accountant, may be filled by the vote of a majority of

those members of the board of directors who are not interested

persons of such registered company, cast in person at a meeting

called for the purpose of voting on such action;

(3) the employment of such accountant shall have been

conditioned upon the right of the company by vote of a majority

of the outstanding voting securities at any meeting called

for the purpose to terminate such employment forthwith without

any penalty; and

(4) such certificate or report of such accountant shall be

addressed both to the board of directors of such registered company

and to the security holders thereof.

If the selection of an accountant has been rejected pursuant to

paragraph (2) or his employment terminated pursuant to paragraph

(3), the vacancy so occurring may be filled by a vote of a majority

of the outstanding voting securities, either at the meeting at

which the rejection or termination occurred or, if not so filled, at

a subsequent meeting which shall be called for the purpose. In the

case of a common-law trust of the character described in section

16(c), no ratification of the employment of such accountant shall be

required but such employment may be terminated and such

accountant removed by action of the holders of record of a majority

of the outstanding shares of beneficial interest in such trust in the

same manner as is provided in section 16(c) in respect of the removal

of a trustee, and all the provisions therein contained as to

the calling of a meeting shall be applicable. In the event of such

termination and removal, the vacancy so occurring may be filled by

action of the holders of record of a majority of the shares of beneficial

interest either at the meeting, if any, at which such termination

and removal occurs, or by instruments in writing filed with

the custodian, or if not so filed within a reasonable time then at

a subsequent meeting which shall be called by the trustees for the

purpose. The provisions of paragraph (42) of section 2(a) as to a

majority shall be applicable to the vote cast at any meeting of the

shareholders of such a trust held pursuant to this subsection.

(b) No registered management company or registered faceamount

certificate company shall file with the Commission any

financial statement in the preparation of which the controller or

other principal accounting officer or employee of such company participated,

unless such controller, officer or employee was selected,

either by vote of the holders of such company’s voting securities at

the last annual meeting of such security holders, or by the board

of directors of such company.

(c) The Commission is authorized, by rules and regulations or

order in the public interest or for the protection of investors, to require

accountants and auditors to keep reports, work sheets, and

other documents and papers relating to registered investment companies

for such period or periods as the Commission may prescribe,

and to make the same available for inspection by the Commission

or any member or representative thereof.