should the ric not distribute this share of income it may be subject to an excise tax by the irs the ric would also have to issue an irs form 2439 to shareholders stating that the capital gains are being retained 
finally to qualify as a regulated investment company at least 50 of a company s total assets must be in the form of cash cash equivalents or securities no more than 25 of the company s total assets may be invested in securities of a single issuer unless the investments are government securities or the securities of other rics real world examplepresident obama signed the regulated investment company modernization act of 2010 into law dec 22 2010 it made changes to the rules governing the tax treatment of regulated investment companies rics including open end mutual funds closed end funds and most exchange traded funds the last update to the rules governing rics was the tax reform act of 1986 the primary reason for the 2010 ric modernization act was due to vast changes in the mutual fund industry in the 25 years between 1986 and 2010 further many of the tax rules applicable to rics became obsolete created administrative burdens or caused uncertainty 