All this is directed toward avoiding the temptations for self-dealing. The act limits the extent to which persons affiliated with management may become directors. In the event that neither the management organization nor an affiliate thereof serves as principal underwriter for the fund, six out of ten board members of a fund may be affiliated persons. This drops to four out of ten if the management and the principal underwriter are the same, or are affiliated with management; and in several other cases principally where, among other things, no sales charge is made on sales and the management fee of the fund is not over 1 per cent annually of average net assets, all of the fund directors but one may be affiliates of management. A recent thoughtful study concludes that "in practice it is not the number of affiliated directors that effectuates the result intended by the statute, but their diligence and astuteness and the sense of responsibility of the management personnel."x Insider trading in the securities of investment companies is subject to the same regulation as that contained in the Securities and Exchange Act of 1934.

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