Shareholders of an investment company have the authority to approve changes to fundamental investment policies. Fundamental policies are core operating restrictions or investment mandates that define how the fund may invest and operate. Because these policies are central to the nature of the fund the shareholder purchased, they cannot be changed merely by the portfolio manager, marketing officer, or management company acting alone. The SEC regulates investment companies and requires disclosures, but it does not function as the voting body that approves a fund’s fundamental policy change. The portfolio manager makes day-to-day investment decisions within the permitted mandate but cannot unilaterally alter fundamental restrictions. The chief marketing officer has no investment-policy approval authority. The SIE outline places investment companies within packaged products and requires knowledge of disclosures, net asset value, costs, fees, share classes, and the regulatory framework governing investment companies. The applicable regulatory foundation is the Investment Company Act of 1940, which the SIE outline identifies as a foundational federal statute for the exam. Reference: Section 2.1.4 Packaged Products; Investment Company Act of 1940 topics.