ICA Rule 3a-2 provides a time-limited (one year) exemption for an issuer that, generally upon the occurrence of an extraordinary event, becomes an “investment company” by virtue of its holdings of “investment securities” (essentially non-majority interests in other companies), but expects to take reasonably prompt action so that it will go outside of the ICA Section 3(a)(1)(C) quantitative test of an investment company. Such entities are commonly referred to as “transient investment companies.” Actions that might cause an operating company to fall within the quantitative definition of “investment company” are, for example, the sale of a majority-owned subsidiary; conversely, an entity may take itself outside of the definition of investment company by using its cash to take a majority interest in an operating subsidiary. Rule 3a-2 specifies, among other things, how the one‑year time period during which an issuer may rely on the transient investment company exemption is measured, and the frequency with which the exemption may be invoked.
While there is some overlap in concepts, a transient investment company is different from an inadvertent investment company in that a transient investment company expects to take action to bring itself outside the quantitative tests, while an inadvertent investment company expects to continue to fail those tests, and claims an exemption on the basis that the substance of its activities do not constitute passive investment. See generally the topic page on Inadvertent Investment Companies (ICA Section 3(b)).
For a comprehensive list of exemptions and exclusions from registration available to investment companies, see the topic page on Exemptions from Registration under the Investment Company Act.