What is not regulated by the Investment Company Act of 1940?

The Investment Company Act of 1940 primarily aims to regulate investment companies and protect investors while promoting transparency and integrity within the industry. This act does not set minimum rates of return for investment companies, as investment returns are contingent on market conditions and various other factors that can fluctuate over time.

Investment company mergers, as one aspect of how these entities operate within the regulatory framework, are indeed regulated under the act. Furthermore, while investment company performance and strategies may be scrutinized for compliance and transparency, there’s no provision within the act that establishes specific performance metrics or strategies, which would still fall under broader market dynamics.

On the other hand, broker-dealer transactions are subject to extensive regulation, particularly under different acts like the Securities Exchange Act, but they are not governed by the Investment Company Act of 1940. Thus, the correct option concerning what is not regulated by the act is the establishment of minimum rates of return, as such benchmarks are not part of the act's provisions.