A bill to modernize certain provisions of Subchapter M of the Internal Revenue Code of 1954.

Amends the Internal Revenue Code to repeal the provisions which provide that a regulated investment company does not qualify for conduit treatment (no taxation at the corporate level) if 30 percent or more of its gross income is derived from the sale (or other disposition) of stock or securities held for less than three months.

Expands the definition of permitted income of regulated investment companies to provide that "securities" has the same meaning as it does under the Investment Company Act of 1940. Provides that foreign currency gains are included in the definition of qualifying income as well as other income with respect to a regulated investment company's business of investing in stocks, securities, or income from gains from options or futures contracts. Permits the Secretary of the Treasury to issue regulations which exclude from qualifying income foreign currency gains that are not ancillary to the company's principal business of investing in stock or securities (or options and futures thereon).

Provides that each separate portfolio in a series fund will be treated as a separate corporation for purpose of eligibility for conduit treatment of a regulated investment company.

Extends to 60 days the period for mailing various notices to shareholders of regulated investment companies.

Expands the definition of "third-party recordkeepers" to include regulated investment companies with respect to certain protections in connection with summonses that are served for obtaining records.

Establishes a transition rule for series funds that had been treated for tax purposes as a single corporation.