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S. 3948: Increasing Investor Opportunities Act


The text of the bill below is as of Mar 29, 2022 (Introduced).


II

117th CONGRESS

2d Session

S. 3948

IN THE SENATE OF THE UNITED STATES

March 29, 2022

introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To amend the Investment Company Act of 1940 to prohibit limitations on closed-end companies investing in private funds, and for other purposes.

1.

Short title

This Act may be cited as the Increasing Investor Opportunities Act.

2.

Closed-end company authority to invest in private funds

(a)

In general

Section 5 of the Investment Company Act of 1940 (15 U.S.C. 80a–5) is amended by adding at the end the following:

(d)

Closed-End company authority To invest in private funds

(1)

In general

The Commission may not limit a closed-end company from investing any or all of the assets of the company in a private fund solely or primarily because of the status of the fund as a private fund.

(2)

Application

Notwithstanding section 6(f), this subsection shall apply to a closed-end company that elects to be treated as a business development company pursuant to section 54.

.

(b)

Definition of private fund

(1)

Investment Company Act of 1940

Section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)) is amended by adding at the end the following:

(55)

The term private fund means an issuer that would be an investment company but for the exception provided for in paragraph (1) or (7) of section 3(c).

.

(2)

Investment Advisers Act of 1940

Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)) is amended—

(A)

by redesignating the second paragraph (29) (relating to commodity pool and other terms) as paragraph (31); and

(B)

by amending paragraph (29) to read as follows:

(29)

The term private fund has the meaning given the term in section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)).

.

(c)

Treatment by national securities exchanges

Section 6(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(b)) is amended by adding at the end the following:

(11)
(A)

The rules of the exchange do not prohibit the listing or trading of securities of a closed-end company by reason of the amount of the investment by the company of assets in private funds.

(B)

In this paragraph—

(i)

the term closed-end company

(I)

has the meaning given the term in section 5(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–5(a)); and

(II)

includes a closed-end company that elects to be treated as a business development company under section 6(f) of the Investment Company Act of 1940 (15 U.S.C. 80a–6(f)); and

(ii)

the term private fund has the meaning given the term in section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)).

.

(d)

Investment limitation

Section 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(c)) is amended—

(1)

in paragraph (1), in the matter preceding subparagraph (A), in the second sentence, by striking subparagraphs (A)(i) and (B)(i) and inserting subparagraphs (A)(i), (B)(i), and (C); and

(2)

in paragraph (7)(D), by striking subparagraphs (A)(i) and (B)(i) and inserting subparagraphs (A)(i), (B)(i), and (C).