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House Bill 2627
118th Congress(2023-2024)
Increasing Investor Opportunities Act
Introduced
Introduced
Introduced in House on Apr 13, 2023
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H. R. 2627 (Introduced-in-House)


118th CONGRESS
1st Session
H. R. 2627


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

IN THE HOUSE OF REPRESENTATIVES

April 13, 2023

Mrs. Wagner (for herself and Mr. Meeks) introduced the following bill; which was referred to the Committee on Financial Services

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.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

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

SEC. 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 company’s assets in private funds solely or primarily because of the private funds’ status as private funds.

“(2) APPLICATION.—Notwithstanding section 6(f), this subsection shall also apply to a closed-end company that elects to be treated as a business development company.”.

(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 paragraph (1) or (7) of section 3(c).”.

(2) INVESTMENT ADVISERS ACT OF 1940.—The first paragraph (29) (relating to “private fund”) of section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)) is amended to read as follows:

“(29) The term ‘private fund’ has the meaning given that term under section 2(a) of the Investment Company Act of 1940.”.

(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 solely or primarily by reason of the amount of the company’s investment of assets in private funds.

“(B) In this paragraph—

“(i) the term ‘closed-end company’ has the meaning given that term under section 5(a) of the Investment Company Act of 1940, and includes a closed-end company that elects to be treated as a business development company under section 6(f) of such Act; and

“(ii) the term ‘private fund’ has the meaning given that term under section 2(a) of the Investment Company Act of 1940.”.

(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), 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)”.