1. Short title
This Act may be cited as the “Increasing Investor Opportunities Act”.
Increasing Investor Opportunities Act
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.
2. Closed-end company authority to invest in private funds
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.”
Definition of private fund—
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).”
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.”
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.”
Investment limitation— Section 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(c)) is amended—
in paragraph (1), by striking “subparagraphs (A)(i) and (B)(i)” and inserting “subparagraphs (A)(i), (B)(i), and (C)”; and
in paragraph (7)(D), by striking “subparagraphs (A)(i) and (B)(i)” and inserting “subparagraphs (A)(i), (B)(i), and (C)”.
Effective date— The amendments made by this section shall take effect after the end of the 2-year period beginning on the date of enactment of this Act, or such earlier date as the Securities and Exchange Commission may determine is necessary or appropriate in the public interest or for the protection of investors, upon notification of the Congress and the public.