Section 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.
Sec. 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 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.”
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 the exception provided for in paragraph (1) or (7) of section 3(c).”
Investment Advisers Act of 1940— Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)) is amended—
by redesignating the second paragraph (29) (relating to “commodity pool” and other terms) as paragraph (31); and
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)).”
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)).”
Investment limitation— Section 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(c)) is amended—
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
in paragraph (7)(D), by striking “subparagraphs (A)(i) and (B)(i)” and inserting “subparagraphs (A)(i), (B)(i), and (C)”.