I
118THCONGRESS
1
STSESSION 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
APRIL13, 2023
Mrs. W
AGNER(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 Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Increasing Investor 4
Opportunities Act’’. 5
SEC. 2. CLOSED-END COMPANY AUTHORITY TO INVEST IN 6
PRIVATE FUNDS. 7
(a) I
NGENERAL.—Section 5 of the Investment Com-8
pany Act of 1940 (15 U.S.C. 80a–5) is amended by add-9
ing at the end the following: 10
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‘‘(d) CLOSED-ENDCOMPANYAUTHORITYTOINVEST 1
INPRIVATEFUNDS.— 2
‘‘(1) I
N GENERAL.—The Commission may not 3
limit a closed-end company from investing any or all 4
of the company’s assets in private funds solely or 5
primarily because of the private funds’ status as pri-6
vate funds. 7
‘‘(2) A
PPLICATION.—Notwithstanding section 8
6(f), this subsection shall also apply to a closed-end 9
company that elects to be treated as a business de-10
velopment company.’’. 11
(b) D
EFINITION OFPRIVATEFUND.— 12
(1) I
NVESTMENT COMPANY ACT OF 1940 .—Sec-13
tion 2(a) of the Investment Company Act of 1940 14
(15 U.S.C. 80a–2(a)) is amended by adding at the 15
end the following: 16
‘‘(55) The term ‘private fund’ means an issuer 17
that would be an investment company but for para-18
graph (1) or (7) of section 3(c).’’. 19
(2) I
NVESTMENT ADVISERS ACT OF 1940 .—The 20
first paragraph (29) (relating to ‘‘private fund’’) of 21
section 202(a) of the Investment Advisers Act of 22
1940 (15 U.S.C. 80b–2(a)) is amended to read as 23
follows: 24
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‘‘(29) The term ‘private fund’ has the meaning 1
given that term under section 2(a) of the Investment 2
Company Act of 1940.’’. 3
(c) T
REATMENT BY NATIONALSECURITIESEX-4
CHANGES.—Section 6(b) of the Securities Exchange Act 5
of 1934 (15 U.S.C. 78f(b)) is amended by adding at the 6
end the following: 7
‘‘(11)(A) The rules of the exchange do not pro-8
hibit the listing or trading of securities of a closed- 9
end company solely or primarily by reason of the 10
amount of the company’s investment of assets in pri-11
vate funds. 12
‘‘(B) In this paragraph— 13
‘‘(i) the term ‘closed-end company’ has the 14
meaning given that term under section 5(a) of 15
the Investment Company Act of 1940, and in-16
cludes a closed-end company that elects to be 17
treated as a business development company 18
under section 6(f) of such Act; and 19
‘‘(ii) the term ‘private fund’ has the mean-20
ing given that term under section 2(a) of the 21
Investment Company Act of 1940.’’. 22
(d) I
NVESTMENTLIMITATION.—Section 3(c) of the 23
Investment Company Act of 1940 (15 U.S.C. 80a–3(c)) 24
is amended— 25
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(1) in paragraph (1), by striking ‘‘subpara-1
graphs (A)(i) and (B)(i)’’ and inserting ‘‘subpara-2
graphs (A)(i), (B)(i), and (C)’’; and 3
(2) in paragraph (7)(D), by striking ‘‘subpara-4
graphs (A)(i) and (B)(i)’’ and inserting ‘‘subpara-5
graphs (A)(i), (B)(i), and (C)’’. 6
Æ
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