IB
Union Calendar No. 252
118THCONGRESS
1
STSESSION H. R. 2627
[Report No. 118–312]
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
D
ECEMBER12, 2023
Additional sponsors: Mr. T
ORRESof New York, Mr. DAVIDSCOTTof Georgia,
and Mr. N
ICKEL
D
ECEMBER12, 2023
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on April 13, 2023]
VerDate Sep 11 2014 00:01 Dec 13, 2023 Jkt 049200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H2627.RH H2627 2
•HR 2627 RH
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.
VerDate Sep 11 2014 00:01 Dec 13, 2023 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H2627.RH H2627 3
•HR 2627 RH
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 Op-4
portunities 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 adding 9
at the end the following: 10
‘‘(d) C
LOSED-ENDCOMPANYAUTHORITY TOINVEST IN 11
P
RIVATEFUNDS.— 12
‘‘(1) I
N GENERAL.—Except as otherwise prohib-13
ited or restricted by this Act (or any rule issued 14
under this Act), the Commission may not prohibit or 15
otherwise limit a closed-end company from investing 16
any or all of the assets of the closed-end company in 17
securities issued by private funds. 18
‘‘(2) O
THER RESTRICTIONS ON COMMISSION AU -19
THORITY.— 20
‘‘(A) I
N GENERAL.—Except as otherwise 21
prohibited or restricted by this Act (or any rule 22
issued under this Act) or to the extent permitted 23
by subparagraph (B), the Commission may not 24
VerDate Sep 11 2014 00:01 Dec 13, 2023 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H2627.RH H2627 4
•HR 2627 RH
impose any condition on, restrict, or otherwise 1
limit— 2
‘‘(i) the offer to sell, or the sale of, secu-3
rities issued by a closed-end company that 4
invests, or proposes to invest, in securities 5
issued by private funds; or 6
‘‘(ii) the listing of the securities of a 7
closed-end company described in clause (i) 8
on a national securities exchange. 9
‘‘(B) U
NRELATED RESTRICTIONS .—The 10
Commission may impose a condition on, restrict, 11
or otherwise limit an activity described in clause 12
(i) or (ii) of subparagraph (A) if that condition, 13
restriction or limitation is unrelated to the un-14
derlying characteristics of a private fund or the 15
status of a private fund as a private fund. 16
‘‘(3) A
PPLICATION.—Notwithstanding section 17
6(f), this subsection shall also apply to a closed-end 18
company that elects to be treated as a business devel-19
opment company pursuant to section 54.’’. 20
(b) D
EFINITION OFPRIVATEFUND.—Section 2(a) of 21
the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)) 22
is amended by adding at the end the following: 23
VerDate Sep 11 2014 00:01 Dec 13, 2023 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H2627.RH H2627 5
•HR 2627 RH
‘‘(55) The term ‘private fund’ has the meaning 1
given in section 202(a) of the Investment Advisers Act 2
of 1940 (15 U.S.C. 80b–2(a)).’’. 3
(c) T
REATMENT BY NATIONALSECURITIESEX-4
CHANGES.—Section 6 of the Securities Exchange Act of 5
1934 (15 U.S.C. 78f) is amended by adding at the end the 6
following: 7
‘‘(m)(1) Except as otherwise prohibited or restricted by 8
rules of the exchange that are consistent with section 5(d) 9
of the Investment Company Act of 1940 (15 U.S.C. 80a– 10
5(d)), an exchange may not prohibit, condition, restrict, or 11
impose any other limitation on the listing or trading of 12
the securities of a closed-end company when the closed-end 13
company invests, or may invest, some or all of the assets 14
of the closed-end company in securities issued by private 15
funds. 16
‘‘(2) In this paragraph— 17
‘‘(A) the term ‘closed-end company’— 18
‘‘(i) has the meaning given the term in sec-19
tion 5(a) of the Investment Company Act of 1940 20
(15 U.S.C. 80a–5(a)); and 21
‘‘(ii) includes a closed-end company that 22
elects to be treated as a business development 23
company pursuant to section 54 of the Invest-24
VerDate Sep 11 2014 00:01 Dec 13, 2023 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H2627.RH H2627 6
•HR 2627 RH
ment Company Act of 1940 (15 U.S.C. 80a–53); 1
and 2
‘‘(B) the term ‘private fund’ has the meaning 3
given the term in section 2(a) of the Investment Com-4
pany Act of 1940 (15 U.S.C. 80a–2(a))).’’. 5
(d) I
NVESTMENTLIMITATION.—Section 3(c) of the In-6
vestment Company Act of 1940 (15 U.S.C. 80a–3(c)) is 7
amended— 8
(1) in paragraph (1), in the matter preceding 9
subparagraph (A), in the second sentence, by striking 10
‘‘subparagraphs (A)(i) and (B)(i)’’ and inserting 11
‘‘subparagraphs (A)(i), (B)(i), and (C)’’; and 12
(2) in paragraph (7)(D), by striking ‘‘subpara-13
graphs (A)(i) and (B)(i)’’ and inserting ‘‘subpara-14
graphs (A)(i), (B)(i), and (C)’’. 15
(e) R
ULES OFCONSTRUCTION.— 16
(1) Nothing in this Act or the amendments made 17
by this Act may be construed to limit or amend any 18
fiduciary duty owed to a closed-end company (as de-19
fined in section 5(a)(2) of the Investment Company 20
Act of 1940 (15 U.S.C. 80a-5(a)(2))) or by an invest-21
ment adviser (as defined under section 2(a) of the In-22
vestment Company Act of 1940 (15 U.S.C. 80a–2(a))) 23
to a closed-end company. 24
VerDate Sep 11 2014 00:01 Dec 13, 2023 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H2627.RH H2627 7
•HR 2627 RH
(2) Nothing in this Act or the amendments made 1
by this Act may be construed to limit or amend the 2
valuation, liquidity, or redemption requirements or 3
obligations of a closed-end company (as defined in 4
section 5(a)(2) of the Investment Company Act of 5
1940 (15 U.S.C. 80a-5(a)(2))) as required by the In-6
vestment Company Act of 1940. 7
VerDate Sep 11 2014 00:01 Dec 13, 2023 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H2627.RH H2627 Union Calendar No.
252
118
TH
CONGRESS
1
ST
S
ESSION
H. R. 2627
[Report No. 118–312]
A BILL
To amend the Investment Company Act of 1940 to
prohibit limitations on closed-end companies in-
vesting in private funds, and for other purposes.
D
ECEMBER
12, 2023
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed
VerDate Sep 11 2014 00:01 Dec 13, 2023 Jkt 049200 PO 00000 Frm 00008 Fmt 6651 Sfmt 6651 E:\BILLS\H2627.RH H2627