Us Congress 2023-2024 Regular Session

Us Congress House Bill HB2627 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	IB
2		-	Union Calendar No. 252
	1	+	I
3	2		118THCONGRESS
4	3		1
5	4		STSESSION H. R. 2627
6		-	[Report No. 118–312]
7	5		To amend the Investment Company Act of 1940 to prohibit limitations
8	6		on closed-end companies investing in private funds, and for other purposes.
9	7		IN THE HOUSE OF REPRESENTATIVES
10	8		APRIL13, 2023
11	9		Mrs. W
12	10		AGNER(for herself and Mr. MEEKS) introduced the following bill;
13	11		which was referred to the Committee on Financial Services
14		-	D
15		-	ECEMBER12, 2023
16		-	Additional sponsors: Mr. T
17		-	ORRESof New York, Mr. DAVIDSCOTTof Georgia,
18		-	and Mr. N
19		-	ICKEL
20		-	D
21		-	ECEMBER12, 2023
22		-	Reported with an amendment, committed to the Committee of the Whole
23		-	House on the State of the Union, and ordered to be printed
24		-	[Strike out all after the enacting clause and insert the part printed in italic]
25		-	[For text of introduced bill, see copy of bill as introduced on April 13, 2023]
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27		-	•HR 2627 RH
28	12		A BILL
29	13		To amend the Investment Company Act of 1940 to prohibit
30	14		limitations on closed-end companies investing in private
31	15		funds, and for other purposes.
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33		-	•HR 2627 RH
34	16		Be it enacted by the Senate and House of Representa-1
35	17		tives of the United States of America in Congress assembled, 2
36	18		SECTION 1. SHORT TITLE. 3
37		-	This Act may be cited as the ‘‘Increasing Investor ~~Op-~~4
38		-	~~portunities~~ Act’’. 5
	19	+	This Act may be cited as the ‘‘Increasing Investor 4
	20	+	Opportunities Act’’. 5
39	21		SEC. 2. CLOSED-END COMPANY AUTHORITY TO INVEST IN 6
40	22		PRIVATE FUNDS. 7
41	23		(a) I
42	24		NGENERAL.—Section 5 of the Investment Com-8
43		-	pany Act of 1940 (15 U.S.C. 80a–5) is amended by adding 9
44		-	at the end the following: 10
45		-	‘‘(d) C
46		-	LOSED-ENDCOMPANYAUTHORITY TOINVEST IN 11
47		-	P
48		-	RIVATEFUNDS.— 12
	25	+	pany Act of 1940 (15 U.S.C. 80a–5) is amended by add-9
	26	+	ing at the end the following: 10
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	29	+	•HR 2627 IH
	30	+	‘‘(d) CLOSED-ENDCOMPANYAUTHORITYTOINVEST 1
	31	+	INPRIVATEFUNDS.— 2
49	32		‘‘(1) I
50		-	N GENERAL.—Except as otherwise prohib-13
51		-	ited or restricted by this Act (or any rule issued 14
52		-	under this Act), the Commission may not prohibit or 15
53		-	otherwise limit a closed-end company from investing 16
54		-	any or all of the assets of the closed-end company in 17
55		-	securities issued by private funds. 18
56		-	‘‘(2) O
57		-	THER RESTRICTIONS ON COMMISSION AU -19
58		-	THORITY.— 20
59		-	‘‘(A) I
60		-	N GENERAL.—Except as otherwise 21
61		-	prohibited or restricted by this Act (or any rule 22
62		-	issued under this Act) or to the extent permitted 23
63		-	by subparagraph (B), the Commission may not 24
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65		-	•HR 2627 RH
66		-	impose any condition on, restrict, or otherwise 1
67		-	limit— 2
68		-	‘‘(i) the offer to sell, or the sale of, secu-3
69		-	rities issued by a closed-end company that 4
70		-	invests, or proposes to invest, in securities 5
71		-	issued by private funds; or 6
72		-	‘‘(ii) the listing of the securities of a 7
73		-	closed-end company described in clause (i) 8
74		-	on a national securities exchange. 9
75		-	‘‘(B) U
76		-	NRELATED RESTRICTIONS .—The 10
77		-	Commission may impose a condition on, restrict, 11
78		-	or otherwise limit an activity described in clause 12
79		-	(i) or (ii) of subparagraph (A) if that condition, 13
80		-	restriction or limitation is unrelated to the un-14
81		-	derlying characteristics of a private fund or the 15
82		-	status of a private fund as a private fund. 16
83		-	‘‘(3) A
84		-	PPLICATION.—Notwithstanding section 17
85		-	6(f), this subsection shall also apply to a closed-end 18
86		-	company that elects to be treated as a business devel-19
87		-	opment company pursuant to section 54.’’. 20
	33	+	N GENERAL.—The Commission may not 3
	34	+	limit a closed-end company from investing any or all 4
	35	+	of the company’s assets in private funds solely or 5
	36	+	primarily because of the private funds’ status as pri-6
	37	+	vate funds. 7
	38	+	‘‘(2) A
	39	+	PPLICATION.—Notwithstanding section 8
	40	+	6(f), this subsection shall also apply to a closed-end 9
	41	+	company that elects to be treated as a business de-10
	42	+	velopment company.’’. 11
88	43		(b) D
89		-	EFINITION OFPRIVATEFUND.—Section 2(a) of 21
90		-	the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)) 22
91		-	is amended by adding at the end the following: 23
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93		-	•HR 2627 RH
94		-	‘‘(55) The term ‘private fund’ has the meaning 1
95		-	given in section 202(a) of the Investment Advisers Act 2
96		-	of 1940 (15 U.S.C. 80b–2(a)).’’. 3
	44	+	EFINITION OFPRIVATEFUND.— 12
	45	+	(1) I
	46	+	NVESTMENT COMPANY ACT OF 1940 .—Sec-13
	47	+	tion 2(a) of the Investment Company Act of 1940 14
	48	+	(15 U.S.C. 80a–2(a)) is amended by adding at the 15
	49	+	end the following: 16
	50	+	‘‘(55) The term ‘private fund’ means an issuer 17
	51	+	that would be an investment company but for para-18
	52	+	graph (1) or (7) of section 3(c).’’. 19
	53	+	(2) I
	54	+	NVESTMENT ADVISERS ACT OF 1940 .—The 20
	55	+	first paragraph (29) (relating to ‘‘private fund’’) of 21
	56	+	section 202(a) of the Investment Advisers Act of 22
	57	+	1940 (15 U.S.C. 80b–2(a)) is amended to read as 23
	58	+	follows: 24
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	62	+	‘‘(29) The term ‘private fund’ has the meaning 1
	63	+	given that term under section 2(a) of the Investment 2
	64	+	Company Act of 1940.’’. 3
97	65		(c) T
98	66		REATMENT BY NATIONALSECURITIESEX-4
99		-	CHANGES.—Section 6 of the Securities Exchange Act of 5
100		-	1934 (15 U.S.C. 78f) is amended by adding at the end the 6
101		-	following: 7
102		-	‘‘(m)(1) Except as otherwise prohibited or restricted by 8
103		-	rules of the exchange that are consistent with section 5(d) 9
104		-	of the Investment Company Act of 1940 (15 U.S.C. 80a– 10
105		-	5(d)), an exchange may not prohibit, condition, restrict, or 11
106		-	impose any other limitation on the listing or trading of 12
107		-	the securities of a closed-end company when the closed-end 13
108		-	company invests, or may invest, some or all of the assets 14
109		-	of the closed-end company in securities issued by private 15
110		-	funds. 16
111		-	‘‘(2) In this paragraph— 17
112		-	‘‘(A) the term ‘closed-end company’— 18
113		-	‘‘(i) has the meaning given the term in sec-19
114		-	tion 5(a) of the Investment Company Act of 1940 20
115		-	(15 U.S.C. 80a–5(a)); and 21
116		-	‘‘(ii) includes a closed-end company that 22
117		-	elects to be treated as a business development 23
118		-	company pursuant to section 54 of the Invest-24
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120		-	•HR 2627 RH
121		-	ment Company Act of 1940 (15 U.S.C. 80a–53); 1
122		-	and 2
123		-	‘‘(B) the term ‘private fund’ has the meaning 3
124		-	given the term in section 2(a) of the Investment Com-4
125		-	pany Act of 1940 (15 U.S.C. 80a–2(a))).’’. 5
	67	+	CHANGES.—Section 6(b) of the Securities Exchange Act 5
	68	+	of 1934 (15 U.S.C. 78f(b)) is amended by adding at the 6
	69	+	end the following: 7
	70	+	‘‘(11)(A) The rules of the exchange do not pro-8
	71	+	hibit the listing or trading of securities of a closed- 9
	72	+	end company solely or primarily by reason of the 10
	73	+	amount of the company’s investment of assets in pri-11
	74	+	vate funds. 12
	75	+	‘‘(B) In this paragraph— 13
	76	+	‘‘(i) the term ‘closed-end company’ has the 14
	77	+	meaning given that term under section 5(a) of 15
	78	+	the Investment Company Act of 1940, and in-16
	79	+	cludes a closed-end company that elects to be 17
	80	+	treated as a business development company 18
	81	+	under section 6(f) of such Act; and 19
	82	+	‘‘(ii) the term ‘private fund’ has the mean-20
	83	+	ing given that term under section 2(a) of the 21
	84	+	Investment Company Act of 1940.’’. 22
126	85		(d) I
127		-	NVESTMENTLIMITATION.—Section 3(c) of the In-6
128		-	vestment Company Act of 1940 (15 U.S.C. 80a–3(c)) is 7
129		-	amended— 8
130		-	(1) in paragraph (1), in the matter preceding 9
131		-	subparagraph (A), in the second sentence, by striking 10
132		-	‘‘subparagraphs (A)(i) and (B)(i)’’ and inserting 11
133		-	‘‘subparagraphs (A)(i), (B)(i), and (C)’’; and 12
134		-	(2) in paragraph (7)(D), by striking ‘‘subpara-13
135		-	graphs (A)(i) and (B)(i)’’ and inserting ‘‘subpara-14
136		-	graphs (A)(i), (B)(i), and (C)’’. 15
137		-	(e) R
138		-	ULES OFCONSTRUCTION.— 16
139		-	(1) Nothing in this Act or the amendments made 17
140		-	by this Act may be construed to limit or amend any 18
141		-	fiduciary duty owed to a closed-end company (as de-19
142		-	fined in section 5(a)(2) of the Investment Company 20
143		-	Act of 1940 (15 U.S.C. 80a-5(a)(2))) or by an invest-21
144		-	ment adviser (as defined under section 2(a) of the In-22
145		-	vestment Company Act of 1940 (15 U.S.C. 80a–2(a))) 23
146		-	to a closed-end company. 24
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148		-	•HR 2627 RH
149		-	(2) Nothing in this Act or the amendments made 1
150		-	by this Act may be construed to limit or amend the 2
151		-	valuation, liquidity, or redemption requirements or 3
152		-	obligations of a closed-end company (as defined in 4
153		-	section 5(a)(2) of the Investment Company Act of 5
154		-	1940 (15 U.S.C. 80a-5(a)(2))) as required by the In-6
155		-	vestment Company Act of 1940. 7
156		-	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.
157		-	252
158		-	118
159		-	TH
160		-	CONGRESS
161		-	1
162		-	ST
163		-	S
164		-	ESSION
165		-
166		-	H. R. 2627
167		-	[Report No. 118–312]
168		-	A BILL
169		-	To amend the Investment Company Act of 1940 to
170		-	prohibit limitations on closed-end companies in-
171		-	vesting in private funds, and for other purposes.
172		-	D
173		-	ECEMBER
174		-	12, 2023
175		-	Reported with an amendment, committed to the Com-
176		-	mittee of the Whole House on the State of the Union,
177		-	and ordered to be printed
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	86	+	NVESTMENTLIMITATION.—Section 3(c) of the 23
	87	+	Investment Company Act of 1940 (15 U.S.C. 80a–3(c)) 24
	88	+	is amended— 25
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	92	+	(1) in paragraph (1), by striking ‘‘subpara-1
	93	+	graphs (A)(i) and (B)(i)’’ and inserting ‘‘subpara-2
	94	+	graphs (A)(i), (B)(i), and (C)’’; and 3
	95	+	(2) in paragraph (7)(D), by striking ‘‘subpara-4
	96	+	graphs (A)(i) and (B)(i)’’ and inserting ‘‘subpara-5
	97	+	graphs (A)(i), (B)(i), and (C)’’. 6
	98	+	Æ
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