[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8786 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 8786

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

                           November 19, 2020

Mr. Gonzalez of Ohio 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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Increasing Investor Opportunities 
Act''.

SEC. 2. CLOSED-END COMPANY AUTHORITY TO INVEST IN PRIVATE FUNDS.

    (a) 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.''.
    (b) Definition of Private Fund.--
            (1) 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).''.
            (2) 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.''.
    (c) 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.''.
    (d) Investment Limitation.--Section 3(c) of the Investment Company 
Act of 1940 (15 U.S.C. 80a-3(c)) is amended--
            (1) in paragraph (1), by striking ``subparagraphs (A)(i) 
        and (B)(i)'' and inserting ``subparagraphs (A)(i), (B)(i), and 
        (C)''; and
            (2) in paragraph (7)(D), by striking ``subparagraphs (A)(i) 
        and (B)(i)'' and inserting ``subparagraphs (A)(i), (B)(i), and 
        (C)''.
    (e) 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.
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