To amend the Investment Company Act of 1940 to prohibit limitations on closed-end companies investing in private funds, and for other purposes.
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
What This Bill Does
This bill removes regulatory barriers that currently limit closed-end investment funds from investing in private funds like hedge funds, private equity, and venture capital. It prohibits the SEC and securities exchanges from restricting or conditioning these investments.
Who Benefits and How
Closed-end investment companies and their managers gain expanded investment options and can now freely allocate assets to private funds without SEC restrictions. Private fund managers (hedge funds, private equity, venture capital) gain access to a new pool of capital from listed closed-end funds. Retail investors gain indirect access to private fund investments through publicly-traded closed-end funds.
Who Bears the Burden and How
The SEC loses regulatory authority to restrict or condition closed-end fund investments in private funds. Retail investors face potential increased risk exposure to illiquid, complex private fund investments with less regulatory protection.
Key Provisions
- Prohibits SEC from limiting closed-end companies from investing in private funds
- Prohibits SEC from restricting sales or exchange listings of closed-end funds that invest in private funds
- Prevents securities exchanges from imposing listing restrictions on closed-end funds investing in private funds
- Preserves existing fiduciary duties and valuation/liquidity requirements
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers.
At a Glance
What This Bill Does
Allows closed-end investment companies to invest unlimited amounts in private funds (hedge funds, private equity, venture capital) by prohibiting the SEC from restricting such investments
Key Policy Areas
Financial Services, Securities Regulation
Primary Purpose
Allows closed-end investment companies to invest unlimited amounts in private funds (hedge funds, private equity, venture capital) by prohibiting the SEC from restricting such investments
Policy Domains
Section 2 - Closed-end company authority to invest in private funds
Identified Gains
Contextual inference, no direct clause citation- Closed-end investment companies
- Private fund managers
- Investment advisers
- Securities exchanges
Contextual inference, no direct clause citation
Identified Costs
Contextual inference, no direct clause citation- Securities and Exchange Commission
- Retail investors (increased risk exposure)
Contextual inference, no direct clause citation
Sponsors
Legislative Progress
ReportedAdditional sponsors: Mr. Torres of New York, Mr. David Scott …
Reported with an amendment, committed to the Committee of the …
Mrs. Wagner (for herself and Mr. Meeks) introduced the following …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
National securities exchanges, Private fund managers (hedge funds, private equity, venture capital)
Investment advisers to closed-end funds
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_commission"
- → Securities and Exchange Commission (SEC)
Key Definitions
Terms defined in this bill
Has the meaning given in section 202(a) of the Investment Advisers Act of 1940 - generally means funds exempt from Investment Company Act registration under sections 3(c)(1) or 3(c)(7), including hedge funds, private equity funds, and venture capital funds
Has the meaning given in section 5(a) of the Investment Company Act of 1940 - investment companies that issue a fixed number of shares not redeemable at net asset value; includes business development companies under section 54
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology