To amend the Investment Company Act of 1940 with respect to the authority of closed-end companies to invest in private funds.
Sponsors
Legislative Progress
Passed HouseReceived; read twice and referred to the Committee on Banking, …
Passed House (inferred from eh version)
Reported with an amendment, committed to the Committee of the …
Mrs. Wagner (for herself, Mr. Meeks, Mr. Torres of New …
On Passage
Increasing Investor Opportunities Act
On Agreeing to the Amendment
On Agreeing to the Amendment
On Agreeing to the Amendment
Summary
What This Bill Does
This bill removes regulatory barriers that prevent publicly traded closed-end investment companies from investing in private funds like hedge funds and private equity. Currently, the SEC can restrict these investments; this bill prohibits such restrictions and also prevents stock exchanges from refusing to list these companies.
Who Benefits and How
Asset managers and private fund sponsors benefit enormously as this opens a massive new pool of retail investor capital to private funds that were previously limited to wealthy accredited investors. Closed-end fund companies gain flexibility to offer new products that invest in hedge funds and private equity. Investment banks and exchanges benefit from new listing fees and trading commissions.
Who Bears the Burden and How
Retail investors face increased exposure to risky, illiquid, and opaque private fund investments that were historically restricted to sophisticated investors who can bear losses. The SEC loses authority to protect ordinary investors from complex private fund structures. Consumer protection advocates lose a key regulatory safeguard.
Key Provisions
- Prohibits SEC from restricting closed-end companies from investing in private funds
- Prohibits SEC from limiting the sale or listing of such closed-end company securities
- Extends these rules to business development companies (BDCs)
- Prohibits stock exchanges from refusing to list these funds
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Allows closed-end investment companies and business development companies to freely invest in private funds (hedge funds, private equity, venture capital) without SEC restrictions, and allows exchanges to list such companies.
Policy Domains
Legislative Strategy
"Deregulate private fund access to enable retail investor participation through publicly traded closed-end fund wrappers"
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 a fund that would be an investment company but for sections 3(c)(1) or 3(c)(7) exemptions (i.e., hedge funds, private equity, venture capital)
As defined in section 5(a) of the Investment Company Act of 1940, 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