II 

117TH CONGRESS 

2D SESSION S. 3948 

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 SENATE OF THE UNITED STATES 

MARCH 29, 2022 

Mr. DAINES introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Increasing Investor 

5 Opportunities Act’’. 

6 SEC. 2. CLOSED-END COMPANY AUTHORITY TO INVEST IN 

7 PRIVATE FUNDS. 

8 (a) IN GENERAL.—Section 5 of the Investment Com9 pany Act of 1940 (15 U.S.C. 80a–5) is amended by add10 ing at the end the following: 


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•S 3948 IS

1 ‘‘(d) CLOSED-END COMPANY AUTHORITY TO INVEST

2 IN PRIVATE FUNDS.— 

3 ‘‘(1) IN GENERAL.—The Commission may not 

4 limit a closed-end company from investing any or all 

5 of the assets of the company in a private fund solely 

6 or primarily because of the status of the fund as a 

7 private fund. 

8 ‘‘(2) APPLICATION.—Notwithstanding section 

9 6(f), this subsection shall apply to a closed-end com10 pany that elects to be treated as a business develop11 ment company pursuant to section 54.’’. 

12 (b) DEFINITION OF PRIVATE FUND.— 

13 (1) INVESTMENT COMPANY ACT OF 1940.—Sec14 tion 2(a) of the Investment Company Act of 1940 

15 (15 U.S.C. 80a–2(a)) is amended by adding at the 

16 end the following: 

17 ‘‘(55) The term ‘private fund’ means an issuer 

18 that would be an investment company but for the ex19 ception provided for in paragraph (1) or (7) of sec20 tion 3(c).’’. 

21 (2) INVESTMENT ADVISERS ACT OF 1940.—Sec22 tion 202(a) of the Investment Advisers Act of 1940 

23 (15 U.S.C. 80b–2(a)) is amended— 


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•S 3948 IS

1 (A) by redesignating the second paragraph 

2 (29) (relating to ‘‘commodity pool’’ and other 

3 terms) as paragraph (31); and 

4 (B) by amending paragraph (29) to read 

5 as follows: 

6 ‘‘(29) The term ‘private fund’ has the meaning 

7 given the term in section 2(a) of the Investment 

8 Company Act of 1940 (15 U.S.C. 80a–2(a)).’’. 

9 (c) TREATMENT BY NATIONAL SECURITIES EX10 CHANGES.—Section 6(b) of the Securities Exchange Act 

11 of 1934 (15 U.S.C. 78f(b)) is amended by adding at the 

12 end the following: 

13 ‘‘(11)(A) The rules of the exchange do not pro14 hibit the listing or trading of securities of a closed15 end company by reason of the amount of the invest16 ment by the company of assets in private funds. 

17 ‘‘(B) In this paragraph— 

18 ‘‘(i) the term ‘closed-end company’— 

19 ‘‘(I) has the meaning given the term 

20 in section 5(a) of the Investment Company 

21 Act of 1940 (15 U.S.C. 80a–5(a)); and 

22 ‘‘(II) includes a closed-end company 

23 that elects to be treated as a business de24 velopment company under section 6(f) of 


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•S 3948 IS

1 the Investment Company Act of 1940 (15 

2 U.S.C. 80a–6(f)); and 

3 ‘‘(ii) the term ‘private fund’ has the mean4 ing given the term in section 2(a) of the Invest5 ment Company Act of 1940 (15 U.S.C. 80a– 

6 2(a)).’’. 

7 (d) INVESTMENT LIMITATION.—Section 3(c) of the 

8 Investment Company Act of 1940 (15 U.S.C. 80a–3(c)) 

9 is amended— 

10 (1) in paragraph (1), in the matter preceding 

11 subparagraph (A), in the second sentence, by strik12 ing ‘‘subparagraphs (A)(i) and (B)(i)’’ and inserting 

13 ‘‘subparagraphs (A)(i), (B)(i), and (C)’’; and 

14 (2) in paragraph (7)(D), by striking ‘‘subpara15 graphs (A)(i) and (B)(i)’’ and inserting ‘‘subpara16 graphs (A)(i), (B)(i), and (C)’’. 

Æ 


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