Increasing Investor Opportunities Act

Section 5 of the Investment Company Act of 1940 (15 U.S.C. 80a–5) is amended by adding at the end the following:

The Commission may not limit a closed-end company from investing any or all of the assets of the company in a private fund solely or primarily because of the status of the fund as a private fund.

Notwithstanding section 6(f), this subsection shall apply to a closed-end company that elects to be treated as a business development company pursuant to section 54.

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 the exception provided for in paragraph (1) or (7) of section 3(c).

Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)) is amended—

(A) by redesignating the second paragraph (29) (relating to commodity pool and other terms) as paragraph (31); and

(B) by amending paragraph (29) to read as follows:

(29) The term private fund has the meaning given the term in section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)).

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:

(A) The rules of the exchange do not prohibit the listing or trading of securities of a closed-end company by reason of the amount of the investment by the company of assets in private funds.

(B) In this paragraph—

(i) the term closed-end company —

(I) has the meaning given the term in section 5(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–5(a)); and

(II) includes a closed-end company that elects to be treated as a business development company under section 6(f) of the Investment Company Act of 1940 (15 U.S.C. 80a–6(f)); and

(ii) the term private fund has the meaning given the term in section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)).

Section 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(c)) is amended—

(1) in paragraph (1), in the matter preceding subparagraph (A), in the second sentence, 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).