S.Amdt. 5977

1. Adds SEC. ___. CLOSED-END COMPANY AUTHORITY TO INVEST IN PRIVATE FUNDS wherever appropriate

   Adds a section

   Inserted: SEC. ___. CLOSED-END COMPANY AUTHORITY TO INVEST IN PRIVATE FUNDS.

   Inserted: (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:

   Inserted: "(d) Closed-End Company Authority To Invest in Private Funds.--

   Inserted: "(1) In general.--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.

   Inserted: "(2) Application.--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.".

   Inserted: (b) Definition of Private Fund.--

   Inserted: (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:

   Inserted: "(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).".

   Inserted: (2) Investment advisers act of 1940.--Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended--

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

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

   Inserted: "(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)).".

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   Inserted: (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:

   Inserted: "(11)(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.

   Inserted: "(B) In this paragraph--

   Inserted: "(i) the term 'closed-end company'--

   Inserted: "(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

   Inserted: "(II) includes a closed-end company that elects to be treated as a business development company pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a-53); and

   Inserted: "(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)).".

   Inserted: (d) Investment Limitation.--Section 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)) is amended--

   Inserted: (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

   Inserted: (2) in paragraph (7)(D), by striking "subparagraphs (A)(i) and (B)(i)" and inserting "subparagraphs (A)(i), (B)(i), and (C)".

   The amendment doesn't say where this goes; the clerk decides.

   Original wording

   At the appropriate place, insert the following:

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As printed