Expanding Investment Opportunities Act

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4279) to direct the Securities and Exchange Commission to revise any rules necessary to enable closed-end companies to use the securities offering and proxy rules that are available to other issuers of securities, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within

which to revise and extend their remarks and include extraneous material on this bill.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, closed-end funds are important retirement savings and investment vehicles for retail investors and serve as a long-term source of capital for operating companies, which helps promote job creation, research and development, and economic growth.

Despite the many benefits of closed-end funds, the number of closed- end funds has been declining over the last several years.

Closed-end funds occupy a unique space within a framework of regulated investment companies. They have opportunities to invest in small enterprises and stocks and bonds that they may issue that would not necessarily be ones that are open-ended or invested in by mutual funds.

Since the SEC has adopted its 2005 offering reform for traditional operating companies, the SEC has had more than 12 years to consider a parallel framework for closed-end funds, but has failed to do so. H.R. 4279 would direct the SEC to draft rules as appropriate to permit closed-end funds to take advantage of the 2005 offering reforms.

If the SEC does not finalize these rules within 1 year, closed-end funds that otherwise meet the requirements could take advantage of the 2005 offering reforms until the SEC adopts a rule. By simplifying the closed-end fund offering process and liberalizing existing restrictions on communications, the legislation would reduce unnecessary regulatory burdens that raise cost for investors. In turn, this would enhance the ability of closed-end funds to act as a source of financing for the economy.

I think this is a commonsense piece of legislation. I would also note that, in a committee that often doesn't see a lot of bipartisanship, this bill passed out of committee with a vote of 58-2, signifying broad and wide support amongst the parties and from our committee.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 5 minutes to the gentleman from Indiana (Mr. Hollingsworth), the sponsor of this legislation.

Mr. Speaker, this is a unique space where, oftentimes, we would look to the SEC to actually act. Because they haven't acted, I am proud to say I am part of a group in Congress that are willing to act proactively to make sure, again, we are protecting investors, protecting savers, but also helping capital flow into spaces that are so needed by this reform.

Mr. Speaker, again, I encourage all of my colleagues to support this commonsense, bipartisan bill, and I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I rise today in support of H.R. 4279.

There are two big problems that I hear a lot about in district. The first is ensuring that mom-and-pop investors in retail Main Street America have all of the options available to them to be able to invest for their future retirement and invest for their kids' college education. They want a cornucopia of different investment opportunities for them to be able to pursue: making the decision as to whether mutual funds are the right answer, making the decision as to whether open-end funds are the right answer, making the decision as to whether ETFs are the right answer, and making the decision as to whether, yes, closed- end funds are the right answer.

Over the last 10 years, we have seen closed-end funds decline in number by 81 percent. Some of that decline has been because of the regulatory burden, the onerous burden that is on them, compared to some of their counterparts. We want to make sure that ultimately there might be reasons for a level playing field between them and some other well- known seasoned issuers.

The second big problem that I continue to hear about is how dynamic the market is; how fleeting opportunities are; and how we need to make sure that there is not long, duplicative timelines and not onerous, duplicative paperwork that companies and closed-end funds are having to fill out and having to wait in order to take advantage of the opportunities that may exist in the market. We want to truncate down that time without removing any of the regulation and governance that is so important to ensuring the transparency and credibility of U.S. markets around the world.

I want to thank Mr. Foster because, as he well said, from day one he has been diligently working on both of those problems. We have been able to work together and, as he said, negotiate all the way through the eleventh hour, not to come up with a shotgun solution that doesn't address both of these, but, instead, to come up with a comprehensive solution that solves both of these problems: the problem for the Main Street mom-and-pop 401(k) investor that wants to be able to pursue different opportunities in saving for their retirement, and for companies that are pursuing dynamic opportunities in the market. I want them to be as competitive as possible in this global marketplace.

Mr. Speaker, I thank Mr. Foster for all of his effort along the way. I want to thank the committee for their 58-2 support of this legislation. I am hopeful and I urge my colleagues on the floor to vote for this legislation as well. I think this is a commonsense, thoughtful approach to both of those problems that I hear far too often when I am back home in my district.

Mr. Speaker, I yield myself such time as I may consume, and rise today in support of H.R. 4279.

This was a thoroughly negotiated bill, incorporating the views of affected funds and consumer and investor advocacy groups.

My staff worked with Congressman Hollingsworth's staff up to the eleventh hour in committee, demonstrating the importance of bipartisan relationships in creating legislation. The ranking member's staff and the chairman's staff worked with us throughout this process, and I offered an amendment that we all agreed to.

My amendment simply changed the approach the bill used to accomplish parity for closed-end investment funds with operating companies under the SEC's securities offering reforms of 2005.

Moving this bill in regular order, we heard in a legislative hearing that there were reasons why parity might not mean identical treatment. This amendment would direct the SEC to propose, within 180 days, a rule that would allow closed-end funds that are listed or have periodic redemptions--interval funds--to be treated as well-known seasoned issuers, WKSIs.

This rule will have to be finalized within a year, or else the bill will provide a statutory ability for these companies to qualify if they meet the other criteria currently applicable to operating companies. The SEC can act at any time thereafter to propose rules that would be controlling for closed-end funds covered by the bill.

I encourage the SEC to consider the disclosure regime under the Investment Company Act of 1940 to promulgate a rule that will allow listed closed-end funds and interval funds to use the streamlined offering and proxy rules that are available to WKSIs.

This bill will increase options for investors and savers while ensuring that protections appropriate to a WKSI are applied to closed- end and interval funds.

Mr. Speaker, I encourage all of my colleagues to support this bill as it comes to a decision on the floor, and I reserve the balance of my time.

Mr. Speaker, at this point I have no further speakers, so I would like to close with a few words here.

This bipartisan bill will increase options for investors and savers while ensuring that the protections appropriate to a WKSI are applied to closed-end fund and interval funds. It is my hope that we can do more bipartisan work like this in our committee and in our Congress for the remainder of this term.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on Wednesday, January 17, 2018, I was unable to vote on any legislative measures due to an illness. Had I been present, I would have voted the following:

Roll no. 20, On ordering the previous question providing for consideration of H.R. 3326--World Bank Accountability Act and H.R. 2954--Home Mortgage Disclosure Adjustment Act, had I been present I would have voted yes.

Roll no. 21, On adoption of the combined rule providing for consideration of H.R. 3326--the World Bank Accountability Act and H.R. 2954--the Home Mortgage Disclosure Adjustment Act, had I been present I would have voted yes.

Roll no. 22, On passage of H.R. 4258--Family Self-Sufficiency Act, had I been present I would have voted yes.

Roll no. 23, On agreeing to the amendment of Mr. Connolly of Virginia Part A Amendment No. 2 to H.R. 3326--World Bank Accountability Act, had I been present I would have voted yes.

Roll no. 24, On passage of H.R. 3326--World Bank Accountability Act, had I been present I would have voted yes.

Roll no. 25, On passage of H.R. 4279--Expanding Investment Opportunities Act, had I been present I would have doted yes.

Roll no. 26, On Approving the Journal, had I been present I would have voted yes.

Mr. Speaker, I demand a recorded vote.