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S. 3671Senate119th Congress (2025-2027)In Committee

A bill to amend the Investment Company Act of 1940 with respect to the authority of closed-end companies to invest in private funds, and for other purposes.

Sponsored by Steve DainesSen. Steve Daines (R-MT)
Introduced January 15, 2026

AI-Generated Summary

Updated February 5, 2026 at 6:02 AM UTC

The Increasing Investor Opportunities Act changes the Investment Company Act of 1940 so that closed‑end investment companies can put any or all of their assets into securities issued by private funds. It also stops the SEC and stock exchanges from limiting the sale, offering, or listing of those closed‑end company securities when they invest in private funds. The bill applies to all closed‑end companies, including those that are treated as business development companies, and keeps existing fiduciary and valuation rules intact.

Key Provisions

  • Allows closed‑end companies to invest any or all of their assets in securities issued by private funds, unless another law specifically prohibits it.
  • Bars the SEC from restricting the offer, sale, or exchange listing of closed‑end company securities that invest in private funds.
  • Requires national securities exchanges not to prohibit or limit the listing or trading of such securities, unless the exchange’s own rules are consistent with the new provision.
  • Adopts the definition of “private fund” from the Investment Advisers Act of 1940.
  • Specifies that the amendment does not change fiduciary duties, valuation, liquidity, or redemption requirements for closed‑end companies.

Legislative Activity

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SenateIntro Referral Latest Action

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Banking, Housing, and Urban Affairs Committee

January 15, 2026

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SenateIntro Referral

Introduced in Senate

January 15, 2026

SenateIntro Referral

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Banking, Housing, and Urban Affairs Committee

January 15, 2026

Bill Text

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Introduced in SenateIssued January 15, 2026

II

119th CONGRESS

2d Session

S. 3671

IN THE SENATE OF THE UNITED STATES

January 15, 2026

Mr. Daines (for himself and Mr. Rounds) 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 with respect to the authority of closed-end companies to invest in private funds, and for other purposes.

1.

Short title

This Act may be cited as the Increasing Investor Opportunities Act.

2.

Closed-end company authority to invest in private funds

(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:

(d)

Closed-End company authority To invest in private funds

(1)

In general

Except as otherwise prohibited or restricted by this Act (or any rule issued under this Act), the Commission may not prohibit or otherwise limit a closed-end company from investing any or all of the assets of the closed-end company in securities issued by private funds.

(2)

Other restrictions on Commission authority

Except as otherwise prohibited or restricted by this Act (or any rule issued under this Act), the Commission may not impose any condition on, restrict, or otherwise limit—

(A)

the offer to sell, or the sale of, securities issued by a closed-end company that invests, or proposes to invest, in securities issued by private funds; or

(B)

the listing of the securities of a closed-end company described in subparagraph (A) on a national securities exchange.

(3)

Unrelated restrictions

The Commission may impose a condition on, restrict, or otherwise limit an activity described in paragraph (1) or subparagraph (A) or (B) of paragraph (2) if that condition, restriction, or limitation is unrelated to the underlying characteristics of a private fund or the status of a private fund as a private fund.

(4)

Rule of application

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

.

(b)

Definition of private fund

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 has the meaning given the term in section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)).

.

(c)

Treatment by national securities exchanges

Section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end the following:

(m)

Closed-End companies

(1)

In general

Except as otherwise prohibited or restricted by rules of the exchange that are consistent with section 5(d) of the Investment Company Act of 1940 (15 U.S.C. 80a–5(d)), an exchange may not prohibit, condition, restrict, or impose any other limitation on the listing or trading of the securities of a closed-end company when the closed-end company invests, or may invest, some or all of the assets of the closed-end company in securities issued by private funds.

(2)

Definitions

In this subsection—

(A)

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 pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a–53); and

(B)

the term private fund has the meaning given in section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)).

.

(d)

Investment limitation

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).

(e)

Rules of construction

(1)

Definition

In this subsection, the term closed-end company has the meaning given the term in section 5(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–5(a)).

(2)

Rules

Nothing in this section, or in any amendment made by this section, may be construed to limit or amend—

(A)

any fiduciary duty owed—

(i)

to a closed-end company; or

(ii)

by an investment adviser (as defined in section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a))) to a closed-end company; or

(B)

the valuation, liquidity, or redemption requirements or obligations of a closed-end company, as required under the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.).