H.R.2225 - Access to Small Business Investor Capital Act (119th Congress)
Summary
H.R.2225, the Access to Small Business Investor Capital Act, aims to amend regulations concerning Acquired Fund Fees and Expenses reporting for registered investment companies. Specifically, it permits these companies to exclude fees incurred from investments in business development companies when calculating these expenses. The bill intends to ease the regulatory burden on investment companies, potentially encouraging more investment in small businesses.
Expected Effects
The primary effect of this bill would be a change in how registered investment companies report their Acquired Fund Fees and Expenses. By allowing the exclusion of fees from investments in business development companies, the reported expense ratios may decrease. This could make these investment companies more attractive to investors and potentially increase the flow of capital to small businesses.
Potential Benefits
- Simplifies regulatory compliance for registered investment companies.
- Potentially lowers reported expense ratios, making investment companies more attractive.
- May encourage increased investment in business development companies and small businesses.
- Could lead to greater capital access for small businesses, fostering growth and innovation.
- Could improve market efficiency by reducing compliance costs.
Most Benefited Areas:
Potential Disadvantages
- May reduce transparency regarding the true cost of investing in funds that invest in business development companies.
- Could incentivize investment companies to favor business development companies over other investment options, potentially distorting market allocations.
- The benefits to small businesses may be indirect and difficult to quantify.
- Potential for unintended consequences due to altered reporting requirements.
- The change in reporting may confuse some investors.
Constitutional Alignment
The bill appears to align with the Constitution, particularly the Commerce Clause (Article I, Section 8), as it regulates investment companies and aims to facilitate capital flow to businesses. There are no apparent infringements on individual rights or liberties as defined in the Bill of Rights. The bill does not appear to encroach on powers reserved to the states.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).