S.1808 - Access to Small Business Investor Capital Act (119th Congress)
Summary
S.1808, the Access to Small Business Investor Capital Act, aims to amend regulations concerning acquired fund fees and expenses reported on investment company registration statements. Specifically, it allows registered investment companies to exclude fees incurred indirectly through investments in business development companies (BDCs) from their acquired fund fees and expenses calculations. This adjustment seeks to encourage investment in small businesses by reducing the perceived cost of investing in funds that include BDCs.
Expected Effects
The bill, if enacted, would likely lead to increased investment in BDCs by registered investment companies. This could provide small businesses with greater access to capital, potentially stimulating growth and innovation. The change in fee calculation aims to make investments in funds holding BDCs more attractive to investors.
Potential Benefits
- Increased Investment in Small Businesses: By making investments in BDCs more attractive, the bill could channel more capital to small businesses.
- Simplified Fee Calculation: The exclusion of certain fees simplifies the reporting process for investment companies.
- Potential for Economic Growth: Increased capital access for small businesses can stimulate economic growth and job creation.
- Enhanced Competitiveness of BDCs: BDCs may become more competitive as investment becomes more appealing.
- Attractiveness to Investors: The change in fee calculation may make investment funds holding BDCs more attractive to investors.
Most Benefited Areas:
Potential Disadvantages
- Reduced Transparency: Excluding certain fees could obscure the true cost of investment for some investors.
- Potential for Misleading Investors: Investors might not fully understand the implications of excluding these fees.
- Risk of Over-Investment in BDCs: The change could lead to excessive investment in BDCs, potentially creating market imbalances.
- Limited Impact: The actual impact on small business investment may be smaller than anticipated.
- Complexity: The definitions of terms like 'acquired fund' and 'fee table disclosure' rely on SEC forms, which may be complex for average investors to understand.
Constitutional Alignment
The bill appears to align with the Constitution's broad goals of promoting the general welfare (Preamble). Congress has the power to regulate commerce (Article I, Section 8), which includes the regulation of investment companies and securities. The bill does not appear to infringe on any specific constitutional rights or limitations.
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).