HB2225, titled the Access to Small Business Investor Capital Act, would change how registered investment companies report “Acquired Fund Fees and Expenses” in their SEC registration statements. Under the bill, a registered investment company could exclude from that calculation certain indirect fees and expenses incurred through investments in shares of one or more acquired funds when those acquired funds are business development companies (BDCs). The bill applies to registration statements filed under section 8(b) of the Investment Company Act of 1940 and is framed as a disclosure/reporting change rather than a direct change to investment restrictions or tax rules.
In practical terms, the bill would amend the fee-table disclosure framework used on Forms N-1A, N-2, and N-3, allowing fund sponsors to present lower acquired-fund fee figures when the underlying acquired fund is a BDC. The stated purpose is to make the cost presentation for funds that invest in BDCs more accurate or less duplicative, especially where those fees are already reflected elsewhere in the fund’s expense structure. The bill does not alter the definition of a BDC or the SEC’s broader authority over fund disclosure forms, but it would give registrants a specific exclusion in calculating a required fee metric.
The general sentiment reflected in the available legislative history is favorable or at least noncontroversial: the House passed the bill, and there is no recorded committee transcript or vote breakdown indicating organized opposition. The measure was then received in the Senate and referred to the Senate Banking, Housing, and Urban Affairs Committee, suggesting it is being handled as a financial-services technical amendment. The absence of recorded debate in the provided materials limits insight into broader political disagreement.
The main point of contention, based on the bill’s structure, is likely whether excluding these indirect BDC-related fees improves transparency or instead makes fund costs appear lower to investors than they effectively are. Supporters would likely argue the change prevents double-counting and better reflects the economics of investing in BDCs, while critics could worry that it reduces comparability across funds or obscures total investor costs. No specific opposing members or stakeholder groups are identified in the provided record.
Impact
HB2225 would amend federal securities disclosure requirements for registered investment companies by allowing them to omit certain indirect fees and expenses tied to investments in business development companies from the Acquired Fund Fees and Expenses calculation on SEC registration statements. This would affect disclosure on Forms N-1A, N-2, and N-3 and could change how fund expenses are presented to investors, but it would not directly change the Investment Company Act’s substantive regulation of fund operations or BDC status.
Sentiment
The available record suggests the bill was generally viewed positively or as a technical, targeted financial-services measure. It passed the House and was referred in the Senate without any recorded committee debate or vote opposition in the materials provided. The lack of transcript or vote detail indicates no visible controversy in the supplied history, though the issue may still draw scrutiny from investor-protection advocates concerned about disclosure clarity.
Contention
The likely substantive disagreement is over investor transparency versus fee presentation. Supporters of the bill would likely say that fees incurred through BDC investments should not be counted in a way that duplicates costs already borne by the fund, while critics may argue that excluding those fees could make fund expenses look artificially lower and reduce comparability among investment products. No named lawmakers, agencies, or outside groups are identified in the provided materials as taking either side.