Access to Small Business Investor Capital Act
- Bill Number
- S. 1808
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-05-20: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2026-06-19T11:03:24Z
AI-Generated Summary
Purpose
The "Access to Small Business Investor Capital Act" (S. 1808) aims to simplify fee reporting for investment funds that invest in business development companies (BDCs). BDCs are specialized investment firms that provide capital to small and mid-sized businesses. By allowing certain fees to be excluded from calculations, the bill seeks to make these investments more appealing, thereby improving access to capital for small businesses.
Key Provisions
- Definitions: The bill defines key terms, including:
- "Acquired fund": A fund in which another investment company invests, as outlined in SEC forms (N-1A, N-2, N-3).
- "Acquired fund fees and expenses": Indirect fees from investing in other funds, shown in a fund's fee table.
- "Business development company" (BDC): A type of investment company regulated under the Investment Company Act of 1940 that focuses on financing small businesses.
- "Fee table disclosure": The summary table in SEC registration forms that lists a fund's costs to investors.
- "Registered investment company": A mutual fund, ETF, or similar entity registered with the SEC under the Investment Company Act of 1940.
- Fee Exclusion Rule: Registered investment companies can exclude fees and expenses from BDCs when calculating "acquired fund fees and expenses" on their SEC registration statements (filed under Section 8(b) of the Investment Company Act). This applies to indirect costs from holding shares in one or more BDCs.
Significant Changes to Existing Law
- Amends disclosure requirements under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.) and related SEC forms (N-1A, N-2, N-3).
- Previously, all indirect fees from acquired funds had to be included in the fee table, which could inflate reported costs for funds investing in BDCs. This bill introduces an optional exclusion specifically for BDC-related fees, reducing the complexity of fee calculations without altering core SEC oversight rules.
Potential Impacts
- On Government Agencies: Minimal direct impact on the SEC, which oversees investment disclosures. The change could slightly reduce administrative burdens in reviewing fee tables but may require minor updates to SEC guidance or forms.
- On Citizens: Investors in mutual funds or ETFs may see lower reported fees for funds that invest in BDCs, potentially leading to more affordable investment options and broader participation in markets supporting small businesses. Small business owners could benefit indirectly through increased capital availability from BDCs.
- On International Relations: No apparent impact, as the bill focuses on domestic U.S. investment regulations.
Main Stakeholders Affected
- Registered Investment Companies: Mutual funds, closed-end funds, and variable annuities that invest in BDCs; they gain flexibility in fee reporting.
- Business Development Companies (BDCs): These entities, which lend to or invest in small businesses, may attract more upstream investments due to less burdensome fee disclosures.
- Small Businesses: Primary beneficiaries, as easier access to BDC funding could support growth, job creation, and economic development.
- Investors: Individual and institutional investors who hold shares in funds investing in BDCs; they could experience clearer, lower fee presentations.
- Securities and Exchange Commission (SEC): Responsible for implementing and enforcing the changes through form updates.
Notable Legal, Constitutional, or Political Implications
- Legal: Streamlines compliance with the Investment Company Act without weakening investor protections, as exclusions are optional and limited to BDCs. No conflicts with existing antifraud or disclosure mandates under federal securities laws.
- Constitutional: No significant issues; the bill operates within Congress's authority to regulate interstate commerce and securities markets under the Commerce Clause.
- Political: Supports pro-small business policies by reducing regulatory hurdles for capital formation, potentially appealing to bipartisan interests in economic growth. Introduced by Senators McCormick and Alsobrooks, it was referred to the Senate Committee on Banking, Housing, and Urban Affairs for further review.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (17)
Sen. Alsobrooks, Angela D. [D-MD], Sen. Daines, Steve [R-MT], Sen. Gallego, Ruben [D-AZ], Sen. Hagerty, Bill [R-TN], Sen. Blunt Rochester, Lisa [D-DE], Sen. Moreno, Bernie [R-OH], Sen. Kim, Andy [D-NJ], Sen. Banks, Jim [R-IN], Sen. Warner, Mark R. [D-VA], Sen. Britt, Katie Boyd [R-AL], Sen. Hickenlooper, John W. [D-CO], Sen. Kennedy, John [R-LA], Sen. Shaheen, Jeanne [D-NH], Sen. Justice, James C. [R-WV], Sen. Rosen, Jacky [D-NV], Sen. Hassan, Margaret Wood [D-NH], Sen. Husted, Jon [R-OH]
Recent Actions
- 2025-05-20: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2025-05-20: Introduced in Senate
Bill Versions
- Access to Small Business Investor Capital Act — issued 2025-05-20 — PDF (3 pages)