S. 3671 — Increasing Investor Opportunities Act

This section authorizes closed-end companies, including those electing business development company (BDC) status, to invest any or all assets in private funds (i.e., unregistered pooled investment vehicles such as hedge funds and private equity funds exempt from Investment Company Act registration under 3(c)(1) or 3(c)(7)); prohibits the Securities and Exchange Commission (SEC) from restricting such investments, the offer or sale of related closed-end company securities, or their listing on national securities exchanges (except for unrelated restrictions or those under the Investment Company Act); and similarly prohibits exchanges from restricting the listing or trading of such securities (consistent with the new Investment Company Act section 5(d)). The section (1) defines "private fund" in the Investment Company Act by reference to the Investment Advisers Act; (2) amends Investment Company Act section 3(c)(1) and 3(c)(7)(D) to include subparagraph (C) in certain cross-references; and (3) states rules of construction preserving fiduciary duties, investment adviser obligations, and closed-end company valuation, liquidity, and redemption requirements. (As background, closed-end companies are registered investment companies issuing a fixed number of exchange-traded shares; BDCs focus on debt and equity investments in small and developing businesses.)