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IIB
116TH CONGRESS
1ST SESSION H. R. 3050
IN THE SENATE OF THE UNITED STATES
JULY 10, 2019
Received; read twice and referred to the Committee on Banking, Housing, and
Urban Affairs
AN ACT
To require the Securities and Exchange Commission to carry
out a study of the 10 per centum threshold limitation
applicable to the definition of a diversified company
under the Investment Company Act of 1940, and for
other purposes.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Expanding Investment
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in Small Businesses Act of 2019’’.
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SEC. 2. SEC STUDY.
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(a) IN GENERAL.—The Securities and Exchange
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Commission shall carry out a study of the 10 per centum
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threshold limitation applicable to the definition of a diver-
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sified company under section 5(b)(1) of the Investment
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Company Act of 1940 (15 U.S.C. 80a–5(b)(1)) and deter-
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mine the impacts of such threshold limits upon the protec-
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tion of investors, efficiency, competition, and capital for-
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mation.
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(b) CONSIDERATIONS.—In carrying out the study re-
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quired under subsection (a), the Commission shall con-
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sider the following:
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(1) The size and number of diversified compa-
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nies that are currently restricted in their ability to
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own more than 10 percent of the voting shares in an
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individual company.
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(2) How the investing preferences of diversified
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companies have shifted over time with respect to
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companies with smaller market capitalizations and
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companies in industries where competition may be
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limited.
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(3) The expected impact to small and emerging
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growth companies regarding the availability of cap-
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ital, related impacts on investor confidence and risk,
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and impacts on competition, if the threshold is in-
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creased or otherwise changed.
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(4) The ability of registered funds to manage li-
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quidity risk.
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(5) Any other consideration that the Commis-
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sion considers necessary and appropriate for the pro-
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tection of investors.
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(c) SOLICITATION OF PUBLIC COMMENTS.—In car-
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rying out the study required under subsection (a), the
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Commission may solicit public comments.
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(d) REPORT.—Not later than the end of the 180-day
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period beginning on the date of enactment of this Act, the
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Commission shall issue a report to the Congress, and
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make such report publicly available on the website of the
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Commission, containing—
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(1) all findings and determinations made in car-
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rying out the study required under subsection (a);
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and
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(2) any legislative recommendations of the
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Commission.
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Passed the House of Representatives July 9, 2019.
Attest:
CHERYL L. JOHNSON,
Clerk.
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