HR 119: A Comprehensive Bill on Investment Companies

HR 119: A Bill to Establish a New Framework for Investment Companies, as introduced in the United States House of Representatives on January 3, 2021.

Section 1. Short title

The short title of this Act shall be the “Investment Company Simplification and Consumer Protection Act”.

SEC. 2. Findings

Findings:

(a) The United States has a large number of investment companies, many of which are not adequately regulated or supervised;
(b) The lack of adequate regulation and supervision of these companies can lead to risks for consumers and investors;
(c) There is a need for a comprehensive framework that balances regulatory requirements with innovation and consumer protection;

SEC. 3. Definitions

<pDefinitions:

A “business” means any activity or venture in which the company engages, including but not limited to investing, lending, and servicing.

SEC. 4. Registration of Investment Companies

Registration:

(a) In general, an investment company shall be required to register with the Secretary within 120 days after the date of commencement of business;
(b) The registration process shall include providing information regarding the company’s business, its principals and directors, and its financial condition.

SEC. 5. Investment Company Act

The purpose of this section is to provide a framework for investment companies to operate within the United States.

“An investment company shall be defined as any entity engaged in a business involving the purchase, sale, or management of securities.”

SEC. 6. Regulatory Oversight

Regulatory Oversight:

(a) The Secretary shall have the authority to regulate and supervise investment companies;
(b) The Secretary may issue rules, regulations, or orders necessary to ensure compliance with this Act.

SEC. 7. Investment Company Guarantees

Investment Company Guarantees:

(a) The Secretary shall issue guarantees under this section at least once every 12 months;
(b) Such guarantees shall be made to investors who have purchased securities issued by investment companies subject to the provisions of this Act.

SEC. 8. Miscellaneous

Miscellaneous:

Any ownership investment company may receive fees for services rendered to banks and other investors or lenders.

SEC. 9. Liability

Liability:

“Except as expressly provided otherwise in this Act, nothing in this Act shall be deemed to impose any liability on the United States with respect to any obligations entered into, or stocks issued, or commitments made, by any company operating under the provisions of this Act.”

SEC. 10. Effective Date

Effective Date:

(a) This Act shall take effect on the date that is one year after the date of enactment.
(b) The provisions of this section shall apply to investment companies that are registered under this Act and subject to its regulatory oversight.