Sponsors (18)
The bill reduces reporting complexity for funds that invest in BDCs and can make those funds' fee totals look smaller, but at the cost of reduced fee transparency for everyday investors, which could lead to poorer comparisons and higher long-term costs.
Registered investment companies (e.g., mutual funds) that invest in BDCs face a reduced disclosure burden and simpler fee presentation on SEC forms (N-1A/N-2/N-3), easing compliance and reporting.
Investors in mutual funds that invest in BDCs may see lower reported 'acquired fund fees and expenses' on fund disclosures, making those funds appear to have lower fee totals.
Mutual fund investors (retail investors) may experience reduced transparency because some indirect fees/expenses tied to underlying BDC investments can be omitted from the acquired fund fees line, making it harder to see the true cost of their investments.
Less comprehensive fee disclosure could make fee comparisons across funds more difficult for everyday investors, potentially leading to poorer fund choices and higher costs over time.
Based on analysis of 2 sections of legislative text.
Allows registered investment companies to exclude fees/expenses incurred from investments in business development companies when calculating acquired fund fees and expenses for disclosure.
Official title: Permit a registered investment company to omit certain fees from the calculation of acquired fund fees and expenses, and for other purposes.
Introduced May 20, 2025 by David Harold McCormick · Last progress May 20, 2025
Allows a registered investment company that files under the Investment Company Act to exclude from its acquired fund fees and expenses calculation the portion of fees and expenses it incurred indirectly because it invested in business development companies (BDCs). The bill defines key terms (acquired fund, acquired fund fees and expenses, BDC, fee table disclosure, and applicable SEC forms) so funds can apply this exclusion consistently in required fee disclosures.