S1808

The Access to Small Business Investor Capital Act (S.1808) was introduced May 20, 2025 by Sen. McCormick (R-PA) with 16 cosponsors and referred to the Senate Banking, Housing, and Urban Affairs Committee. The bill amests SEC disclosure rules so registered investment companies can exclude fees from investments in Business Development Companies from their 'acquired fund fees and expenses' calculations. This is a regulatory exemption, not a spending authorization — zero dollars are appropriated. The money mechanism is structural: mutual funds and ETFs are required to report all fees shareholders pay, including fees embedded in underlying fund holdings. BDCs, which charge management fees typical of investment companies, create a 'double-layer' fee disclosure that makes funds holding BDCs appear more expensive than identical funds that avoid BDC exposure. Removing BDCs from this calculation eliminates the disclosure penalty, making it economically rational for fund managers to include BDC shares in their portfolios without misleading their clients about total fee loads. The structural beneficiaries are publicly traded BDCs. Ares Capital ($ARCC) at $18.67 is the sector's largest player. Main Street Capital ($MAIN) at $53.75 has a differentiated internally-managed model. Hercules Capital ($HTGC) at $15.50 offers venture debt exposure. Blackstone Secured Lending ($BXSL) at $23.94 and Carlyle Secured Lending ($CGBD) at $11.44 round out the set. All are directly affected because the mechanism applies uniformly to any registered BDC. Market data shows mixed recent performance: 30-day changes range from +9.15% (HTGC) to +0.63% (BXSL), reflecting normal sector volatility rather than bill-related movement. The legislative path is early. The bill has seen only two actions — introduction and committee referral — both on May 20, 2025. Its companion bill H.R. 2225 is at identical stage in the House. Passage requires: committee markup and vote, full Senate vote, full House vote (or reconciliation with H.R. 2225), and Presidential signature. Even if signed, the actual effect requires the SEC to provide guidance on how to implement the disclosure change, introducing regulatory implementation lag.