House Passes Bill to Expand Accredited Investor Test

The U.S. House of Representatives this week passed the Equal Opportunity for All Investors Act of 2023, which would allow U.S. investors an alternative route to participate in private markets. The bill passed overwhelming in a 383-18 vote.

Should the bill become law, it would require the Securities and Exchange Commission to establish an exam, administered by the Financial Industry Regulatory Authority, for individual investors seeking to attain accredited investor status.

As The DI Wire previously reported, several bills broadening retail investors’ access to unregistered securities and private placements were passed in April 2023, including an earlier version of the Equal Opportunity for All Investors Act.

Individual investors currently qualify as accredited if they meet certain requirements including a net worth that exceeds $1 million or an annual income in excess of $200,000 (or $300,000 jointly with a spouse), criteria that were established in the 1980s. In 2020 the SEC expanded the accredited investor definition to include individuals who failed to meet the net worth or income thresholds, but who could demonstrate defined measures of professional knowledge, experience or certifications.

According to the agency’s latest regulatory agenda, the SEC has plans to review its accredited investor definition.

The Equal Opportunity for All Investors Act of 2023 will now require passage by the U.S. Senate.

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