HR 3394
Fair Investment Opportunities for Professional Experts Act
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Bill overview
This bill, the Fair Investment Opportunities for Professional Experts Act, aims to broaden who qualifies as an ‘accredited investor’ in private securities offerings. It expands the definition to include individuals with demonstrable professional knowledge through education or experience, as determined by the SEC. The bill also clarifies existing criteria for accredited investors, such as net worth, income, and licensure as a broker or investment advisor, and directs the SEC to update its regulations to align with these changes.
Key provisions
- Expands the definition of an accredited investor to include individuals with professional knowledge (education or experience) as determined by the SEC.
- Clarifies existing criteria for accredited investors: net worth exceeding $1,000,000 (adjusted for inflation), income exceeding $200,000 or $300,000 (joint income with spouse), and licensure as a broker or investment advisor.
- Excludes a person’s primary residence from net worth calculations.
- Limits the inclusion of secured debt against a primary residence.
- Allows the SEC to determine individuals with professional knowledge through regulation.
- Requires the SEC to revise Regulation D within 180 days of the bill’s enactment to reflect the changes.
Who is affected
- Individual investors
- Securities firms
- The Securities and Exchange Commission (SEC)
- Financial advisors
- Broker-dealers
Notable changes
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119th CONGRESS — 1st Session
H. R. 3394
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend the Securities Act of 1933 to codify certain qualifications of individuals as accredited investors for purposes of the securities laws.
This Act may be cited as the Fair Investment Opportunities for Professional Experts Act
.
by redesignating subparagraphs (i) and (ii) as subparagraphs (A) and (F), respectively; and
; orand inserting a semicolon, and inserting after such subparagraph the following:
the person’s primary residence shall not be included as an asset;
any natural person who is—
currently licensed or registered as a broker or investment adviser by the Commission, a self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934), or the securities division of a State, the District of Columbia, or a territory of the United States or the equivalent division responsible for licensing or registration of individuals in connection with securities activities; and
in good standing with respect to such licence or registration;
Not later than 180 days after the date of enactment of this Act, the Securities and Exchange Commission shall revise the definition of accredited investor under Regulation D (17 CFR 230.500 et seq.) to conform with the amendments made by subsection (a).