Accredited Investor Definition Review Act

Floor Speech

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Mrs. WAGNER. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1579) to amend the Securities Act of 1933 and the Dodd-Frank Wall Street Reform and Consumer Protection Act with respect to the definition of accredited investor, and for other purposes, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 1579

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``Accredited Investor Definition Review Act''. SEC. 2. CERTIFICATIONS, DESIGNATIONS, AND CREDENTIALS UNDER THE DEFINITION OF ACCREDITED INVESTOR.

Section 2(a)(15) of the Securities Act of 1933 (15 U.S.C. 77b(a)(15)) is amended--

(1) by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively;

(2) in subparagraph (A), as so redesignated, by striking ``adviser; or'' and inserting ``adviser;'';

(3) in subparagraph (B), as so redesignated, by striking the period at the end and inserting ``; or''; and

(4) by adding at the end the following:

``(C) an individual holding such certifications, designations, or credentials as the Commission determines necessary or appropriate in the public interest or for the protection of investors, where such list of certifications, designations, or credentials shall be no less broad than those certifications, designations, or credentials described in the amendments made to section 230.501 of title 17, Code of Federal Regulations, by the final rule of the Commission titled `Accredited Investor Definition' (85 Fed. Reg. 64234; published October 9, 2020).''. SEC. 3. PERIODIC REVIEW OF CERTIFICATIONS, DESIGNATIONS, AND CREDENTIALS.

Section 413(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 77b note) is amended by adding at the end the following:

``(3) Periodic review of certifications, designations, and credentials.--Not later than 18 months after the date of the enactment of this paragraph and not less frequently than once every 5 years thereafter, the Commission shall--

``(A) review the list of certifications, designations, and credentials accepted with respect to meeting the requirements of the definition of `accredited investor' under section 2(a)(15) of the Securities Act of 1933 (15 U.S.C. 77b(a)(15)) and rules issued pursuant to such section;

``(B) add such certifications, designations, and credentials to such list as the Commission determines are substantially similar in measuring the financial sophistication, knowledge, and experience in financial matters of an individual to the certifications, designations, and credentials included on such list at the time of such review; and

``(C) adjust or modify such list as the Commission determines necessary or appropriate in the public interest or for the protection of investors.''.

Mr. Speaker, I rise in support of H.R. 1579, the Accredited Investor Definition Review Act.

I thank my colleagues, Congressmen Huizenga and Lawler, for working on this important piece of legislation that balances increasing investor opportunities with investor protection.

Currently, to qualify as an accredited investor, an individual must have an annual income of at least $200,000 or a net worth of over $1 million. These thresholds exclude many sophisticated but not wealthy investors from participating in high-growth private companies.

H.R. 1579 requires the SEC to review and update the list of certifications, designations, and credentials that an investor must satisfy to qualify as an accredited investor every 5 years, ensuring that the definition remains relevant and accessible.

By supporting H.R. 1579, we can create a more democratized investment landscape, where more Americans have the opportunity to invest in high- growth private companies, not just the wealthy elite.

This bill provides a pathway for sophisticated investors of all backgrounds to accumulate wealth and participate in the success of private companies.

Mr. Speaker, in short, by expanding the definition of accredited investors and promoting greater access to private investments, H.R. 1579 will help to level the playing field and ensure that all Americans have an opportunity to participate in the growth and success of our economy.

For this reason, I urge my colleagues to support H.R. 1579.

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Mrs. WAGNER. Mr. Speaker, I strongly urge my colleagues to support H.R. 1579, and I yield back the balance of my time.

Ms. JACKSON LEE. Mr. Speaker, I rise today in support of H.R. 1579, the Accredited Investor Definition Review Act of 2023.

This bill revises who may be considered an accredited investor for purposes of participating in private offerings of securities.

Certain unregistered securities may only be offered to accredited investors.

Specifically, the bill allows the Securities and Exchange Commission (SEC) discretion in determining what certifications, designations, or credentials investors must possess for purposes of investor protection, provided that the credentials are at least as broad as the existing regulations.

Additionally, the SEC must review these credentials every five years.

This bill amends the definition of investor in the Securities Act of 1933 by adding the following language:

``(C) an individual holding such certifications, designations, or credentials as the Commission determines necessary or appropriate in the public interest or for the protection of investors, where such list of certifications, designations, or credentials shall be no less broad than those certifications, designations, or credentials described in the amendments made to section 230.501 of title 17, Code of Federal Regulations, by the final rule of the Commission titled `Accredited Investor Definition' (85 Fed. Reg. 64234; published October 9, 2020).''

This amendment will give small business startups and everyday citizens in Houston and around the U.S. the opportunity to participate in the growth and success of our economy.

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