[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3921 Introduced in Senate (IS)]

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117th CONGRESS
  2d Session
                                S. 3921

   To amend the Securities Act of 1933 to expand the definition of a 
        qualifying accredited investor, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 24, 2022

Mr. Tillis (for himself and Mr. Scott of South Carolina) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
   To amend the Securities Act of 1933 to expand the definition of a 
        qualifying accredited investor, and for other purposes.

    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 ``Equal Opportunity for all Investors 
Act''.

SEC. 2. CERTIFICATION EXAMINATIONS FOR ACCREDITED INVESTORS.

    (a) Examination Alternative.--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) any individual who is certified as an 
                accredited investor through an examination established 
                or approved by the Commission, the securities 
                commission (or any agency or office performing like 
                functions) of any State, or any self-regulatory 
                organization as defined in the Securities Exchange Act 
                of 1934 (15 U.S.C. 78c(a)(26)) that--
                            ``(i) measures whether an individual 
                        certified as an accredited investor pursuant to 
                        such examination understands and appreciates 
                        the risks and opportunities of investing in 
                        securities;
                            ``(ii) is designed to ensure that an 
                        individual with financial sophistication or 
                        training would be unlikely to fail; and
                            ``(iii) may be designed and/or administered 
                        by any other person approved by the Commission, 
                        such securities commission, or such self-
                        regulatory organization.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the date of the enactment of this Act.
    (c) Examination.--The Commission shall establish or approve an 
examination that complies with subsection (a) no later than 18 months 
after the date of enactment of this Act.

SEC. 3. ACCREDITED INVESTOR SELF-CERTIFICATION.

    Section 4(b) of the Securities Act of 1933 (15 U.S.C. 77d(b)) is 
amended by inserting ``Unless the issuer knows, or has a reckless 
disregard for whether, the purchaser is not an accredited investor, 
obtaining a self-certification from the purchaser that the purchaser 
meets the income or net worth requirements of Rule 501 of Regulation D 
shall constitute reasonable steps to verify that purchasers of the 
securities are accredited investors.'' after the period at the end.

SEC. 4. MODIFICATION OF RULES.

    (a) In General.--Not later than 9 months after the date of the 
enactment of this Act, the Securities and Exchange Commission shall 
revise its rules issued in section 230.501(a) of title 17, Code of 
Federal Regulations, to make parallel changes set forth in Section 2 
and to add to the definition of accredited investor the following 
categories:
            (1) Any natural person with at least $500,000 worth of 
        investments.
            (2) Any natural person with total transactions during a 12-
        month period under section 230.506 of title 17, Code of Federal 
        Regulations, and under section 4(a)(6) of the Securities Act of 
        1933 (15 U.S.C. 77d(a)(6)) that are not greater than the 
        highest amount of the following--
                    (A) 10 percent of the total investments of the 
                person;
                    (B) 10 percent of the annual income of the person 
                or 10 percent of the annual combined income with that 
                person's spouse; or
                    (C) 10 percent of the net worth of the person 
                excluding the value of the person's principal place of 
                residence.
    (b) Definitions.--
            (1) Definitions.--In this subsection:
                    (A) Cash and cash equivalents.--The term ``cash and 
                cash equivalents'' includes--
                            (i) bank deposits, certificates of deposit, 
                        bankers acceptances and similar bank 
                        instruments held for investment purposes; and
                            (ii) the net cash surrender value of an 
                        insurance policy.
                    (B) Commodity interests.--The term ``commodity 
                interests'' means commodity futures contracts, options 
                on commodity futures contracts, and options on physical 
                commodities traded on or subject to the rules of--
                            (i) any contract market designated for 
                        trading such transactions under the Commodity 
                        Exchange Act (7 U.S.C. 1 et seq.) and the rules 
                        issued under that Act; or
                            (ii) any board of trade or exchange outside 
                        the United States, as described in part 30 of 
                        title 17, Code of Federal Regulations.
                    (C) Digital assets.--The term ``digital assets''--
                            (i) means a digital representation of value 
                        that--
                                    (I) is used as a medium of 
                                exchange, unit of account, or store of 
                                value; and
                                    (II) is not legal tender, whether 
                                or not denominated in legal tender; and
                            (ii) does not include--
                                    (I) a transaction in which a 
                                merchant grants, as part of an affinity 
                                or rewards program, value that cannot 
                                be taken from or exchanged with the 
                                merchant for legal tender, bank credit, 
                                or virtual currency; or
                                    (II) a digital representation of 
                                value issued by or on behalf of a 
                                publisher and used solely within an 
                                online game, game platform, or family 
                                of games sold by the same publisher or 
                                offered on the same game platform.
                    (D) Investment purposes.--The term ``investment 
                purposes''--
                            (i) includes--
                                    (I) real estate owned by a 
                                prospective purchaser who is engaged 
                                primarily in the business of investing, 
                                trading, or developing real estate in 
                                connection with such business; and
                                    (II) a commodity interest or 
                                physical commodity owned, or a 
                                financial contract entered into, by the 
                                prospective purchaser who is engaged 
                                primarily in the business of investing, 
                                reinvesting, or trading in commodity 
                                interests, physical commodities, or 
                                financial contracts in connection with 
                                such business; and
                            (ii) does not include real estate held for 
                        investment purposes by a prospective purchaser 
                        if the real estate is used by the prospective 
                        purchaser, a sibling, spouse or former spouse, 
                        a direct lineal descendant by birth or 
                        adoption, or spouse of such lineal descendant 
                        or ancestor for personal purposes or as a place 
                        of business, or in connection with the conduct 
                        of the trade or business of the prospective 
                        purchaser or such related person.
                    (E) Investments.--The term ``investments'' means--
                            (i) securities, as defined in section 2(a) 
                        of the Securities Act of 1933 (15 U.S.C. 
                        77b(a)), other than securities issued by an 
                        issuer that is controlled by the prospective 
                        purchaser that owns such securities;
                            (ii) real estate held for investment 
                        purposes;
                            (iii) commodity interests held for 
                        investment purposes;
                            (iv) physical commodities held for 
                        investment purposes;
                            (v) digital assets held for investment 
                        purposes;
                            (vi) to the extent not securities, 
                        financial contracts (as such term is defined in 
                        section 3(c)(2)(B)(ii) of the Investment 
                        Company Act of 1940 (15 U.S.C. 
                        80a3(c)(2)(B)(ii))) entered into for investment 
                        purposes; and
                            (vii) cash and cash equivalents (including 
                        foreign currencies) held for investment 
                        purposes.
                    (F) Personal purposes.--The term ``personal 
                purposes'' does not include residential real estate if 
                deductions with respect to such real estate are not 
                disallowed by section 280A of the Internal Revenue Code 
                of 1986.
                    (G) Physical commodities.--The term ``physical 
                commodities'' means any physical commodity with respect 
                to which a commodity interest is traded on a market 
                described in subparagraph (B)(i).
    (c) Self-execution.--If the Securities and Exchange Commission does 
not revise its rules in accordance with the deadline set forth in 
subsection (a), then any person described in subsection (b) shall be 
deemed to be an accredited investor for all purposes under the Federal 
securities laws (including regulations).

SEC. 5. ADJUSTING THE ACCREDITED INVESTOR STANDARD.

    Section 413 of the Private Fund Investment Advisers Registration 
Act of 2010 (15 U.S.C. 77b note) is amended by striking subsection (b) 
and inserting the following:
    ``(b) Review and Adjustment.--
            ``(1) In general.--The Commission may undertake a review of 
        the definition of the term `accredited investor', as such term 
        applies to natural persons, to determine whether the 
        requirements of the definition, excluding the requirement 
        relating to the net worth standard described in subsection (a), 
        should be adjusted or modified for the protection of investors, 
        in the public interest, and in light of the economy.
            ``(2) Adjustment or modification.--Upon completion of a 
        review under paragraph (1), the Commission may, by notice and 
        comment rulemaking, make such adjustments to the definition of 
        the term `accredited investor', excluding adjusting or 
        modifying the requirement relating to the net worth standard 
        described in subsection (a), as such term applies to natural 
        persons, as the Commission may deem appropriate for the 
        protection of investors, in the public interest, and in light 
        of the economy.''.
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