[Congressional Record Volume 171, Number 124 (Monday, July 21, 2025)]
[House]
[Pages H3506-H3508]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
EQUAL OPPORTUNITY FOR ALL INVESTORS ACT OF 2025
Mr. HILL of Arkansas. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 3339) to require certification examinations for
accredited investors, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3339
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 of 2025''.
SEC. 2. CERTIFICATION EXAMINATIONS FOR ACCREDITED INVESTORS.
(a) In General.--The Commission shall revise the definition
of ``accredited investor'' under Regulation D (section
230.500 et seq. of title 17, Code of Federal Regulations) to
include any natural person who is certified through the
examination required under subsection (b).
(b) Establishment of Examination.--Not later than 1 year
after the date of the enactment of this Act, the Commission
shall establish an examination (including a test,
certification, or examination program)--
(1) to certify an individual as an accredited investor; and
(2) that--
(A) is designed with an appropriate level of difficulty
such that an individual with financial sophistication would
be unlikely to fail; and
(B) includes methods to determine whether an individual
seeking to be certified as an accredited investor
demonstrates competency with respect to--
(i) the different types of securities;
(ii) the disclosure requirements under the securities laws
applicable to issuers and offerings of securities exempt from
registration under section 5 of the Securities Act of 1933 as
compared to issuers and offerings of securities subject to
such section 5;
(iii) corporate governance;
(iv) financial statements and the components of such
statements;
(v) aspects of unregistered securities, securities issued
by private companies, and investments into private funds,
including risks associated with--
(I) limited liquidity;
(II) limited disclosures;
(III) subjectivity and variability in valuations and the
analytical tools investors may use to assess such valuations;
(IV) information asymmetry;
(V) leverage risks;
(VI) concentration risk; and
(VII) longer investment horizons;
(vi) potential conflicts of interest, when the interests of
financial professionals and their clients are misaligned or
when their professional responsibilities may be in conflict
with financial motivations; and
(vii) such other criteria as the Commission determines
necessary or appropriate in the public interest or for the
protection of investors.
(c) Administration.--Beginning not later than 180 days
after the date the examination is established under
subsection (b), such examination shall be administered and
offered free of charge to the public by a registered national
securities association under section 15A of the Securities
Exchange Act of 1934 (15 U.S.C. 78o-3).
(d) Commission Defined.--In this section, the term
``Commission'' means the Securities and Exchange Commission.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Arkansas (Mr. Hill) and the gentlewoman from California (Ms. Waters)
each will control 20 minutes.
The Chair recognizes the gentleman from Arkansas.
General Leave
Mr. HILL of Arkansas. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days to revise and extend their remarks
and include extraneous material on the bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Arkansas?
There was no objection.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in strong support of H.R. 3339, the Equal
Opportunity for All Investors Act.
The accredited investor definition is severely outdated. While its
intention is to protect investors, its overly broad definition excludes
millions of Americans who are experienced and knowledgeable enough to
invest in private markets.
Wealth alone should not be the sole determinant as to who can invest
in these markets. My friend from Nebraska, Representative Flood's bill,
provides a merit-based alternative by the establishment of an exam that
allows individuals to qualify as accredited investors by demonstrating
their understanding of investments and private markets.
This is a smart, commonsense modernization of these outdated rules
that provides a meaningful step towards making private markets more
accessible.
Mr. Speaker, I urge my colleagues on both sides of the aisle to join
me in supporting this bill, and I reserve the balance of my time.
{time} 1720
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, in both this Congress and last, I have been particularly
outspoken about the risks of retail investors investing in private
securities. Amongst other things, private securities lack sufficient
transparency, have longer lock-up periods, and are much more volatile
and less liquid than their public counterparts. It is critical that
anyone who invests in these risky assets have sufficient knowledge of
those risks.
Currently, companies, or the brokers they hire, can only solicit
these ``investment opportunities'' to individuals who have been deemed
to be accredited investors. This definition is currently based on a
person's income and net worth, meaning only those making a certain
amount of money or possessing a big enough bank account have access to
them. Anyone can tell you that just because you have a lot of money,
that doesn't make you knowledgeable about the markets. Knowledge is the
key here, and the definition needs to be revised to center around this
core concept of knowledge and expertise.
The committee has heard from investors who want to invest their own
money in some of these risky and illiquid investments and don't want to
be barred from investing just because they don't meet the wealth or
income tests.
The Equal Opportunity for All Investors Act addresses this problem by
allowing an individual to qualify as an accredited investor if they
pass an exam that ensures they are properly versed in the risks of
investing in the private markets.
With this change, ordinary investors who want to invest in private
securities can now do so, assuming they pass the test, which would
establish that they are keenly aware of the specific pitfalls related
to high-risk and illiquid securities, as well as the conflicts of
interest presented when financial professionals try to sell them these
products.
[[Page H3507]]
Last year, committee Democrats worked with Former Chairman McHenry
and my colleague Mr. Flood to ensure that this test contained specific,
robust elements, elements that the Republican witnesses at previous
Financial Services hearings talked about when discussing how they teach
and mentor their budding investors.
I am so glad that the Financial Services Committee agreed to make the
test available free of charge to anyone who is willing and able to go
through the rigor.
Finally, I thank Mr. Flood, my colleague from across the aisle, for
working with the committee Democrats on a bill that ensures that the
SEC is appropriately overseeing this exam process.
I urge my colleagues to vote ``yes'' on this bill, and I reserve the
balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I include in the record the CBO
estimate for this bill.
H.R. 3339, EQUAL OPPORTUNITY FOR ALL INVESTORS ACT OF 2025, AS REPORTED
BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES ON JUNE 3, 2025
------------------------------------------------------------------------
By fiscal year, millions of
dollars--
-------------------------------
2025 2025-2030 2025-2035
------------------------------------------------------------------------
Direct Spending (Outlays)............... 0 0 0
Revenues................................ 0 0 0
Increase or Decrease (-) in the Deficit. 0 0 0
Spending Subject to Appropriation * * **
(Outlays)..............................
------------------------------------------------------------------------
* = between -$500,000 and $500,000.
** = not estimated.
Increases net direct spending in any of the four
consecutive 10-year periods beginning in 2036? No.
Increases on-budget deficits in any of the four consecutive
10-year periods beginning in 2036? No.
Statutory pay-as-you-go procedures apply? No.
Mandate Effects:
Contains intergovernmental mandate? No.
Contains private-sector mandate? Yes, Under Threshold.
H.R. 3339 would require the Securities and Exchange
Commission (SEC) to develop an exam and certify people who
pass as ``accredited investors,'' which would allow them to
make investments for which they are not currently eligible.
Under current law, accredited investors are defined as people
or entities with sufficient financial sophistication and
resources to sustain the risk of loss, including banks,
broker-dealers, and investment companies. Accredited
investors may participate in investment opportunities not
available to nonaccredited investors, such as purchasing
securities that are exempt from registration with the SEC.
Based on the cost of similar provisions, CBO estimates that
implementing H.R. 3339 would cost $1 million in both 2026 and
2027. CBO expects that the SEC would need three employees, at
an average annual cost of $330,000 for each employee, to
establish the examination and amend the current rules on
accredited investors. Because the SEC is authorized to
collect fees each year to offset its annual appropriation,
CBO expects that the net effect on discretionary spending
over the 2025-2030 period would be negligible, assuming
appropriation actions consistent with that authority.
If the SEC increases annual fees to offset the costs of
implementing provisions of H.R. 3339, it would increase the
costs of an existing private-sector mandate on entities
required to pay those fees. CBO estimates that the
incremental cost of the mandate would be small and would fall
well below the annual threshold established in the Unfunded
Mandates Reform Act (UMRA) for private-sector mandates ($206
million in 2025, adjusted annually for inflation).
The bill contains no intergovernmental mandates.
The CBO staff contacts for this estimate are Aurora Swanson
(for federal costs) and Rachel Austin (for mandates). The
estimate was reviewed by H. Samuel Papenfuss, Deputy Director
of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
Mr. HILL of Arkansas. Mr. Speaker, I yield such time as he may
consume to the gentleman from Nebraska (Mr. Flood), the author of this
important bill.
Mr. FLOOD. Mr. Speaker, I thank Chairman Hill and Ranking Member
Waters for their support. I also thank my co-lead on this bill,
Congressman Cleo Fields, for all of his work.
The Equal Opportunity for All Investors Act would expand the
accredited investor definition to include individuals that are
certified through an exam written by the SEC and administered by FINRA.
Accredited investors are individuals that are allowed to participate
in investment opportunities that are not generally available to the
broader public, like private offerings.
Most current pathways to becoming an accredited investor are based on
your balance sheet, your wealth, and your income. This bill changes and
opens up a brand-new pathway allowing for investors' knowledge to be
the determining factor in whether they are able to become an accredited
investor.
In my view, wealth alone is not a particularly strong judge of
whether someone should be an accredited investor or not. A better one
is whether someone has the knowledge to accurately weigh the benefits
and risks of private offerings.
In 2020, the SEC started allowing professional investors with
credentials like a Series 65 or a Series 7 to become accredited
investors. This was a very helpful step forward, but licensing
requirements for brokers and investment advisers go beyond what is
needed to properly weigh the risks of private offerings for an
individual's personal finances.
Following the principle that merit, not just wealth, should guide who
can become an accredited investor, an exam specifically written to
determine the sophistication of investors is a natural next step.
The examination created by this bill is meant to strike the right
balance between rigorously testing for sophistication and not being set
to such a difficult standard that even an intelligent investor could
not pass it.
This bill is a commonsense, bipartisan product that will expand
opportunity in our capital markets. I urge my colleagues to support
this bill.
Ms. WATERS. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Delaware, (Ms. McBride.)
Ms. McBRIDE. Mr. Speaker, I am proud to rise as a co-lead of the
Equal Opportunity for All Investors Act with my Republican colleague
Representative Flood from the great State of Nebraska.
Our bill will unlock capital for entrepreneurs and small business
owners who have been left out for far too long.
Current law allows only millionaires to invest in the markets that
fuel small businesses, shutting out countless Americans, especially
women, veterans, and people of color, based on wealth, not knowledge.
Our bill addresses this by creating an exam to assess your ability to
understand financial risk when investing in private markets, enabling a
more diverse group of people to invest responsibly, regardless of their
net worth.
This legislation creates a new path for capital to reach more hands.
In my State, the Delaware Black Chamber of Commerce has told me that
the legislation would help close the capital gap for diverse
businessowners. Small business leaders say that it is not lack of ideas
but a lack of capital that holds them back.
This bill opens up new sources of funding from a pool of investors
more reflective of the community so that these founders can turn their
vision into jobs and economic growth.
I urge all my colleagues to vote in favor of this commonsense,
bipartisan legislation today. I thank Representative Flood, Chair Hill,
and Ranking Member Waters for their leadership.
Ms. WATERS. Mr. Speaker, I yield myself the balance of my time.
Compared to investing in publicly traded securities, private
securities contain lots of risks. They are less liquid, harder to
value, and are more volatile than their public counterparts. It is,
therefore, essential that anyone investing in these products fully
understand the risks involved, just as prospective drivers must pass a
written test displaying they understand the rules and dangers of the
road before they are given access to a car.
This bill puts that commonsense principle into practice by creating
an SEC-administered test investors can take if they want to invest in
private securities.
In doing so, we adequately balance investor protection while
providing folks with sufficient freedom to do what they please with
their hard-earned dollars. I urge my colleagues to support this bill,
and I yield back the balance of my time.
{time} 1730
Mr. HILL of Arkansas. Mr. Speaker, I yield myself the balance of my
time.
Mr. Speaker, for all the reasons that I have identified, changes need
to be made in the credit investor rule. After 40 years, I think the
changes proposed by the gentleman from Nebraska are solid.
[[Page H3508]]
Mr. Speaker, I urge my colleagues to support the bill, and I yield
back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Arkansas (Mr. Hill) that the House suspend the rules and
pass the bill, H.R. 3339, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________