[House Report 119-127]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-127
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EQUAL OPPORTUNITY FOR ALL INVESTORS ACT OF 2025
_______
June 3, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 3339]
The Committee on Financial Services, to whom was referred
the bill (H.R. 3339) to require certification examinations for
accredited investors, and for other purposes, having considered
the same, reports favorably thereon with an amendment and
recommends that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Consideration.......................................... 3
Related Hearings................................................. 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 6
Performance Goals and Objectives................................. 6
Committee Cost Estimate.......................................... 6
New Budget Authority and CBO Cost Estimate....................... 6
Unfunded Mandates Statement...................................... 6
Earmark Statement................................................ 6
Federal Advisory Committee Act Statement......................... 7
Applicability to the Legislative Branch.......................... 7
Duplication of Federal Programs.................................. 7
Section-by-Section Analysis of the Legislation................... 7
Changes in Existing Law Made by the Bill, as Reported............ 7
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
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.
PURPOSE AND SUMMARY
H.R. 3339, the Equal Opportunity for All Investors Act of
2025, was introduced on May 13, 2025, by Representative Mike
Flood (NE-01). H.R. 3339 expands the ``accredited investor''
definition to include individuals who are certified through an
examination established by the Securities and Exchange
Commission (SEC) and administered by the Financial Industry
Regulatory Authority (FINRA).
BACKGROUND AND NEED FOR LEGISLATION
To qualify as an accredited investor, the SEC requires
individuals and businesses to meet one of several financial or
professional criteria.\1\ H.R. 3339 expands the pathways to
qualify as an accredited investor by allowing certification for
individuals who pass an examination established by the SEC and
administered by FINRA. This approach modernizes the existing
definition that has inappropriately sidelined sophisticated,
but not wealthy, individuals from high-growth asset classes
historically reserved for the wealthiest individuals.
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\1\17 C.F.R. Sec. 270.
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COMMITTEE CONSIDERATION
119TH CONGRESS
On May 13, 2025, Representative Mike Flood (R-NE)
introduced H.R. 3339, the Equal Opportunity for All Investors
Act of 2025, with Representatives Cleo Fields (D-LA), Mike
Lawler (R-NY), Sarah McBride (D-DE), and Shri Thanedar (D-MI)
as original cosponsors. The bill was referred solely to the
Committee on Financial Services. The bill was attached to the
February 26, 2025, hearing titled ``The Future of American
Capital: Strengthening Public and Private Markets by Increasing
Investor Access and Facilitating Capital Formation'' and the
March 25, 2025, hearing titled, ``Beyond Silicon Valley:
Expanding Access to Capital Across America.''
On May 20, 2025, the Committee met in open session to
consider, among others, H.R. 3339. The Committee ordered H.R.
3339, as amended to be favorably reported to the House of
Representatives.
RELATED HEARINGS
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearings were used to
develop H.R. 3339:
The Capital Markets Subcommittee of the Committee on
Financial Services held a February 26, 2025, hearing titled
``The Future of American Capital: Strengthening Public and
Private Markets by Increasing Investor Access and Facilitating
Capital Formation'' and the Full Committee held a March 25,
2025, hearing titled, ``Beyond Silicon Valley: Expanding Access
to Capital Across America.'' A discussion draft version of the
bill was attached to both hearings. The following witnesses
testified at the February 26, 2025, hearing: Mr. Andrew
Barnell, CEO and Co-Founder, Geneoscopy; Mr. McKeever Conwell,
Founder and Managing Partner, RareBreed Ventures; Ms. Rebecca
Kacaba, CEO and Co-Founder, DealMaker; Ms. Anna Pinedo,
Partner, Mayer Brown; and Ms. Alexandra Thornton, Senior
Director, Financial Regulation, Center for American Progress.
The following witnesses testified at the March 25, 2025,
hearing: Mr. Steve Case, Chairman and CEO, Revolution LLC Mr.
Bill Newell, Senior Business Advisor & Former CEO, Sutro
Biopharma; Ms. Candice Matthews Brackeen, General Partner,
Lightship Capital; Mr. Joel Trotter, Partner, Latham & Watkins
LLP; and Ms. Amanda Senn, Director of the Alabama Securities
Commission.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
On May 20, 2025, the Committee ordered H.R. 3339, as
amended, to be reported favorably to the House by a recorded
vote of 49 yeas and 2 nays, a quorum being present. (Record
Vote No. FC-111).
Before the question to report was called, the Committee
adopted an amendment in the nature of a substitute, designated
FLOOD_014, which made minor edits and technical changes,
offered by Representative Flood. The amendment was adopted by
voice vote, a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 3339 is to expand
the pathways to qualify as an accredited investor by allowing
certification for individuals who pass an examination
established by the SEC and administered by FINRA, thereby
modernizing the existing definition that has inappropriately
sidelined sophisticated, but not wealthy, individuals from
high-growth asset classes historically reserved for the
wealthiest individuals.
COMMITTEE COST ESTIMATE
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 3339. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of House rule XIII, the Committee
will adopt as its own the cost estimate by the Director of the
Congressional Budget Office once it has been prepared.
NEW BUDGET AUTHORITY AND CBO COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
UNFUNDED MANDATES STATEMENT
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Committee will adopt the estimate once
it has been prepared by the Director.
EARMARK STATEMENT
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the resolution and states that the provisions
of the bill do not contain any congressional earmarks, limited
tax benefits, or limited tariff benefits within the meaning of
the rule.
FEDERAL ADVISORY COMMITTEE ACT STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO THE LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
This section cites H.R. 3339 as the ``Equal Opportunity for
All Investors Act of 2025.''
Section 2. Certification examination for accredited investors
This section amends the definition of an accredited
investor in Regulation D to include individuals who are
certified through an examination established by the Securities
and Exchange Commission (SEC) and administered by Financial
Industry Regulatory Authority (FINRA). This section requires
the examination be designed with an appropriate level of
difficulty such that an individual with financial
sophistication would be unlikely to fail and may include
methods to determine competency with respect to different types
of securities, disclosure requirements under the federal
securities laws, corporate governance, financial statement,
aspect of unregistered securities, potential conflicts of
interest between financial professionals and their clients, and
other criteria the SEC determines necessary. This section also
requires that the examination be offered free of charge to the
public.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 3339 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report required under clause 3(e) of rule XIII of
the House of Representatives.
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