[House Report 119-134]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-134
======================================================================
ACCREDITED INVESTOR DEFINITION REVIEW ACT
_______
June 4, 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
together with
MINORITY VIEWS
[To accompany H.R. 3348]
The Committee on Financial Services, to whom was referred
the bill (H.R. 3348) 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, 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.................................................. 4
Committee Oversight Findings..................................... 7
Performance Goals and Objectives................................. 7
Committee Cost Estimate.......................................... 7
New Budget Authority and CBO Cost Estimate....................... 7
Unfunded Mandates Statement...................................... 7
Earmark Statement................................................ 7
Federal Advisory Committee Act Statement......................... 8
Applicability to the Legislative Branch.......................... 8
Duplication of Federal Programs.................................. 8
Section-by-Section Analysis of the Legislation................... 8
Changes in Existing Law Made by the Bill, as Reported............ 8
Minority Views................................................... 16
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 ``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--
``(i) such list of certifications,
designations, or credentials shall include
those professional certifications described in
the Commission order titled `Order Designating
Certain Professional Licenses as Qualifying
Natural Persons for Accredited Investor Status'
(85 Fed. Reg. 64234; published October 9,
2020); and
``(ii) in establishing which attributes
should be considered for purposes of
determining such certifications, designations,
or credentials, the Commission shall consider
attributes that are no less broad than those
attributes described in the amendments made to
section 230.501(a)(10) 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 designated as qualifying
natural persons for accredited investor status pursuant
to Rule 501(a)(10) (17 CFR 230.501(a)(10));
``(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.''.
Purpose and Summary
H.R. 3348, the Accredited Investor Definition Review Act,
was introduced on May 13, 2025, by Representative Bill Huizenga
(MI-04). H.R. 3348 requires the Securities and Exchange
Commission (SEC) to review the list of certifications,
designations, and credentials for individuals to qualify as an
accredited investor and add additional certifications,
designations, and credentials that the SEC determines are
substantially similar. The bill requires the SEC to repeat this
process every five years after the initial assessment.
Background and Need for Legislation
Under current law, accredited investors are defined as
people or entities with sufficient financial sophistication and
resources to sustain the risk of loss.\1\ H.R. 3348 expands the
definition to include all individuals who demonstrate they have
a sufficient understanding of the offering and the risks
involved. This bill will ensure that investments in high-growth
private companies are not reserved for only the elite, wealthy
investors who currently qualify as accredited investors.
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\1\17 C.F.R. Sec. 270.
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Committee Consideration
117TH CONGRESS
On July 27, 2021, Representative Bill Huizenga (R-MI)
introduced H.R. 4708, the Accredited Investor Definition Review
Act. This bill is an earlier iteration of H.R. 3348. The bill
was referred solely to the Committee on Financial Services.
118TH CONGRESS
On March 14, 2023, Representative Huizenga introduced H.R.
1579, the Accredited Investor Definition Review Act.
Representative Mike Lawler (R-NY) was subsequently added as a
cosponsor. This bill is an earlier iteration of H.R. 3348. The
bill was referred solely to the Committee on Financial
Services. The Subcommittee on Capital Markets of the Committee
on Financial Services held a hearing to examine matters
relating to H.R. 1579 on February 8, 2023. On April 26, 2023,
the Committee on Financial Services ordered H.R. 1579 to be
favorably reported to the House of Representatives by a vote of
41-2. On June 5, 2023, the House suspended the rules and passed
the bill by voice vote. It was received in the Senate and
referred to the Committee on Banking, Housing, and Urban
Affairs. In addition, Senator Bill Hagerty (R-TN) introduced S.
5121, a companion bill to H.R. 1579.
119TH CONGRESS
On May 13, 2025, Representative Huizenga introduced H.R.
3348, the Accredited Investor Definition Review Act. 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. 3348. The Committee ordered H.R.
3348, as amended, to be reported favorably 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. 3348:
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. 3348, as
amended, to be reported favorably to the House by a recorded
vote of 34 yeas and 16 nays, a quorum being present. (Record
Vote No. FC-115).
The Committee considered the following amendments to H.R.
3348:
Representative Bill Huizenga (R-MI) offered
an amendment in the nature of a substitute, which made
minor edits and technical changes. This amendment was
adopted by a voice vote.
Representative Maxine Waters (D-CA) offered
an amendment (No. 2), designated AMEND_HR3348_1. This
amendment requires the SEC to adjust or modify the list
of certifications, designations, and credentials to
qualify as an accredited investor as the Commission
determines necessary or appropriate to facilitate
capital formation without reducing investor protection.
This amendment failed by a recorded vote of 22 yeas and
28 nays, a quorum being present. (Record Vote No. FC-
114).
[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. 3348 is empower
sophisticated-but-not-wealthy investors to qualify as
accredited investors by requiring the SEC to review the list of
certifications, designations, and credentials for individuals
to qualify as an accredited investor and add additional
certifications, designations, and credentials that the SEC
determines are substantially similar.
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. 3348. 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 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. 3348 as the ``Accredited Investor
Definition Review Act.''
Section 2. Definition of accredited investor
This section amends the definition of an accredited
investor to include individuals who have certifications,
designations, or credentials as the SEC determines necessary or
appropriate.
Section 3. Periodic review of certifications, designations, and
credentials
This section amends Dodd-Frank to require the SEC to review
the list of certifications, designations, and credentials to
qualify as an accredited investor within 18 months and every
five years thereafter. This section also directs the SEC to add
such certificates, designations, and credentials to the list
that the SEC determines are substantially similar to the ones
included on the list at the time of review and to adjust the
list if the SEC deems it necessary in the public interest or
for the protection of investors.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
SECURITIES ACT OF 1933
TITLE I--
* * * * * * *
definitions
Sec. 2. (a) Definitions.--When used in this title, unless the
context otherwise requires--
(1) The term ``security'' means any note, stock,
treasury stock, security future, security-based swap,
bond, debenture, evidence of indebtedness, certificate
of interest or participation in any profit-sharing
agreement, collateral-trust certificate,
preorganization certificate or subscription,
transferable share, investment contract, voting-trust
certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option, or
privilege on any security, certificate of deposit, or
group or index of securities (including any interest
therein or based on the value thereof), or any put,
call, straddle, option, or privilege entered into on a
national securities exchange relating to foreign
currency, or, in general, any interest or instrument
commonly known as a ``security'', or any certificate of
interest or participation in, temporary or interim
certificate for, receipt for, guarantee of, or warrant
or right to subscribe to or purchase, any of the
foregoing.
(2) The term ``person'' means an individual, a
corporation, a partnership, an association, a joint-
stock company, a trust, any unincorporated
organization, or a government or political subdivision
thereof. As used in this paragraph the term ``trust''
shall include only a trust where the interest or
interests of the beneficiary or beneficiaries are
evidenced by a security.
(3) The term ``sale'' or ``sell'' shall include every
contract of sale or disposition of a security or
interest in a security, for value. The term ``offer to
sell'', ``offer for sale'', or ``offer'' shall include
every attempt or offer to dispose of, or solicitation
of an offer to buy, a security or interest in a
security, for value. The terms defined in this
paragraph and the term ``offer to buy'' as used in
subsection (c) of section 5 shall not include
preliminary negotiations or agreements between an
issuer (or any person directly or indirectly
controlling or controlled by an issuer, or under direct
or indirect common control with an issuer) and any
underwriter or among underwriters who are or are to be
in privity of contract with an issuer (or any person
directly or indirectly controlling or controlled by an
issuer, or under direct or indirect common control with
an issuer). Any security given or delivered with, or as
a bonus on account of, any purchase of securities or
any other thing, shall be conclusively presumed to
constitute a part of the subject of such purchase and
to have been offered and sold for value. The issue or
transfer of a right or privilege, when originally
issued or transferred with a security, giving the
holder of such security the right to convert such
security into another security of the same issuer or of
another person, or giving a right to subscribe to
another security of the same issuer or of another
person, which right cannot be exercised until some
future date, shall not be deemed to be an offer or sale
of such other security; but the issue or transfer of
such other security upon the exercise of such right of
conversion or subscription shall be deemed a sale of
such other security. Any offer or sale of a security
futures product by or on behalf of the issuer of the
securities underlying the security futures product, an
affiliate of the issuer, or an underwriter, shall
constitute a contract for sale of, sale of, offer for
sale, or offer to sell the underlying securities. Any
offer or sale of a security-based swap by or on behalf
of the issuer of the securities upon which such
security-based swap is based or is referenced, an
affiliate of the issuer, or an underwriter, shall
constitute a contract for sale of, sale of, offer for
sale, or offer to sell such securities. The publication
or distribution by a broker or dealer of a research
report about an emerging growth company that is the
subject of a proposed public offering of the common
equity securities of such emerging growth company
pursuant to a registration statement that the issuer
proposes to file, or has filed, or that is effective
shall be deemed for purposes of paragraph (10) of this
subsection and section 5(c) not to constitute an offer
for sale or offer to sell a security, even if the
broker or dealer is participating or will participate
in the registered offering of the securities of the
issuer. As used in this paragraph, the term ``research
report'' means a written, electronic, or oral
communication that includes information, opinions, or
recommendations with respect to securities of an issuer
or an analysis of a security or an issuer, whether or
not it provides information reasonably sufficient upon
which to base an investment decision.
(4) The term ``issuer'' means every person who issues
or proposes to issue any security; except that with
respect to certificates of deposit, voting-trust
certificates, or collateral-trust certificates, or with
respect to certificates of interest or shares in an
unincorporated investment trust not having a board of
directors (or persons performing similar functions) or
of the fixed, restricted management, or unit type, the
term ``issuer'' means the person or persons performing
the acts and assuming the duties of depositor or
manager pursuant to the provisions of the trust or
other agreement or instrument under which such
securities are issued; except that in the case of an
unincorporated association which provides by its
articles for limited liability of any or all of its
members, or in the case of a trust, committee, or other
legal entity, the trustees or members thereof shall not
be individually liable as issuers of any security
issued by the association, trust, committee, or other
legal entity; except that with respect to equipment-
trust certificates or like securities, the term
``issuer'' means the person by whom the equipment or
property is or is to be used; and except that with
respect to fractional undivided interests in oil, gas,
or other mineral rights, the term ``issuer'' means the
owner of any such right or of any interest in such
right (whether whole or fractional) who creates
fractional interests therein for the purpose of public
offering.
(5) The term ``Commission'' means the Securities and
Exchange Commission.
(6) The term ``Territory'' means Puerto Rico, the
Virgin Islands, and the insular possessions of the
United States.
(7) The term ``interstate commerce'' means trade or
commerce in securities or any transportation or
communication relating thereto among the several States
or between the District of Columbia or any Territory of
the United States and any State or other Territory, or
between any foreign country and any State, Territory,
or the District of Columbia, or within the District of
Columbia.
(8) The term ``registration statement'' means the
statement provided for in section 6, and includes any
amendment thereto and any report, document, or
memorandum filed as part of such statement or
incorporated therein by reference.
(9) The term ``write'' or ``written'' shall include
printed, lithographed, or any means of graphic
communication.
(10) The term ``prospectus'' means any prospectus,
notice, circular, advertisement, letter, or
communication, written or by radio or television, which
offers any security for sale or confirms the sale of
any security; except that (a) a communication sent or
given after the effective date of the registration
statement (other than a prospectus permitted under
subsection (b) of section 10) shall not be deemed a
prospectus if it is proved that prior to or at the same
time with such communication a written prospectus
meeting the requirements of subsection (a) of section
10 at the time of such communication was sent or given
to the person to whom the communication was made, and
(b) a notice, circular, advertisement, letter, or
communication in respect of a security shall not be
deemed to be a prospectus if it states from whom a
written prospectus meeting the requirements of section
10 may be obtained and, in addition, does no more than
identify the security, state the price thereof, state
by whom orders will be executed, and contain such other
information as the Commission, by rules or regulations
deemed necessary or appropriate in the public interest
and for the protection of investors, and subject to
such terms and conditions as may be prescribed therein,
may permit.
(11) The term ``underwriter'' means any person who
has purchased from an issuer with a view to, or offers
or sells for an issuer in connection with, the
distribution of any security, or participates or has a
direct or indirect participation in any such
undertaking, or participates or has a participation in
the direct or indirect underwriting of any such
undertaking; but such term shall not include a person
whose interest is limited to a commission from an
underwriter or dealer not in excess of the usual and
customary distributors' or sellers' commission. As used
in this paragraph the term ``issuer'' shall include, in
addition to an issuer, any person directly or
indirectly controlling or controlled by the issuer, or
any person under direct or indirect common control with
the issuer.
(12) The term ``dealer'' means any person who engages
either for all or part of his time, directly or
indirectly, as agent, broker, or principal, in the
business of offering, buying, selling, or otherwise
dealing or trading in securities issued by another
person.
(13) The term ``insurance company'' means a company
which is organized as an insurance company, whose
primary and predominant business activity is the
writing of insurance or the reinsuring of risks
underwritten by insurance companies, and which is
subject to supervision by the insurance commissioner,
or a similar official or agency, of a State or
territory or the District of Columbia; or any receiver
or similar official or any liquidating agent for such
company, in his capacity as such.
(14) The term ``separate account'' means an account
established and maintained by an insurance company
pursuant to the laws of any State or territory of the
United States, the District of Columbia, or of Canada
or any province thereof, under which income, gains and
losses, whether or not realized, from assets allocated
to such account, are, in accordance with the applicable
contract, credited to or charged against such account
without regard to other income, gains, or losses of the
insurance company.
(15) The term ``accredited investor'' shall mean--
[(i)] (A) a bank as defined in section
3(a)(2) whether acting in its individual or
fiduciary capacity; an insurance company as
defined in paragraph (13) of this subsection;
an investment company registered under the
Investment Company Act of 1940 or a business
development company as defined in section
2(a)(48) of that Act; a Small Business
Investment Company licensed by the Small
Business Administration; or an employee benefit
plan, including an individual retirement
account, which is subject to the provisions of
the Employee Retirement Income Security Act of
1974, if the investment decision is made by a
plan fiduciary, as defined in section 3(21) of
such Act, which is either a bank, insurance
company, or registered investment adviser; [or]
[(ii)] (B) any person who, on the basis of
such factors as financial sophistication, net
worth, knowledge, and experience in financial
matters, or amount of assets under management
qualifies as an accredited investor under rules
and regulations which the Commission shall
prescribe[.]; or
(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--
(i) such list of certifications,
designations, or credentials shall
include those professional
certifications described in the
Commission order titled ``Order
Designating Certain Professional
Licenses as Qualifying Natural Persons
for Accredited Investor Status'' (85
Fed. Reg. 64234; published October 9,
2020); and
(ii) in establishing which attributes
should be considered for purposes of
determining such certifications,
designations, or credentials, the
Commission shall consider attributes
that are no less broad than those
attributes described in the amendments
made to section 230.501(a)(10) 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).
(16) The terms ``security future'', ``narrow-based
security index'', and ``security futures product'' have
the same meanings as provided in section 3(a)(55) of
the Securities Exchange Act of 1934.
(17) The terms ``swap'' and ``security-based swap''
have the same meanings as in section 1a of the
Commodity Exchange Act (7 U.S.C. 1a).
(18) The terms ``purchase'' or ``sale'' of a
security-based swap shall be deemed to mean the
execution, termination (prior to its scheduled maturity
date), assignment, exchange, or similar transfer or
conveyance of, or extinguishing of rights or
obligations under, a security-based swap, as the
context may require.
(19) The term ``emerging growth company'' means an
issuer that had total annual gross revenues of less
than $1,000,000,000 (as such amount is indexed for
inflation every 5 years by the Commission to reflect
the change in the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics,
setting the threshold to the nearest 1,000,000) during
its most recently completed fiscal year. An issuer that
is an emerging growth company as of the first day of
that fiscal year shall continue to be deemed an
emerging growth company until the earliest of--
(A) the last day of the fiscal year of the
issuer during which it had total annual gross
revenues of $1,000,000,000 (as such amount is
indexed for inflation every 5 years by the
Commission to reflect the change in the
Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics,
setting the threshold to the nearest 1,000,000)
or more;
(B) the last day of the fiscal year of the
issuer following the fifth anniversary of the
date of the first sale of common equity
securities of the issuer pursuant to an
effective registration statement under this
title;
(C) the date on which such issuer has, during
the previous 3-year period, issued more than
$1,000,000,000 in non-convertible debt; or
(D) the date on which such issuer is deemed
to be a ``large accelerated filer'', as defined
in section 240.12b-2 of title 17, Code of
Federal Regulations, or any successor thereto.
(b) Consideration of Promotion of Efficiency, Competition,
and Capital Formation.--Whenever pursuant to this title the
Commission is engaged in rulemaking and is required to
consider or determine whether an action is necessary or
appropriate in the public interest, the Commission shall also
consider, in addition to the protection of investors, whether
the action will promote efficiency, competition, and capital
formation.
* * * * * * *
----------
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
* * * * * * *
TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS
* * * * * * *
SEC. 413. ADJUSTING THE ACCREDITED INVESTOR STANDARD.
(a) In General.--The Commission shall adjust any net worth
standard for an accredited investor, as set forth in the rules
of the Commission under the Securities Act of 1933, so that the
individual net worth of any natural person, or joint net worth
with the spouse of that person, at the time of purchase, is
more than $1,000,000 (as such amount is adjusted periodically
by rule of the Commission), excluding the value of the primary
residence of such natural person, except that during the 4-year
period that begins on the date of enactment of this Act, any
net worth standard shall be $1,000,000, excluding the value of
the primary residence of such natural person.
(b) Review and Adjustment.--
(1) Initial review and adjustment.--
(A) Initial review.--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.
(B) Adjustment or modification.--Upon
completion of a review under subparagraph (A),
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.
(2) Subsequent reviews and adjustment.--
(A) Subsequent reviews.--Not earlier than 4
years after the date of enactment of this Act,
and not less frequently than once every 4 years
thereafter, the Commission shall undertake a
review of the definition, in its entirety, of
the term ``accredited investor'', as defined in
section 230.215 of title 17, Code of Federal
Regulations, or any successor thereto, as such
term applies to natural persons, to determine
whether the requirements of the definition
should be adjusted or modified for the
protection of investors, in the public
interest, and in light of the economy.
(B) Adjustment or modification.--Upon
completion of a review under subparagraph (A),
the Commission may, by notice and comment
rulemaking, make such adjustments to the
definition of the term ``accredited investor'',
as defined in section 230.215 of title 17, Code
of Federal Regulations, or any successor
thereto, 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.
(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 designated as
qualifying natural persons for accredited
investor status pursuant to Rule 501(a)(10) (17
CFR 230.501(a)(10));
(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.
* * * * * * *
MINORITY VIEWS
This bill gives the SEC broad discretion to expand the
accredited investor definition as it sees fit. It further
requires the SEC to review the list of certifications and
credentials for individuals to qualify as an accredited
investor and add additional certifications and credentials to
such list which the SEC determines are substantially similar to
existing ones on a periodic basis.
Democrats no longer support this bill--which would give the
SEC broad discretion to amend the accredited investor
definition--due to the current SEC's de-prioritization of
investor protection and reduced independence from the current
presidential administration. Democrats were willing to accept
this bill at the May 2025 markup had Republicans accepted a
Democratic-sponsored revision that would limit the SEC's
discretion to change the definition; however, this revision was
not accepted by the Chairman. While a prior version of this
bill was agreed to by a recorded vote of 41-2 in markup in the
118th Congress, Democrats voted against this bill at the May
2025 markup as they believe the current SEC is no longer
sufficiently independent and could unilaterally weaken the
accredited investor definition.
For these reasons, we oppose H.R. 3348.
Sincerely,
Maxine Waters,
Ranking Member.
Nydia M. Velazquez,
Stephen F. Lynch,
Al Green,
Joyce Beatty,
Sylvia R. Garcia,
Nikema Williams,
Members of Congress.
[all]