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SEC Committee to Examine Accredited Investor Definition

By Melanie Waddell

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The Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee plans to review and evaluate the accredited investor definition at its Nov. 29 meeting.

The SEC’s Division of Corporation Finance’s Office of Small Business Policy (OSBP) “will discuss its role in the SEC’s mission and provide an overview of the current accredited investor framework, including background information on the accredited investor definition and how the definition interrelates with capital-raising rules,” according to a notice on the SEC’s website.

The committee will review and evaluate the existing accredited investor definition and “consider whether there are potential changes that could positively affect capital-raising opportunities for both entrepreneurs and investors,” the notice states.

The full House passed legislation on June 1 requiring the SEC to devise an accredited investor certification exam.

The bill, The Equal Opportunity for All Investors Act of 2023, introduced by Reps. Mike Flood, R-Neb., and Wiley Nickel, D-N.C., was introduced in April.

On June 5, the full House passed two more accredited investor-related bills.

The Accredited Investor Definition Review Act, H.R. 1579, sponsored by Rep. Bill Huizenga, R-Mich., would allow the SEC to broaden the list of certifications, designations or credentials that qualify an investor for accredited status. It would require the agency to review the definition every five years.

The Fair Investment Opportunities for Professional Experts Act, H.R. 835, sponsored by Rep. French Hill, R-Ariz., expands the accredited investor definition to those with qualifying professional knowledge through educational or professional experience.

Melanie Waddell

@Think_MelanieW

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