H.R. 3348: Accredited Investor Definition Review Act

This bill, known as the Accredited Investor Definition Review Act, proposes changes to the definition of an "accredited investor" under U.S. securities laws. The purpose of the bill is to update and potentially expand the qualifications for individuals to be considered accredited investors, which is important for participating in certain types of private investment opportunities that are currently limited to accredited investors.

Key Provisions of the Bill

Amendment to Certifications and Designations

One significant aspect of the bill is the amendment to the Securities Act of 1933. It involves:

• Renaming certain clauses related to accredited investors to better organize them.
• Adding the possibility for individuals to qualify as accredited investors if they hold specified certifications, designations, or credentials as determined by the Securities and Exchange Commission (SEC). This would include a review of existing qualifications to ensure they align with current financial industry standards.

New Qualification Criteria

The bill indicates that the SEC would be tasked with creating and maintaining a list of acceptable professional certifications. These certifications would be assessed based on their ability to measure financial knowledge and sophistication. The intention is to include certifications that are deemed appropriate for the protection of investors.

Periodic Review of Qualifications

Additionally, the bill mandates that the SEC conduct a review of the list of accepted certifications, designations, and credentials:

• The first review must occur within 18 months of the bill's enactment and subsequently at least once every five years.
• During these reviews, the SEC may add new certifications that are similar in terms of measuring financial sophistication and adjust the existing list based on what it deems necessary for investor protection.

Impact of the Bill

The overall goal of the Accredited Investor Definition Review Act is to ensure that more individuals have the opportunity to invest in private offerings by allowing those with relevant professional credentials to qualify as accredited investors, thereby potentially increasing access to a range of investment opportunities.

Relevant Companies

• None found