HR3348-119

What This Bill Does

The Accredited Investor Definition Review Act changes who can qualify as an accredited investor. It amends the Securities Act definition so individuals may qualify if they hold certifications, designations, or credentials that the Securities and Exchange Commission determines show financial sophistication. The list must include the professional certifications identified in the SEC's 2020 accredited-investor order, and the attributes the SEC considers must be at least as broad as the 2020 final rule. The bill also amends Dodd-Frank's periodic-review provision: within 18 months and every five years after that, the SEC must review the Rule 501(a)(10) credential list, add substantially similar certifications that measure financial sophistication, knowledge, or experience, and adjust the list when needed for public interest, investor protection, and economic conditions.

Who Benefits and How

Licensed financial professionals benefit because recognized credentials can qualify them for accredited-investor status even if they do not satisfy wealth or income thresholds. Professional certification bodies benefit because SEC recognition can increase the value of their credentials. Private fund managers benefit from a larger pool of eligible accredited investors. Startup private issuers benefit because more credentialed investors may be allowed to participate in private offerings. The Securities and Exchange Commission benefits from an explicit periodic-review framework rather than ad hoc credential-list updates.

Who Bears the Burden and How

The Securities and Exchange Commission must review certifications within 18 months, repeat the review every five years, evaluate whether credentials measure sophistication, and adjust the list as conditions change. SEC investor-protection staff must weigh public-interest and investor-protection risks when adding credentials. Retail investors without SEC-recognized credentials may remain excluded from private offerings even if the credential path expands access for others. Broker-dealers and private-offering compliance staff must update accredited-investor verification procedures. Investor advocacy organizations may bear a policy burden if broader credential access increases exposure to private-market risks.

Key Provisions

• Amends the Securities Act accredited-investor definition to include SEC-recognized certifications, designations, and credentials.
• Requires the SEC list to include professional certifications from the 2020 accredited-investor order.
• Requires SEC credential attributes to be no less broad than the 2020 accredited-investor final rule.
• Directs the SEC to review Rule 501(a)(10) credentials within 18 months and every five years.
• Requires the SEC to add substantially similar credentials and adjust the list for public interest, investor protection, and economic conditions.