Fair Investment Opportunities for Professional Experts Act

I 116TH CONGRESS 1ST SESSION H. R. 4762 To amend the Securities Act of 1933 to codify certain qualifications of individuals as accredited investors for purposes of the securities laws. IN THE HOUSE OF REPRESENTATIVES OCTOBER 18, 2019 Mr. HILL of Arkansas (for himself and Mr. SCHWEIKERT) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Securities Act of 1933 to codify certain quali- fications of individuals as accredited investors for pur- poses of the securities laws. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Fair Investment Op- 4 portunities for Professional Experts Act’’. 5 SEC. 2. DEFINITION OF ACCREDITED INVESTOR. 6 (a) IN GENERAL.—Section 2(a)(15) of the Securities 7 Act of 1933 (15 U.S.C. 77b(a)(15)) is amended— 8 (1) by redesignating clauses (i) and (ii) as sub- 9 paragraphs (A) and (F), respectively; and 10 VerDate Sep 11 2014 23:26 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4762.IH H4762 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 4762 IH (2) in subparagraph (A) (as so redesignated), 1 by striking ‘‘; or’’ and inserting a semicolon, and in- 2 serting after such subparagraph the following: 3 ‘‘(B) any natural person whose individual 4 net worth, or joint net worth with that person’s 5 spouse, exceeds $1,000,000 (which amount, 6 along with the amounts set forth in subpara- 7 graph (C), shall be adjusted for inflation by the 8 Commission every 5 years to the nearest 9 $10,000 to reflect the change in the Consumer 10 Price Index for All Urban Consumers published 11 by the Bureau of Labor Statistics) where, for 12 purposes of calculating net worth under this 13 subparagraph— 14 ‘‘(i) the person’s primary residence 15 shall not be included as an asset; 16 ‘‘(ii) indebtedness that is secured by 17 the person’s primary residence, up to the 18 estimated fair market value of the primary 19 residence at the time of the sale of securi- 20 ties, shall not be included as a liability (ex- 21 cept that if the amount of such indebted- 22 ness outstanding at the time of sale of se- 23 curities exceeds the amount outstanding 60 24 days before such time, other than as a re- 25 VerDate Sep 11 2014 23:26 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4762.IH H4762 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 4762 IH sult of the acquisition of the primary resi- 1 dence, the amount of such excess shall be 2 included as a liability); and 3 ‘‘(iii) indebtedness that is secured by 4 the person’s primary residence in excess of 5 the estimated fair market value of the pri- 6 mary residence at the time of the sale of 7 securities shall be included as a liability; 8 ‘‘(C) any natural person who had an indi- 9 vidual income in excess of $200,000 in each of 10 the 2 most recent years or joint income with 11 that person’s spouse in excess of $300,000 in 12 each of those years and has a reasonable expec- 13 tation of reaching the same income level in the 14 current year; 15 ‘‘(D) any natural person who is currently 16 licensed or registered as a broker or investment 17 adviser by the Commission, the Financial In- 18 dustry Regulatory Authority, or an equivalent 19 self-regulatory organization (as defined in sec- 20 tion 3(a)(26) of the Securities Exchange Act of 21 1934), or the securities division of a State or 22 the equivalent State division responsible for li- 23 censing or registration of individuals in connec- 24 tion with securities activities; 25 VerDate Sep 11 2014 23:26 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4762.IH H4762 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 4762 IH ‘‘(E) any natural person the Commission 1 determines, by regulation, to have demonstrable 2 education or job experience to qualify such per- 3 son as having professional knowledge of a sub- 4 ject related to a particular investment, and 5 whose education or job experience is verified by 6 the Financial Industry Regulatory Authority or 7 an equivalent self-regulatory organization (as 8 defined in section 3(a)(26) of the Securities Ex- 9 change Act of 1934); or’’. 10 (b) RULEMAKING.—The Commission shall revise the 11 definition of accredited investor under Regulation D (17 12 CFR 230.501 et seq.) to conform with the amendments 13 made by subsection (a). 14 Æ VerDate Sep 11 2014 23:26 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H4762.IH H4762 pamtmann on DSKBC07HB2PROD with BILLS