WASHINGTON, DC - Today, Rep. David Schweikert (AZ-06) and Rep. French Hill (AR-02) introduced H.R. 3328, the Fair Investment Opportunities for Professional Experts Act. The legislation expands the definition of an accredited investor, allowing Americans who have relevant education, professional experience, or other similar credentials to invest in private offerings.
“I am pleased to re-introduce this legislation to rightfully expand the definition of an accredited investor. This would expand the definition to include professional experts, providing more Americans with the opportunity to invest in ideas based on their knowledge and capabilities, without being penalized for their current income levels,” said Rep. Schweikert (AZ-06). “The current financial restrictions on investors are based exclusively on an individual’s income and wealth, excluding too many hard-working Americans who have the experiences necessary to be provided access to capital. I will continue working to ensure all Americans who are looking to grow, and create new opportunities and investments in our communities are able to do so.”
“An arbitrary wealth test should not be the metric by which the federal government determines who can and who can’t invest in private offerings,” said Rep. Hill (AR-02). “Small businesses and startups in Arkansas and across the country are integral to our nation’s economic growth, innovation, and job creation. This legislation would simply provide individuals who demonstrate a strong understanding of an offering the opportunity to invest in private offerings – providing greater investment opportunities for Arkansans and enabling entrepreneurs to create more jobs.”
Rep. Schweikert and Rep. Hill have previously introduced this legislation several times, including most recently in the 117th Congress. Because of significant costs and barriers to raising capital in the U.S. public markets, most small companies raise start-up or expansion funds in the private market, where most offerings are limited to “accredited investors.” The current “accredited investor” definition focuses on the financial status of the investor, and as a result, only rich individuals can participate in private offerings, barring the majority of Americans from what may be attractive investment opportunities.
The Fair Investment Opportunities for Professional Experts Act expands the definition of an accredited investor to allow individuals access to private offerings who have demonstrated an understanding of the subject matter related to the offering. For example, the Securities and Exchange Commission might determine, as directed by the legislation, that a practicing doctor should be able to invest in a telehealth business or a farmer should be able to invest in a tractor company as long as the investor can demonstrate knowledge and experience in their field. This bill provides provide additional investment opportunities for more Americans and will enhance the ability of small businesses to raise capital and grow.
In the 115th Congress, the House Financial Services Committee passed a previous version of this legislation, H.R. 1585, by an overwhelming bipartisan vote of 58-2, and by a voice vote in the full House. With the change in majority leadership in the 116th Congress, the bill did not receive Committee or Floor consideration.