LEGAL ALERT: House Passes The Equal Opportunity for All Investors Act

The Equal Opportunity for All Investors Act of 2023 was passed by the U.S. House of Representatives on Wednesday, June 7, 2023, with a vote of 383-18. The bill aims to provide U.S. investors another pathway to participate in private markets. The bill will require the Securities and Exchange Commission (SEC) to establish an exam for individual investors seeking to attain accredited investor status. The Financial Industry Regulatory Authority (FINRA) will administer the exam. Currently, only investors who meet specific financial and professional criteria can qualify as accredited investors. The bill aims to provide greater access to capital markets due to merit and knowledge, not just wealth.

According to the agency's latest regulatory agenda, the SEC plans to look at its accredited investor definition. However, it has yet to propose a rule on the subject during Chairman Gary Gensler's tenure. The American Investment Council (AIC), a private equity trade group, supports responsible programs that give more Americans access to private markets as it will increase their investment opportunities and their ability to save for retirement. However, Better Markets, a non-profit watchdog, declined to comment on the bill's passage. In February, Dennis M. Kelleher, the group's president, and CEO, said in a statement that those who seek to make high-risk private offerings more widely available haven’t made credible, factual arguments to support change. Investors aren’t clamoring for more access; legitimate companies already have access to capital, and there isn’t reliable data showing that a weaker accredited investor test would do anything other than expose more investors to fraud and risk.

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Click here to read the bill.

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