[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3921 Introduced in Senate (IS)]
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117th CONGRESS
2d Session
S. 3921
To amend the Securities Act of 1933 to expand the definition of a
qualifying accredited investor, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 24, 2022
Mr. Tillis (for himself and Mr. Scott of South Carolina) introduced the
following bill; which was read twice and referred to the Committee on
Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Securities Act of 1933 to expand the definition of a
qualifying accredited investor, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Equal Opportunity for all Investors
Act''.
SEC. 2. CERTIFICATION EXAMINATIONS FOR ACCREDITED INVESTORS.
(a) Examination Alternative.--Section 2(a)(15) of the Securities
Act of 1933 (15 U.S.C. 77b(a)(15)) is amended--
(1) by redesignating clauses (i) and (ii) as subparagraphs
(A) and (B), respectively;
(2) in subparagraph (A), as so redesignated, by striking
``adviser; or'' and inserting ``adviser;'';
(3) in subparagraph (B), as so redesignated, by striking
the period at the end and inserting ``; or''; and
(4) by adding at the end the following:
``(C) any individual who is certified as an
accredited investor through an examination established
or approved by the Commission, the securities
commission (or any agency or office performing like
functions) of any State, or any self-regulatory
organization as defined in the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)(26)) that--
``(i) measures whether an individual
certified as an accredited investor pursuant to
such examination understands and appreciates
the risks and opportunities of investing in
securities;
``(ii) is designed to ensure that an
individual with financial sophistication or
training would be unlikely to fail; and
``(iii) may be designed and/or administered
by any other person approved by the Commission,
such securities commission, or such self-
regulatory organization.''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect on the date of the enactment of this Act.
(c) Examination.--The Commission shall establish or approve an
examination that complies with subsection (a) no later than 18 months
after the date of enactment of this Act.
SEC. 3. ACCREDITED INVESTOR SELF-CERTIFICATION.
Section 4(b) of the Securities Act of 1933 (15 U.S.C. 77d(b)) is
amended by inserting ``Unless the issuer knows, or has a reckless
disregard for whether, the purchaser is not an accredited investor,
obtaining a self-certification from the purchaser that the purchaser
meets the income or net worth requirements of Rule 501 of Regulation D
shall constitute reasonable steps to verify that purchasers of the
securities are accredited investors.'' after the period at the end.
SEC. 4. MODIFICATION OF RULES.
(a) In General.--Not later than 9 months after the date of the
enactment of this Act, the Securities and Exchange Commission shall
revise its rules issued in section 230.501(a) of title 17, Code of
Federal Regulations, to make parallel changes set forth in Section 2
and to add to the definition of accredited investor the following
categories:
(1) Any natural person with at least $500,000 worth of
investments.
(2) Any natural person with total transactions during a 12-
month period under section 230.506 of title 17, Code of Federal
Regulations, and under section 4(a)(6) of the Securities Act of
1933 (15 U.S.C. 77d(a)(6)) that are not greater than the
highest amount of the following--
(A) 10 percent of the total investments of the
person;
(B) 10 percent of the annual income of the person
or 10 percent of the annual combined income with that
person's spouse; or
(C) 10 percent of the net worth of the person
excluding the value of the person's principal place of
residence.
(b) Definitions.--
(1) Definitions.--In this subsection:
(A) Cash and cash equivalents.--The term ``cash and
cash equivalents'' includes--
(i) bank deposits, certificates of deposit,
bankers acceptances and similar bank
instruments held for investment purposes; and
(ii) the net cash surrender value of an
insurance policy.
(B) Commodity interests.--The term ``commodity
interests'' means commodity futures contracts, options
on commodity futures contracts, and options on physical
commodities traded on or subject to the rules of--
(i) any contract market designated for
trading such transactions under the Commodity
Exchange Act (7 U.S.C. 1 et seq.) and the rules
issued under that Act; or
(ii) any board of trade or exchange outside
the United States, as described in part 30 of
title 17, Code of Federal Regulations.
(C) Digital assets.--The term ``digital assets''--
(i) means a digital representation of value
that--
(I) is used as a medium of
exchange, unit of account, or store of
value; and
(II) is not legal tender, whether
or not denominated in legal tender; and
(ii) does not include--
(I) a transaction in which a
merchant grants, as part of an affinity
or rewards program, value that cannot
be taken from or exchanged with the
merchant for legal tender, bank credit,
or virtual currency; or
(II) a digital representation of
value issued by or on behalf of a
publisher and used solely within an
online game, game platform, or family
of games sold by the same publisher or
offered on the same game platform.
(D) Investment purposes.--The term ``investment
purposes''--
(i) includes--
(I) real estate owned by a
prospective purchaser who is engaged
primarily in the business of investing,
trading, or developing real estate in
connection with such business; and
(II) a commodity interest or
physical commodity owned, or a
financial contract entered into, by the
prospective purchaser who is engaged
primarily in the business of investing,
reinvesting, or trading in commodity
interests, physical commodities, or
financial contracts in connection with
such business; and
(ii) does not include real estate held for
investment purposes by a prospective purchaser
if the real estate is used by the prospective
purchaser, a sibling, spouse or former spouse,
a direct lineal descendant by birth or
adoption, or spouse of such lineal descendant
or ancestor for personal purposes or as a place
of business, or in connection with the conduct
of the trade or business of the prospective
purchaser or such related person.
(E) Investments.--The term ``investments'' means--
(i) securities, as defined in section 2(a)
of the Securities Act of 1933 (15 U.S.C.
77b(a)), other than securities issued by an
issuer that is controlled by the prospective
purchaser that owns such securities;
(ii) real estate held for investment
purposes;
(iii) commodity interests held for
investment purposes;
(iv) physical commodities held for
investment purposes;
(v) digital assets held for investment
purposes;
(vi) to the extent not securities,
financial contracts (as such term is defined in
section 3(c)(2)(B)(ii) of the Investment
Company Act of 1940 (15 U.S.C.
80a3(c)(2)(B)(ii))) entered into for investment
purposes; and
(vii) cash and cash equivalents (including
foreign currencies) held for investment
purposes.
(F) Personal purposes.--The term ``personal
purposes'' does not include residential real estate if
deductions with respect to such real estate are not
disallowed by section 280A of the Internal Revenue Code
of 1986.
(G) Physical commodities.--The term ``physical
commodities'' means any physical commodity with respect
to which a commodity interest is traded on a market
described in subparagraph (B)(i).
(c) Self-execution.--If the Securities and Exchange Commission does
not revise its rules in accordance with the deadline set forth in
subsection (a), then any person described in subsection (b) shall be
deemed to be an accredited investor for all purposes under the Federal
securities laws (including regulations).
SEC. 5. ADJUSTING THE ACCREDITED INVESTOR STANDARD.
Section 413 of the Private Fund Investment Advisers Registration
Act of 2010 (15 U.S.C. 77b note) is amended by striking subsection (b)
and inserting the following:
``(b) Review and Adjustment.--
``(1) In general.--The Commission may undertake a review of
the definition of the term `accredited investor', as such term
applies to natural persons, to determine whether the
requirements of the definition, excluding the requirement
relating to the net worth standard described in subsection (a),
should be adjusted or modified for the protection of investors,
in the public interest, and in light of the economy.
``(2) Adjustment or modification.--Upon completion of a
review under paragraph (1), the Commission may, by notice and
comment rulemaking, make such adjustments to the definition of
the term `accredited investor', excluding adjusting or
modifying the requirement relating to the net worth standard
described in subsection (a), as such term applies to natural
persons, as the Commission may deem appropriate for the
protection of investors, in the public interest, and in light
of the economy.''.
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