II 

115TH CONGRESS 

2D SESSION S. 2756 

To amend the Securities Act of 1933 to direct the Securities and Exchange 

Commission to revise the regulations of the Commission regarding the 

qualifications of natural persons as accredited investors. 

IN THE SENATE OF THE UNITED STATES 

APRIL 25, 2018 

Mr. TILLIS (for himself and Ms. CORTEZ MASTO) 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 direct the Securities 

and Exchange Commission to revise the regulations of 

the Commission regarding the qualifications of natural 

persons as accredited investors. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Fair Investment Op5 portunities for Professional Experts Act’’. 


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•S 2756 IS

1 SEC. 2. DEFINITION OF ACCREDITED INVESTOR. 

2 (a) IN GENERAL.—Section 2(a) of the Securities Act 

3 of 1933 (15 U.S.C. 77b(a)) is amended by striking para4 graph (15) and inserting the following: 

5 ‘‘(15)(A) The term ‘accredited investor’ shall 

6 mean— 

7 ‘‘(i) a bank, as defined in section 3(a)(2), 

8 whether acting in its individual or fiduciary ca9 pacity; an insurance company, as defined in 

10 paragraph (13) of this subsection; an invest11 ment company registered under the Investment 

12 Company Act of 1940 (15 U.S.C. 80a–1 et 

13 seq.) or a business development company, as 

14 defined in section 2(a)(48) of that Act (15 

15 U.S.C. 80a–2(a)(48)); a small business invest16 ment company licensed by the Small Business 

17 Administration; or an employee benefit plan, in18 cluding an individual retirement account, which 

19 is subject to the provisions of the Employee Re20 tirement Income Security Act of 1974 (29 

21 U.S.C. 1001 et seq.), if the investment decision 

22 is made by a plan fiduciary, as defined in sec23 tion 3(21) of such Act (29 U.S.C. 1002(21)), 

24 which is either a bank, an insurance company, 

25 or a registered investment adviser; 


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1 ‘‘(ii) any natural person whose individual 

2 net worth, or joint net worth with that person’s 

3 spouse, exceeds $1,000,000 (which amount 

4 shall be adjusted for inflation by the Commis5 sion every 3 years to reflect the change in the 

6 Consumer Price Index for All Urban Con7 sumers published by the Bureau of Labor Sta8 tistics, rounding to the nearest $10,000) where, 

9 for purposes of calculating net worth under this 

10 clause— 

11 ‘‘(I) the person’s primary residence 

12 shall not be included as an asset; 

13 ‘‘(II) indebtedness that is secured by 

14 the person’s primary residence, up to the 

15 estimated fair market value of the primary 

16 residence at the time of the sale of securi17 ties, shall not be included as a liability (ex18 cept that if the amount of such indebted19 ness outstanding at the time of sale of se20 curities exceeds the amount outstanding 60 

21 days before such time, other than as a re22 sult of the acquisition of the primary resi23 dence, the amount of such excess shall be 

24 included as a liability); and 


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1 ‘‘(III) indebtedness that is secured by 

2 the person’s primary residence in excess of 

3 the estimated fair market value of the pri4 mary residence at the time of the sale of 

5 securities shall be included as a liability; 

6 ‘‘(iii) any natural person who had an indi7 vidual income in excess of $200,000 in each of 

8 the 2 most recent years or joint income with 

9 that person’s spouse in excess of $300,000 in 

10 each of those years and has a reasonable expec11 tation of reaching the same income level in the 

12 current year (which amounts shall be adjusted 

13 for inflation by the Commission every 3 years 

14 to reflect the change in the Consumer Price 

15 Index for All Urban Consumers published by 

16 the Bureau of Labor Statistics, rounding to the 

17 nearest $10,000); 

18 ‘‘(iv) any natural person who holds securi19 ties purchased from an issuer if such issuer has 

20 a reasonable belief that the natural person ex21 ceeded the threshold described in clause (ii) or 

22 (iii) at the time of the original purchase and 

23 would continue to exceed that threshold, with24 out regard to any subsequent adjustment for in25 flation; 


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1 ‘‘(v) any natural person who is currently li2 censed or registered as a broker, dealer, reg3 istered representative, investment adviser, or in4 vestment adviser representative by the Commis5 sion, the Financial Industry Regulatory Author6 ity, or an equivalent self-regulatory organiza7 tion, as defined in section 3(a) of the Securities 

8 Exchange Act of 1934 (15 U.S.C. 78c(a)), or 

9 the securities division of a State or the equiva10 lent State division responsible for licensing or 

11 registration of individuals in connection with se12 curities activities; 

13 ‘‘(vi) any natural person that the Commis14 sion determines, by regulation and in accord15 ance with subparagraph (B), to have demon16 strable education, job, or professional experi17 ence to qualify such person as an accredited in18 vestor; or 

19 ‘‘(vii) any natural person who, on the basis 

20 of such factors as financial sophistication, net 

21 worth, knowledge, and experience in financial 

22 matters, or amount of assets under manage23 ment qualifies as an accredited investor under 

24 rules and regulations which the Commission 

25 shall prescribe. 


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1 ‘‘(B) When issuing a regulation under subpara2 graph (A)(vi), the Commission shall— 

3 ‘‘(i) consider such factors as whether a 

4 natural person has— 

5 ‘‘(I) a qualifying education, job, or 

6 professional experience, as verified by the 

7 Financial Industry Regulatory Authority 

8 or an equivalent self-regulatory organiza9 tion, as defined in section 3(a) of the Secu10 rities Exchange Act of 1934 (15 U.S.C. 

11 78c(a)), or a certification or accreditation 

12 as verified by an independent third party; 

13 and 

14 ‘‘(II) a reasonable level of relevant fi15 nancial expertise in order to understand— 

16 ‘‘(aa) features of commonly 

17 issued private securities, including any 

18 voting and economic rights and disclo19 sure obligations of the issuer; 

20 ‘‘(bb) the basic components of a 

21 financial statement; 

22 ‘‘(cc) the material investment 

23 risk associated with the investment; 

24 and 


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1 ‘‘(dd) any other factor that the 

2 Commission determines will serve the 

3 public interest and protect investors; 

4 and 

5 ‘‘(ii) determine the period of time during 

6 which an accredited investor shall retain such 

7 status.’’. 

8 (b) REGULATIONS.—The Securities and Exchange 

9 Commission shall revise the definition of accredited inves10 tor under section 230.501 of title 17, Code of Federal 

11 Regulations, to conform with the amendment made by 

12 subsection (a). 

Æ 


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