Equal Opportunity for All Investors Act of 2023

Subjects: Finance and Financial Sector, Banking and financial institutions regulation, Financial services and investments, Securities

Summary:  <p><strong>Equal Opportunity for All Investors Act of 2023</strong></p> <p>This bill expands who may be considered an accredited investor for purposes of participating in private offerings of securities. Certain unregistered securities may only be offered to accredited investors. </p> <p>Specifically, the bill allows an individual to qualify through an examination established by the Securities and Exchange Commission. The examination must</p> <ul> <li>be designed with an appropriate difficulty level such that an individual with financial sophistication or training would be unlikely to fail,</li> <li>include methods to determine competency in certain areas, and </li> <li>be administered by a registered national securities association and offered free of charge to the public. </li> </ul> <p>Currently, accredited investors must satisfy certain requirements indicating their reduced exposure to financial risk, including those related to income, net worth, or knowledge and experience.</p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2797 Introduced in House (IH)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                H. R. 2797

     To amend the Securities Act of 1933 to require certification 
     examinations for accredited investors, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 24, 2023

 Mr. Flood (for himself and Mr. Nickel) introduced the following bill; 
       which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
     To amend the Securities Act of 1933 to require certification 
     examinations for accredited investors, 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 of 2023''.

SEC. 2. CERTIFICATION EXAMINATIONS FOR ACCREDITED INVESTORS.

    Section 2(a)(15) of the Securities Act of 1933 (15 U.S.C. 
77b(a)(15)) is amended--
            (1) by striking ``(15) The term `accredited investor' shall 
        mean--'' and inserting the following:
            ``(15) Accredited investor.--
                    ``(A) In general.--The term `accredited investor' 
                means--'';
            (2) in clause (i), by striking ``or'' at the end;
            (3) in clause (ii), by striking the period at the end and 
        inserting ``; or''; and
            (4) by adding at the end the following:
                            ``(iii) any individual who is certified as 
                        an accredited investor through an examination 
                        that--
                                    ``(I) not later than 180 days after 
                                the date of the enactment of this 
                                clause, the criteria of which shall be 
                                established by the Commission;
                                    ``(II) is designed with an 
                                appropriate level of difficulty such 
                                that an individual with financial 
                                sophistication would be unlikely to 
                                fail;
                                    ``(III) may include methods to 
                                determine whether an individual seeking 
                                to be certified as an accredited 
                                investor demonstrates competency with 
                                respect to--
                                            ``(aa) the different types 
                                        of securities;
                                            ``(bb) the disclosure 
                                        requirements under the 
                                        securities laws applicable to 
                                        issuers and private companies 
                                        as compared to public 
                                        companies;
                                            ``(cc) corporate 
                                        governance;
                                            ``(dd) financial statements 
                                        and the components of such 
                                        statements;
                                            ``(ee) aspects of 
                                        unregistered securities, 
                                        securities issued by private 
                                        companies, and investments into 
                                        private funds, including risks 
                                        associated with--

                                                    ``(AA) limited 
                                                liquidity;

                                                    ``(BB) limited 
                                                disclosures;

                                                    ``(CC) variance in 
                                                valuation methods;

                                                    ``(DD) information 
                                                asymmetry;

                                                    ``(EE) leverage 
                                                risks;

                                                    ``(FF) 
                                                concentration risk; and

                                                    ``(GG) longer 
                                                investment horizons;

                                            ``(ff) potential conflicts 
                                        of interest, when the interests 
                                        of the financial professionals 
                                        and their clients are 
                                        misaligned or when their 
                                        professional responsibilities 
                                        are compromised by financial 
                                        motivations; and
                                            ``(gg) other criteria the 
                                        Commission determines necessary 
                                        or appropriate in the public 
                                        interest or for the protection 
                                        of investors; and
                                    ``(IV) beginning not later than 180 
                                days after the date the examination is 
                                established under subclause (I), shall 
                                be administered, and offered free of 
                                charge to the public, by a registered 
                                national securities association under 
                                section 15A of the Securities Exchange 
                                Act of 1934 (15 U.S.C. 78o-3).
                    ``(B) Examination defined.--In subparagraph 
                (A)(iii), the term `examination' includes any test, 
                certification, or examination program, the criteria of 
                which shall be established by the Commission, that 
                tests the understanding of any individual of aspects 
                related to investing in unregistered securities, 
                private companies, or private funds.''.
                                 &lt;all&gt;
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