II 115th CONGRESS 2d Session S. 2756 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. Short title This Act may be cited as the Fair Investment Opportunities for Professional Experts Act . 2. Definition of accredited investor (a) In general Section 2(a) of the Securities Act of 1933 ( 15 U.S.C. 77b(a) ) is amended by striking paragraph (15) and inserting the following: (15) (A) The term accredited investor shall mean— (i) a bank, as defined in section 3(a)(2), whether acting in its individual or fiduciary capacity; an insurance company, as defined in paragraph (13) of this subsection; an investment company registered under the Investment Company Act of 1940 ( 15 U.S.C. 80a–1 et seq.) or a business development company, as defined in section 2(a)(48) of that Act ( 15 U.S.C. 80a–2(a)(48) ); a small business investment company licensed by the Small Business Administration; or an employee benefit plan, including an individual retirement account, which is subject to the provisions of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001 et seq.), if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act ( 29 U.S.C. 1002(21) ), which is either a bank, an insurance company, or a registered investment adviser; (ii) any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000 (which amount shall be adjusted for inflation by the Commission every 3 years to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, rounding to the nearest $10,000) where, for purposes of calculating net worth under this clause— (I) the person’s primary residence shall not be included as an asset; (II) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (III) indebtedness that is secured by the person's primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability; (iii) any natural person who had an individual income in excess of $200,000 in each of the 2 most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year (which amounts shall be adjusted for inflation by the Commission every 3 years to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, rounding to the nearest $10,000); (iv) any natural person who holds securities purchased from an issuer if such issuer has a reasonable belief that the natural person exceeded the threshold described in clause (ii) or (iii) at the time of the original purchase and would continue to exceed that threshold, without regard to any subsequent adjustment for inflation; (v) any natural person who is currently licensed or registered as a broker, dealer, registered representative, investment adviser, or investment adviser representative by the Commission, the Financial Industry Regulatory Authority, or an equivalent self-regulatory organization, as defined in section 3(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a) ), or the securities division of a State or the equivalent State division responsible for licensing or registration of individuals in connection with securities activities; (vi) any natural person that the Commission determines, by regulation and in accordance with subparagraph (B), to have demonstrable education, job, or professional experience to qualify such person as an accredited investor; or (vii) any natural person who, on the basis of such factors as financial sophistication, net worth, knowledge, and experience in financial matters, or amount of assets under management qualifies as an accredited investor under rules and regulations which the Commission shall prescribe. (B) When issuing a regulation under subparagraph (A)(vi), the Commission shall— (i) consider such factors as whether a natural person has— (I) a qualifying education, job, or professional experience, as verified by the Financial Industry Regulatory Authority or an equivalent self-regulatory organization, as defined in section 3(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a) ), or a certification or accreditation as verified by an independent third party; and (II) a reasonable level of relevant financial expertise in order to understand— (aa) features of commonly issued private securities, including any voting and economic rights and disclosure obligations of the issuer; (bb) the basic components of a financial statement; (cc) the material investment risk associated with the investment; and (dd) any other factor that the Commission determines will serve the public interest and protect investors; and (ii) determine the period of time during which an accredited investor shall retain such status. . (b) Regulations The Securities and Exchange Commission shall revise the definition of accredited investor under section 230.501 of title 17, Code of Federal Regulations, to conform with the amendment made by subsection (a).