Fair Investment Opportunities for Professional Experts Act

Bill: 114-hr-2187
Sponsor: full_name: Rep. Schweikert, David [R-AZ-6]
Introduced: 2015-04-30
Policy area: Finance and Financial Sector
Subjects: Administrative law and regulatory procedures

Banking and financial institutions regulation

Financial services and investments

Licensing and registrations

Securities

Securities and Exchange Commission (SEC)
Latest action: action_date: 2016-02-02
text: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Summaries:
action_date: 2015-04-30
action_desc: Introduced in House
text: <p><b>Fair Investment Opportunities for Professional Experts Act</b></p> <p>This bill directs the Securities and Exchange Commission (SEC) to revise its rules under Regulation D to consider a natural person an accredited investor, regardless of specified income and net worth requirements, if the person certifies to the issuer before the sale of securities to that person that he or she:</p> <ul> <li>is a person described in specified other requirements of Regulation D,</li> <li>has retained and used the services of certain banks, savings and loan associations, insurance companies, registered brokers or dealers, or certain other entities or their employees to make an investment decision relative to the securities being offered, or</li> <li>is licensed as an accredited investor by the Financial Industry Regulatory Authority (FINRA) after completing an exam administered by FINRA using specified criteria established by the SEC. </li> </ul> <p>The SEC shall establish such criteria for FINRA to use in administering an exam to license as accredited investors natural persons who don't meet certain income and net worth requirements of Regulation D.</p>

action_date: 2016-02-01
action_desc: Passed House amended
text: <p><b>Fair Investment Opportunities for Professional Experts Act</b></p> <p>(Sec. 2) This bill amends the Securities Act of 1933 to add to the definition of accredited investor any natural person whose individual net worth, or joint net worth with his or her spouse, exceeds $1 million (adjusted every five years for inflation).</p> <p>The person's net worth shall exclude: </p> <ul> <li>the person's primary residence; and </li> <li>as a liability any indebtedness secured by the primary residence, up to the estimated fair market value of the residence at the time of the sale of securities.</li> </ul> <p>Indebtedness secured by the person's primary residence in excess of the residence's estimated fair market value at the time of the sale of securities, however, shall be included in net worth as a liability.</p> <p>An accredited investor shall also include any natural person:</p> <ul> <li>whose individual income exceeded $200,000 in each of the two most recent years, or whose joint income with spouse exceeded $300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year; </li> <li>currently licensed or registered as a broker or investment adviser by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (FINRA) (or an equivalent self-regulatory organization), or a state division responsible for licensing or registration of individuals in connection with securities activities; or</li> <li>whose demonstrable education or job experience qualifies as professional knowledge of a subject related to a particular investment, and whose education or job experience is verified by the FINRA or an equivalent self-regulatory organization.</li> </ul>

tv_txt: I 114th CONGRESS 1st Session H. R. 2187 IN THE HOUSE OF REPRESENTATIVES April 30, 2015 Mr. Schweikert introduced the following bill; which was referred to the Committee on Financial Services A BILL To direct the Securities and Exchange Commission to revise its regulations 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. Accredited investor definition Not later than 180 days after the date of enactment of this Act, the Securities and Exchange Commission shall revise its rules under Regulation D (17 C.F.R. 230.501 et seq.) to provide that a natural person shall be considered an accredited investor under such regulation notwithstanding the income and net worth requirements in paragraphs (5) and (6) of section 230.501(a) of title 17, Code of Federal Regulations, if such person certifies to the issuer prior to the sale of securities to such person that he or she— (1) is a person described in paragraphs (1), (2), (3), or (4) of section 506(c)(2)(ii)(C) of such title; (2) has retained and used the services of any person referred to in paragraph (1) to make an investment decision relative to the securities being offered; or (3) is licensed as an accredited investor by the Financial Industry Regulatory Authority after completing an exam administered by such Authority using the criteria established by the Securities and Exchange Commission under section 2. 3. FINRA licensing program Not later than 180 days after the date of enactment of this Act, the Securities and Exchange Commission shall establish criteria for use by the Financial Industry Regulatory Authority in administering an exam to license as accredited investors natural persons who don’t meet the income and net worth requirements in paragraphs (5) and (6) of section 230.501(a) of title 17, Code of Federal Regulations. Such criteria may include methods for assuring that licensed accredited investors demonstrate a competency in understanding the following: (1) The different types of securities. (2) The disclosure obligations under the securities laws of issuers versus private companies. (3) The structures of corporate governance. (4) The components of a financial statement. (5) Other criteria the Commission shall establish in the public interest and for the protection of investors.

tv_txt: I 114th CONGRESS 2d Session H. R. 2187 IN THE HOUSE OF REPRESENTATIVES AN ACT To direct the Securities and Exchange Commission to revise its regulations 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 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 (F), respectively; and (2) in subparagraph (A) (as so redesignated), by striking ; or and inserting a semicolon, and inserting after such subparagraph the following: (B) any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000 (which amount, along with the amounts set forth in subparagraph (C), shall be adjusted for inflation by the Commission every 5 years to the nearest $10,000 to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics) where, for purposes of calculating net worth under this subparagraph— (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; (C) 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; (D) any natural person who is currently licensed or registered as a broker or investment adviser by the Commission, the Financial Industry Regulatory Authority, or an equivalent self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934), or the securities division of a State or the equivalent State division responsible for licensing or registration of individuals in connection with securities activities; (E) any natural person the Commission determines, by regulation, to have demonstrable education or job experience to qualify such person as having professional knowledge of a subject related to a particular investment, and whose education or job experience is verified by the Financial Industry Regulatory Authority or an equivalent self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934); or .

Passed the House of Representatives February 1, 2016. Karen L. Haas, Clerk.

tv_txt: IIB 114th CONGRESS 2d Session H. R. 2187 IN THE SENATE OF THE UNITED STATES February 2, 2016 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To direct the Securities and Exchange Commission to revise its regulations 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 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 (F), respectively; and (2) in subparagraph (A) (as so redesignated), by striking ; or and inserting a semicolon, and inserting after such subparagraph the following: (B) any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000 (which amount, along with the amounts set forth in subparagraph (C), shall be adjusted for inflation by the Commission every 5 years to the nearest $10,000 to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics) where, for purposes of calculating net worth under this subparagraph— (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; (C) 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; (D) any natural person who is currently licensed or registered as a broker or investment adviser by the Commission, the Financial Industry Regulatory Authority, or an equivalent self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934), or the securities division of a State or the equivalent State division responsible for licensing or registration of individuals in connection with securities activities; (E) any natural person the Commission determines, by regulation, to have demonstrable education or job experience to qualify such person as having professional knowledge of a subject related to a particular investment, and whose education or job experience is verified by the Financial Industry Regulatory Authority or an equivalent self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934); or .

Passed the House of Representatives February 1, 2016. Karen L. Haas, Clerk

tv_txt: IB Union Calendar No. 309 114th CONGRESS 2d Session H. R. 2187 [Report No. 114–406] IN THE HOUSE OF REPRESENTATIVES April 30, 2015 Mr. Schweikert introduced the following bill; which was referred to the Committee on Financial Services February 1, 2016 Additional sponsor: Ms. Sinema February 1, 2016 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic For text of introduced bill, see copy of bill as introduced on April 30, 2015 A BILL To direct the Securities and Exchange Commission to revise its regulations 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 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 (F), respectively; (2) in subparagraph (A) (as so redesignated), by striking ; or and inserting a semicolon, and inserting after such subparagraph the following: (B) any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000 (which amount, along with the amounts set forth in subparagraph (C), shall be adjusted for inflation by the Commission every five years to the nearest $10,000 to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics) where, for purposes of calculating net worth under this subparagraph— (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; (C) any natural person who had an individual income in excess of $200,000 in each of the two 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; (D) any natural person who is currently licensed or registered as a broker or investment adviser by the Commission, the Financial Industry Regulatory Authority, or an equivalent self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934), or the securities division of a State or the equivalent State division responsible for licensing or registration of individuals in connection with securities activities; (E) any natural person the Commission determines, by regulation, to have demonstrable education or job experience to qualify such person as having professional knowledge of a subject related to a particular investment, and whose education or job experience is verified by the Financial Industry Regulatory Authority or an equivalent self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934); or .

February 1, 2016 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed