Fair Investment Opportunities for Professional Experts Act
Fair Investment Opportunities for Professional Experts Act would amend the Securities Act of 1933 to broaden and codify who qualifies as an “accredited investor” for purposes of private securities offerings. The bill adds several classification categories for individuals to meet the accredited investor threshold: (1) a net worth test of at least $1 million (excluding the value of the primary residence, with specific rules on how mortgage debt is treated); (2) an income test (individual income over $200,000 or joint income over $300,000 in the two most recent years with a reasonable expectation of meeting that level in the current year); (3) current licensing/registration as a broker or investment adviser and in good standing; and (4) recognition by the Commission that a person has demonstrable professional knowledge based on education or job experience, verified by a self-regulatory organization. The $1 million net worth threshold would be adjusted for inflation every five years. The bill also requires the Securities and Exchange Commission to revise Regulation D accordingly within 180 days of enactment. Overall, the measure would expand eligibility for accredited-investor status, potentially increasing participation in private securities offerings, while maintaining investor-education and regulatory guardrails through the Commission and SRO involvement.
Key Points
- 1Expands who qualifies as an accredited investor by adding categories for net worth, income, licensed professionals, and Commission-recognized professionals with verifiable education/experience.
- 2Net worth test: natural persons (and their spouse or spousal equivalent) with at least $1,000,000 in net worth, calculated with specific rules about primary residence and related debt; primary residence equity is generally excluded as an asset.
- 3Inflation adjustment: the $1,000,000 net worth threshold, and the amounts in other related provisions, would be adjusted every five years to reflect changes in the Consumer Price Index for All Urban Consumers, rounded to the nearest $10,000.
- 4Additional pathways: (C) income test; (D) current license/registration as broker or investment adviser in good standing; (E) Commission-determined professional knowledge with verification by an SRO.
- 5Rulemaking obligation: the SEC must revise Regulation D (private offerings exemptions) within 180 days of enactment to conform to the amendments.