Risk Disclosure and Investor Attestation Act
The Risk Disclosure and Investor Attestation Act would amend the Securities Act of 1933 to allow an individual to invest in private issuers if the individual attests, to the issuer, that they understand the risks of investing in private issuers. The attestation must be provided using a form established by the Securities and Exchange Commission (SEC), and that form cannot exceed two pages. In addition, the SEC would be required to issue implementing rules within one year of enactment to carry out these amendments, including establishing the required attestation form. In essence, the bill creates a standardized risk-attestation process as a prerequisite for private-market investment by individuals, aiming to facilitate participation while ensuring investors acknowledge the risks.
Key Points
- 1New investor attestation: An individual may invest in private issuers if they attest to the issuer that they understand the risks of investing in private issuers. The attestation is delivered on a form specified by the SEC and limited to two pages.
- 2SEC rulemaking: The SEC must issue rules within one year of enactment to implement these changes, including creating the attestation form.
- 3Form length limit: The required attestation form may not be longer than two pages.
- 4Issuer role: The attestation is provided to the issuer; the issuer would rely on the investor’s acknowledgement as part of the investment process.
- 5Scope and ambiguity: The bill does not specify investor income/wealth thresholds or prior sophistication; it relies on the investor’s own attestation of understanding risks.