House Advances Bills to Expand Accredited Investor Definition

The full House passed late Monday two more accredited investor-related bills.

The Accredited Investor Definition Review Act, H.R. 1579, sponsored by Rep. Bill Huizenga, R-Mich., updates the list of certifications that an investor must satisfy to qualify as an accredited investor.

The Fair Investment Opportunities for Professional Experts Act, H.R. 835, sponsored by Rep. French Hill, R-Ariz., expands the accredited investor definition, “thereby increasing the pool of investors for small and emerging companies in need of capital — especially minority entrepreneurs who often struggle to secure funding — and providing more Americans with additional investment opportunities,” according to Hill.

Micah Hauptman, director of investor protection for the Consumer Federation of America, told  ThinkAdvisor previously that “CFA strongly opposes” French’s bill.

“It would legislatively enshrine an approach to accredited investor based on financial thresholds we know don’t work at identifying a population of investors that can fend for themselves without the protections afforded by the public markets,” Hauptman said.

Hugh Berkson, president of the Public Investors Advocate Bar Association, or PIABA, told House Financial Services Committee Chairman Patrick McHenry in a recent letter that the various bills to expand the definition of accredited investor require additional language to call on the SEC to study retail investor complaints against RIAs generally.