The full House on Thursday passed the Incentivizing New Ventures and Economic Strength Through Capital Formation (INVEST) Act, a package of more than 20 bills to expand the accredited investor definition and access to 403(b) plans, as well as create a task force at the Securities and Exchange Commission to focus on senior investor fraud.
The INVEST Act, H.R. 3383, sponsored by Reps. Ann Wagner, R-Mo., and Gregory Meeks, D-N.Y., "would make reforms to modernize and strengthen U.S. capital markets," the lawmakers said.
The INVEST Act includes more than 20 bipartisan bills that advanced out of the House Financial Services Committee.
Included in the INVEST Act is the Fair Investment Opportunities for Professional Experts Act, which expands the accredited investor definition to include inflation-adjusted net worth and income tests. It also adds certain licensed professionals — including certified financial planners — and individuals with qualifying education or experience.
The Equal Opportunity for All Investors Act, also included, requires the SEC to direct the Financial Industry Regulatory Authority to create and administer a "new, rigorous investment exam" to earn accredited investor status.
The Retirement Fairness for Charities and Educational Institutions Act, H.R. 1013, meanwhile, allows 403(b) retirement plans to invest in collective investment trusts.
"The bill amends federal securities law to authorize the use of collective investment trusts (CITs) and unregistered insurance company separate accounts within 403(b) retirement savings plans," which principally serve teachers, hospital workers, clergy and nonprofit employees, the Insured Retirement Institute said in a statement.
Also included: The Improving Disclosure for Investors Act, H.R. 2441, which requires the SEC to write a rule allowing financial firms to deliver their documents in digital format.
Also passed as part of the INVEST Act is the Senior Security Act, H.R. 1469, which "would create an interdivisional task force at the SEC to investigate the challenges facing investors and determine meaningful recommendations to Congress about what other measures might be needed to increase protections for the most vulnerable Americans," IRI said.
The task force at the SEC would study and report on issues affecting investors older than 65, and the Government Accountability Office would also be required to study senior financial exploitation.
The INVEST Act "will responsibly broaden opportunities for retail investors to participate in the high-growth segment of the private markets through professionally managed, SEC-regulated structures," Nick Morgan, founder and president of the Investor Choice Advocates Network, told ThinkAdvisor on Thursday in an email. "This bill achieves its objectives without compromising investor protection. We urge the Senate to swiftly pass this vital bill to secure the United States' position as the world's leader in new business formation and capital access."
Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association, said in a statement Thursday that the trade group "applauds the House for passing the INVEST Act and taking an important step to ensure that our securities laws evolve alongside today’s dynamic markets."
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