While the Securities and Exchange Commission (SEC) may be trying to make it more difficult to be deemed an Accredited Investor, thus disenfranchising more individual investors, recently legislation was introduced into the US Senate that would broaden the definition.
S 3709, or the “Investment Opportunity Expansion Act,” adds the following language to the current definition:
“…with respect to a proposed transaction, any individual whose aggregate investment, at the completion of such transaction, in securities with respect to which there has not been a public offering is not more than 10 percent of the greater of—
“(I) the net assets of the individual; or
“(II) the annual income of the individual.”
Of note, this bill introduced by Senator Ted Budd (R-NC) has garnered bipartisan support as Senator Tina Smith (D-MN) has signed up to support the bill. Senator Mike Braun (R-IN) is also a co-sponsor of the legislation.
At the same time, Senator Budd has introduced the Regulation A+ Improvement Act of 2024 – S 3710. This bill increases the funding cap of Tier II of Regulation A (Reg A+) from $50 million to $150 million. The language also compels the exemption to be increased annually based on the CPI.
Reg A+ is a securities exemption that is growing in popularity as it allows both accredited and non-accredited investors to participate in a securities offering that is promoted online. Senator Braun is also a co-sponsor of this bill (but not Senator Smith as of yet).