Senator Tim Scott, the ranking member on the Senate Banking Committee, wants to make the capital markets more inclusive.
In a recent op-ed, Senator Scott said his new Empowering Main Street in America Act framework would “enhance financial education programs to increase market understanding and participation, which will ultimately help more Americans achieve financial security.” Writing on Fox News, Scott says his “framework is designed to create opportunity. It supports pro-growth policies that will result in more high-paying jobs and investment opportunities in minority communities across the country.”
Last November, Scott revealed the Empowering Main Street in America Act framework. The proposal aims to command the Securities and Exchange Commission (SEC) to return to its main mission of making certain capital markets enable entrepreneurship, innovation, and opportunity. Senator Scott believes the SEC is currently “putting up new and burdensome hurdles that limit opportunity, drive new investors out of markets, and chill innovation and competition.” Critics of the Commission have described it as the anti-capital formation Commission, lambasting leadership as focusing on social issues that go beyond the agency’s responsibilities
The Framework seeks to “increase opportunities for everyday investors.” One way he wants to accomplish this is by expanding the definition of an Accredited Investor by making it more inclusive. The definition determines who can access certain private securities offerings currently only available to the affluent.
Senator Scott states that current leadership at the SEC “wants to make it harder to qualify as an accredited investor, which will impact minority investors the most. To allow for a more diverse group of investors to participate in our capital markets.”
Regulation D and the definition of an Accredited Investor have been top agenda items during the tenure of SEC Chairman Gary Gensler. It is well known that Chair Gensler wants to make qualification as Accredited more difficult, thus disenfranchising more Americans while maintaining access for the already wealthy.
At this week’s meeting of the SEC Small Business Capital Formation Advisory Committee, members discussed advising the Commission to broaden the definition. While the Committee is expected to recommend a broadening of the definition formally, the Commission may ignore their feedback.
The Framework for the Empowering Main Street in America Act is available here.