The Increasing Investor Opportunities Act of 2025 (or Invest Act) is moving forward as the House Rules Committee has updated the legislation this week.
HR 3383 aims to improve access to capital while boosting opportunity for investors, including by addressing the current discriminatory nature of the definition of an Accredited Investor.
The bipartisan bill has meandered through the legislative process since this past spring, but with an updated version posted by the Rules committee, it is nearing a vote.
Of the various provisions, the current language of the bill expands the definition of an Accredited Investor by allowing approval based on professional qualifications as well as a test, and removes the punitive wealth metric, which remains. The wealth metric will be adjusted for inflation every five years.
Changes for the definition of an Accredited Investor for Reg D offerings will be determined by:
- Currently licensed or registered as a broker or investment adviser
- Any person who has demonstrable education or job experience to qualify, such as having professional knowledge of a subject related to a particular investment, and whose education or job experience is verified by a self-regulatory organization. This will incorporate SEC rulemaking.
- A person who is certified through the examination. The person must have the sophistication to understand the high potential for failure and illiquidity, as well as competency with the different types of securities. This exam must be administered free of charge by a national securities association.
Other updates include:
- Clarifying demo days to ensure they do not fall under general solicitation transgressions.
- Raises crowdfunding investment limits to $250,000, and potentially up to $400,000
- Representation of smaller firms will be enhanced at the SEC with a new office to coordinate their needs better.
- Aims to improve the IPO market by studying current costs while expanding testing the waters, reducing disclosure requirements for EGCs, and allowing confidential draft registrations.
The bill may be viewed here.
What is missing from the legislation is improvements to Reg CF, such as raising the funding cap to $20 million and increasing Reg A to $150 million.
Depending on the details of the Accredited Investor determination, Reg D could move more issuers away from Reg CF and Reg A. While Reg CF is a notice filing and thus relatively simple to produce, the funding cap is prohibitive. Reg A benefits from scaled disclosure and the option to be immediately tradable on an exchange, if the issuer chooses.
The goal of the Trump Administration is to improve public and private markets by addressing current shortcomings in both. This will not only improve smaller firms ‘ access to capital but also help smaller investors gain access to a broader range of investments, especially under Reg D.
