September 26th, 2018
Outlook good for expanded accredited investor definition after strong approval in House
Sailing through the chamber Monday, 391-2, bill includes changes to who is considered a sophisticated investor eligible to participate in private placements
Congress could act before the end of the year to allow more people to invest in unregistered securities, including retail investment advisers and brokers.
Late Monday, the House passed legislation, 391-2, that rolled up six measures the chamber approved earlier in the year to help small businesses raise capital.
One of them would expand the accredited investor standard, which sets parameters for who is considered a sophisticated investor eligible to participate in private placements.
The House passed the six bills as a package, the Creating Financial Prosperity for Businesses and Investors Act, in order to tee it up for expedited approval by unanimous consent in the Senate, which can be done by a voice, rather than roll call, vote.
The tactic could be stymied, however, by an effort led by Sen. Mark Warner, D-Va., to hold up the unanimous consent process until the Senate addresses legislation to help laid-off mine workers.
The House and Senate are expected to conclude the lame-duck session of Congress sometime over the next week.
The Securities Industry and Financial Markets Association urged Congress to approve the repackaged House bill.
The measure “rightfully focuses on promoting capital formation and decreasing unnecessary friction in our securities laws while upholding necessary customer and market protections,” SIFMA president and chief executive Kenneth Bentsen Jr. said in a statement.
The six-bill measure includes legislation first approved in February by a 347-8 vote that would broaden the parameters for an accredited investor.
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