Sponsors (5)
The bill expands access to private offerings for knowledgeable non‑wealthy investors via a free SEC‑designed exam (potentially improving investor understanding), but raises the risk that more retail investors will suffer losses from complex private securities and creates administrative costs and potential weaknesses if the exam standard is inadequate.
Middle‑class and other non‑wealthy individual investors can qualify as "accredited" by passing an SEC‑designed exam that will be administered without a fee by a national securities association, expanding their ability to participate in private securities offerings.
Investors who pass the SEC‑designed exam will be tested on disclosure differences, valuation risk, liquidity, and conflicts, which could improve investor understanding and reduce harm from complex private investments.
Middle‑class and other retail investors may suffer greater losses if wider access leads them into less‑regulated private securities that have illiquidity, opaque valuations, or information asymmetries.
An exam‑based accreditation could be gamed or set too low, letting individuals who lack true capacity to bear private‑market risks into complex investments despite passing the test.
Creating and administering the SEC exam will impose administrative costs on the SEC and on the national securities associations that operate it, potentially diverting agency resources or increasing costs for market participants/taxpayers.
Based on analysis of 2 sections of legislative text.
Allows people to qualify as accredited investors by passing an SEC-created exam; the SEC must set the exam within 1 year and an SRO must offer it free within 180 days after creation.
Revises the Securities and Exchange Commission’s definition of “accredited investor” so any natural person can qualify by passing a Commission-created exam. The SEC must design the exam within one year, covering specified topics about securities, private offerings, risks, disclosures, governance, and valuation. A registered national securities association must begin offering and administering the exam to the public free of charge within 180 days after the exam is established.
Introduced May 13, 2025 by Mike Flood · Last progress July 22, 2025