Congress Considers Expanding the Accredited Investor Definition

Posted on March 13th, 2025 at 2:30 PM
Congress Considers Expanding the Accredited Investor Definition

From the desk of Jim Eccleston at Eccleston Law

A recent congressional hearing examined potential reforms to the accredited investor definition, a critical threshold determining who can participate in private market investments. According to the DI Wire, the U.S. House Financial Services Subcommittee on Capital Markets convened to discuss the Accredited Investor Definition Review Act, sponsored by Congressman Bill Huizenga (R-Mich.). Lawmakers debated whether the current wealth and income requirements should be expanded to include additional qualification pathways.

Under Rule 501 of Regulation D of the Securities Act of 1933, individuals qualify as accredited investors if they meet one of two financial thresholds:

  • A net worth exceeding $1 million, excluding the primary residence, either individually or jointly with a spouse
  • An annual income exceeding $200,000 in each of the two most recent years (or joint income with a spouse exceeding $300,000) with a reasonable expectation of maintaining the same income level

The SEC last amended the definition in August 2020, expanding eligibility to include:

  • Individuals holding specific professional certifications
  • “Knowledgeable employees” of private funds, but only for investments in that fund
  • SEC-registered and state-registered investment advisers
  • “Family clients” of a “family office” meeting certain criteria
  • Directors, executive officers, and general partners of an issuer or its general partner

The subcommittee is now seeking public feedback on whether the accredited investor definition should move beyond wealth and income thresholds to consider factors such as education, geography, or other qualifications. The deadline for public comment is March 31, 2025, according to the DI Wire.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

I want to extend a tremendous thank you for your dedication, professionalism, hard work and patient demeanor through this challenging time. It was enjoyable interacting with everyone on your team, this certainly helped while dealing with the situation and working towards resolution.

Dan M.

LATEST NEWS AND ARTICLES

October 13, 2025
Morgan Stanley Cuts Advisor Deferrals in 2026 Compensation Plan, Boosting Advisor Payouts

Morgan Stanley Wealth Management announced a significant change to its 2026 compensation plan, cutting advisor deferral rates by half while keeping total pay and grid structures largely unchanged.

October 10, 2025
Former Two Sigma Quant Researcher Faces Fraud Charges Over Manipulated Models

Federal prosecutors and the Securities and Exchange Commission (SEC) have filed parallel actions against Jian Wu, a former quantitative researcher at Two Sigma Investments, alleging he secretly manipulated algorithmic trading models to boost his own compensation by millions of dollars.

October 9, 2025
Former Merrill Lynch Advisors Fight Allegations of Corporate Raid

A dozen former Merrill Lynch advisors who launched their own firm, OpenArc Corporate Advisory, in Atlanta are pushing back against accusations that they orchestrated a “pre-meditated corporate raid.”