HR 3394: Fair Investment Opportunities for Professional Experts Act

HR 3394 in plain English: This bill expands who qualifies as an 'accredited investor' — a status that allows individuals to participate in private securities offerings not registered with the SEC. It would allow people with qualifying professional knowledge, education, or experience to qualify, in addition to those meeting existing income and net worth thresholds. The SEC would be directed to update its Regulation D definition to match the new criteria.

Stated purpose

The bill aims to expand who counts as an 'accredited investor' under securities law by adding people with relevant professional knowledge or expertise — not just wealth — so more individuals can participate in private investment offerings.

Key points

• Allows individuals with qualifying professional knowledge or experience to qualify as accredited investors, not just wealthy ones.
• Codifies existing income threshold of over $200,000 individually or $300,000 jointly in each of the two most recent years.
• Codifies existing net worth threshold of over $1,000,000, excluding primary residence.
• Net worth and income thresholds would be adjusted for inflation every 5 years to the nearest $10,000.
• Brokers and investment advisers already licensed or registered in good standing would also qualify as accredited investors.

Arguments supporters make

• Wealth alone is a poor measure of financial sophistication — a seasoned industry expert with modest savings may understand an investment far better than a rich person with no relevant knowledge.
• Expanding the accredited investor definition democratizes access to private markets that have historically been limited to the wealthy, giving more people a chance to build wealth.
• Writing existing SEC rules into statute provides clearer, more stable legal standards that aren't as easily changed by regulators without congressional action.

Arguments opponents make

• The accredited investor rules exist to protect people from high-risk, hard-to-exit investments with limited disclosure — loosening them could expose more people, including those who overestimate their own expertise, to serious financial harm.
• The bill delegates broad authority to the SEC to decide who has 'demonstrable' knowledge, which could create inconsistent or arbitrary standards and leave investors uncertain about who truly qualifies.
• Private markets already lack the transparency required in public markets; expanding the eligible investor pool without strengthening disclosure requirements may increase the risk of fraud or misrepresentation targeting newly eligible investors.

Tradeoffs

Broadening access to private investment opportunities may benefit knowledgeable people currently excluded by wealth thresholds, but the same protections — wealth requirements as a proxy for financial resilience — that are removed were designed to limit exposure to high-risk, lightly regulated investments.

Current status in Congress: Passed House.

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