Dear Chairman Hill:
The U.S. Chamber of Commerce (“Chamber”) submits these comments and recommendations to the House Financial Services Committee’s (“Committee”) in response to its request for public feedback on legislative proposals to increase investor access and facilitate capital formation. The Chamber commends the Committee for its work during the 119th Congress to advance capital formation legislation that will help companies grow and create jobs, while also allowing more investors to participate in the financial success of America’s best businesses.
The Chamber has been a leading voice on the need to modernize securities regulation to maintain the status of the U.S. capital markets as the gold standard for the world. The Chamber worked closely with Congress on the 2012 Jumpstart Our Business Startups (“JOBS”) Act as well as subsequent legislation to build upon the JOBS Act’s success.[1] The Chamber also continues to work with the Securities and Exchange Commission (“SEC”) on initiatives to help the SEC fulfill its statutory mission of facilitating capital formation.
The Committee has driven much of the capital formation agenda in Washington over the last 15 years. Importantly, the Committee’s work in this area has typically been done on a bipartisan basis and with the support of a diverse private sector coalition. Despite the incremental regulatory improvements that have been made, additional reforms are necessary to ensure that businesses of all sizes are able to raise the capital necessary to support their next phase of growth.
The U.S. capital markets are not a zero-sum game. Expanding capital-raising avenues in one market does not by default weaken the other. Policymakers should seek ways to strengthen both private[2]and public capital markets. Public policy should facilitate access to capital at every stage of a company’s lifecycle – from startup to initial public offering (“IPO”) and each step in between and after.
The Committee’s recent hearings and this request for feedback supports that goal. Several of the measures the Committee is currently considering benefit not just companies seeking capital, but also investors who would be given more opportunities to invest in growth-stage businesses. This access for investors matters in the private markets (e.g. through expansion of the accredited investor definition) as well as the public markets (e.g. through expansion of the JOBS Act “on-ramp” to improve the IPO process).
The Chamber understands that the Committee’s work on capital formation is continuously evolving. While the below may not represent an exhaustive list of every bill the Chamber supports, it includes some of the Chamber’s top priorities and certain legislation the Chamber has supported previously, organized by subject matter.
Amendments to the accredited investor definition
The private capital markets have grown substantially in recent years. Regulation D (“Reg D”) of the Securities Act is a key capital-raising mechanism for many private businesses. However, current SEC rules severely limit the scope of individuals eligible to invest in Reg D or similar offerings. The SEC’s “accredited investor” definition equates financial sophistication with wealth and largely prohibits individuals who do not meet certain income or net worth thresholds from investing in Reg D offerings. The rules therefore have the effect of being discriminatory and harmful to millions of investors who are left behind when private businesses become highly successful or eventually go public. The SEC’s accredited investor rules should take a different approach that allows individuals to invest in private offerings – with certain limitations – regardless of their income or net worth. The Chamber therefore supports the following bills:
H.R.__, the Fair Investment Opportunities for Professional Experts Act (Rep. Hill) This bill would permit individuals that hold certain professional licenses, educational degrees, or have relevant job experience to be deemed accredited.
H.R.__, the Accredited Investor Definition Review Act (Rep. Huizenga) This bill would require that the SEC review and add certain qualifications or professional certifications to the list that would qualify someone as an accredited investor. The SEC would be required to conduct subsequent reviews every five years.
H.R.__, the Equal Opportunity for All Investors Act of 2025 (Rep. Flood). This bill would permit individuals to demonstrate their sophistication – and therefore become accredited under SEC rules – via an exam administered by the Financial Industry Regulatory Authority (FINRA).
H.R.__, the Risk Disclosure and Investor Attestation Act (Rep. Davidson) This bill would allow individuals to “self-certify” their accredited status for certain private offerings. Currently, businesses looking to raise capital or financial intermediaries must go through an extensive process to confirm that someone meets the accredited investor definition. This process causes delays and raises legal uncertainty for issuers. This bill is an important fix that would permit companies to rely on representations made by an individual at the time of their investment.
H.R.__, the Investment Opportunity Expansion Act (Rep. Stutzman) This bill embraces the “sliding scale” approach outlined by SEC Acting Chair Mark Uyeda and would allow an individual to invest 10% or less of the greater of their net assets or annual income in a private offering.[3]
H.R.__, a bill to amend the definition of an accredited investor to include individuals receiving advice from certain professionals. This bill would deem an individual to be an accredited investor if they receive advice to invest in a private offering from a professional (e.g. a registered broker or investment adviser) that is already defined as an accredited investor under SEC regulation.
Unlocking capital for small businesses
While the SEC has a statutory mission to facilitate capital formation, the agency has often demonstrated a benign neglect towards the need of small businesses and their investors. Regulatory costs can often fall disproportionately on smaller entities, and it has been left to Congress (via the JOBS Act and other measures) to amend SEC rules for the benefit of small or startup businesses. The Chamber supports the following bills which would amend certain SEC rules and make the agency more attuned to the needs of smaller entities.
[1] See e.g. “Expanding the On-Ramp: Recommendations to Help More Companies Go and Stay Public” (Spring 2018) https://www.uschamber.com/assets/documents/ipo_report_expanding_the_on-ramp.pdf; Testimony of Tom Quaadman before Senate Banking Committee (December 2022) https://www.banking.senate.gov/imo/media/doc/Quaadman%20Testimony%2012-12-22.pdf
[2] See: U.S. Chamber of Commerce, “Large Private Companies Strengthen Communities Across America.” (October 2024). https://www.uschamber.com/economy/large-private-companies-strengthen-communities-across-america
[3] Remarks at the 51st Annual Securities Regulation Institute. Commissioner Mark Uyeda (Jan. 22, 2024) https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-securities-regulation-institute-012224
