On Dec. 11, 2025, the U.S. House of Representatives, by a vote margin of 302 to 123, passed the Incentivizing New Ventures and Economic Strength Through Capital Formation (INVEST) Act. Among other things, the INVEST Act would modernize the definition of “accredited investor” in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended, so that factors such as education, professional credentials, and experience – not just wealth – would determine whether an individual can invest in private securities offerings. The INVEST Act incorporates the concepts originally introduced in the Fair Investment Opportunities for Professional Experts Act, passed by the U.S. House of Representatives on June 23, 2025, and the Equal Opportunity for All Investors Act, passed by the U.S. House of Representatives on July 21, 2025.

As Taft previously described here, the Fair Investment Opportunities for Professional Experts Act (now Section 201 of the INVEST Act) would require an amendment to the definition of “accredited investor” to include individuals with certain licenses or, as determined by the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority, Inc., qualifying education or job experience.

As Taft previously described here, the Equal Opportunity for All Investors Act (now Section 203 of the INVEST Act) would require an amendment to the definition of “accredited investor” to include any natural person who is certified through a to-be-established SEC examination process. The examination process, which, pursuant to the INVEST Act, must be established by the SEC within one year following the enactment of the INVEST Act, and which may be a test, certification, or examination program, must (i) be designed with an appropriate difficulty level such that an individual with financial sophistication would be unlikely to fail, (ii) include methods to determine competency and knowledge in certain areas such as the disclosure requirements of different securities, and (iii) be administered by a registered national securities association and offered free of charge to the public.

These new categories of “accredited investor” introduced in the INVEST Act would enable individual investors to qualify as accredited beyond the current wealth and income thresholds (generally, $200,000 of annual income for individuals or $300,000 of joint annual income with a spouse or spousal equivalent, or a net worth over $1,000,000)¹. The bill also provides for these wealth and income thresholds, which have not been adjusted since the 1980’s, to be adjusted for inflation every five years.

The INVEST Act has not yet been approved by the U.S. Senate or signed into law.

¹ A natural person can also qualify as an accredited investor if he or she (i) is a director, executive officer or general partner of the issuer, or a director, executive officer or general partner of a general partner of that issuer, (ii) holds in good standing a Series 7, 65, or 82 license, or (iii) is a “knowledgeable employee” of the issuer, as defined in Rule 3c-5(a)(4) under the Investment Company Act of 1940, as amended.