# Plain Language Summary: Equal Opportunity for All Investors Act of 2023

Right now, the term "accredited investor" is mostly based on how much money you have. If you earn over $200,000 a year (or $300,000 with a spouse) or have a net worth over $1 million, you're considered an accredited investor. This status lets you invest in private companies, hedge funds, and other investments that regular people can't touch. The problem, according to this bill, is that having money doesn't necessarily mean you understand how these risky investments work.

This bill creates a new way to become an accredited investor: by passing a test. The Securities and Exchange Commission (SEC) would have six months to design an exam that covers important investment topics like how different types of securities work, how private companies differ from public ones, the risks of private investments (like the fact that you might not be able sell your shares quickly), and potential conflicts of interest with financial advisors. The exam would be designed so that someone with real financial knowledge would likely pass it, but it wouldn't be so easy that anyone could pass without understanding the material.

Once the exam is created, a registered securities association would have to offer it free to the public within six months. This means that even if you don't have $200,000 in annual income or $1 million in net worth, you could potentially qualify as an accredited investor by demonstrating you actually understand what you're getting into. The bill's goal is to open up these investment opportunities to people who are financially savvy but haven't accumulated enough wealth to meet the current income or net worth thresholds. In practice, this could help younger professionals, entrepreneurs, or people early in their careers access private investment opportunities if they can prove they know the risks involved.

Equal Opportunity for All Investors Act of 2023

Flood, Mike

Equal Opportunity for All Investors Act of 2023 This bill expands who may be considered an accredited investor for purposes of participating in private offerings of securities. Certain unregistered securities may only be offered to accredited investors. Specifically, the bill allows an individual to qualify through an examination established by the Securities and Exchange Commission. The examination <ul> <li>must be designed with an appropriate difficulty level such that an individual with financial sophistication or training would be unlikely to fail,</li> <li>may include methods to determine competency in certain areas, and </li> <li>must be administered by a registered national securities association and offered free of charge to the public. </li> </ul> Currently, accredited investors must satisfy certain requirements indicating their reduced exposure to financial risk, including those related to income, net worth, or knowledge and experience.