Bill Overview
Title: Investment Opportunity Expansion Act
Description: 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 if the investment is not more than 10% of the individual's net assets or 10% of the individual's annual income, whichever is greater.
Sponsors: Rep. Budd, Ted [R-NC-13]
Target Audience
Population: People seeking to invest in private securities offerings
Estimated Size: 20000000
- The bill impacts individuals who seek to invest in private offerings of securities.
- Currently, accredited investors include those with specific financial thresholds, such as high net worth individuals.
- The bill allows more individuals to qualify as accredited investors by setting a new criterion: investment not exceeding 10% of net assets or annual income.
- This effectively opens private market investments to a wider section of the population, potentially including more middle-class individuals.
Reasoning
- The policy is designed to broaden the pool of accredited investors by introducing a new criterion based on a percentage of net assets or income. This could potentially include many middle-class individuals who are not traditionally considered wealthy but have substantial savings or income.
- Given the budget constraints, the program might not have a huge promotional or educational campaign, limiting immediate awareness and uptake among the target population.
- The impact on wellbeing is variable, as it depends on individual engagement with the investment opportunities and the actual financial outcomes of such investments.
- People in lower income brackets, older adults hoping to grow retirement savings, and individuals in financially strained situations might be most affected by having new access to investments.
Simulated Interviews
Software Engineer (New York, NY)
Age: 35 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- This policy seems like a great opportunity for people like me who have steady incomes and want to invest more broadly without being mega-rich.
- I think it will help encourage more financially savvy decisions among my peers, although I'm cautious about the risks involved.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Freelancer (Austin, TX)
Age: 28 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- While I welcome the chance to invest, my inconsistent income makes it challenging to commit significant amounts to private securities.
- I'm worried about the risk, I'd hesitate to invest the maximum allowed without extensive research and guidance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Marketing Director (Los Angeles, CA)
Age: 45 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 7.0 years
Commonness: 5/20
Statement of Opinion:
- As someone who already invests, this policy expands my options and could yield better returns.
- However, private market investments require careful consideration and due diligence, so I hope adequate resources will be available for this new class of investors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Accountant (Chicago, IL)
Age: 52 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- At my age, I'm more concerned about securing my retirement, so investing in private offerings seems risky.
- I might use it to try and grow my portfolio, but very cautiously.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Nurse (Denver, CO)
Age: 30 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 6.0 years
Commonness: 8/20
Statement of Opinion:
- I think this policy offers a good entry point into investing, but I don't know much about private securities.
- I would need guidance or education to feel confident about it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Retired Teacher (Miami, FL)
Age: 60 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 5/20
Statement of Opinion:
- The policy seems beneficial for expanding options, but my priority is protecting my existing assets.
- I might invest a small portion to test the waters but am wary of potential losses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Entrepreneur (Seattle, WA)
Age: 39 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 3/20
Statement of Opinion:
- The ability to invest in private offerings presents a unique opportunity to diversify my investments, which is crucial for my business's financial health.
- I'm optimistic but cautious about the complexities and risks involved.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Corporate Executive (Boston, MA)
Age: 42 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 2/20
Statement of Opinion:
- This policy doesn't impact me much as I already participate in such investments.
- I think it's good for the earlier stages of wealth building for others though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
HR Manager (Atlanta, GA)
Age: 48 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 6/20
Statement of Opinion:
- I'm glad the policy offers more opportunities to invest; it's something I've wanted but felt restricted by the current rules.
- It could help grow my savings and lead to a better financial future.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Artist (Portland, OR)
Age: 32 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- The policy has potential benefits, but investing in private securities seems risky, especially with my limited resources.
- I would need to learn a great deal before feeling comfortable making such investments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $12000000 (Low: $8000000, High: $16000000)
Year 3: $10000000 (Low: $7000000, High: $13000000)
Year 5: $9000000 (Low: $6000000, High: $12000000)
Year 10: $8000000 (Low: $5000000, High: $11000000)
Year 100: $5000000 (Low: $3000000, High: $7000000)
Key Considerations
- The ability for more individuals to invest in private offerings could democratize investment opportunities but also pose increased risks if investors are not properly informed.
- Regulatory updates are required to manage an expanded investor base and ensure market integrity.
- Potential fraud risks increase with broader investor participation, necessitating stronger oversight.