H.R. 3348, Accredited Investor Definition Review Act

H.R. 3348 would expand the definition of an accredited investor under the Securities Act of 1933 to include individuals with certifications, designations, or credentials that the Securities and Exchange Commission (SEC) determines are in the public interest. The bill would require the SEC to establish and review a list of accepted certifications, designations, and credentials once every five years and make amendments when necessary. Under current law, accredited investors are defined as people or entities with sufficient financial sophistication and resources to sustain the risk of loss, including banks, broker-dealers, and investment companies. The bill also would require the accredited investor list to include certifications described in a final rule published by the SEC in 2020. Accredited investors may participate in investment opportunities not available to nonaccredited investors, such as purchasing securities that are exempt from registration with the SEC.

Using information about the cost of similar provisions, CBO estimates that implementing H.R. 3348 would cost less than $500,000 over the 2026-2030 period. Because the SEC is authorized to collect fees each year to offset its annual appropriation, CBO expects that the net effect on discretionary spending over the same period would be negligible, assuming appropriation actions consistent with that authority.

If the SEC increases fees to offset the costs associated with implementing the bill, H.R. 3348 would increase the cost of an existing mandate on private entities required to pay those assessments. CBO estimates that the incremental cost of that mandate would be small and fall below the annual threshold established in the Unfunded Mandates Reform Act (UMRA) for private-sector mandates ($206 million in 2025, adjusted annually for inflation).

H.R. 3348 contains no intergovernmental mandates as defined in UMRA.

The CBO staff contacts for this estimate are Zunara Naeem (for federal costs) and Lucy Marret (for mandates). The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.