House Financial Services Committee advances wide package of capital-formation bills, including changes to accredited-investor rules

The House Financial Services Committee on Wednesday advanced a broad package of capital-formation bills intended to expand access to private and public markets, clarify SEC procedures and change who qualifies as an "accredited investor." Committee members approved most measures by voice vote or recorded vote and ordered many bills to be reported favorably to the full House.

The package included bills to allow knowledgeable professionals and qualified individuals to qualify as accredited investors, to modernize the IPO process for emerging-growth companies, to encourage small-company public listings, to ease regulatory burdens for small-entity disclosure and to improve outreach to rural and other underrepresented small businesses.

Why it matters: Supporters said the measures will help small and mid-sized firms raise capital, open private-market opportunities to more investors and modernize decades-old rules. Critics warned that expanding access to riskier, illiquid private offerings without matching investor protections could expose retirees, teachers, nonprofit employees and other savers to harm.

Most prominent among the measures was the suite of bills aimed at changing how the law determines who is an accredited investor. Chairman Hill said of his bill that "For far too long, the federal government has relied on the arbitrary wealth threshold to determine who can and cannot participate in a private investment opportunity." Ranking Member Waters, while supporting some reforms,…