Tim Scott sits on the Financial Innovation Caucus of the U.S. Senate. The caucus will serve as a space in the Senate to discuss domestic and global financial technology issues, and to launch legislation to empower innovators, protect consumers and guide regulators, while driving U.S. financial leadership on the international stage
In his opening statement at today’s U.S. Senate Banking Committee hearing on digital assets, Ranking Member Tim Scott (R-S.C.) explained the importance of safe and sound financial innovation. In addition to calling for Chair Gensler’s testimony before the Committee, the Ranking Member urged his colleagues to pursue a thoughtful, balanced approach to digital assets that protects consumers and promotes innovation and opportunity.
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 (SEC), a state securities commission, or certain self-regulatory organizations. The examination
must measure whether an individual understands and appreciates the risks and opportunities of investing in securities,
must be designed to ensure that an individual with financial sophistication or training would be unlikely to fail, and
may be designed and/or administered by an approved person.
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.
The bill also allows purchasers to self-certify that they meet the income or net worth requirements. Further, the bill allows a person to qualify as an accredited investor by satisfying certain investment or transaction requirements.
Finally, the SEC may review and adjust the definition of accredited investor, except for the net worth standards, at its discretion. Currently, the SEC must perform this review every four years.