Sen. Tim Scott wants to open private markets to more ordinary investors

investmentnews.com:

A leading Senate Republican on financial policy wants to open private-market investing to more people who currently don’t meet the net worth or income thresholds to qualify.

Expanding the pool of accredited investors is one plank in a proposal to reform capital markets released Thursday by Sen. Tim Scott, R-S.C. and ranking member of the Senate Banking Committee.

The proposal is a framework for a pending bill, the Empowering Main Street in America Act, that would boost capital formation by reforming regulation of public and private financial markets. The goal is to “help entrepreneurs, small businesses, and newly public companies more easily access the funding necessary to expand their operations and create jobs,” the framework states.

Scott said in a statement: “All Americans should be able to invest amounts of their choosing in order to grow wealth and build their communities, and our small business owners should be able to access funding in the same way large corporations do.”

The framework doesn’t provide details about what kind of accredited investor reform would be included in the bill. Legislative language has not yet been released. The measure presumably would build on efforts by the SEC and Congress in recent years to add to the ranks of sophisticated investors.

“Currently, the rules around accredited investor are arbitrary, and Ranking Member Scott is looking at ways to incorporate different qualifications focusing on education and knowledge, and qualitative over quantitative criteria, to strike a better balance,” Ben Watson, a Scott spokesperson on the Banking Committee, wrote in an email. “Based on the current wealth thresholds, minority groups like Black and Latinos continue to be excluded from the