House Financial Services Committee Convenes Hearing to Examine Capital Formation

Last week, the Subcommittee on Capital Markets under the House Financial Services Committee hosted a hearing titled The Future of American Capital: Strengthening Public and Private Markets by Increasing Invest or Access and Facilitating Capital Formation.

We are happy to report that expanding the accredited investor definition – one of IPA’s top policy priorities – came up several times and received significant support during the two-hour hearing. Subcommittee Chair Ann Wagner (R-Mo.) in her opening remarks advocated for broadening the pool of accredited investors, which “will unlock new sources of capital that will benefit businesses and investors.”

Congressman Warren Davidson (R-Ohio), who has for years called for expanding the accredited investor definition, submitted IPA’s Accredited Investor Alliance letter alongside IPA’s own letter for the hearing record.

Also of significant note, Congressman Andrew Garbarino (R-N.Y.) posed questions to the hearing witnesses about increasing access to alternative investments and the importance of modernizing the accredited investor definition. IPA proposed these questions and are grateful to Rep. Garbarino for his steadfast support of the alts industry.

Additionally, Chair Wagner expressed her desire to eliminate restrictions on registered closed-end funds investing in private assets, which IPA strongly supports. IPA further supports Chair Wagner’s Increasing Invest or Opportunities Act, which would prohibit the SEC from limiting the sale or listing of securities of a registered CEF that invests in private investment funds. We remain steadfast in our advocacy and will continue to build on this strong momentum for the alternative investment and private market community.

IPA also joined a letter from the Innovation Coalition, which, similar to IPA’s letter to the Committee, called for Congressional action to expand the accredited investor definition and eliminate restrictions on registered closed-end funds investing in private assets.