Opening the Gates: What the Equal Opportunity for All Investors Act Could Mean for Private Markets

The definition of “accredited investor” has long limited entry into private markets to individuals with substantial wealth and sophistication. The Equal Opportunity for All Investors Act of 2025 proposes a major shift: qualified access based on knowledge rather than net worth. If enacted, the Act would require the SEC to administer a credentialing exam, opening the door to private equity, venture capital, real estate syndications, and hedge funds for anyone who demonstrates financial sophistication. Here is what the legislation entails, what it could mean, and the key points investors and platforms should be watching.

What It Does: Expanding the Definition of Accredited Investor

First introduced in the House on May 13, 2025, by Representatives Mike Flood (Republican, Nebraska) and Sarah McBride (Democrat, Delaware), the Equal Opportunity for All Investors Act (H.R. 3339) passed the House by unanimous voice vote in July.

Under the existing SEC rules, individuals qualify as accredited investors only if their annual income exceeds $200,000 (or $300,000 with a spouse) or their net worth is above $1 million (excluding primary residence). The new bill would add a third route: passing a financial knowledge exam created by the SEC.

The exam must be designed to identify individuals with genuine financial sophistication. It is expected to cover topics such as securities types, disclosure standards, financial statements, governance structures, risks tied to private offerings, illiquidity, valuation uncertainty, information gaps, leverage, long-term investment horizons, and potential conflicts of interest.

Once finalized, the exam would be available at no cost and administered by a national securities association, most likely FINRA. It would need to be operational within 180 days of SEC approval.

Why It Matters: Impacts Across the Ecosystem

For investors

This knowledge-based path could open access for financially literate individuals who do not meet the traditional wealth thresholds. Young professionals, educators, and entrepreneurs may gain the opportunity to participate in private markets based on what they know rather than what they own. It reframes access around competency rather than capital.

For issuers and platforms

Fintech platforms would likely expand their audience to include exam-qualified users. At the same time, they would need systems to verify credentials, manage expiration periods, and update KYC procedures. Investor onboarding may become more complex, requiring additional disclosures and suitability checks.

For private markets overall

An expanded investor base could drive more capital into startups, private funds, and real assets. However, regulators and consumer advocates warn that increased access also raises the risk of exposure to illiquid, opaque, and volatile investments. Simply passing a test may not guarantee an investor is financially equipped to handle downside risk or capital calls.

What’s Next: Timeline and Risk Factors

The bill has moved to the Senate and was referred to the Committee on Banking, Housing, and Urban Affairs. While House support was unanimous, Senate timing is uncertain given other legislative priorities.

If passed, the SEC would have one year to develop the exam and establish passing criteria. From that point, test administration would need to begin within six months. That means the first wave of qualified test-takers could emerge in late 2026.

The Act is part of a broader movement to modernize access to private capital markets. Parallel efforts include updates to Regulation A and proposals to better protect senior investors. These signal a growing bipartisan interest in expanding capital formation pathways and financial inclusion.

Key Watch Points for Investors and Advisors

The true test of this legislation will not be whether more people technically qualify, but whether the private markets actually evolve to serve them. If the exam is too easy, it risks being dismissed by issuers and regulators alike. If it is too complex or costly to maintain, participation could stall before it begins. Platforms will need reliable infrastructure to verify credentials, and without a centralized registry or clear compliance standards, inconsistencies may emerge. But the core question remains whether this new path will create a more inclusive investor base or simply segment the market further—adding a layer of “exam-qualified” individuals who remain underserved. For the Act to deliver on its promise, platforms, advisors, and product issuers must treat this cohort as a viable audience and not just a checkbox. The shift from wealth to knowledge will only matter if it leads to real participation and thoughtful risk alignment.

References

House bill would expand the pool of people who can buy certain investments — if they can pass an SEC test
https://www.cnbc.com/2025/07/23/house-bill-accredited-investor-sec-test.html?ck_subscriber_id=3169026976 

Angel Capital Association – “Federal Insights: ACA Legislative Updates”
https://angelcapitalassociation.org/blog/federal-insights-aca-legislative-updates

U.S. Congress – H.R. 3339 Equal Opportunity for All Investors Act of 2025
https://www.congress.gov/bill/119th-congress/house-bill/3339

Congressional Budget Office – Cost Estimate for H.R. 3339
https://www.cbo.gov/publication/61562

The Wall Street Journal – “Private Markets Are Reserved for the Rich. Should a Test Let You In?”
https://www.wsj.com/finance/investing/private-markets-are-reserved-for-the-rich-should-a-test-let-you-in-66c6021c

them. – “Sarah McBride’s First Successful Bill Is a Private Equity Law Co-Sponsored by an Anti-Trans Republican”
https://www.them.us/story/sarah-mcbride-mike-flood-private-equity-act-first-bill-house