Bills to expand accredited-investor pool, reform retirement savings, protect seniors poised to return in 2017

The House and Senate wrapped up the congressional lame-duck session without acting on the measures and without confirming two nominees to the Securities and Exchange Commission

Dec 22, 2016 @ 11:00 am

By Mark Schoeff Jr.

Legislation that would expand the pool of investors eligible to buy unregistered securities, make it easier to put annuities in 401(k) retirement plans and stop a Treasury Department rule changing estate valuations are likely to be revived in 2017 after dying in this year's Congress.

The House and Senate wrapped up the congressional lame-duck session without acting on the measures and without confirming two nominees to the Securities and Exchange Commission — Republican Hester Peirce and Democrat Lisa Fairfax.

The legislation will now have to be reintroduced in the next Congress, which begins on Jan. 3. The Trump administration will have to submit SEC nominees — possibly two new ones — as well as a new agency chairman to the Senate for confirmation.

Here's a rundown of the bills that did not make it across the finish line:


In December, the House approved, 391-2, a package of bills designed to make it easier for start-up companies to raise capital.

One of the measures would expand the definition of accredited investor — someone who can participate in private placements — to include people who have securities licenses, such as investment advisers and brokers. Currently, the definition is based on income — more than $200,000 for an individual — and net worth — more than $1 million excluding the value of a home.

An advocate for broadening the standard is confident that the measure will return next year.

“I think it will be part of a package in the spring,” D.J. Paul, co-chair of the Crowdfund Intermediary Regulatory Advocates, said. “There seems to be an appetite for dealing with this issue.”


In November, the Senate Finance Committee introduced a bill, the Retirement Enhancement and Savings Act of 2016, that would make it easier for plans 401(k) sponsors to include annuities in the plans and would require lifetime income disclosures in statements, among other provisions.

The legislation did not make it out of the Senate, but the committee chairman, Sen. Orrin Hatch, R-Utah, will bring it back.

“In the new Congress, Chairman Hatch will work with members of the committee and Senate leadership to advance the bipartisan policies found in the [bill] that will assist employers, beneficiaries and hard-working Americans save the for the future,” committee spokesman Aaron Fobes wrote in an email.


In August, the Treasury Department proposed a rule that would curb valuation discounts for estate taxes. The measure drew strong resistance from Capitol Hill. But bills introduced by Rep. Warren Davidson, R-Ohio, and Sen. Marco Rubio, R-Fla., were not approved by Congress.

Those bills could be reintroduced and other avenues to stop the regulation also will be pursued next year, said Palmer Schoening, chairman of the Family Business Coalition.

For instance, if the regulation is not finalized before Inauguration Day, the Trump Treasury Department could nullify it. If it does go final before then, the new Congress could pass a resolution to kill it.

“We're taking an all-of-the-above approach,” Mr. Schoening said.

He's hopeful that the estate tax will be scrapped next year as part of broader tax reform because President-elect Donald Trump supports getting rid of the levy.

“There's going to be a lot of pressure on Congress to repeal the death tax,” Mr. Schoening said.


A bill that would give liability protections to financial advisers reporting financial abuse of elderly investors was not able to make it through the Senate, despite its author's plea for a senator putting a hold on the bill to relent.

“I am greatly disappointed that we have been unable to overcome objections from just one senator from the other side of the aisle who is blocking the passage of the Senior Safe Act, legislation I introduced to help protect seniors from financial fraud and exploitation,” Sen. Susan Collins, R-Maine, said in a Dec. 8 floor speech.

It is unclear when Ms. Collins and her co-author, Sen. Claire McCaskill, D-Mo., will reintroduce the bill next year.


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