Bill Summary
The "Securities Clarity Act of 2025" seeks to amend various U.S. securities laws by excluding "investment contract assets" from the definition of a security. Specifically, it modifies the Securities Act of 1933, the Investment Advisers Act of 1940, the Investment Company Act of 1940, the Securities Exchange Act of 1934, and the Securities Investor Protection Act of 1970 to clarify that investment contract assets are not classified as securities.
An "investment contract asset" is defined as a digital representation of value that can be transferred directly between individuals without the need for intermediaries, stored on a secure public ledger, and sold under an investment contract, provided it does not fit the traditional definition of a security. This legislation aims to provide regulatory clarity for digital assets, potentially encouraging innovation and investment in blockchain technologies while reducing compliance burdens for certain digital asset transactions.
Possible Impacts
The proposed "Securities Clarity Act of 2025," which aims to exclude investment contract assets from the definition of a security, could have several significant impacts on people, including:
1. **Increased Access to Investments**: By categorizing investment contract assets as non-securities, the legislation may lower the regulatory barriers for individuals and companies to create and invest in these assets. This could lead to a wider range of investment opportunities for retail investors, allowing them to participate in emerging technologies such as cryptocurrencies, tokenized assets, and decentralized finance (DeFi) platforms without facing the stringent regulations typically associated with traditional securities.
2. **Regulatory Uncertainty and Risk**: While the exclusion may simplify the legal landscape for investment contract assets, it could also create uncertainty regarding consumer protections. Without the regulatory oversight typically applied to securities, investors might face higher risks of fraud or loss, as the protections (such as disclosures and fiduciary duties) commonly associated with securities may not apply. This could lead to potential financial losses for individuals uninformed about the risks involved with these investments.
3. **Impact on Financial Institutions and Advisers**: Financial professionals, such as investment advisers and brokers, would need to adapt their business models and compliance strategies to account for the new classification of investment contract assets. This might lead to changes in how investment advice is provided, potentially reducing the number of products or services available to clients. Additionally, some institutions may choose to limit their involvement with these assets due to perceived risks or lack of regulatory clarity, thereby affecting the investment options available to their clients.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2365 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2365
To amend the securities laws to exclude investment contract assets from
the definition of a security.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 26, 2025
Mr. Emmer (for himself and Mr. Soto) introduced the following bill;
which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the securities laws to exclude investment contract assets from
the definition of a security.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be referred to as the ``Securities Clarity Act of
2025''.
SEC. 2. TREATMENT OF INVESTMENT CONTRACT ASSETS.
(a) Securities Act of 1933.--Section 2(a) of the Securities Act of
1933 (15 U.S.C. 77b(a)) is amended--
(1) in paragraph (1), by adding at the end the following:
``The term `security' does not include an investment contract
asset.''; and
(2) by adding at the end the following:
``(20) The term `investment contract asset' means a
fungible digital representation of value--
``(A) that can be exclusively possessed and
transferred, person to person, without necessary
reliance on an intermediary, and is recorded on a
cryptographically secured public distributed ledger;
``(B) sold or otherwise transferred, or intended to
be sold or otherwise transferred, pursuant to an
investment contract; and
``(C) that is not otherwise a security pursuant to
the first sentence of paragraph (1).''.
(b) Investment Advisers Act of 1940.--Section 202(a)(18) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is amended by
adding at the end the following: ``The term `security' does not include
an investment contract asset (as such term is defined under section
2(a) of the Securities Act of 1933).''.
(c) Investment Company Act of 1940.--Section 2(a)(36) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(36)) is amended by
adding at the end the following: ``The term `security' does not include
an investment contract asset (as such term is defined under section
2(a) of the Securities Act of 1933).''.
(d) Securities Exchange Act of 1934.--Section 3(a)(10) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended by
adding at the end the following: ``The term `security' does not include
an investment contract asset (as such term is defined under section
2(a) of the Securities Act of 1933).''.
(e) Securities Investor Protection Act of 1970.--Section 16(14) of
the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll(14)) is
amended by adding at the end the following: ``The term `security' does
not include an investment contract asset (as such term is defined under
section 2(a) of the Securities Act of 1933).''.
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