Members of an SEC Advisory Committee on Small and Emerging Companies agreed that the financial threshold in determining who qualifies as an accredited investor should remain at the current level. Members stated that if the levels were raised, the SEC should determine other ways (i.e., examination, sophistication, etc.) for someone to qualify.
Critics of the rule argued that the "accredited investor" definition is over-inclusive because it uses financial thresholds that have not been adjusted over time to account for inflation. Others claim it is under-inclusive because it does not take into account any other indicators of financial sophistication.
Chair White remarked that the SEC's rules should provide small companies with a range of options to raise capital, while at the same time ensuring that investors can have confidence in the markets.
Commissioner Piwowar remarked that the SEC should consider whether to move away from the notion of defining an "accredited investor" altogether.
Commissioner Stein asked whether the SEC should (i) consider how a growing private market impacts the pricing in the private and public space, and (ii) consider what type of disclosures or information should be provided to sophisticated accredited investors versus retail investors.
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