The SEC issued a staff report on the accredited investor
definition, as required by Dodd-Frank every four years, to
determine whether the definition should be modified or adjusted.
Among other possibilities, the report recommends that the
definition be revised "to allow individuals to qualify as
accredited investors based on other measures of
sophistication" than the current measures of income and net
worth. It suggests that people with a threshold level of
investments or a professional certification could become eligible,
as well as those experienced investing in exempt offerings,
"knowledgeable employees of private funds" or anyone who
passes a test. The report analyzes various approaches for modifying
the definition and considers comments on the definition received
from a variety of sources, including members of the public, the
Investor Advisory Committee and the Advisory Committee on Small and
Emerging Companies. It considers alternative approaches to defining
accredited investor, provides staff recommendations for potential
updates and modifications to the existing definition and analyzes
the impact potential approaches may have on the pool of accredited
investors.
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