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Staff Report on Accredited Investor Definition Issued

The Securities and Exchange Commission (“SEC”) is seeking public comments on its staff report regarding the definition of an “accredited investor.” Prepared by members from the SEC’s Divisions of Corporation Finance and Economic and Risk Analysis, the report discusses the history behind the accredited investor definition and includes the following: Feedback on the definition from public commenters and various committees; Alternative ways to define an accredited investor; Staff recommendations for possible revisions to the current definition; and Analysis of the effect the potential approaches could have on accredited investors. More on the staff report is available in the SEC’s December 18th press release .

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Investor Advisory Committee to Discuss Accredited Investor Definition

Preparing to revise the decades-old accredited investor definition in Rule 501 of Regulation D, the Securities and Exchange Commission’s (“SEC”) Investor Advisory Committee (“the Committee”) is scheduled to meet on Thursday, October 9th. The current definition, which has been in place for over 30 years, describes an individual, or such combined with a spouse, a net worth of $1 million or more. While current income thresholds are $200,000 (individual) and $300,000 (married couple), investors have called for a number adjustment to reflect inflation. The Committee previously discussed changes to the accredited investor definition in July, but couldn’t reach a decision. Read More.

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SEC’s Investor Advisory Committee at Odds over Accredited Investor Definition

As efforts to update the “accredited investor” definition continue, members of the U.S. Securities and Exchange Commission’s (“SEC”) Investor Advisory Committee (“the Committee”) remain at an impasse on what changes should be made. During its recent meeting, Committee members acknowledged that a consensus on the definition’s first update in over 30 years will not occur anytime soon. The proposed revision to “accredited investor” stems from SEC’s Release No. 33-9415, Eliminating the Prohibition Against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings. While the SEC removed the marketing ban on private offerings provision from the rule, Release. Read More.

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