Accredited Investor

The SEC issued a report evaluating the definition of "accredited investor" as part of its obligations under the Dodd-Frank Act. Perhaps most significantly, the report recommends modifications to the definition that could drastically change capital fundraising and the ability for issuers to rely on exemptions from registering their securities offerings. Currently, accredited investors are defined as those natural persons whose income exceeds $200,000 individually or $300,000 jointly with their spouses for the two most recent years and who reasonably anticipate income to remain constant in the current year; those natural persons whose net worth exceeds $1 million, excluding the value of their primary residence; and certain entities with assets exceeding $5 million. Financial Threshold Recommendations The report suggests that the SEC consider one or more of the following recommendations as related to the required financial thresholds for individuals or entities to qualify for “accredited investor” status: Impose investment limitations on the current income and net worth thresholds, such as limiting investments [...]