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  • Kevin Cleveland

Securities and Exchange Commission Amends Accredited Investor Definition to Expand Capital Markets

In a move to boost capital investment markets, the SEC expands its definition of an accredited investor. Previously, accredited investor definitions relied on strict income and net worth requirements regardless of the financial sophistication of the investor. The amendments are part of the Commission’s broader policy efforts to simplify, harmonize, and improve the exempt offering framework to expand investment opportunities while protecting investor capital.

The amendments revise Rule 501(a), Rule 215, and Rule 144A of the Securities Act. You can check the SEC press release here:

The primary amendment to the definition, made to Rule 501(a), adds a new category to the accredited investor definition to allow accreditation based on specific professional certifications, designations, or credentials. For example, the Commission specifically designated holders of the Series 7, Series 65, and Series 82 as persons having sufficient knowledge to warrant accreditation status. Members of the public may propose for the Commission’s consideration additional certifications, designations, or credentials to satisfy the same.

Other expansions and amendments to the accredited investor rule include:

· “Knowledgeable employees” of an investment fund are considered accredited investors.

· Limited liability companies with $5 million in assets

· SEC- and state-registered investment advisers, exempt reporting advisers, and rural business investment companies (RBICs)

· “Family offices” with at least $5 million in assets under management and their “family clients.”

· Adding the term “spousal equivalent” to the accredited investor definition, so those spousal equivalents may pool their finances to qualify as accredited investors.

If you want to learn more about Regulation D Private Placements, reach out to Young, Cohen, and Durrett LLP Senior Attorney Benjamin Cadranel at

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