On December 18th, The Securities and Exchange Commission (SEC) issued a staff report on the accredited investor definition. As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, the SEC is required to review the accredited investor definition as it relates to natural persons every four years to determine whether the definition should be modified or adjusted. Staff from the Divisions of Corporation Finance and Economic and Risk Analysis prepared the 118-page report in connection with the first review of the definition.
“This report analyzes various approaches for modifying the definition of an accredited investor,” said SEC Chair Mary Jo White. “I encourage investors, companies and other market participants to provide comments as public input will be very valuable as the Commission considers the definition.”
The report examines the history of the accredited investor definition and considers comments on the definition received from a variety of sources, including public commenters, the Investor Advisory Committee and the Advisory Committee on Small and Emerging Companies. The report 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.
The SEC invites members of the public to provide comments on the accredited investor definition, generally, and specifically on the staff recommendations contained in the report. Members of the public wishing to submit comments may use the following link on the Commission’s website: http://go.usa.gov/ck8Z7.