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US Securities and Exchange Commission (SEC) expands accredited investor definition

US Securities and Exchange Commission (SEC) expands accredited investor definition To explain amendments to the definition of “accredited investor” approved by the SEC in August 2020 and to describe the impact of the changes.Design/methodology/approachExplains how the amendments expand the pool of qualified investors in various subsections of the definition, explains related amendments, and then discusses the implications of the changes.FindingsThe amendments, among other things: (i) permit natural persons to qualify as accredited investors based on certain professional credentials or, for investments in private funds, based on “knowledgeable employee” status”; (ii) add LLCs and other specified entity types to the list of potentially-qualifying entities, and add a “catch-all” category for unspecified entities (although with different quantitative standards); (iii) add the term “spousal equivalent” to the definition; and (iv) codify certain related staff interpretive positions. In addition, the amendments revise the definition of “qualified institutional buyer” to include additional entity types to avoid inconsistencies with the new accredited investor definition.Originality/valueExpert analysis and guidance from experienced securities attorneys who counsel clients on all manner of SEC regulatory policy matters. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Investment Compliance Emerald Publishing

US Securities and Exchange Commission (SEC) expands accredited investor definition

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1528-5812
DOI
10.1108/joic-09-2020-0029
Publisher site
See Article on Publisher Site

Abstract

To explain amendments to the definition of “accredited investor” approved by the SEC in August 2020 and to describe the impact of the changes.Design/methodology/approachExplains how the amendments expand the pool of qualified investors in various subsections of the definition, explains related amendments, and then discusses the implications of the changes.FindingsThe amendments, among other things: (i) permit natural persons to qualify as accredited investors based on certain professional credentials or, for investments in private funds, based on “knowledgeable employee” status”; (ii) add LLCs and other specified entity types to the list of potentially-qualifying entities, and add a “catch-all” category for unspecified entities (although with different quantitative standards); (iii) add the term “spousal equivalent” to the definition; and (iv) codify certain related staff interpretive positions. In addition, the amendments revise the definition of “qualified institutional buyer” to include additional entity types to avoid inconsistencies with the new accredited investor definition.Originality/valueExpert analysis and guidance from experienced securities attorneys who counsel clients on all manner of SEC regulatory policy matters.

Journal

Journal of Investment ComplianceEmerald Publishing

Published: May 11, 2021

Keywords: US Securities and Exchange Commission (SEC); Accredited investor; Private fund investments; Qualified institutional buyer; Regulation D of the Securities Act of 1933; Rule 144A of the Securities Act of 1933

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