New SEC Guidelines Allow for Easier Investment

The Securities and Exchange Commission (SEC) has lowered it’s standards for “Accredited Investors”. It used to be you needed a net worth of $1 Million or above or had an annual income of $200,000 and above. The new guidelines are listed below.

  • Holders in good standing of the Series 7, Series 65, and Series 82 licenses as qualifying natural persons.
  • Include as accredited investors, with respect to investments in a private fund, natural persons who are “knowledgeable employees” of the fund.
  • Limited liability companies with $5 million in assets and rural business investment companies (RBICs).
  • Any entity, including Indian tribes, governmental bodies, funds, and entities organized under the laws of foreign countries, that own “investments,” as defined in Rule 2a51-1(b) under the Investment Company Act, in excess of $5 million and that was not formed for the specific purpose of investing in the securities offered
  • “family offices” with at least $5 million in assets under management and their “family clients,”
  • “spousal equivalent” to the accredited investor definition, so that spousal equivalents may pool their finances for the purpose of qualifying as accredited investors

Their purpose for making these changes was: “These amendments are part of the Commission’s ongoing effort to simplify, harmonize, and improve the exempt offering framework, thereby expanding investment opportunities while maintaining appropriate investor protections and promoting capital formation. “

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