SEC amends net worth standard for accredited investor qualification

On December 21, the SEC adopted amendments to its rules under the Securities Act to exclude the value of an individual's primary residence from the calculation of net worth used to determine whether an individual qualifies as an "accredited investor" on the basis of having a net worth in excess of $1 million. The amendments conform the SEC's accredited investor standards to the change in the net worth standard that became effective in July 2010 upon the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The amendments will become effective 60 days after they are published in the Federal Register. In limited circumstances specified in the amended rules, individuals will be permitted to qualify as accredited investors under the former net worth test even after the amendments are effective. The new rules are discussed in Release No. 33-9287.

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