Debate Over Accredited Investor Definition Gaining Momentum

Simon Riveles Accredited Investor, Private Placement, SEC

Discussions surrounding the accredited investor definition have crescendoed of late, demonstrating a sharp divide in opinion among regulators. On one side lies the North American Securities Administrators Association (“NASAA”), the lobbying group that represents the state securities administrators. The NASAA published a comment letter on the definition on May 25, 2016, evidencing a highly conservative approach.[1] The group relies on investor protection concerns in calling …

SEC Staff Issues Report and Recommendations in Connection with Changes to the Accredited Investor Standard

Simon Riveles Accredited Investor, Dodd-Frank, SEC

By William Kelly and Simon Riveles On December 18, the SEC staff issued a report summarizing its review of the accredited investor definition. The report offers historical and current analyses of the definition, evaluates relevant comments on and suggested modifications to the definition, and considers alternative approaches under federal and state securities laws for identifying financially sophisticated investors. The report concludes with SEC staff recommendations …

Simon Riveles, Chairman of the HFA’s Regulatory and and Government Advisory Board, Comments on Impact of Raising Accredited Investor Net Worth Requirements by the SEC

Simon Riveles Accredited Investor, SEC

On October 7, 2014, The Hedge Fund Association (“HFA”), an international not-for-profit organization representing the interests of investors, hedge funds and service providers, has submitted a comment letter, which can be found at HFA-SEC-Comment-Letter, to the U.S. Securities and Exchange Commission’s (SEC) as the regulatory agency considers proposed changes to the definition of an “accredited investor” under Rule 501 of Regulation D. On behalf of the …

Proposed Crowdfunding Rules Available for Public Comment

Simon Riveles Accredited Investor, Advertising, Crowdfunding, SEC, Uncategorized

On October 23, 2013, the SEC released a set of proposed rules under the JOBS Act (the “Act”), which would permit emerging growth companies (EGC’s) to offer and sell securities through crowdfunding platforms.  In their current form, the proposed rules closely resemble the original parameters outlined in Section III of the Act, the section from which the crowdfunding provision was born.  The rules will be …

SEC Repeals the Ban on General Solicitation under Rule 506

Simon Riveles Accredited Investor, Advertising, General Solicitation, Reg D Rule 506, SEC

On July 10, 2013, the Securities and Exchange Commission (the “Commission”) adopted amendments to Rule 506 of Regulation D (“Rule 506(c)”) implementing changes mandating by the Jumpstart Our Business Startups Act (“JOBS Act”). Rule 506(c) permits an issuer to engage in general solicitation or general advertising[1] in offering and selling of securities under Rule 506 provided such issuer reasonably believes and takes “reasonable steps” to …

FINRA Rule 5123 Becomes Effective December 3, 2012

Simon Riveles Accredited Investor, FINRA Rule 5123, Private Placement, Reg D Rule 506

On September 5, 2012, FINRA issued a regulatory notice informing its members that Rule 5123, approved by the SEC in June, will become effective December 3, 2012. The rule requires that FINRA registered broker-dealers provide a notice filing to FINRA within 15 days of making a private placement of securities to certain classes of investors. The notice filing will consist of the private placement memorandum …