In addition to amendment of Regulation D and Rule 506 to permit general solicitation, the SEC is also considering a change to the definition of “accredited investor” as it relates to natural persons — the current threshold requirements have not been amended since the creation of accredited investor status in the 1980s. Currently, the SEC has not proposed any amended rules as it relates to the definition of accredited investors, but are leaving the matter open for further study and public comment.
In particular, the SEC is considering the following issues and seeking public comments:
– Are the current net worth and income tests appropriate for determining whether a natural person is an accredited investor, whether they have such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of a prospective investment; if not, what would be a more appropriate test?
– Are the current dollar thresholds in the net worth and income tests still appropriate thresholds for determining accredited investor status? Should the thresholds be indexed to inflation?
– Are fixed dollar amounts a proper metric for determining accredited investor status, or should the net worth and income tests be changed to thresholds based on a formula or percentage?
The SEC is accepting comments at this link: http://www.sec.gov/cgi-bin/ruling-comments?ruling=s70613&rule_path=/comments/s7-06-13&file_num=S7-06-13&action=Show_Form&title=Amendments%20to%20Regulation%20D,%20Form%20D%20and%20Rule%20156%20under%20the%20Securities%20Act