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Regulation and Compliance > Federal Regulation > SEC

SEC to Take Up Accredited Investor Definition Changes on Dec. 18

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The Securities and Exchange Commission plans to vote Wednesday on whether to propose amendments to the accredited investor definition.

SEC Chairman Jay Clayton said on Nov. 19 at the Securities Industry and Financial Markets Association’s annual conference in Washington that a proposal on the accredited investor definition would come before the commission likely soon that “will reflect the comments we received.”

The SEC meeting notice states the agency “accredited investor” revisions “are intended to update and improve the definition in order to identify more effectively investors that do not need the protections of registration under the Securities Act of 1933.”

The potential changes are garnering mixed reviews.

The Investment Adviser Association “has long asked” the SEC to revisit its accredited investor definition “to allow all investors that are represented by SEC-registered advisors acting in a discretionary capacity to invest in private funds where that is consistent with the investors’ best interest,” Gail Bernstein, IAA’s general counsel, told ThinkAdivsor in previous interview.

Barbara Roper, director of investor protection for the Consumer Federation of America, told ThinkAdvisor in a previous interview that the SEC’s concept release on harmonization of private offering exemptions, which centered on expanding the accredited investor definition, “made clear” that the SEC “doesn’t currently have the data necessary to make informed policy regarding the accredited investor definition, certainly not to justify any expansion of that definition.”

What the agency does know “suggests that only a tiny percentage of current accredited investors actually choose to invest in private offerings,” Roper said. “And there’s no evidence of demand from non-accredited investors.”

— Check out Investor Advocate Barbara Roper Doesn’t Mince Words on SEC Rules on ThinkAdvisor.


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