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Regulation and Compliance > Federal Regulation > SEC

SEC's Peirce Says She'll Fight to Further Expand Accredited Investor Definition

By Melanie Waddell

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SEC Commissioner Hester Peirce said Tuesday that she’ll be advocating within the agency for more designations to be added as accredited investors.

“My view is we really ought to try to move away from these not completely arbitrary distinctions of, ‘you can invest and you can’t invest,’” Peirce said during a Zoom event held by the Competitive Enterprise Institute.

Peirce added that it was “incumbent upon all of us to know ourselves and to know what our limits are but also to know when we need to get professional financial advice, which can help us make decisions, too.”

The agency expanded its accredited investor definition on Aug. 26 to allow investors to qualify based on defined measures of professional knowledge, experience or certifications — including certain Financial Industry Regulatory Authority licenses — in addition to the existing tests for income or net worth.

Peirce said that while the changes “were not revolutionary … they were a positive step forward. I’m planning to work from within the SEC to try to make sure that we really do have an open door to some of these ideas for new credentials that might qualify people as accredited investors. I will be advocating for us to, when it makes sense, it’s all going to be facts and circumstances, for that to be a bigger tent.”

Peirce also reiterated her view that the SEC needs to create a safe harbor that allows for the building of “crypto networks.”

“I think there is a need for us [the SEC] to do something specific for this space, because people are trying to build these crypto networks and that means they need to get tokens out into the hands of a lot of people,” Peirce said.

As it stands now, the SEC assesses whether digital assets are “investment contracts” as set out in securities law, Peirce explained. “Securities laws are able to accommodate different types of things as they arise. That’s a good thing. We want our rules not to be based in years past and not able to accommodate changes as we move along.”

“What the SEC has been confronted with is some of these digital assets are being marketed to people [in a way] that looks like a security,” Peirce said.

— Related on ThinkAdvisor:

Melanie Waddell

@Think_MelanieW

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