Private funds will be able to advertise and solicit for investor, provided all of the investors are “accredited investors.” The Jumpstart Our Business Startups Act will dramatically change the way capital raising for private funds operates. The drawback is the loss of 35 non-accredited investors in the fund. That exception has been eliminated. Funds will [...]
Tag Archives | Accredited Investor
Accredited Investors and the JOBS Act
The Jumpstart Our Business Startups Act repeals the SEC’s ban on general solicitation and advertising under Rule 506. That is the exemption from registration used by most private fund managers. Is this a good thing? I didn’t like the ban, mostly because it was so broad. The SEC gave little guidance as to what was [...]
The New Accredited Investor Standard
After thinking about it for almost year, the Securities and Exchange Commission has finalized the new definition of “accredited investor.” On January 25, 2011, the SEC proposed amendments to the accredited investor standards in the rules under the Securities Act of 1933 to implement the requirements of Section 413(a) of the Dodd-Frank Wall Street Reform [...]
Proposed “New” Standard for Accredited Investor
If you are involved in the private placement of securities, then you have been waiting to hear how the SEC was going to change the definition of “accredited investor.” Section 413(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the definitions of “accredited investor” to exclude the value of a person’s primary [...]
The First Attack on the Accredited Investor Standard
Many of the provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act merely provide for future regulatory framework. That it is in part true for the changing definition of “accredited investor” under the Securities Act. The other part is that the definition changed once President Obama signed the bill into law ten days [...]
The Changing Standard for an Accredited Investor
As financial reform has made its way through Congress there have been several proposed changes to the standard of what it takes to be an accredited investor. In 1982, the SEC prescribed the standard in Rule 501 of Regulation D: 5. Any natural person whose individual net worth, or joint net worth with that person’s [...]
Dodd Bill, Private Placements and Accredited Investors
I previously wrote about how the Restoring American Financial Stability Act being tossed around in the Senate could affect private investment funds by changing the definition of accredited investor and altering the process for a Regulation D private placement. It looks like much of that is going to be wiped out of the bill. Senate [...]
Accredited Investors under the Restoring American Financial Stability Act
One of the surprises in the Restoring American Financial Stability Act of 2010 is that it proposes to raise the standard for being an accredited investor. Section 412 of the bill would require the SEC to increase the dollar thresholds to be qualified as an accredited investor. Section 413 would require the GAO to study [...]
Defining An Accredited Investor
One of the key rules for private investment funds is that their investors generally need to be “accredited investors.” This is the gateway to an exemption from the registration requirement under the federal securities laws. The exemption is generally targeted so that experienced investors with significant financial resources and their own advisers are in less [...]
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