On Aug. 26, 2020, the Securities and Exchange Commission adopted amendments to its Regulation D to cautiously expand the definition of “accredited investor” in the Commission’s rules. The change will give additional categories of investors access to certain private offerings of securities that rely upon Regulation D.1 The Commission also made changes to allow some other entities to qualify as accredited investors. The changes become effective 60 days after publication in the Federal Register.

Chairman Jay Clayton noted that: “Today’s amendments are the product of years of effort by the Commission and its staff to consider and analyze approaches to revising the accredited investor definition. For the first time, individuals will be permitted to participate in our private capital markets not only based on their income or net worth, but also based on established, clear measures of financial sophistication. I am also pleased that we have expanded and updated the list of entities, including tribal governments and other organizations, that may qualify to participate in certain private offerings.”

Read the full GT Alert “SEC Amends the ‘Accredited Investor’ Definition”