On December 18, 2019, the SEC announced it voted to propose amendments to the definition of “accredited investor” to add new categories of individuals and entities.
Among other new categories, the amendments would include within the definition of “accredited investor” those individuals who have obtained certain professional certifications, such as a Series 7, 65 or 82 license or who are “knowledgeable employees” of a private fund that is being invested in. Furthermore, limited liability companies would qualify for accredited investor status if they have total assets in excess of $5 million and were not formed for the specified purpose of acquiring the securities being offered.
“Spousal equivalents”, which would be classified as cohabitants occupying relationships generally equivalent to that of spouses, are also included in the “accredited investor” definition, thereby allowing spousal equivalents to pool finances for the purpose of meeting the “accredited investor” thresholds.
The proposed amendments can be found here.
KMK Legal Alerts and Blog Posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. Please consult with counsel of your choice regarding any specific questions you may have.
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