SEC Expands the Accredited Investor Definition
Last week, the Securities and Exchange Commission (the “SEC”) adopted amendments to the “accredited investor” definition in Regulation D (“Reg D”) under the Securities Act of 1933 (the “Securities Act”). In adopting these amendments, the SEC said it intended to update and improve the accredited investor definition to identify more effectively institutional and individual investors that have the knowledge and expertise to participate in private capital markets. Absent changes in its composition–always a likelihood after a Presidential election, the SEC is likely to take additional steps to modify the exempt offering framework, which could further enhance access to capital for private fund sponsors (“Sponsors”). This memorandum summarizes the amendments and highlights some key takeaways for Sponsors.