The Securities and Exchange Commission (SEC) amends its definition of a “certified investor” to simplify the pure asset-based requirements after such plans were announced in December 2019.
US-accredited investors enjoy special benefits with the SEC – the ability to participate in certain types of optimized security sales such as Regulation D.
The Securities and Exchange Commission found that previous tariffs were based on certain income and net criteria that did not take actual “financial performance” into account. In the United States, these requirements amount to either a net worth of $ 1 million or a stable income of at least $ 200,000 per year.
The criteria have now been expanded “as a result of years of efforts by the Commission and its staff to study and analyze the approach to validate the definition of a certified investor,” said Chairman Jay Clayton.
The details are not entirely clear yet, but the new definition will allow people to qualify as Certified Investors based on “professional certificates, titles, diplomas or other credentials issued by an accredited educational institution”.
These educational institutions are to be appointed at a later date at the discretion of the SEC. It is not clear what types of facilities can be accredited for these purposes and whether they require specialized training or general economic and financial education.
Other minor additions to the standards include “informed employees” for private mutual funds and family offices with assets in excess of $ 5 million.
The decision may result from crypto-based fundraising as it expands the list of potential investors for security token offerings. However, it remains to be seen whether the new measures will be generalized in such a way that the pool of accredited investors is expanded by a significant amount.