SEC Proposes to Amend Definition of "Accredited Investor" (12/30/19)

SEC PROPOSES RULE TO AMEND THE

DEFINITION OF "ACCREDITED INVESTOR"

I wanted to bring to your attention an SEC proposed rule approved by the Commission this month that would amend the definition of “accredited investor.”

The biggest change for natural persons would be this:

“(10) Any natural person holding in good standing one or more professional certifications or designations or credentials from an accredited educational institution that the Commission has designated as qualifying an individual for accredited investor status.

In determining whether to designate a professional certification or designation or credential from an accredited educational institution for purposes of this paragraph (a)(10), the Commission will consider, among others, the following attributes:

(i) the certification, designation, or credential arises out of an examination or series of examinations administered by a self-regulatory organization or other industry body or is issued by an accredited educational institution;

(ii) the examination or series of examinations is designed to reliably and validly demonstrate an individual’s comprehension and sophistication in the areas of securities and investing;

(iii) persons obtaining such certification, designation, or credential can reasonably be expected to have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of a prospective investment; and

(iv) an indication that an individual holds the certification or designation is made publicly available by the relevant self-regulatory organization or other industry body;

NOTE: The professional certifications or designations or credentials currently recognized by the Commission as satisfying the above criteria will be posted on the Commission’s website.”

Comments on the proposed rule are due 60 days after publication in the Federal Register (i.e. the due date for comments will probably be late February).

YOUR LINKS (won’t work on my website)

The fact sheet on the proposed rule is available here: https://www.sec.gov/news/press-release/2019-265

The rule itself is available here:

Amending the “Accredited Investor” Definition, Proposed Rule

https://www.sec.gov/rules/proposed/2019/33-10734.pdf

IN CLOSING

I would like to thank David Burton for bringing this proposed amendment to my attention. If you support or oppose this SEC rule amendment proposal, you have approximately 6 weeks left to file a comment letter - FYI.

Wishing everyone a very happy holiday season!

Best regards,

Paige

Paige W. Pierce

The Pierce Group, LLC

(Consulting: Management, Regulatory, Legislative, Cyber)