Final Rule: Net Worth Standard for Accredited Investors
Federal Register Publication Date: 12/29/2011
Summary: The SEC adopted amendments to the accredited investor standards in SEC rules under the Securities Act of 1933 (“Securities Act”) to implement the requirements of Section 413(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). Section 413(a) requires the definitions of “accredited investor” in the SEC’s Securities Act rules to exclude the value of a person’s primary residence for purposes of determining whether the person qualifies as an “accredited investor” on the basis of having a net worth in excess of $1 million. This change to the net worth standard was effective upon enactment by operation of the Dodd-Frank Act, but Section 413(a) also requires the SEC to revise its current Securities Act rules to conform to the new standard. The SEC also adopted technical amendments to Form D and a number of SEC rules to conform them to the requirements of Section 413(a) and to correct cross-references to former Section 4(6) of the Securities Act, which was renumbered Section 4(5) by Section 944 of the Dodd-Frank Act.