The US Securities and Exchange Commission (SEC) identifies accredited investors in Rule 501 of Regulation D as follows:
According to Forbes magazine, "8.99 million U.S. households today have a net worth of $1 million, which could qualify them as accredited investors." ("Finally, Some Real Action on the JOBS Act," July 24, 2013.)
In response to the 2012 Jumpstart Our Business Startups Act (JOBS Act), the SEC voted 4-1 on July 10, 2013 to adopt final rules to permit general solicitation in Rule 506 offerings as long as sales are limited to "accredited investors" and the issuer takes "reasonable steps" to verify that all purchasers of the securities are accredited investors. The new Rule 506(c) will become effective on September 23, 2013.
With this change, private funds (including private equity funds, venture capital funds, hedge funds and similar investment vehicles – including private companies) that rely on Rule 506(c), face a much less onerous task in finding investors and raising capital. As long as the applicable requirements of Rule 506 and Regulation D are met, these issuers will be allowed to make potential investors aware of their offerings through advertising in published media (newspapers, magazines), seminars, mailings and via the Internet (websites, email and social media) as well as any other form of general solicitation without registering the offering as a public offering with the SEC.
High Alert Investment Management Ltd. believes this to be an accurate and up-to-date definition of "accredited investors" as outlined by the SEC in Rule 501 of Regulation D. However, before relying on any information contained here readers are encouraged to visit the SEC's website at http://www.sec.gov/answers/accred.htm.