Previously, to qualify as accredited investors, individuals need to have a net worth of at least $1m excluding the value of their primary residence, or an annual income of at least $200k for the last two years. Now, many more people may be able to make those investments, if they can prove that they are knowledgeable enough, including employees of investments firms or governmental bodies.
Now, under the amendments––proposed in 2019 How the SEC Wants to Expand Access to Private MarketsThe agency is proposing to expand its definition of accredited investors to include financial professionals and Native American tribes, among others. Continue reading and finalized on Wednesday––the SEC will allow individual investors to qualify if they hold certain professional certifications, designations, or other credentials from accredited educational institutions. “There is no doubt persons who have successfully obtained these certifications––and maintained them in good standing––are sufficiently financially sophisticated to participate in the private markets,” wrote Clayton. SEC Commissioner Hester Peirce tweeted Wednesday: “Americans shouldn’t have to ask the SEC for permission to invest, but today’s accredited investor rule at least offers people a path to ask permission based on their education, rather than simply telling them ‘no, unless you’re rich.’”