The accredited investor exemption has been widely and frequently used in private capital raising activities for many years. The exemption is one of the easiest to establish and least expensive for a company to utilize. It has therefore remained popular since the definition and the associated regulation was adopted in 1982.

Notwithstanding its popularity, investors and other market participants have long expressed interest in updating the accredited investor definition to increase the number of individuals and entities that would qualify for the exemption and thereby be able to participate in private securities offerings. Fortunately, in December 2019, the Securities and Exchange Commission (SEC) proposed amendments to Regulation D to update and modernize the definition of accredited investor. The proposed amendments would expand those classes of individuals and entities who could qualify under the exemption. This article discusses the amendments and their potential impact on privacy securities offerings.

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