SEC redefines accredited investors

The SEC has widened the definition of accredited investor in the hopes of bringing more ordinary people into the $23trn private funds market.

Financial professionals who have passed their Series 7, Series 65 and Series 82 exams will now be qualified as accredited investors under a new rule adopted by the SEC on August 26.

The new rule, passed over Democratic objections, aims at opening up private markets to the broader public and also defines “knowledgeable employees” of private funds as accredited investors, as well as family offices (and family clients) with at least $5 million in AUM.

The rule allows for the possibility that LLCs with $5 million or more in assets could qualify as accredited investors, as well as SEC- and state-registered IAs.

Read the new rule below.