NES Financial offers a series of articles written by industry experts addressing current key issues in the EB-5 industry. This article by Jor Law, Redefining Accredited Investors, provides much-needed perspective and detail on accredited investors and exemptions in securities laws, as well as proposed changes.
In the EB-5 industry, Rule 506 of Regulation D is one of the commonly relied upon exemptions used by issuers of securities to avoid having to register securities offerings with the SEC. Accredited investors are central to Rule 506 and are currently defined as investors who can fend for themselves due to their ability to sustain losses.
The Dodd-Frank Wall Street Reform and Consumer Protect Act directs the SEC to review the definition for an accredited investor every four years. Proposed changes drawn from a December 18, 2015 Report on the Review of the Definition of “Accredited Investor” are discussed along with the potential impact on EB-5 issuers and investors.
Redefining Accredited Investors addresses the far-reaching impact of such definition changes, including:
- An overview of Rule 506 of Regulation D
- The current definition and role of an “accredited investor”
- Proposed changes to accredited investor definition
- The impact of a definition change on EB-5
- Potential new categorical sophistication standards
To read Redefining Accredited Investors, download the full eBook, Insights from Experts: Medallion Partners Cover Hot Industry Topics.
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