Accredited Investor Status Changes

[Parsad]

Hi Folks,

 

I know we have a number of investment managers who run funds on our board.  Just thought I would give you guys a heads up, if your attorneys haven't already, but the definition for accredited investor has changed slightly due to the new Dodd-Frank Reform Bill.  The new definition is "$1 Million Net Worth, excluding their primary residence." 

 

If they meet any of the other qualifications ($200K income, $300K joint income, $5M trust/corporation/partnership, etc, they are ok, but if they are basing it solely on the $1M net worth criteria, then that has changed.  The new rules are retroactive to July 21st, so any partners brought in since, also have to requalify.  You should also update your subscription documents accordingly.  Cheers!

 

http://www.lexology.com/library/detail.aspx?g=9888d833-11cc-470c-8a53-23df8b986907

[pilaniman]

I believe it is only true if a fund is registered with SEC otherwise the rules of state where RIA is registered continue to apply. That's my understanding talking to a lawyer post FINREG.