TheCorporateCounsel.net

As Dave shared, the Small Business Capital Formation Advisory Committee met last week Tuesday to discuss the accredited investor definition (again) and the state of the IPO market. During the meeting, a number of the Commissioners shared prepared remarks — each of which is discussed in this blog from “Jim Hamilton’s World of Securities Regulation.” Following the prepared remarks, the Committee voted in favor of three recommendations, which this Mayer Brown blog summarizes as follows:

– The current net worth and income thresholds in the definition should not be indexed for inflation;

– Non-accredited investors should be permitted to invest up to five percent of their income or net worth in private offerings annually if they meet certain sophistication criteria or pass a certification exam; and

– The SEC should require a risk statement to be included in private placement documents.

In terms of next steps, the blog says the SEC is expected to consider amendments to the definition during the course of this year, including the Committee’s recommendations, the SEC Staff report and any comments submitted in response to the report.

– Meredith Ervine