Dorsey – SEC Proposes to Expand Potential Investor Pool for Private Placements

SEC Proposes to Expand Potential Investor Pool for Private Placements

THE SEC RECENTLY PROPOSED TO EXPAND THE DEFINITION OF “ACCREDITED INVESTOR” TO INCREASE THE POOL OF INVESTORS THAT CAN READILY PARTICIPATE IN PRIVATE CAPITAL MARKETS TRANSACTIONS.

The proposal includes certain financially sophisticated individuals (regardless of income or net worth) in the definition of accredited investor. It also expands the category of entities that are considered accredited investors to include certain entities that have the ability to make sound investment decisions without the protection provided by the securities registration process. The full text of the SEC release can be found at: https://www.sec.gov/rules/proposed/2019/33-10734.pdf