Free Lunch Podcast Episode 37 – The Debate Over the SEC’s Accredited Investor Standard
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This teleforum will consider the U.S. Securities and Exchange Commission’s accredited investor standard. This standard is used as a screen to determine the group of investors eligible to invest in offerings that are exempt from most SEC rules on public offerings and which are the primary fundraising tools of hedge funds and private equity funds. The SEC currently uses a wealth and income-based standard, which raises questions about whether limiting investment opportunities to only high-income individuals is sound government policy. Some critics of this standard have urged the SEC to expand the standard to include individuals with financial experience, but who do not otherwise meet the wealth threshold. Other critics have suggested more aggressive reforms. Supporters of the accredited investor standard, however, have advanced proposals to further restrict the group of eligible investors by increasing the income and net worth requirements. The SEC has promised to revisit the accredited investor standard soon, and this teleforum will consider and debate potential reforms to the rule.