We've just received notice that the Securities and Exchange Commission has announced final rules on the definition of accredited investor.
For example, as amended in today's agreement, the new individual net worth standard in the accredited investor definition is:
Any natural person whose individual net worth, or joint net worth with that person's spouse, exceeds $1,000,000.
(1) Except as provided in paragraph (2) of this section, for purposes of calculating net worth under this paragraph:
(i) The person's primary residence shall not be included as an asset;
(ii) Indebtedness that is secured by the person's primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of the sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and
(iii) Indebtedness that is secured by the person's primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability.
(2) Paragraph (1) of this section will not apply to any calculation of a person's net worth made in connection with a purchase of securities in accordance with a right to purchase such securities, provided that:
(i) such right was held by the person on July 20, 2010;
(ii) the person qualified as an accredited investor on the basis of net worth at the time the person acquired such right; and
(iii) the person held securities of the same issuer, other than such right, on July 20, 2010.
The comprehensive rules are available on the SEC website in a 42-page document at www.sec.gov/rules/final/2011/33-9287.pdf. Enjoy reviewing the new rules!