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SEC Looks to Expand ‘Accredited Investor’ Classification

The Securities and Exchange Commission announced on Dec. 18 that it is looking for public commentary on amendments to its category of accredited investor. Currently, the SEC’s language defines an accredited investor as an individual with a net worth of over $1 million or an entity controlling over $5 million in assets. Other means of classifying include being an executive at the company making the offering.The theory behind this was protect the average person from predatory offerings. But it has also garnered criticism by those claiming it helps the rich to get richer while not allowing the average person to try to get in on investment.

The new amendments put forward by the SEC could serve to open up investment opportunities to a wider pool of people. They would include new categories such as allowing people with professional qualifications who can prove they are knowledgable enough to invest. The US regulator is now looking for public commentary on how to amend its accredited investor classification.

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