Regulation: USA's SEC to modify definition of "accredited investor"
It's long overdue: at last the Securities and Exchange Commission - which allows "accredited investors" to take part in various investment activities outside a range of protections - included those who were "house rich, cash poor." That's all about to change.
A proposal issued by the SEC yesterday - for which consultation closes on 11 March 2011 - is that the value of a person's primary residence should be left out of account when deciding whether that person qualifies as an accredited investor.
The change was effective when the Dodd-Frank Act was passed but the SEC has only just got around to making the rules, or rather just got around to having a discussion about making the rules.
The SEC says "we are not proposing to make revisions tot he definitions of "accredited investor" that are not required by the Dodd-Frank Act at this time but may consider doing so in future rule-making." The Act requires a study of the regime to be completed within three years.
Full discussion paper for consideration of issues: http://www.sec.gov/rules/proposed/2011/33-9177.pdf
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