Acting SEC Chair Signals Interest in Revising Accredited Investor Threshold

In remarks by Acting SEC Chair Michael S. Piwowar, he signals his interest in revising the accredited investor threshold in an effort to level access to higher risk, higher return investments.

At the February 24 “SEC Speaks Conference 2017,” Piwowar’s theme focused on “The Forgotten Investor.” He stated there is a glaring need to move beyond the artificial distinction between “accredited” and “non-accredited” investors, questioning whether non-accredited investors are truly protected by regulations that prevent them from investing in high-risk, high-return securities available to others.

An accredited investor must earn $200,000 or more in annual income or have a net worth of more than $1 million, exclusive of their personal residence. He points out the current threshold prohibits non-accredited investors from investing in high-risk securities which amounts to a blanket prohibition on their earning the very highest expected returns.

Previously, in Remarks at the Meeting of the SEC Advisory Committee on Small and Emerging Companies, he stated, “Remarkably, if you think about it, by allowing only high-income and high-net-worth individuals to reap the risk and return benefits from investing in certain securities, the government may actually exacerbate wealth inequality and hinder job creation and economic growth.”

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