The accredited investor definition is the well-known standard to permit persons of reasonable liquidity to invest in unregistered offerings of companies seeking capital; it facilitates the so-called Regulation D offerings which raise about as much investment capital as to all public offerings combined (2014 data). The SEC this May 18 will conduct a meeting of its Advisory Committee on Small and Emerging Businesses to consider revisions to this vital definition. Here are some of the SEC staff recommendations for consideration:

There likely will be revisions to the economic parameters. The present individual requirements (family net worth excluding principal residence of $1 Million, individual earnings of $200,000 or family earnings of $300,000) should remain, although those minimums now may invoke caps on investment amounts; higher economics may be established to qualify for avoidance of investment caps.

If an older-definition accredited person has invested in a given company, that investor will be “grandfathered” as fully accredited as to that particular company.

The present sole definition of accredited status, which is economic, should be expanded for some sophisticated investors, including experienced investors based on various definitions, certain professionals and those who pass an “investor examination.”

Of course it is not clear which if any proposal will be adopted, but the SEC this year seems committed to a systematic review of the accredited investor definition.