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SEC Considering Changes to Private Offering Rules

Thursday, June 20, 2019

The SEC has issued a Concept Release that is requesting comment on possible changes to the offering rules, including the “accredited investor” definition and the use of private funds to raise capital. The SEC is asking for input regarding the accredited investor definition on whether it should (i) revise financial thresholds for qualification; (ii) add categories of qualifying investors based on prior experience, professional credentials, or an examination; and/or (iii) measure accreditation based on the amount of investments rather than income. For private funds, the SEC wants input on whether it should (i) include 3(c)(7) (qualified purchaser) funds within the definition of “accredited investor” and (ii) change the definition of qualified client for purposes of taking performance fees. The SEC is also considering changes to Regulation D private placements, Regulation Crowdfunding and secondary trading rules.

Click here to read the release.