Under the Securities Act of 1933, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements.
The Act provides companies with a number of exemptions.
Federal securities law defines the term Accredited Investor under Title 17, Section 230.500, Regulation D as:
- a bank, insurance company, registered investment company, business development company, or small business investment company
- an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million
- a charitable organization, corporation, or partnership with assets exceeding $5 million
- a director, executive officer, or general partner of the company selling the securities
- a business in which all the equity owners are accredited investors
- a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year
- a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.
This information is presented as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult an attorney specializing in securities law.
Wax Ink is a baseline equity research company not licensed or registered with any government agency
Copyright © 2014 Wax Ink