Richer Accredited Investors

If, as expected, President Obama signs the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act") into law, one provision that will go into effect immediately upon enactment and with no notice period affects all those issuing securities in private placements in the United States in reliance on Regulation D, by effectively raising the accredited investor net worth standard for natural persons.

The Act will immediately exclude the value of a natural person's primary residence in determining whether the individual net worth of that person (or joint net worth with the spouse of that person) exceeds the $1 million test for being an accredited investor under Regulation D. Previously, the value of the person's primary residence was included in the calculation of net worth to satisfy the $1 million minimum.