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ARTICLE · 12 AUGUST 2010

Changes to Net Worth Test for Accredited Investor Standard (Updated)

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The Dodd-Frank Wall Street Reform Act (the "Act") changed the net worth test for meeting the "Accredited Investor" standard. The SEC has released guidance on how the value of a primary residence should be determined for purposes of calculating an investor’s net worth.

United StatesFinance and Banking
Scott Anenberg
Scott Anenberg
Charles Horn
Charles Horn
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Originally published August 6, 2010

Keywords: changes, net worth test, accredited investor standard, Dodd-Frank, SEC, guidance, Regulation D

The Dodd-Frank Wall Street Reform Act (the "Act") changed the net worth test for meeting the "Accredited Investor" standard. The SEC has released guidance on how the value of a primary residence should be determined for purposes of calculating an investor's net worth.

Regulation D, promulgated under the Securities Act of 1933, as amended (the "Securities Act"), creates several safe harbors from the registration requirements of the Securities Act for transactions in securities by an issuer not involving a public offering. In many Regulation D offerings, the "accredited investor" status of the offerees is an important element in determining the availability of the safe harbor. "Accredited investors" include, among other categories, any natural person whose individual net worth, or net worth with the person's spouse, at the

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