On Dec. 21, 2011, the Securities and Exchange Commission (SEC)
issued a final rule1 (the Rule) amending the Accredited
Investor Standard in the SEC's rules under the Securities Act
of 1933.
These changes were required by the Dodd-Frank Wall Street Reform
and Consumer Protection Act (the Dodd-Frank Act) and conform the
SEC's rules to the changes made to the Accredited Investor
Standard when the Dodd-Frank Act was signed into law on July 21,
2010.
The Dodd-Frank Act changed the Accredited Investor Standard by
excluding the value of a natural person's primary residence in
calculating whether he or she meets the $1 million net worth test
for qualifying as an Accredited Investor.
The Rule clarifies two aspects of the Dodd-Frank change. First,
the Rule clarifies that: 1) indebtedness that is secured by the
person's primary residence, up to the estimated fair market
value of the primary residence at the time of the sale of
securities, is not included as a liability
