An accredited investor is an individual or entity that is permitted to trade securities that haven't been registered with securities regulatory bodies, like the SEC. An accredited investor is one who is deemed to be sufficiently financially sophisticated so as to not need the protection offered by regulatory disclosures that come with registered securities. Accredited investors typically include high-net-worth individuals, banks, insurance companies, brokers, and trusts.
In the US, the definition of accredited investor is set forth in Rule 501 of Regulation D.
- Investment Funds
On August 26th, 2020, the U.S. Securities and Exchange Commission (“SEC”) amended its definition of “accredited investor” to include additional categories of individuals and entities that would qualify to invest in certain private offerings exempted from registration under the Securities Act of 1933
The structure of securities law tends to makes it more challenging to operate in stealth mode when raising money from investors.