Notice2026-20308
Potential Designation of U.S. Certified Public Accountant License as Qualifying Natural Persons for Accredited Investor Status
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 5, 2026
Issuing agencies
Securities and Exchange Commission
Abstract
Notice is given that the Securities and Exchange Commission (the "Commission") is considering whether to issue an order designating holding a license as a U.S. certified public accountant (a "CPA") in good standing as qualifying natural persons for accredited investor status.
Full Text
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<title>Federal Register, Volume 91 Issue 191 (Monday, October 5, 2026)</title>
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[Federal Register Volume 91, Number 191 (Monday, October 5, 2026)]
[Notices]
[Pages 63368-63376]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20308]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 33-11446; File No. 4-932]
Potential Designation of U.S. Certified Public Accountant License
as Qualifying Natural Persons for Accredited Investor Status
AGENCY: Securities and Exchange Commission.
ACTION: Notice; request for comment.
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SUMMARY: Notice is given that the Securities and Exchange Commission
(the ``Commission'') is considering whether to issue an order
designating holding a license as a U.S. certified public accountant (a
``CPA'') in good standing as qualifying natural persons for accredited
investor status.
DATES: This release was published in the Federal Register on October 5,
2026. Comments should be received on or before December 4, 2026.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/comments/4-932/potential-designation-us-certified-public-accountant-license-qualifying-natural-persons-accredited">https://www.sec.gov/comments/4-932/potential-designation-us-certified-public-accountant-license-qualifying-natural-persons-accredited</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#9ae8eff6ffb7f9f5f7f7fff4eee9dae9fff9b4fdf5ec"><span class="__cf_email__" data-cfemail="a7d5d2cbc28ac4c8cacac2c9d3d4e7d4c2c489c0c8d1">[email protected]</span></a>. Please include
File Number 4-932 on the subject line. To submit a comment to more than
one file, please include each file number on the subject line.
Paper Comments
<bullet> Send paper comments to Vanessa A. Countryman, Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number 4-932. To submit a comment
to more than one file, please refer to each file number. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more
[[Page 63369]]
efficiently, please use only one method of submission. The Commission
will post all submitted comments on its website (<a href="https://www.sec.gov/rules-regulations/public-comments/4-932">https://www.sec.gov/rules-regulations/public-comments/4-932</a>). Do not include personally
identifiable information in submissions; you should submit only
information that you wish to make available publicly. The Commission
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection.
FOR FURTHER INFORMATION CONTACT: John Byrne, Office Chief, Kenisha D.
Nicholson, Senior Special Counsel, or Max Corey, Special Counsel,
Office of Small Business Policy, Division of Corporation Finance, at
202-551-3460, and Blaine Roundy, Senior Special Counsel, Office of the
Chief Accountant, at (202) 551-5300, Securities and Exchange
Commission, 100 F Street NE, Washington, DC 20549.
SUPPLEMENTARY INFORMATION:
I. Background
A. Accredited Investor Definition
Regulation D \1\ provides a widely-used set of exemptions from
registration under 15 U.S.C. 77a et seq. (the ``Securities Act'') for
the offer and sale of securities.\2\ Among other things, Regulation D
includes the regulatory definition of ``accredited investor'' in 17 CFR
230.501(a) (``Rule 501(a)'') followed by the three main operative
provisions--17 CFR 230.504 (``Rule 504''),\3\ 17 CFR 230.506(b) (``Rule
506(b)''),\4\ and 17 CFR 230.506(c) (``Rule 506(c)'').\5\ The
Commission has stated that the ``accredited investor'' definition under
Regulation D is intended to capture persons whose financial
sophistication renders the protection of the Securities Act's
registration process unnecessary.\6\
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\1\ 17 CFR 230.500 through 230.508.
\2\ Approximately $400 billion was raised in Regulation D
offerings (excluding pooled funds) between July 1, 2024 and June 30,
2025. See Staff Report from Office of the Advocate for Small
Business Capital Formation (``OASB'') Fiscal Year 2025 OASB Annual
Report (Jan. 8, 2026) at 14, available at <a href="https://www.sec.gov/files/2025-oasb-staff-report.pdf">https://www.sec.gov/files/2025-oasb-staff-report.pdf</a>.
\3\ Rule 504 provides an exemption from registration under the
Securities Act for the offer and sale of up to $10 million of
securities in a 12-month period from an unlimited number of
investors (without regard to whether those investors are
accredited).
\4\ Rule 506(b) is a safe harbor under section 4(a)(2) of the
Securities Act that permits issuers to raise any amount from an
unlimited number of accredited investors but limits the number of
non-accredited investors to 35 in any 90-calendar-day period. The
rule does not permit general solicitation and, where non-accredited
investors purchase in the Rule 506(b) offering, the information
requirements in 17 CFR 230.502(b) must be met. See 17 CFR
230.506(b)(1); 17 CFR 230.506(b)(2)(i); 17 CFR 230.502(b).
\5\ Rule 506(c) provides an exemption from registration under
the Securities Act, and permits issuers to raise any amount from an
unlimited number of accredited investors. The exemption permits
general solicitation, but issuers may not make any sales to non-
accredited investors under Rule 506(c), and the issuer must take
reasonable steps to verify that all purchasers are accredited. See
also Jumpstart Our Business Startups Act of 2012, Public Law 112-
106, sec. 201(a), 126 Stat. 306 (2012) (directing the Commission to
revise its rules ``to provide that the prohibition against general
solicitation or general advertising contained in section 230.502(c)
of such title [17] shall not apply to offers and sales of securities
made pursuant to section 230.506, provided that all purchasers of
the securities are accredited investors . . . . Section 230.506 of
title 17, Code of Federal Regulations, as revised pursuant to this
section, shall continue to be treated as a regulation issued under
section 4(2) of the Securities Act of 1933 (15 U.S.C. 77d(2))'').
\6\ See Accredited Investor Definition, Release No. 33-10824
(Aug. 26, 2020) [85 FR 64234, n.7 and accompanying text (Oct. 9,
2020)] (``Accredited Investor Adopting Release''); Regulation D
Revisions; Exemption for Certain Employee Benefit Plans, Release No.
33-6683 (Jan. 16, 1987) [52 FR 3015 (Jan. 30, 1987)]. See also SEC
v. Ralston Purina Co., 346 U.S. 119, 125 (1953) (taking the position
that the availability of the section 4(a)(2) exemption ``should turn
on whether the particular class of persons affected needs the
protection of the [Securities] Act. An offering to those who are
shown to be able to fend for themselves is a transaction `not
involving any public offering' '').
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The definition of ``accredited investor'' is a cornerstone of
Regulation D and also plays an important role in other Federal
securities law contexts.\7\ Qualifying for accredited investor status
is significant because accredited investors may, under Commission
rules, participate in investment opportunities that are generally not
available to non-accredited investors, such as investments in private
companies and offerings by private funds.
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\7\ For example, each of 17 CFR 230.251 through 230.263
(``Regulation A'') and 17 CFR 227.100 through 227.504 (``Regulation
Crowdfunding'') contains limitations on the amount an investor may
invest if such investor is not an accredited investor. See 17 CFR
230.251(d)(2)(i)(C) and 17 CFR 227.100(a)(2).
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Accredited investors are natural persons and entities that come
within, or that the issuer reasonably believes come within, any of the
enumerated categories contained in Rule 501(a). Natural persons may
qualify as accredited investors if they are:
<bullet> Any director, executive officer, or general partner of the
issuer of the securities being offered or sold or of a general partner
of that issuer, pursuant to 17 CFR 230.501(a)(4);
<bullet> Individuals who have a net worth exceeding $1,000,000
(excluding the value of the individual's primary residence and any
indebtedness secured by such residence up to the estimated value of the
residence), either alone or with their spouse or spousal equivalent,
pursuant to 17 CFR 230.501(a)(5);
<bullet> Individuals who had an income in excess of $200,000 in
each of the two most recent years, or joint income with the
individual's spouse or spousal equivalent in excess of $300,000 in each
of those years, and have a reasonable expectation of reaching the same
income level in the current year, pursuant to 17 CFR 230.501(a)(6);
<bullet> Individuals who are holders in good standing of one or
more professional certifications or designations or credentials from an
accredited educational institution that the Commission has designated
as qualifying an individual for accredited investor status, pursuant to
17 CFR 230.501(a)(10) (``Rule 501(a)(10)'');
<bullet> Individuals who are ``knowledgeable employees,'' \8\ under
the Investment Company Act of 1940 (the ``Investment Company Act''),\9\
of the private-fund issuer of the securities being offered or sold,
pursuant to 17 CFR 230.501(a)(11); or
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\8\ 17 CFR 270.3c-5(a)(4).
\9\ 15 U.S.C. 80a-1 et seq.
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<bullet> Individuals who are ``family clients'' of a ``family
office'' \10\ under the Investment Advisers Act of 1940 (the ``Advisers
Act'') \11\ and whose prospective investment in the issuer is directed
by such family office in accordance with 17 CFR 230.501(a)(12)(iii),
pursuant to 17 CFR 230.501(a)(13) (``Rule 501(a)(13)'').
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\10\ 17 CFR 275.202(a)(11)(G)-1 (defining ``family office'').
\11\ 15 U.S.C. 80b-1 et seq.
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Various institutions may qualify as accredited investors based on
their status alone or on a combination of their status and the amount
of their total assets or investments. Institutions that qualify
include:
<bullet> Banks, savings and loan associations; brokers or dealers
registered pursuant to section 15 of the Securities Exchange Act of
1934; \12\ certain investment advisers; insurance companies; investment
companies registered under the Investment Company Act or business
development companies as defined in section 2(a)(48) of the Investment
Company Act; \13\ and certain specialized investment companies; \14\
plans established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its
[[Page 63370]]
employees, if such plan has total assets in excess of $5 million;
employee benefit plans (within the meaning of the Employee Retirement
Income Security Act of 1974 \15\) if a bank, savings and loan
association, insurance company, or registered investment adviser makes
the investment decisions, or if the plan has total assets in excess of
$5 million, or, if a self-directed plan, with investment decisions made
solely by persons who are accredited investors, pursuant to 17 CFR
230.501(a)(1) (``Rule 501(a)(1)'');
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\12\ 15 U.S.C. 78o.
\13\ 15 U.S.C. 80a-2(a)(48).
\14\ This includes small business investment companies licensed
under section 301(c) or (d) of the Small Business Investment Act of
1958 [15 U.S.C. 661 et seq.], and any rural business investment
company as defined in section 384A of the Consolidated Farm and
Rural Development Act [7 U.S.C. 1921].
\15\ 29 U.S.C. 1001 et seq.
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<bullet> Any private business development company as defined in
section 202(a)(22) of the Advisers Act,\16\ pursuant to 17 CFR
230.501(a)(2) (``Rule 501(a)(2)'');
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\16\ 15 U.S.C. 80b-2(a)(22).
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<bullet> Charitable organizations, corporations, business trusts,
partnerships, or limited liability companies not formed for the
specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000, pursuant to 17 CFR 230.501(a)(3) (``Rule
501(a)(3)''); \17\
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\17\ A charitable organization is as described in section
501(c)(3) of the Internal Revenue Code [26 U.S.C. 501(c)(3)].
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<bullet> Trusts with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as described in 17
CFR 230.506(b)(2)(ii), pursuant to 17 CFR 230.501(a)(7) (``Rule
501(a)(7)'');
<bullet> Entities in which all of the equity owners are accredited
investors, pursuant to 17 CFR 230.501(a)(8) (``Rule 501(a)(8)'');
<bullet> Any entity, of a type not listed in Rules 501(a)(1), (2),
(3), (7), or (8), not formed for the specific purpose of acquiring the
securities offered, owning investments in excess of $5,000,000,
pursuant to 17 CFR 230.501(a)(9);
<bullet> ``Family offices'' meeting certain requirements, pursuant
to 17 CFR 230.501(a)(12) (``Rule 501(a)(12)''); \18\ and
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\18\ The family office must have assets under management in
excess of $5,000,000; not been formed for the specific purpose of
acquiring the securities offered; and its prospective investments
directed by a person who has such knowledge and experience in
financial and business matters that such family office is capable of
evaluating the merits and risks of the prospective investment. See
17 CFR 230.501(a)(12)(i) through 230.501(a)(12)(iii).
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<bullet> Entities that are ``family clients'' of a ``family
office'' that meets the requirements of Rule 501(a)(12), pursuant to
Rule 501(a)(13).
B. Background on Rule 501(a)(10) and Overview of Potential Designation
Rule 501(a)(10) confers accredited investor status on any natural
person holding in good standing one or more professional certifications
or designations or credentials from an accredited educational
institution that the Commission has designated as qualifying an
individual for accredited investor status.\19\ In adopting Rule
501(a)(10), the Commission stated that certain ``professional
credentials and experience should enable [investors that hold such
credentials] to assess investment opportunities, appropriately allocate
capital based on their individual circumstances, including whether to
reallocate investment capital between private investments and other
equivalent-sized investments, and otherwise make appropriately informed
decisions regarding their financial interests, including their ability
to bear the financial risk.'' \20\
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\19\ Rule 501(a)(10) does not expressly define what constitutes
good standing. In connection with the adoption of Rule 501(a)(10),
the Commission stated that in addition to passing the relevant exam,
``maintaining an active certification, designation, or license is
sufficient to demonstrate the individual's financial sophistication
to invest in exempt offerings . . . . [and] that an inactive
certification, designation, or license, particularly when the
certification or designation has been inactive for an extended
period of time, could lessen the validity of the certification or
designation as a measure of financial sophistication.'' Accredited
Investor Adopting Release at 64242. See infra section II.B.1.
\20\ Id. at 64241.
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Rule 501(a)(10) contains the following non-exclusive list of
attributes that the Commission will consider in determining whether to
designate a professional certification or designation or credential
from an accredited educational institution as qualifying for accredited
investor status:
<bullet> The certification, designation, or credential arises out
of an examination or series of examinations administered by a self-
regulatory organization or other industry body or is issued by an
accredited educational institution, under 17 CFR 230.501(a)(10)(i)
(``Rule 501(a)(10)(i)'');
<bullet> The examination or series of examinations is designed to
reliably and validly demonstrate an individual's comprehension and
sophistication in the areas of securities and investing, under 17 CFR
230.501(a)(10)(ii) (``Rule 501(a)(10)(ii)'');
<bullet> Persons obtaining such certification, designation, or
credential can reasonably be expected to have sufficient knowledge and
experience in financial and business matters to evaluate the merits and
risks of a prospective investment, under 17 CFR 230.501(a)(10)(iii)
(``Rule 501(a)(10)(iii)''); and
<bullet> An indication that an individual holds the certification
or designation is either made publicly available by the relevant self-
regulatory organization or other industry body or is otherwise
independently verifiable, under 17 CFR 230.501(a)(10)(iv) (``Rule
501(a)(10)(iv)'').\21\
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\21\ Additionally, Note 1 to paragraph 501(a)(10) specifies that
the Commission will designate professional certifications or
designations or credentials as qualifying such holders as accredited
investors by order, after notice and an opportunity for public
comment.
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In proposing Rule 501(a)(10), the Commission noted prior
recommendations to designate CPA licenses as qualifying natural persons
for accredited investor status, but did not include them in the
proposed list of certifications or designations to be included in an
initial Commission order accompanying the final rule, if adopted.\22\
In response to the omission, some commenters to the Accredited Investor
Proposing Release suggested including CPA licenses in the initial list
of professional certifications, designations, and credentials.\23\ One
of these commenters stated that the CPA exam process is ``rigorous''
and requires ``extensive'' education.\24\ Other commenters opposed
including CPAs as accredited investors.\25\ One of these commenters
expressed concerns that the ``[CPA license] is not focused on
investing,'' \26\ and another commenter stated that the CPA license by
itself ``[does not] reliably and validly demonstrate an individual's
comprehension and sophistication in the areas of securities and
investing.'' \27\
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\22\ See Amending the ``Accredited Investor'' Definition,
Release No. 33-10734 (Dec. 18, 2019) [85 FR 2574, 2579-2581 (Jan.
15, 2020)] (the ``Accredited Investor Proposing Release'').
\23\ See, e.g., letter from American Association of Private
Lenders (May 27, 2020); letter from Seyed Arab (Dec. 18, 2019) (``S.
Arab''); from Artivest Holdings, Inc. (Apr. 22, 2020); letter from
David Burton (May 1, 2020) (``D. Burton''); letter from Carta, Inc.
(Mar. 16, 2020); letters from CityVest (Jan. 6, 2020 and Jan. 7,
2020); letter from Geraci LLP (Mar. 9, 2020); letter from Matt
Langford (Dec. 18, 2019). The comment letters to the Accredited
Investor Proposing Release are available at <a href="https://www.sec.gov/comments/s7-25-19/s72519.htm">https://www.sec.gov/comments/s7-25-19/s72519.htm</a>.
\24\ See letter from S. Arab.
\25\ See, e.g., letter from the Maryland State Bar Association
(Mar. 16, 2020) (stating ``[w]e do not believe that even the most
thorough understanding of accounting and auditing standards provides
the individual who possesses such knowledge with any degree of
financial sophistication in the sense of being able to make
knowledgeable investment decisions''); letter from Consumer
Federation of America (Mar. 9, 2020) (``Consumer Federation'');
letter from the North American Securities Administrators Association
(Mar. 16, 2020) (``NASAA''); letter from G. Philip Rutledge (Jan.
31, 2020).
\26\ See letter from NASAA.
\27\ See letter from Consumer Federation.
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Consistent with the proposal, at the time of adoption of Rule
501(a)(10), the Commission issued an order designating
[[Page 63371]]
the General Securities Representative license (Series 7), Private
Securities Offerings Representative license (Series 82), and Investment
Adviser Representative license (Series 65) as qualifying a holder of
such licenses in good standing for accredited investor status.\28\ In
the Accredited Investor Adopting Release, the Commission expressly
noted that ``[a]lthough other professional certifications,
designations, and credentials, such as other FINRA exams, a specific
accredited investor exam, other educational credentials, or
professional experience received broad commenter support, we are taking
a measured approach to the expansion of the definition . . . . [and] we
believe it is appropriate to consider these other credentials after
first gaining experience with the revised rules.'' \29\
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\28\ The exams for the General Securities Representative license
(Series 7) and the Private Securities Offerings Representative
license (Series 82) are developed and administered by the Financial
Industry Regulatory Authority (``FINRA''), and the exam for the
Investment Adviser Representative license (Series 65) was developed
by NASAA and is administered by FINRA. See Order Designating Certain
Professional Licenses as Qualifying Natural Persons for Accredited
Investor Status, Release No. 33-10823 (Aug. 26, 2020) [85 FR 64234
(Oct. 9, 2020)].
\29\ Accredited Investor Adopting Release at 64243.
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The Commission has now had over five years of experience with the
initially designated professional licenses. There is no evidence that
we are aware of to suggest that the expansion in 2020 of the accredited
investor definition to include these types of financially sophisticated
investors has created investor protection concerns. Since the adoption
of Rule 501(a)(10) and the initial designations, the Commission has
received recommendations to further expand the number of investors that
qualify as accredited investors under Rule 501(a)(10).\30\ The
arguments in some of these recommendations echo the arguments contained
in letters from commenters in connection with the adoption of Rule
501(a)(10), which stated that the definition limits access to private
investments primarily to those who are wealthy,\31\ have close ties to
the issuer,\32\ or have certain jobs in the financial industry.\33\ The
Commission has also received petitions for rulemaking requesting
changes to the accredited investor definition.\34\
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\30\ See, e.g., Report on the 45th Annual Small Business Forum
(July 27, 2026) at 17, available at <a href="https://www.sec.gov/files/2026-oasb-annual-forum-report.pdf">https://www.sec.gov/files/2026-oasb-annual-forum-report.pdf</a> (recommending that the Commission
``expand the accredited investor definition to include additional
measures of sophistication, including through an investor test and
experience''); Report on the 44th Annual Small Business Forum (Sept.
22, 2025) at 18, available at <a href="https://www.sec.gov/files/2025-oasb-annual-forum-report.pdf">https://www.sec.gov/files/2025-oasb-annual-forum-report.pdf</a> (recommending that the Commission ``[e]xpand
the accredited investor definition to include additional measures of
sophistication''); SEC Small Business Capital Formation Advisory
Committee Recommendation regarding the Accredited Investor
Definition (May 1, 2024), available at <a href="https://www.sec.gov/files/recs-accredited-investor-definition.pdf">https://www.sec.gov/files/recs-accredited-investor-definition.pdf</a> (recommending in part that
persons not meeting the definition be able to undertake an
educational program, which would allow them to invest a percent of
their assets); OASB, Annual Report for Fiscal Year 2023 at 75,
available at <a href="https://www.sec.gov/files/2023-oasb-annual-report.pdf">https://www.sec.gov/files/2023-oasb-annual-report.pdf</a>
(recommending expansion of the accredited investor definition to add
qualitative professional criteria and alternative ways to
demonstrate financial sophistication). See also SEC Investor
Advisory Committee Recommendation regarding Retail Investor Access
to Private Market Assets (Sept. 18, 2025), available at <a href="https://www.sec.gov/files/iac-recommendation-private-market-assets-final-09182025.pdf">https://www.sec.gov/files/iac-recommendation-private-market-assets-final-09182025.pdf</a> (not taking a position on whether the accredited
investor definition should be expanded, but recommending that, if
the definition were to be expanded, the Commission consider
expanding the accredited investor definition to cover additional
professional certifications or designations or credentials,
including a CPA license).
\31\ See, e.g., letter from D. Burton (stating that ``people
outside of the financial industry should have a means to prove that
they have the knowledge and sophistication to qualify as [accredited
investors] . . . . [o]therwise, the Commission will effectively
creat[e] barriers where only affluent people or those it regulates
in the financial industry have access to these investments.'');
letter from Tron Black (Nov. 20, 2019, last updated Dec. 24, 2019).
\32\ See, e.g., letter from Bruce A. Wallick (Dec. 19, 2019)
(stating that the ``[accredited investor definition] should include
an opportunity for self-taught investors to demonstrate their
financial sophistication and achieve accredited status.''); letter
from D. Burton.
\33\ See, e.g., letter from Crowdwise, LLC (Mar. 1, 2020)
(stating that it is crucial for the Commission to ``consider how
self-taught, sophisticated investors who do not have any other
financial credentials (nor the ability to get them) or finance
industry experience can still have access to the same investment
opportunities that are available to accredited investors today.'');
letter from D. Burton (stating that expansion of the accredited
investor definition ``will help investors that would typically
otherwise be barred from investing in Regulation D offerings (most
often younger investors or those that live outside of high-income
metropolitan areas).'').
\34\ See Benjamin Bartel, Petition for Rulemaking to Amend the
Accredited Investor Definition in Rule 501(a) of SEC Regulation D
(Sept. 25, 2025), available at <a href="https://www.sec.gov/files/rules/petitions/2025/petn4-871.pdf">https://www.sec.gov/files/rules/petitions/2025/petn4-871.pdf</a>; Fabricio R. Murillo Garcia, Petition
for Modification of Definition of Accredited Investors (Feb. 13,
2024), available at <a href="https://www.sec.gov/files/rules/petitions/2024/petn4-823.pdf">https://www.sec.gov/files/rules/petitions/2024/petn4-823.pdf</a>; Nicholas Morgan, Investor Choice Advocates Network,
Rulemaking petition to reduce the diversity, equity, and inclusion
(``DEI'') barriers for ``accredited investors'' by replacing the net
worth and income requirements of Rule 501(a) under the Securities
Act of 1933 with non-financial metrics (Nov. 9, 2022), available at
<a href="https://www.sec.gov/files/rules/petitions/2022/petn4-796.pdf">https://www.sec.gov/files/rules/petitions/2022/petn4-796.pdf</a>; Benny
R. Brown, Request to change the rules which qualifies an individual
or individuals as an accredited investor (Apr. 26, 2021), available
at <a href="https://www.sec.gov/files/rules/petitions/2021/petn4-773.pdf">https://www.sec.gov/files/rules/petitions/2021/petn4-773.pdf</a>. The
Commission has considered these petitions in connection with this
notice and the other notices published elsewhere in this issue of
the Federal Register. See infra note 35.
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For the reasons set forth in section II, we believe that holding a
CPA license in good standing would satisfy the standard in Rule
501(a)(10).\35\ Accordingly, as required by Rule 501(a)(10), we are
providing notice and an opportunity for public comment on potential
designation of holding a CPA license in good standing as qualifying
natural persons for accredited investor status.\36\
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\35\ We are also concurrently providing notice pursuant to Note
1 to paragraph 501(a)(10) with respect to the potential designation
of each of the following as qualifying natural persons for
accredited investor status: the passage of an accredited investor
exam to be developed by FINRA; holding a charter as a Chartered
Financial Analyst in good standing; holding a certification as a
Certified Financial Planner in the United States in good standing;
and the Investment Banking Representative license (Series 79) and
the Research Analyst license (Series 86 and Series 87). See
Potential Designation of Passage of an Accredited Investor Exam to
be Developed by FINRA as Qualifying Natural Persons for Accredited
Investor Status; Potential Designation of Chartered Financial
Analyst Designation as Qualifying Natural Persons for Accredited
Investor Status; Potential Designation of Certified Financial
Planner Certification as Qualifying Natural Persons for Accredited
Investor Status; Potential Designations of the Investment Banking
Representative License (Series 79) and the Research Analyst License
(Series 86 and Series 87) as Qualifying Natural Persons for
Accredited Investor Status published elsewhere in this issue of the
Federal Register.
\36\ As is the case for the other prongs of the accredited
investor definition, individuals holding CPA licenses in good
standing would only themselves qualify as accredited investors and
could not rely on their status as accredited investors to purchase
securities on behalf of another person.
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II. Discussion
A. CPA Licensure Requirements
1. Background
We believe designating holding a CPA license in good standing as
qualifying natural persons for accredited investor status would be
consistent with the standard in Rule 501(a)(10) because such status
meets the non-exclusive attributes the Commission identified in Rule
501(a)(10) as relevant to its consideration of adding additional
professional certifications or designations or credentials.
A CPA license is issued by one of 55 U.S. jurisdictions (each of
the fifty states plus the District of Columbia, the Northern Mariana
Islands, Guam, Puerto Rico, and the U.S. Virgin Islands).\37\ In order
to obtain a CPA license, an individual must meet the educational and
experience requirements as well as pass the Uniform CPA Examination
(the ``Exam'') and meet the licensure requirements specific to the
jurisdiction in which she would like to be
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licensed.\38\ The American Institute of Certified Public Accountants
(the ``AICPA'') is responsible for developing and scoring the Exam.
NASBA--a member organization composed of the accounting boards of each
jurisdiction that issues a CPA license--serves as a central
clearinghouse for information related to persons who take the Exam.\39\
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\37\ See National Association of State Boards of Accountancy
(``NASBA''), CPA Exam Candidate Guide (``Candidate Guide'') at 6,
available at <a href="https://nasba.org/wp-content/uploads/2026/09/CPA-Exam-Candidate-Guide-09212026.pdf">https://nasba.org/wp-content/uploads/2026/09/CPA-Exam-Candidate-Guide-09212026.pdf</a> (last retrieved Sept. 24, 2026).
\38\ The education requirements to sit for the Exam are
different for every state. For example, some states require 150
total semester hours to qualify; while some may require less. See
NASBA, How to Get Licensed (``NASBA Licensing''), available at
<a href="https://nasba.org/licensure/gettingacpalicense/howtogetlicensed/">https://nasba.org/licensure/gettingacpalicense/howtogetlicensed/</a>
(last retrieved Sept. 24, 2026). See also infra note 42.
\39\ See Candidate Guide at 7.
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As of August 27, 2026, NASBA estimates there are over 650,000
CPAs.\40\ Additionally, the AICPA has found that participation by
undergraduate and graduate students in accounting programs has
increased recently, which could, over time, lead to an increase in the
number of persons who hold a CPA license in good standing.\41\
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\40\ Two jurisdictions--Hawaii and New Mexico--are not included
in this estimate. See NASBA, How Many CPAs Are There, available at
<a href="https://nasba.org/licensure/howmanycpas">https://nasba.org/licensure/howmanycpas</a> (estimating the number of
actively licensed CPAs based on the aggregate of data from the
Accountancy Licensee Database) (last retrieved Sept. 24, 2026).
\41\ Postsecondary enrollment consists of enrollments at 4-year
colleges and universities, community colleges, hybrid institutions
that primarily offer associate's degrees, and graduate schools. See
AICPA, U.S. Accounting Undergraduate Enrollment Rises for Third
Straight Year (Jan. 20, 2026) available at <a href="https://www.aicpa-cima.com/news/article/u-s-accounting-undergraduate-enrollment-rises-for-third-straight-year">https://www.aicpa-cima.com/news/article/u-s-accounting-undergraduate-enrollment-rises-for-third-straight-year</a> (last retrieved Sept. 24, 2026).
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2. Educational and Supervised Experience Requirements
Prior to applying for CPA licensure, a person must confirm with the
jurisdiction where she intends to seek licensure that she meets the
requirements of such jurisdiction.\42\ Jurisdictions typically have an
educational component, such as an accounting degree, and a supervised
experience component, such as having been employed in the accounting
industry, that the applicant must meet before being eligible to sit for
the Exam. Generally, each jurisdiction requires at least one of the
following pathways:
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\42\ See NASBA Licensing. NASBA and the AICPA have mutual
recognition agreements with the following professional organizations
outside of the U.S.: CPA Australia, Chartered Accountants Australia
and New Zealand, CPA Canada, Chartered Accountants Ireland, CPA
Ireland, Instituto Mexicano de Contadores Publicos, and South
African Institute of Chartered Accountants. These agreements set the
qualification requirements for International Qualification Exam
(``IQEX''), which is an exam designed to facilitate the CPA
qualification process for accounting professionals from those
jurisdictions. The IQEX specifically uses a section of the Exam that
tests knowledge related to ethics, professional and legal
responsibilities, business law, and taxation in U.S. accounting
practice; however, passage does not grant individuals who pass the
IQEX a CPA license. Accordingly, passing the IQEX alone would not
qualify a person as an accredited investor. See NASBA, International
Qualification Examination (IQEX), available at <a href="https://nasba.org/exams/iqex/">https://nasba.org/exams/iqex/</a> (last retrieved Sept. 24, 2026). See also NASBA, IQEX
Candidate Guide (``IQEX Candidate Guide'') at 2 (stating that
``[t]he IQEX currently uses an administration of the Uniform CPA
Examination's Regulation (REG) section''), available at <a href="https://nasba.org/wp-content/uploads/2026/09/IQEX-Guide_New-Design-09212026.pdf">https://nasba.org/wp-content/uploads/2026/09/IQEX-Guide_New-Design-09212026.pdf</a> (last retrieved Sept. 24, 2026). However, NASBA
recognizes the requirements of the jurisdictions that are party to
these mutual recognition agreements as substantially equivalent to
the education, examination, and experience requirements of CPAs
through the passage of the Exam and satisfaction of the requirements
of their jurisdiction of licensure. Therefore, if an individual that
passes the IQEX becomes licensed as a CPA and holds such license in
good standing, such persons would qualify as an accredited investor.
See NASBA, Candidates & Professionals, available at <a href="https://nasba.org/international/candidates-professionals/">https://nasba.org/international/candidates-professionals/</a> (last retrieved
Sept. 24, 2026); IQEX Candidate Guide at 5.
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<bullet> a baccalaureate degree with an accounting
concentration,\43\ 30 additional educational credit hours, and one year
of supervised experience;
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\43\ A concentration typically means getting a specific number
of credits in accounting and related business subjects. The specific
credit hour requirements vary by state, but they are often between
24-30 hours of accounting and 24 hours of business subjects. See
AICPA and CIMA, Education Pathways: Frequently Asked Questions,
available at <a href="https://www.thiswaytocpa.com/education/articles/choosing-well/faq-new-pathway-become-cpa/">https://www.thiswaytocpa.com/education/articles/choosing-well/faq-new-pathway-become-cpa/</a> (last retrieved Sept. 24,
2026).
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<bullet> a post-baccalaureate degree with an accounting
concentration, and one year of supervised experience; or
<bullet> a baccalaureate degree with an accounting concentration,
and two years of supervised experience.
The first two pathways are currently available in each
jurisdiction, and the third pathway is being implemented in a number of
jurisdictions.\44\ The specific educational and supervised experience
requirements for the issuance of a CPA license are set by each
individual jurisdiction.
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\44\ The third pathway was created in 2025 through NASBA and
AICPA's adoption of new model rules governing the licensure of CPAs.
See NASBA, AICPA and NASBA Approve Model Legislation for New CPA
Licensure Path (May 14, 2025) available at <a href="https://nasba.org/wp-content/uploads/2025/05/AICPA-and-NASBA-Approve-Model-Legislation-for-New-CPA-Licensure-Path_Final-14May25.pdf">https://nasba.org/wp-content/uploads/2025/05/AICPA-and-NASBA-Approve-Model-Legislation-for-New-CPA-Licensure-Path_Final-14May25.pdf</a> (last retrieved Sept.
24, 2026). As of July 21, 2026, NASBA reports that a majority of
jurisdictions have adopted additional licensure pathways with
effectiveness dates ranging from 2025 through 2027. See NASBA, New
Licensures Pathways Legislation, available at <a href="https://nasba.org/pathways/">https://nasba.org/pathways/</a>, under ``Click Here.'' (last retrieved Sept. 24, 2026).
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CPA candidates must also comply with any other requirements
specific to the jurisdiction in which they will be licensed.\45\ While
education and supervised experience requirements have changed over time
in certain jurisdictions (for example, in the past, certain licensees
were not required to complete the same amount of educational and
supervised experience currently required), such persons would have been
subject to ongoing education requirements in order to maintain an
active CPA license, which are discussed in section II.A.4.
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\45\ For example, certain jurisdictions require a stand-alone
ethics exam prior to licensure, which may be the AICPA's ethics exam
or a jurisdiction-specific ethics exam. Most jurisdictions require
proof of residency or U.S. citizenship to take the Exam, but some do
not require either. Two jurisdictions require that the person be 21
years of age to take the Exam and receive a CPA license. See Becker,
CPA Exam Requirements, available at <a href="https://www.becker.com/cpa-review/requirements">https://www.becker.com/cpa-review/requirements</a> (last retrieved Sept. 24, 2026). California, for
example, requires a criminal background check prior to licensure,
while Wyoming requires self-reporting of certain events, such as a
conviction from a felony or other crime where an element of the
crime was dishonesty or fraud. See also California Board of
Accountancy, Initial Licensing FAQs, available at <a href="https://www.dca.ca.gov/cba/applicants/initial-license-faqs.shtml">https://www.dca.ca.gov/cba/applicants/initial-license-faqs.shtml</a> (last
retrieved Sept. 24, 2026); Wyoming Board of Certified Public
Accountants, Original Certificate Application, available at <a href="https://cpaboard.wyo.gov/individuals/certificate-application-information/original-certificate">https://cpaboard.wyo.gov/individuals/certificate-application-information/original-certificate</a> (last retrieved Sept. 24, 2026).
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3. Exam
i. Contents
The Exam is designed to assess the knowledge and skills that the
AICPA has determined that all CPAs need in their role to protect the
public interest.\46\ The Exam tests accounting related knowledge and
skills through:
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\46\ AICPA, Uniform CPA Examination[supreg] Blueprints (Aug. 18,
2025) (``Blueprints 2026'') at 2, available at <a href="https://www.aicpa-cima.com/resources/article/learn-what-is-tested-on-the-cpa-exam">https://www.aicpa-cima.com/resources/article/learn-what-is-tested-on-the-cpa-exam</a>
(last retrieved Sept. 24, 2026). NASBA and the AICPA collaborated on
a significant overhaul of the Exam that went into effect in 2024
that involved the replacement of the Business Environment and
Concepts section with subject matter expertise specific sections and
a greater emphasis on technology. See AICPA, Trust in the CPA Exam
(Feb. 13, 2025), available at <a href="https://www.aicpa-cima.com/professional-insights/article/trust-in-the-cpa-exam">https://www.aicpa-cima.com/professional-insights/article/trust-in-the-cpa-exam</a> (last retrieved
Sept. 24, 2026).
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<bullet> Three four-hour sections that cover: Auditing and
Attestation (the ``AUD''); \47\ Financial Accounting and
[[Page 63373]]
Reporting (the ``FAR''); \48\ and Taxation and Regulation (the
``REG'').\49\
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\47\ The AUD section tests knowledge and skills that CPAs must
demonstrate when performing audit, attestation, and accounting and
review service engagements. It specifically focuses on a CPA's role
in planning, risk assessment, performing procedures, obtaining
evidence, and reporting for those types of engagements. See
Blueprints 2026 at 6.
\48\ The FAR section tests knowledge and skills that CPAs must
demonstrate in the financial accounting and reporting frameworks
used by for-profit (public and non-public) and not-for-profit
entities. It specifically focuses on a CPA's role in the preparation
and review of financial statements, account balances, and
transactions to ensure compliance with applicable frameworks. See
Blueprints 2026 at 30.
\49\ The REG section tests knowledge and skills that CPAs must
demonstrate with respect to the U.S. ethics and professional
responsibilities of tax practice, U.S. business law, and certain
U.S. Federal tax compliance concepts. See Blueprints 2026 at 48.
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<bullet> One four-hour section selected by the CPA candidate from
one of three topics (each a ``Discipline''): Business Analysis and
Reporting (the ``BAR''); \50\ Information Systems and Controls (the
``ISC''); \51\ or Tax Compliance and Planning (the ``TCP'').\52\
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\50\ The BAR section tests knowledge and skills related to
higher-order concepts in lease accounting and revenue recognition.
See Blueprints 2026 at 65. Specifically, the BAR section tests
``financial statement and financial information analysis with a
focus on a[ ]CPA's role in comparing historical results to budgets
and forecasts, deriving the impact of transactions, events (actual
and proposed) and market conditions on financial and non-financial
performance measures and comparing investment alternatives[;]
[s]elect technical accounting and reporting requirements under the
Financial Accounting Standards Board (FASB) Accounting Standards
Codification and the [Commission] that are applicable to for-profit
business entities and employee benefit plans[; and] [f]inancial
accounting and reporting requirements under the Governmental
Accounting Standards Board (GASB) that are applicable to state and
local government entities.'' Id.
\51\ The ISC section tests knowledge and skills that CPAs must
demonstrate with respect to information systems, including
processing integrity, availability, security, confidentiality, and
privacy. See Blueprints 2026 at 83.
\52\ The TCP section tests knowledge and skills that CPAs must
demonstrate for individuals and entities with a focus on nonroutine
and higher complexity transactions, U.S. Federal tax planning for
individuals and entities, and personal financial planning. See
Blueprints 2026 at 99. See also NASBA, What is the Uniform CPA
Examination?, available at <a href="https://nasba.org/exams/becomingacpa/whatistheuniformcpaexam/">https://nasba.org/exams/becomingacpa/whatistheuniformcpaexam/</a> (last retrieved Sept. 24, 2026).
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The Exam is designed to cover content areas, specific to each
section, and skill areas of ``Remembering & Understanding,''
``Application,'' ``Analysis,'' and ``Evaluation,'' which are assigned
different weights for purposes of scoring each section.\53\ In addition
to the AICPA's regular review of the contents of the Exam, the Exam is
also regularly updated to reflect changes in accounting and auditing
pronouncements, and applicable laws and rules.\54\
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\53\ See Blueprints 2026 at 3-4. Evaluation is only weighted for
the AUD section.
\54\ Generally, the earliest that a change will be eligible for
inclusion in the Exam is six months after the effective or enactment
date of the change. See AICPA, CPA Exam Policy on New
Pronouncements, available at <a href="https://www.aicpa-cima.com/resources/article/learn-what-is-tested-on-the-cpa-exam">https://www.aicpa-cima.com/resources/article/learn-what-is-tested-on-the-cpa-exam</a> (last retrieved Sept.
24, 2026.
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ii. Administration of the Exam
Depending on the jurisdiction of licensure, the CPA candidate
either applies to take the Exam through NASBA or directly through the
relevant board of accountancy. However, the administration of the
actual exam is handled by a third party.\55\ The fees associated with
the Exam vary based on the jurisdiction of licensure.\56\
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\55\ See Candidate Guide at 6-8.
\56\ In order to register for the Exam, CPA candidates must be
eligible for licensure in their selected jurisdiction, which
requires the payment of application fees and Exam fees, which in the
aggregate are currently estimated to be on average approximately
$1,400. There are separate fees to obtain a CPA license after
passing the Exam. See Becker, The Cost of the CPA Exam Cost and
Other CPA Licensure Fees (Sept. 2, 2026), available at <a href="https://www.becker.com/blog/cpa/the-real-cost-of-the-cpa-exam">https://www.becker.com/blog/cpa/the-real-cost-of-the-cpa-exam</a> (last
retrieved Sept. 24, 2026). In addition, to the extent the Exam needs
to be rescheduled, whether a rescheduling fee is assessed depends
upon how close to the scheduled Exam date the rescheduling request
is made, but the maximum fee is approximately $100. See Candidate
Guide at 34. There are also fees if CPA candidates request that
their scores be reviewed ($240) or appeal their scores (a fee of
$550, plus $100 for each item appealed). NASBA, Score Information,
available at <a href="https://nasba.org/exams/cpaexam/scores/">https://nasba.org/exams/cpaexam/scores/</a> (last retrieved
Sept. 24, 2026).
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4. Continuing Education
In order to maintain an active CPA license, a person must complete
Continuing Professional Education (``CPE'') hours.\57\ The jurisdiction
that issued the CPA license determines what CPEs are required.\58\
However, NASBA and AICPA jointly set certain standards as to what types
of activities should qualify for CPEs.\59\
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\57\ See National Registry of CPE Sponsors, The Standards for
Continuing Professional Education (CPE) Programs, available at
<a href="https://www.nasbaregistry.org/the-standards">https://www.nasbaregistry.org/the-standards</a> (stating that
``[c]ontinuing professional education is required for CPAs to
maintain their professional competence and provide quality
professional services'') (last retrieved Sept. 24, 2026). See also
infra notes 65-66 (discussing that the Commission believes that
requirement of an active CPA license constitutes an appropriate
measure of good standing for the purposes of Rule 501(a)(10)).
\58\ Enforcing compliance with licensure requirements, including
continuing education requirements, is the responsibility of the
jurisdiction(s) where a CPA is licensed. For example, the California
Code of Regulations provides that failure to comply with continuing
education rules constitutes cause for disciplinary action. See Cal.
Code Regs. Tit. 16, Sec. 94.
\59\ These standards are reviewed on a two-year cycle and the
most recent changes went into effect on Aug. 1, 2026.
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5. Public Verification
NASBA maintains <a href="http://CPAVerify.org">CPAVerify.org</a>, which it describes as the ``only
official, free, single-source national database of licensed CPAs
available to the public.'' \60\ The data is provided by member
jurisdictions of NASBA. Neither Hawaii nor New Mexico provide
information to <a href="http://CPAVerify.org">CPAVerify.org</a>; however, each of these jurisdictions
maintains a website containing information regarding CPAs that are
licensed in such jurisdiction, which is available to the public.\61\
Additionally, many jurisdictions also have a look-up tool specific to
the CPA licenses issued in such jurisdiction and the status of the
license.\62\
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\60\ NASBA, What is CPAVerify? (Nov. 13, 2023), available at
<a href="https://nasba.org/blog/2023/11/13/what-is-cpaverify/">https://nasba.org/blog/2023/11/13/what-is-cpaverify/</a> (last retrieved
Sept. 24, 2026).
\61\ Information related to CPA licenses issued by Hawaii is
available from the Professional and Vocational Licensing Division,
available at <a href="https://mypvl.dcca.hawaii.gov/public-license-search/">https://mypvl.dcca.hawaii.gov/public-license-search/</a>.
Information related to CPA licenses issued by New Mexico is
available from the New Mexico Regulation and & Licensing Department,
available at <a href="https://nmrldlpi.my.site.com/bcd/s/public-search-license-division">https://nmrldlpi.my.site.com/bcd/s/public-search-license-division</a>.
\62\ See, e.g., California Board of Accountancy, available at
<a href="https://www.dca.ca.gov/cba/consumers/license-lookup.shtml">https://www.dca.ca.gov/cba/consumers/license-lookup.shtml</a>; New York
State Education Department Office of the Professions, available at
<a href="https://www.op.nysed.gov/certified-public-accountants">https://www.op.nysed.gov/certified-public-accountants</a>; Wyoming Board
of Certified Public Accountants, available at <a href="https://online.wycpaboard.org/#/VerifyLicense">https://online.wycpaboard.org/#/VerifyLicense</a>; South Carolina Board of
Accountancy, available at <a href="https://llr.sc.gov/acct/">https://llr.sc.gov/acct/</a>.
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B. Rationale for Designation
1. Rule 501(a)(10) Generally and Rule 501(a)(10)(i)
We believe it would be appropriate to designate holding a CPA
license in good standing as qualifying an individual for accredited
investor status pursuant to Rule 501(a)(10). The addition of holding a
CPA license in good standing as a designated professional certification
would provide an additional knowledge-based means for individuals to
qualify as accredited investors while appropriately balancing investor
protection concerns.\63\
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\63\ As the Commission stated in connection with adoption of
Rule 501(a)(10) ``[w]e believe that the amendments we are adopting
in [the Accredited Investor Adopting Release] provide appropriate
investor protections while facilitating capital formation.'' See
Accredited Investor Adopting Release at 64256. See also supra note
20.
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Rule 501(a)(10) requires that any professional certifications and
designations and other credentials designated as qualifying such holder
for accredited investor status be held in good standing.\64\
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\64\ See supra note 19 and infra notes 65-66.
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The Commission's rules related to the preparation of financial
statements state we ``will not recognize any person as a certified
public accountant who is not duly registered and in good standing as
such under the laws of the place of his
[[Page 63374]]
residence or principal office.'' \65\ Accordingly, for the purposes of
good standing under Rule 501(a)(10) for the CPA license, we believe it
would be appropriate to use this standard.\66\
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\65\ See 17 CFR 210.2-01(a).
\66\ Different jurisdictions use different language to describe
the requirement described by the Commission in 17 CFR 210.2-01(a).
See, e.g., Cal. Bus. & Professions Code Sec. 5033 (`` `Certified
public accountant' means any person who has received from the board
a certificate of certified public accountant and who holds a valid
permit to practice'' (emphasis added)); N.Y. Ed. Law Sec. 7401-a
(```Certified public accountant' or `CPA' means any person who has
received a license from the [state education] department or any
other state as a certified public accountant for the practice of
public accountancy.'' (emphasis added)). We believe, whatever the
language used by the relevant jurisdictions, it is appropriate to
treat as in ``good standing'' (for purposes of Rule 501(a)(10)) any
CPAs whom the Commission would recognize under 17 CFR 210.2-01(a).
For the purposes of this notice, the phrase ``active CPA'' or a
``CPA license in good standing'' means a person that meets this
standard. CPAs that are currently denied the privilege of appearing
and practicing before the Commission for failing to ``possess the
requisite qualifications to represent others'' under 17 CFR
201.102(e)(1)(i) would not be eligible to rely on their CPA license
to qualify as accredited investors. However, CPAs that are denied
the privilege of appearing or practicing before the Commission under
17 CFR 201.102(e)(1)(ii) through (1)(iv) or suspended from appearing
or practicing before the Commission under 17 CFR 201.102(e)(2) or
(3) would still be eligible to rely on their CPA license to qualify
as accredited investors, so long as they remained ``in good
standing,'' as described above. We believe disqualifying such CPAs
from being accredited investors would be unnecessarily punitive.
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We believe that the standards set by the relevant jurisdiction of
licensure for CPA license holders to retain their license in an active
status are an appropriate measure of good standing; and accordingly,
licensees that hold inactive or suspended licenses would not be
considered in good standing. Therefore, a holder of an inactive or
suspended license would not qualify as an accredited investor under
this category.
Rule 501(a)(10)(i) additionally requires that a designated
certification, designation, or credential arise out of an examination
or series of examinations administered by a self-regulatory
organization or other industry body or be issued by an accredited
educational institution. As described in section II.A.1, the Exam,
which is a prerequisite to holding a CPA license in good standing,\67\
is designed and administered by the AICPA with assistance from NASBA,
and state boards of accountancy. Although ``other industry body'' is
not defined in Rule 501(a)(10), we believe that each of the AICPA and
NASBA are industry bodies as contemplated under Rule 501(a)(10) due to
their integral role in setting requirements for the accounting
industry.\68\
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\67\ See supra note 42 (discussing individuals who pass the
IQEX, who may be able to hold a CPA license in good standing without
taking the Exam in its entirety).
\68\ In connection with the adoption of Rule 501(a)(10), the
Commission received comments regarding what other credentials it
should consider designating as qualifying such holders as accredited
investors and its discussion of such comments primarily focused on
whether having obtained a CPA license should be included. See
Accredited Investor Adopting Release at 64239. The Commission did
not request comment on whether the AICPA or NASBA constituted an
``other industry body'' nor did any commenters question whether the
AICPA or NASBA should be considered an other industry body. See
Accredited Investor Proposing Release at 2582-2584.
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2. Rules 501(a)(10)(ii) and 501(a)(10)(iii)
Rule 501(a)(10)(ii) states that the Commission will consider
whether ``[t]he examination or series of examinations is designed to
reliably and validly demonstrate an individual's comprehension and
sophistication in the areas of securities and investing.'' Rule
501(a)(10)(iii) states the Commission will consider whether ``[p]ersons
obtaining [a] certification, designation, or credential [designated
under Rule 501(a)(10)] can reasonably be expected to have sufficient
knowledge and experience in financial and business matters to evaluate
the merits and risks of a prospective investment.'' We believe that
passage of the Exam satisfies the objectives of Rule 501(a)(10)(ii). We
further believe that passage of the Exam combined with the satisfaction
of the requirements to obtain a CPA license would satisfy the
objectives of Rule 501(a)(10)(iii). As described in more detail in
section II.A.3.i, the Exam is designed to evaluate a person's knowledge
and skill in the area of accounting for both public and private
companies. The AUD section of the Exam specifically covers matters that
require special audit consideration, such as investments in
securities.\69\ The BAR section of the Exam requires demonstration of
knowledge and skills related to analysis of business, some of which are
directly relevant to a person's comprehension and sophistication in the
areas of securities and investing. Areas that may be tested include
interpreting financial statement fluctuations and ratios (e.g.,
profitability, liquidity, solvency, performance); interpreting non-
financial measures (e.g., customer retention rate, employee turnover,
labor productivity rate, ticket response time) and non-GAAP measures
and analyzing specific aspects of an entity's performance and risk
profile; calculating the present value of future cash flows or the net
present value of a potential investment; and comparing acquisition and
divestiture opportunities based on given market analysis and investment
criteria.\70\ The REG section of the Exam expressly tests knowledge and
skills related to U.S. business law, such as contracts and debtor-
creditor relationships and the legal aspects of business entity
selection, formation, operation and termination.\71\
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\69\ See Blueprints 2026 at 7.
\70\ See Blueprints 2026 at 70-73.
\71\ See Blueprints 2026 at 48-50. In addition, the IQEX
currently uses an administration of the REG section. See supra note
42.
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As described in section II.A.2, in addition to the passage of the
Exam, in order to be eligible to obtain a CPA license, the CPA
candidate must have the required educational and supervised experience.
We therefore believe that in obtaining a CPA license, which requires
attaining and demonstrating the knowledge and skills tested by the
Exam, and obtaining the required educational experience and supervised
experience, such persons will have demonstrated that they have the
comprehension and sophistication to evaluate the merits and risks of
investment opportunities, and ultimately, appropriately allocate
capital based on their individual circumstances, and otherwise make
appropriately informed decisions regarding their financial
interests.\72\
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\72\ See Accredited Investor Adopting Release at 64241.
Additionally, we believe that the CPE requirement further supports
that holders of a CPA license in good standing have and continue to
have sufficient knowledge and experience in financial and business
matters to evaluate the merits and risks of a prospective
investment. See supra note 57 and the accompanying text.
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3. Rule 501(a)(10)(iv)
Rule 501(a)(10)(iv) states the Commission will consider whether
``[a]n indication that an individual holds the certification or
designation is either made publicly available by the relevant self-
regulatory organization or other industry body or is otherwise
independently verifiable.'' As described in section II.A.5, the public
may use CPAverify.org or jurisdiction-specific websites to verify
whether any person holds a CPA license in good standing.
C. Economic Considerations
As discussed above, we are considering whether to add holding a
license as a CPA in good standing to the list of designated
professional certifications, designations, or credentials that would
qualify natural persons for accredited investor status under Rule
501(a)(10). Thus, individuals who hold a CPA license in good standing
would qualify as accredited investors and would be able
[[Page 63375]]
to participate in investment opportunities that may not otherwise have
been available to them, unless they were already accredited investors
based on another criterion.\73\ This change could also impact issuers
seeking to raise capital.\74\ The designation of holders of a CPA
license in good standing as accredited investors would have economic
effects on investors and issuers that would be consistent with those
the Commission discussed in creating the Rule 501(a)(10) designation
process in the Accredited Investor Adopting Release.\75\
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\73\ CPAs may decline to participate in certain offerings due to
issues that might arise under related professional requirements. For
example, a CPA working as an audit professional would need to
consider the audit independence implications of an investment in an
audit client.
\74\ To the extent that the accredited investor definition is
used outside of the Federal securities laws (such as for non-Federal
securities laws that incorporate the accredited investor
definition), the designation of CPAs as accredited investors might
have indirect economic effects.
\75\ See Accredited Investor Adopting Release at section VI.
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It is difficult to quantify how many additional natural persons
would qualify as accredited investors. There are approximately 650,000
active CPA license holders.\76\ However, we do not have information on
whether these CPA license holders already qualify as accredited
investors based on one or more of the other eligibility criteria in
Rule 501(a), such as those for net worth, income, and other qualifying
professional certifications, designations, or credentials.\77\ Further,
it is unclear to what extent any newly eligible accredited investors
will choose to participate in exempt offerings.
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\76\ According to NASBA, there were 650,667 actively licensed
CPAs, as of Aug. 27, 2026 according to their data (with the data for
Hawaii and New Mexico not available). See supra note 40 and
accompanying text.
\77\ Specifically with respect to income, as of May 2025, the
median pay for accountants and auditors was $83,680. In addition,
the bottom decile (10th percentile) of pay was $56,020, and the top
decile (90th percentile) of pay was $144,090, respectively. See
Occupational Outlook Handbook: Accountant and Auditors, Bureau Lab.
Stats., <a href="https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm">https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm</a> (last modified Aug. 27, 2026, last retrieved Sept.
24, 2026). The estimate includes non-CPA accountants, who likely
lower the salary estimate. There is considerable variation in CPA
income based on region, experience, role seniority, overtime/bonus/
equity compensation, and type of firm. The estimates of medians are
lower than averages due to a small number of high-salary
observations. The estimates do not account for income other than
earned income. See also, e.g., CPA Firms Report Steady Growth in
Revenue and Profit, AICPA Research Finds, AICPA & CIMA (Sept. 10,
2025), <a href="https://www.aicpa-cima.com/news/article/cpa-firms-report-steady-growth-in-revenue-and-profit-aicpa-research-finds">https://www.aicpa-cima.com/news/article/cpa-firms-report-steady-growth-in-revenue-and-profit-aicpa-research-finds</a> (last
retrieved Sept. 24, 2026) (reporting the median value of salaries
for new graduates with bachelor's (master's) degrees of $60,834
($67,750)); 2025 MAP Survey Executive Summary, AICPA & CIMA (Nov.
17, 2025), <a href="https://www.aicpa-cima.com/resources/download/map-survey-executive-summary">https://www.aicpa-cima.com/resources/download/map-survey-executive-summary</a> (last retrieved Sept. 24, 2026) (noting that the
median value of equity partner/owner pay was over $202,521 and the
median value of director pay was $149,822), consistent with lower
pay for less experienced accountants, and vice versa. Thus, some
investors that would qualify based on being an active CPA license
holder may already qualify as accredited investors based on income
or net worth criteria in Rule 501. Such individuals also may hold
other licenses or credentials that are already designated, or that
we are potentially designating, under Rule 501(a)(10). See supra
note 35.
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Issuers are expected to benefit from the expansion of the
accredited investor definition under Rule 501(a)(10) through
potentially greater capital formation, lower cost of capital, and
greater efficiency in raising capital due to an expanded pool of
accredited investors (especially for issuers that are small or do not
have access to a network of institutional accredited investors or
persons with the required net worth or income to qualify as accredited
investors).\78\ This change may also benefit issuers in exempt
offerings by making it easier and less costly to find and verify
accredited investors (i.e., by reducing search costs).\79\ As discussed
in section II.A.5, CPA license status can be easily independently
verified, which would directly reduce issuers' costs of confirming
accredited investor eligibility, relative to verifying income or net
worth.\80\ This is expected to benefit issuers and intermediaries in
exempt offerings where only accredited investors may be purchasers
(such as Rule 506(c)) or where some provisions, such as limits on the
number of purchasers or investment limits, are dependent on accredited
investor status (e.g., Rule 506(b), Regulation A, and Regulation
Crowdfunding). However, to the extent that issuers would have otherwise
pursued additional financing from accredited investors meeting the
existing definition or engaged in an offering that is not dependent on
accredited investor participation (such as a registered securities
offering), the amount of additional capital formation may be limited.
Still, issuers may benefit from greater flexibility in how they may
raise capital, which could result in some cost savings and a lower cost
of capital. For instance, issuers undertaking a Rule 506(b) offering
may incur lower costs if all of their purchasers are accredited
investors as compared to if not all of their purchasers are accredited
investors, as the rule would not require them to furnish the financial
and other information prescribed by Rule 502(b) for offerings involving
non-accredited investors.\81\ For issuers in Rule 506(c) offerings,
verification of accredited investor status based on a credential that
is easier to confirm may be less costly than verification of other
prongs of the accredited investor definition (such as financial
eligibility), reducing their transaction costs.\82\ For issuers that
undertake a Tier 2 Regulation A or Regulation Crowdfunding offering,
both of which are subject to investment limits for non-accredited
investors, having more accredited investors in the offering enables
higher investment amounts per investor, which may decrease all-in
offering costs.\83\ Issuers choosing among different exempt offering
alternatives may choose a Regulation D offering if they have enough
prospective investors that meet the accredited investor definition,
instead of pursuing a Regulation A or Regulation Crowdfunding offering,
potentially lowering their compliance, intermediary, and marketing
costs-per-dollar raised. Some issuers choosing between an exempt and a
registered offering may choose an exempt offering if they have enough
prospective investors that meet the accredited investor definition,
instead of pursuing a registered offering.
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\78\ See Accredited Investor Adopting Release at 64264-65.
\79\ See Accredited Investor Adopting Release at 64264.
\80\ Thus, even if some CPAs already meet other accredited
investor eligibility criteria, the overall costs of verification of
accredited investor status may decrease with the addition of the CPA
license option.
\81\ See 17 CFR 230.502(b).
\82\ See 17 CFR 230.506(c)(1) through 230.506(c)(2).
\83\ See 17 CFR 230.251(d)(2)(i)(C); 17 CFR 227.100(a)(2).
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For investors, the designation of holders of a CPA license in good
standing as accredited investors could enable more natural persons who
would not otherwise meet one of the eligibility criteria in Rule
501(a), such as the income and net worth criteria, to access a broader
range of investment options, potentially enhancing their ability to
diversify and optimize portfolio allocations.\84\
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\84\ As noted above, the extent of overlap between the CPAs and
the investors that meet the existing accredited investor criteria is
unclear. CPAs who are earlier in their careers, employed at smaller
firms, or located in lower cost-of-living geographic areas, and thus
may on average have lower incomes, may be most affected by the
potential designation. Some investors that already meet income or
net worth criteria may find it is easier or less costly to
demonstrate their accredited investor status under Rule 501(a)(10).
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However, these investment options generally come without the
additional disclosure provided by registration under the Securities Act
and could entail greater costs related to
[[Page 63376]]
illiquidity,\85\ agency costs (i.e., costs arising from conflicts of
interest between investors and managers), adverse selection, and
business risk, as compared to investments in the public capital
markets. Individual investors' comprehension and sophistication in the
areas of securities and investing, and knowledge and experience in
financial and business matters, as reflected in having a professional
certification or designation or credential under Rule 501(a)(10),
increases the likelihood that such individual investors would be
capable of evaluating the merits and risks of a prospective investment
in an exempt offering and managing such risks. For example, such
individuals may be more likely to consider the size of any single
investment relative to their overall portfolio and diversify their
portfolio.\86\ It is unclear whether additional investment
opportunities would improve portfolio efficiency for newly eligible
accredited investors. While individuals incur costs to prepare for and
take the Exam, and obtain and maintain an active CPA license, we do not
expect there to be incremental costs of a CPA license in good standing
being designated as an accredited investor credential under Rule
501(a)(10), since we expect individuals to continue to pursue and
maintain the CPA license for professional purposes, rather than to
qualify as accredited investors.
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\85\ While securities sold in an exempt offering are generally
illiquid, the introduction of a larger pool of investors that become
eligible as accredited investors through a CPA license could
potentially (at the margin) create impetus for additional secondary
market liquidity in these securities. In addition, the expansion of
the accredited investor pool also would potentially increase the
feasibility of resales under section 4(a)(7) of the Securities Act
[15 U.S.C. 77d(a)(7)]. However, if some newly eligible investors
have fewer financial resources (see infra note 86), they may be less
willing to hold restricted securities over long holding periods, and
especially, seek to unload positions during downturns.
\86\ As stated in the Accredited Investor Adopting Release,
while certain of these individuals may have fewer financial
resources and, as a result, be less able to bear the financial risk
of private investments, we believe their professional credentials
and experience should enable these investors to assess investment
opportunities, appropriately allocate capital based on their
individual circumstances, including whether to reallocate investment
capital between private investments and other equivalent-sized
investments, and otherwise make appropriately informed decisions
regarding their financial interests, including their ability to bear
the financial risk. See Accredited Investor Adopting Release at
64241.
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The described effects, including both the benefits and the costs to
issuers and investors, may be modest in magnitude, as discussed in
detail in the Accredited Investor Adopting Release. First, it is
possible that a number of the individuals who would qualify as
accredited investors under the potential designation may already
qualify as accredited investors based on one or more of the criteria in
Rule 501(a) (e.g., since the high end of CPA compensation may exceed
the income thresholds in Rule 501(a)(6)).\87\ Second, because any
newly-eligible individuals may have income and net worth below the
currently required thresholds for individual accredited investors, the
increase in the capital supply from an individual newly eligible
accredited investor would likely be low, and the collective impact
would depend on the size of any increase in the number of individual
accredited investors.\88\ Third, the effects may be more modest to the
extent that some of the newly eligible natural persons may end up not
participating in exempt offerings.\89\ Fourth, it is possible that
issuers may choose to offer securities to institutional accredited
investors, or apply investment minimums (perhaps in an effort to
simplify their capitalization table), such that any individual
accredited investors participating in exempt offerings are more likely
to be those who meet the net worth or income criteria in Rule 501(a).
Fifth, any specific effects of this potential change to the accredited
investor pool would be partly diluted to the extent that other
Commission actions designating other credentials result in expanding
the pool of natural persons qualifying as accredited investors based on
multiple criteria.
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\87\ See Accredited Investor Adopting Release at 64262.
\88\ Id.
\89\ See, e.g., Katherine Carman et al., Exploring Accredited
Investors and Private Market Securities Ownership 18 tbl. 6 (OIAD,
Working Paper No. 1, June 2025), available at <a href="https://www.sec.gov/files/exploring-accredited-investors-june-2025.pdf">https://www.sec.gov/files/exploring-accredited-investors-june-2025.pdf</a> (reporting, based
on a recent investor survey, that, 14.4% of accredited investors and
4.7% of non-accredited investors, respectively, indicate interest in
investing in new or private companies, and that 4.3% of accredited
investors and 1.1% of non-accredited investors, respectively, report
owning a ``private fund or offering''). See also Katherine Carman &
Alycia Chin, Accredited Investors in the US Population, 9 Fin. Plan.
Rev. e70023 (2026).
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III. Notice
For the reasons set forth herein, we believe that holding a CPA
license in good standing would meet the requirements set forth in Rule
501(a)(10). Accordingly, we believe it is appropriate to designate
holding a CPA license in good standing as qualifying natural persons
for accredited investor status pursuant to Rule 501(a)(10). We are
issuing this notice and providing an opportunity for public comment on
such a potential designation. We are particularly interested in
comments on whether we should designate holding a CPA license in good
standing as qualifying natural persons for accredited investor status
pursuant to Rule 501(a)(10), as discussed in this notice, and whether
such designation could raise investor protection concerns unique to
persons who would be qualified under such designation.
By the Commission.
Dated: September 30, 2026.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-20308 Filed 10-2-26; 8:45 am]
BILLING CODE 8011-01-P
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