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accredited investor

Under federal law, an accredited investor is a special kind of investor that due to certain special circumstances or qualities—as the ones indicated in Rule 501 of Regulation D —is allowed to purchase or be offered to purchase unregistered securities . This is an exemption, as under federal securities law , no securities may be sold or offered for sale unless they are registered or unless there is an exemption.

List of accredited investors:

• Banks

• Savings and loan associations

• Brokers or dealers

• Investment advisors

• Insurance companies

• Business development company

• Small Business Investment Company

• Rural Business Investment Company

• State plans for the benefit of its employees (with total assets more than $5,000,000)

• Employment benefit plan (by plan fiduciary)

• Private business development company

• Any tax-exempted organization under section 501(c)(3) of the Internal Revenue Code , corporation, Massachusetts or similar business trust , partnership , or limited liability company , not formed for the specific purpose of acquiring the securities offered, with total assets more than $5,000,000

• Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer

• Natural persons with individual net worth, or joint net worth with spouse of partner, exceeds $1,000,000

• Natural persons with individual income more than $200,000 in each of the two most recent years, or joint income more than $300,000

• Trusts , with total assets more than $5,000,000

• Entities in which all the equity owners are accredited investors themselves

• Other entities, not formed for the specific purpose of acquiring the securities offered, owning investments more than $5,000,000

• Natural persons who hold one or more of the following accreditations:

  • ​Licensed General Securities Representative (Series 7) ;
  • Licensed Investment Adviser Representative (Series 65) ; and
  • Licensed Private Securities Offerings Representative (Series 82)

• Natural persons who are “knowledgeable employees ” of the issuer of the securities being offered or sold where the issuer would be an investment company

• Any “family office ” with assets under management more than $5,000,000, not formed for the specific purpose of acquiring the securities offered, and directed by an experienced professional

• Any “family client ” of a family office and whose prospective investment in the issuer is directed by such family office

See also: private placement ; registration statement ; Securities and Exchange Commission (SEC)

For additional information on accredited investors click here . 

[Last reviewed in January of 2022 by the Wex Definitions Team
]

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