From: Lisa Colon
File Number S7-25-06
When the final rule is issued, please provide clarification regarding the ability of a privately offered investment pool ("pool")to rely on the safe harbor provisions of Rule 506 with respect to its existing investors and its application to new investors. By way of example, assume that a pool has 60 investors, 20 are non accredited under the existing standards, 20 are accredited under the existing standards but would not meet the additional standards of the accredited natural person as proposed, and 20 are accredited under the existing standards and would meet the additional standards as proposed. In this scenario, under the existing rules, the pool meets the safe harbor provisions of Rule 506 because it has 20 non accredited investors, fewer than the 35 non accredited limitation. A new prospective investor would like to invest in the pool. He/she is a natural person who does not meet the new standards of an accredited natural person. If the pool wanted to accept this person as a new investor, does the pool now have 21 non accredited investors for purposes of Rule 506 or does the pool have 41?
Thank you for any clarification the final rule provides.