Speech by SEC Commissioner:
Opening Statement — SEC Open Meeting: Net Worth Standard for Accredited Investors
Chairman Mary L. Schapiro
U.S. Securities and Exchange Commission
January 25, 2011
Next, we consider a recommendation that we amend the definition of “accredited investor” in our rules to conform to recently enacted legislation.
Specifically, under Securities Act rules, individuals and entities who qualify as “accredited investors” are eligible to participate in certain private and limited offerings that are exempt from Securities Act registration requirements. One of the bases on which individuals may qualify as accredited is having a net worth, alone or together with their spouse, of at least $1 million.
The Dodd-Frank Act requires that the calculation for determining accredited investor status must exclude the value of the person’s primary residence. The proposal therefore would amend our rules to reflect the new standard, and clarify how a mortgage on the primary residence will be considered in the calculation of “net worth.”
Before asking Meredith Cross, Director of the Division of Corporation Finance to provide more details about the proposal, I would like to thank those who worked hard to put this proposal together.
From Corp Fin, thanks to Meredith Cross, Gerry Laporte, Tony Barone, Mauri Osheroff, Jennifer Zepralka, and Karen Wiedemann.
From the General Counsel’s Office, thank you to David Fredrickson and Dorothy McCuaig.
Thanks also to our colleagues in Risk Fin, specifically Jennifer Marietta-Westberg and Adam Yonce.
And thank you to Hunter Jones, from the Division of Investment Management.
Now I’ll turn to the staff to hear more about their recommendation.