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:
- 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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