Securities Industry and Financial Markets Association, also known as SIFMA, released a document this summer that provided guidance for investment advisers and broker-dealers to bring more clarity to the process of investor verification. Crowdentials, a compliance firm focused on making capital formation easier for investors and entrepreneurs through automation, has now expanded its own first-to-market Investor Verification tool in order to incorporate the guidance outlined by SIFMA.
The guidance document, which can be found here, summarizes what would constitute “reasonable steps” when verifying the accredited status of investors. These reasonable steps include tapping into the relationship between an investor and his or her broker-dealer, or verifying based on the legal statuses of the entities involved, among other things. The document also provides a lengthy list of law firms that such as Skadden, Arps, Slate, Meagher & Flom LLP, Sullivan & Cromwell LLP and Latham & Watkins LLP that support SIFMA’s guidance on investor verification,
As the leading compliance firm for investor verification, Crowdentials was excited to build on its current solution to include the guidelines released by SIFMA. CEO of Crowdentials, Rich Rodman stated, “We are always going to create the most robust compliance solution on the market, and guidance letters by organizations like SIFMA help us tremendously in our efforts.”
Along with SIFMA, the Securities and Exchange Commission as well as the Commodity Futures Trading Commission have issued guidance of their own. While the SEC released Compliance and Disclosure interpretations, the CFTC issued a letter conditionally exempting CPOs seeking to to generally solicit.
Rodman noted, “Organizations such as SIFMA, being member driven, hold a lot of clout within the financial industry. We relish the opportunity to broaden the scope of our investor verification solution to help even more players in the private equity realm stay compliant with new regulations in the most automated fashion.”