Verification of International Accredited Investors: What You Need to Do

Approved Accredited Investor StampInternational investors have always played an important role in providing capital to private placement offers.  The private placement market under Regulation D is enormous. Since Title II made actionable by the SEC in September of 2013, until the end of 2014, over $1.5 trillion in capital was raised under Reg D.  But Title II, or Rule 506(6), allowed for general solicitation. Or simply advertising. But there is a catch as all investors must be verified as Accredited as defined by current rules.

For international investors seeking to invest in 506(c) private placements, they must adhere to guidance provided by the SEC.  Crowdfunding platforms must take “reasonable steps” to prove the investor qualifies.

The SEC has issued several Compliance and Disclosure Interpretations (CD&Is) to help clarify how the verification process must be completed. VerifyInvestor, a company that provides investor verification services to many of the leading investment crowdfunding platforms, has crafted a helpful infographic which we share below.

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SEC CD&Is on Foreign Accredited Investors

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