Meeting of the SEC Investor Advisory Committee Will Address Reg D and Definition of an Accredited Investor

The Securities and Exchange Commission (SEC), Investor Advisory Committee will meet next week and will discuss two very important policy items that impact capital raising for private firms.

The first panel discussion will review exempt securities offerings under Reg D. This exemption, only available to accredited investors, is exceptionally important for the economy and far larger than the IPO market in the US. Over $1 trillion a year is raised using Reg D, and the more recent version, Reg D 506c, allows for online capital formation (crowdfunding). Reg D is widely lauded and utilized due to its streamlined approach to capital formation, with only a notice filing required.

The panel description states:

“Panelists will examine the consequences to investors flowing from this expansion of the Rule 506 exempt markets, explore any potential changes that could improve information asymmetry and supervision in this vast landscape of exempt offerings, and provide better investor protection for retail investors while still allowing small issuers to raise capital responsibly and efficiently.”

The definition of an accredited investor allows wealthier individuals to access private securities offerings issued under Reg D. In brief, an accredited investor is someone who earns over $200,000 a year or has a net worth of over $1 million (not counting a primary residence). If you are married, the income threshold increases to $300,000. The current definition is discriminatory as it uses a wealth metric instead of a sophistication qualification, thus excluding the majority of individuals in the US. As a majority of successful firms start out as private companies, the definition undermines an opportunity for wealth creation for individuals excluded from this market.

The panel description states:

“This session will review the origins and intent of the “accredited investor” definition and consider whether the “accredited investor” qualifications remain fit for purpose. The panel will explore whether updates to the rule may be necessary to ensure the SEC can balance the needs of investors through its tripartite mission of investor protection, ensuring fair, orderly, and efficient markets, and facilitating capital formation.”

The current leadership of the SEC has consistently listed Reg D reform – i.e. greater disclosure and more investor restrictions – as a top objective for the Commission. Many industry observers are concerned as to how any changes may impact private capital markets which are currently considered the best in the world. Some insiders have described the current Commission as “anti-capital formation.”

The Investor Advisory Committee was created to advocate on behalf of investors. Unfortunately, it has evolved into an entity that advocates more on behalf of regulators, as investor protection is its only concern and not investor interests.

The meeting will take place on September 21, 2023, commencing at 10 AM (public opening) until 5 PM. The gathering will be live-streamed on the SEC website.

The panelists for the meeting are shared below.

Reg D Panel – 10:30 AM to 12 PM

Moderated by:

  • Leslie Van Buskirk Administrator, Division of Securities, Wisconsin Department of Financial Institutions; and Vice Chair, Investor Advisory Committee


  • Sara Hanks, CEO, Crowdcheck
  • Kenisha Nicholson, Special Counsel, Office of Small Business Policy, Division of Corporation Finance, U.S. Securities and Exchange Commission
  • Craig McCann, Principal, SLCG Economic Consulting
  • Amanda Senn, Director, Alabama Securities Commission; and NASAA Enforcement Section Co-Chair
  • Alexandra Thornton, Senior Director, Financial Regulation, The
    Center for American Progress, Article

Accredited Investor Panel – 2:30 PM to 4 PM

Moderated by:

  • Cambria Allen-Ratzlaff, Managing Director and Head of Investor Strategies, JUST Capital; and Investor-as-Owner Subcommittee Chair



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