Did the SEC make it easier for individuals to become Accredited Investors?

The Securities and Exchange Commission (SEC) approved plans to further open private markets or alternative assets to individual investors. Many investors are locked out of the best investments such as Hedge Funds, Private Equity, IPOs, private placement memorandums, etc. due to financial qualifications required by the SEC. Under current securities laws an individual must meet the financial criteria of an Accredited Investor. The current financial criteria is a net worth over $1 million (excluding your primary residence) or income over $200k (single) or $300k (married) in each of the prior two years. In 2020, the SEC added additional Professional Criteria, which allowed certain other individuals to qualify. The new proposal is to provide an exam that, if passed, would license individuals as an Accredited Investor. However, buyers beware! After many decades why would the SEC suddenly decide to become this generous? This episode reviewed multiple articles from CNBC and the definition of an Accredited Investor from the SEC website.

Link: SEC.gov | Accredited Investors