Glossary of Terms

Non-Accredited Investor 2015-11-11 08:00:00

Non-Accredited Investor

An investor who does not meet the special requirements for an accredited investor under the Securities & Exchange Commission’s Rule 501 of Regulation D. In the United States, federal securities laws define the term accredited investor in Rule 501 of Regulation D and as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act as:

  1. A bank, insurance company, registered investment company, business development company, or small business investment company;
  2. An employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
  3. A charitable organization, corporation, or partnership with assets exceeding $5 million;
  4. A director, executive officer, or general partner of the company selling the securities;
  5. A business in which all the equity owners are accredited investors;
  6. A natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase, or has assets under management of $1 million or above, excluding the value of their primary residence;
  7. A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
  8. A trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.

 


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