Definition of Accredited investor:
In the U.S., the term accredited investor is used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by regulatory disclosure filings. Accredited investors include natural high net worth individuals (HNWI), banks, insurance companies, brokers and trusts.
An accredited investor is an individual or a business entity that is allowed to trade securities that may not be registered with financial authorities. They are entitled to this privileged access by satisfying at least one requirements regarding their income, net worth, asset size, governance status or professional experience.
US Securities & Exchange Commission (SEC) term for a person who has individual or joint (with her or her spouse) net worth of over one million dollars, or whose individual annual income exceeded $200,000 ($300,000 in case of joint income with the spouse) in each of the two most recent years and there is a reasonable expectation of maintaining the same income level in the current year. An accredited investor is exempt from being counted as one of the maximum 35 investors in a private limited partnership. He or she, however, must invest at least $150,000 in the partnership and the invested sum must not exceed 20 percent of his or her net worth.
How to use Accredited investor in a sentence?
- Unregistered securities are considered inherently more risky because they lack the normal disclosures that come with SEC registration. .
- Sellers of unregistered securities are only allowed to sell to accredited investors, who are deemed financially sophisticated enough to bear the risks. .
- Accredited investors are allowed to buy and invest in unregistered securities as long as they satisfy one (or more) requirements regarding income, net worth, asset size, governance status or professional experience. .
Meaning of Accredited investor & Accredited investor Definition