Who are accredited investors?

Accredited investors include high-net-worth individuals, banks, insurance companies, brokers, and trusts . Accredited investors are defined by the SEC as qualified to invest in complex or sophisticated types of securities that are not closely regulated.

What is accredited investor verification?

Accredited investor verification is a relatively new process for issuers and investors alike. This leads to a lot of confusion about the exact process requirements on both sides. More importantly, since the investor needs to prove their accredited status with each new opportunity, it results in a ton of duplication and wastage of time and money.

How do I Prove my accredited investor status?

However, per SEC regulation under Rule 506 (c), the onus of proving your accredited investor status falls on the issuer of the securities offering. They cannot simply rely on the investor’s word. Instead, the issuer must take “reasonable steps” to verify this status (not to be confused with the “reasonable belief” standard from Rule 506 (b)).