Next generation “SaaS” Securities and Exchange Commission (SEC) regulatory disclosure service iCrowdNewswire has launched an…
In the early weeks of July, The SEC Division of Corporation Finance issued several new interpretations relating to the verification of “accredited investor” status for securities offerings pursuant to Rule 506c.
Adopted as part of the JOBS Act, Rule 506 permits the use of general solicitation in securities offerings, provided that all participating investors are “accredited investors” as defined in Rule 501 and the issuer takes “reasonable steps” to verify such status. The new C&DI offer guidance in determining and verifying “accredited investor” status, which is dependent on a person’s income and net worth.
The first two C&DIs clarify that (i) if a purchaser’s annual income is not reported in U.S. dollars, the issuer may use either the exchange rate in effect on the last day of the year for which income is being determined or the average exchange rate for such year and (ii) assets held jointly with another person who is not the purchaser’s spouse may be included in the calculation of net worth to only the extent of the purchaser’s percentage ownership in such assets.
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