Accredited Investors

By: Marianne Hudson, ACA Executive Director

December 18 was a very big day for angel investors.  Not only did the SEC put out a staff report that recommends tweaks to the accredited investor definition, but Congress passed a big tax act that makes permanent the 100% exemption of capital gains.  Here’s what you need to know in connected blog posts:

Accredited Investor Definition – A mix of gifts and lumps of coal in our stockings

Not far from the US Capitol Building, the SEC quietly released a report from its staff on the Accredited Investor definition on the same day.  As many angels will remember, the SEC is required to study the definition by Congress in the Dodd-Frank Act.  Time will tell if this staff report fully addresses the requirement or if it informs future rulemaking by SEC Commissioners.

To ACA’s delight, some of the recommendations in the report actually match what our leadership has suggested in multiple meetings and letters, such as allowing people who are sophisticated but don’t meet financial thresholds to be accredited.  As in many things, however, there are also some recommendations in the report that are different than most angels would like.  All in all, the SEC staff’s report could have been much worse – for instance it does not include increasing financial thresholds for income to $450,000 and wealth to $2.5 million as some organizations advocated.

By: William Carleton, Counselor @ Law, and volunteer chair of ACA Public Policy Advisory Council

The following is adapted from remarks prepared for the Angel Capital Association's 2015 Angel Insights Exchange, held in New Orleans the week of November 9. Bill is the volunteer chair of an advisory council to the ACA, but the views he expresses below are personal to him, and not a reflection of ACA views or policy.  This post originally appeared on Counselor @ Law.

As we all know, Dodd-Frank (2010) and the JOBS Act (2012) brought big changes to the rules that govern what’s okay and what’s not okay in the world of federal exemptions from securities registration requirements.

**This post originally appeared on "The Hill" on March 3, 2015.**

By: Chris McCannell, director of APCO Worldwide’s Washington DC financial service practice and government relations. He has over 15 years of Capitol Hill experience working for Members of Congress on the Financial Service Committee and the tax writing Ways and Means Committee. He and his colleagues have been ACA’s registered lobbyist for the past two and a half years. Chris is an active participant in ACA’s programming including national events like this week’s Leadership Workshop.

The conversation around implementation and rulemaking of the Dodd-Frank Financial Reform legislation, which became law in 2010, has been focused on issues such as margin requirements for derivatives, bans on proprietary trading (the Volcker Rule) and other bank centric capital standards. Lost in the debate is a little known part of the legislation which requires the United States Securities and Exchange Commission (SEC) to revisit the definition of an accredited investor. A change in this industry wide definition could have drastic impact on capital formation, start-up growth, and ultimately American jobs.

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