Page 12 - Investment Advisor June 2021

Beginnings

WASHINGTON WATCH

By Melanie Waddell

SEC’s Peirce Pushes for More Accredited

Investor Rule Changes

“We need to open additional doors to accredited investor status, such as
educational credentials,” Peirce said.

existing tests for income or net worth.
Last September, Peirce vowed to advo-
cate within the agency for more designa-
tions to be added as accredited investors.
“My view is we really ought to try to
move away from these not complete-
ly arbitrary distinctions of, ‘you can
invest and you can’t invest,’” Peirce said
then during a Zoom event held by the
Competitive Enterprise Institute.
Peirce added that it was “incumbent
upon all of us to know ourselves and
to know what our limits are but also to
know when we need to get professional
financial advice, which can help us make
decisions, too.”
EC Commissioner Hester Peirce, Peirce said the SEC “laid the ground-
a Republican, wants new SEC work for such an opening in our most GENSLER WEIGHS IN
SChairman Gary Gensler to priori- recent accredited investor rulemaking,” Gensler noted that the work of the Small
tize this year giving greater flexibility in passed last August. “Now we need to act Business Capital Formation Advisory
determining who qualifies as an accred- on it, and the Commission specifically Committee resonated with him as his
ited investor. invited this Committee to ‘make further father “started and ran a small vending
During the agency’s recent meet- recommendations, including additional machine business in Baltimore.”
ing of the SEC Small Business Capital certifications, designations, or creden- A critical part of the SEC’s mission is
Formation Advisory Committee, Peirce tials that further the purpose of the to facilitate capital formation, Gensler
stated that “an entrepreneur who is accredited investor definition.’” said, and “American entrepreneurs and
plugged in to a network of financially The agency expanded its accredited business owners rely on a diverse array
sophisticated people should be able to investor definition on Aug. 26, 2020, to of sources to fund their companies.”
go to those people for funding, even if allow investors to qualify based on defined In his dad’s case, “he used his muster-
they are not wealthy enough to meet our measures of professional knowledge, ing-out pay from World War II to buy Andrew Harrer/Bloomberg
financial thresholds. We need to open experience or certifications — including used vending machines, fix them up, and
additional doors to accredited investor certain Financial Industry Regulatory build our family business. Today, who
status, such as educational credentials.” Authority licenses — in addition to the knows? He might have used equity crowd-

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