Publications

Proposed Amendments to Regulation D

Fall 2007
Marc E. Elovitz
Investment Management Developments - Fall 2007

The Securities and Exchange Commission (the “SEC” or the “Commission”) on Aug. 3, 2007, issued a proposing release (the “Proposing Release”) regarding amendments to Regulation D under the Securities Act of 1933. The proposed amendments would, among other things: (a) amend the definition of “accredited investor” under Rule 501(a) of Regulation D to add an alternative “investments owned” test to determine eligibility and to add new categories of entities covered as accredited investors; (b) add a new exemption, Rule 507 of Regulation D, that would relax some of Regulation D’s general advertising prohibitions for the offer and sale of securities solely to a new category of sophisticated investors called “large accredited investors”; and (c) apply a “bad actor” disqualification provision to all offerings under Regulation D. The SEC also requested additional comments on its Dec. 27, 2006, proposing release (the “Private Pooled Investment Vehicle Release”) to heighten investor qualification standards for investments in pooled investment vehicles by adding a new category of accredited investors called “accredited natural persons.”