SEC accredited investor
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I have to certify myself as one of these every year - but just realized this is highly discriminatory.
To buy certain financial instruments on the private market you have to be an "accredited investor" - which just means your income or net worth is greater than a certain amount.
The kicker is that it doesn't come with responsibilities - just as "protection" for the general public.
The rationale is that you need to be "sophisticated" enough not to get swindled, but something about it feels discriminatory / borderline unconstitutional.
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@copper A pure libertarian view is unfavorable to medical licenses.
But this is a bit different.
It's essentially "You must have a certain amount of income before the government lets you buy this risky good/service (nothing to do with the price of that service)"
It's not a knowledge check, just a wealth/income check.
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Is this an SEC requirement? I am familiar with the concept and when I went through it, it was just a signature on a form.
@loki said in SEC accredited investor:
Is this an SEC requirement? I am familiar with the concept and when I went through it, it was just a signature on a form.
For some investment vehicles, such as hedge funds, venture capital funds and others. IIRC, they are required to verify such, before allowing you to invest in unregistered securities.
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@jon-nyc said in SEC accredited investor:
There actually is a professional experience avenue to qualify also.
Is that only a state thing or nationwide?
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@jon-nyc said in SEC accredited investor:
It’s all SEC regulations so it’s National.
Just saw that - seems like a recent update. Makes sense:
On August 26, 2020, the U.S. Securities and Exchange Commission amended the definition of an accredited investor. According to the SEC's press release, "the amendments allow investors to qualify as accredited investors based on defined measures of professional knowledge, experience or certifications in addition to the existing tests for income or net worth. The amendments also expand the list of entities that may qualify as accredited investors, including by allowing any entity that meets an investments test to qualify." Among other categories, the SEC now defines accredited investors to include the following: individuals who have certain professional certifications, designations or credentials; individuals who are “knowledgeable employees” of a private fund; and SEC- and state-registered investment advisers.
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I have to certify myself as one of these every year - but just realized this is highly discriminatory.
To buy certain financial instruments on the private market you have to be an "accredited investor" - which just means your income or net worth is greater than a certain amount.
The kicker is that it doesn't come with responsibilities - just as "protection" for the general public.
The rationale is that you need to be "sophisticated" enough not to get swindled, but something about it feels discriminatory / borderline unconstitutional.
