SEC Amends Definitions of Accredited Investor and Qualified Institutional Buyer

Summary

This First Analysis article discusses the final amendments to the definitions of "accredited investor" (AI) and "qualified institutional buyer" (QIB) adopted by the Securities and Exchange Commission (SEC) on August 26, 2020 to include new AI categories of natural persons and entities and an expanded list of eligible entities that qualify as QIBs. The AI definition is used principally to determine to whom securities can be marketed in private placements under Rules 506(b) and 506(c) of Regulation D (17 C.F.R. § 230.506), and the QIB definition is used principally to determine to whom securities can be resold in a sale structured under Rule 144A (17 C.F.R. § 230.144A).