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A proposal by the US Securities and Exchange Commission to amend the definition of “accredited investor” in Rule 501(a) of Regulation D — one of the categories of investor to which an issuer can offer and sell securities that have not been registered under the US Securities Act of 1933 — has made its way into a final rule.

This final rule, which amends the definition of accredited investor and will be effective sometime after October 31, among other things, clarifies the guidance applicable to sovereign wealth funds and other statutorily created foreign entities at one time provided on a case-by-case basis by the SEC (i.e., by way of no-action letters).

This new rule provides certainty to sovereign wealth funds, which meet the criteria described below, that they would qualify as accredited investors, thereby providing an easier path for certain investment activities by such institutions.

This article first appeared in Law360.

Author

Steven Canner is a member of the Firm’s Global Corporate and Securities Practice Group in New York. For over 25 years, he has been counseling clients with respect to cross-border and US domestic mergers, acquisitions, joint ventures, private equity and venture capital transactions, as well as corporate reorganizations. Mr. Canner also focuses his practice on public and private securities offerings and securities laws compliance matters. He acts as outside general counsel to a number of international companies, assisting them with their day to day legal concerns.

Author

Michelle Heisner is a member of the Firm's Global Corporate and Securities Practice Group in New York. Michelle's industry experience includes clients in the energy, telecommunications, financial services, and technology sectors. Earlier in her career, Michelle worked as an M&A attorney at a leading global law firm at its offices in New York, Australia and Washington, DC.

Author

Ava Haghighi is an associate in Baker McKenzie's New York office and a member of the North America Transactional Group. She routinely advises clients across a wide range of industries on cross-border and US domestic mergers, acquisitions, joint ventures, private equity and venture capital transactions, as well as corporate reorganizations. In addition to having native fluency in English and Farsi, Ava has working proficiency in Turkish and reading proficiency in Italian, Arabic, and French.