SEC tweaks definition of 'accredited investor' for unregistered sales

Rules exclude value of primary residence from net-worth calculations

By Devika Patel

Knoxville, Tenn., Dec. 22 - The Securities and Exchange Commission announced that it has amended its rules to exclude the value of a person's home from net-worth calculations when determining whether an individual may invest in unregistered offerings.

The changes were made to the SEC's definition of an "accredited investor" according to the requirements of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

Under the revised rule, the value of an individual's primary residence will not count as an asset when calculating net worth to determine "accredited investor" status. The amendments also clarify how to treat debt secured by a primary residence for the net worth calculation.

The changes will take effect 60 days after the Federal Register is published.

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