On September 30, 2026, the Securities and Exchange Commission requested public comment on additional ways for individuals to qualify as accredited investors through professional credentials or a new examination. The potential designations would expand access to private offerings for individuals who can demonstrate financial knowledge but do not meet the existing income or net-worth thresholds.
For many clients, this could mean a bigger pool of potential investors without sacrificing the certainty of the Regulation D safe harbor exemptions from registration under the Securities Act.
Emerging companies, private fund managers, and investment sponsors often want certainty when it comes to compliance with the Securities Act of 1933 (the “Securities Act”). That’s why they usually rely on the safe harbors in Rules 506(b) and (c) of Regulation D. Rule 506(c) requires an issuer to take reasonable steps to verify that every purchaser is an accredited investor. Rule 506(b) limits non-accredited investor purchasers to 35 and requires specified disclosures if any investors in the offering are non-accredited. As a result, both exemptions hinge on the definition of “accredited investor,” which for individuals has turned largely on income and net worth thresholds. After years of debate, including an earlier SEC staff report discussing whether to raise or inflation-index those financial thresholds, the SEC is now looking at ways to expand the definition to bring more potential investors into the fold.
The exemption under Section 4(a)(2) of the Securities Act has long provided a path for private offerings to investors who may not meet the thresholds required under the “accredited investor” standard but who nevertheless have the level of sophistication to properly evaluate the merits and risks of the investment, and access to the information needed to do so. What makes this exemption expansive is also what makes it vague. Section 4(a)(2) is not a safe harbor; it instead requires a facts-and-circumstances analysis. For that reason, most private fund managers and investment sponsors, and some emerging companies, eschew it in favor of the certainty of Rules 506(b) and (c). In addition, unlike Rules 506(b) and (c), Section 4(a)(2) does not preempt state securities registration requirements, which can add significant cost and analysis to an offering.
Current qualifications
Individuals commonly qualify through annual income exceeding $200,000 individually, or $300,000 jointly with a spouse or spousal equivalent, in each of the two most recent years, with a reasonable expectation of reaching the same level in the current year. Alternatively, they may qualify through net worth exceeding $1 million, individually or jointly with a spouse or spousal equivalent, excluding the primary residence and subject to related debt rules.
Existing nonfinancial paths include holding a Series 7, Series 65, or Series 82 license in good standing. Certain issuer insiders, knowledgeable employees investing in their private funds, and qualifying family-office clients may also qualify under specified conditions.
Additional professional credentials
The SEC is considering designating the following credentials, held in good standing, as additional bases for accredited investor status:
- A U.S. certified public accountant (CPA) license;
- A Chartered Financial Analyst (CFA) charter;
- A Certified Financial Planner (CFP) certification in the United States;
- A FINRA Investment Banking Representative license (Series 79); and
- A FINRA Research Analyst license (Series 86 and Series 87).
Rule 501(a)(10), adopted in 2020, already permits the SEC to designate qualifying credentials by order following notice and an opportunity for public comment. The SEC is considering these additions under that existing framework.
A new accredited investor examination
Separately, the SEC is considering recognizing passage of an accredited investor examination to be developed by FINRA. As contemplated, the exam would be open to individuals age 18 or older without requiring association with a FINRA member firm. It would assess knowledge of securities and investment structures, investment risks, disclosures and regulatory requirements, financial statements, conflicts of interest, and corporate governance. Passing would provide a potential route to accredited investor status, but would not itself authorize the individual to conduct securities business.
These additional paths would address the concern that wealth alone is an imperfect measure of financial sophistication. They could enable knowledgeable individuals to participate in private offerings without first meeting financial thresholds, broadening the pool of capable investors. For emerging companies, fund managers, and sponsors, that means a larger pool of investors they can reach while still relying on the Rule 506(b) and (c) safe harbors. Accredited status would not, however, satisfy every separate eligibility requirement an investment may carry.
The potential designations are not yet effective. The notices were published in the Federal Register on October 5, 2026, and comments are due December 4, 2026. Existing qualification requirements remain in place pending further SEC action. More information and the full text of the proposals can be found here: https://www.sec.gov/newsroom/press-releases/2026-96-sec-proposes-amendments-expand-responsible-retailization-private-markets
Sources: SEC announcement | Exam notice | Current qualifications