3 ms·
The bill gives the SEC an open ticket to make the form of inflation adjustment it deems reasonable. In other words, if the SEC uses the statutory grant of autho
by grellas 17y ago
The bill gives the SEC an open ticket to make the form of inflation adjustment it deems reasonable. In other words, if the SEC uses the statutory grant of authority to take this in a direction of radically scaling back the numbers of investors who qualify as "accredited," there is nothing anybody can do about it. In effect, we are at the mercy of the regulators.
This takes an area that has been defined by certainty and by a liberal view of what it takes to be "accredited" - no small benefit for the rise of startups over the past 30 years - and, in my view, gratuitously places a big question mark over it. You can take a sanguine view of what this means. I choose not to. Only time will tell which of us has the right instincts about it.
For the benefit of the startups I represent, I sincerely hope that you are right and I am wrong.
- hristov 17y agoWell it is not surprising the SEC are getting that order, as they created the whole accredited investor stuff from whole cloth to begin with. But I do not think you are correct that this is a grant of authority. The SEC have always had the authority to change those numbers; as I mentioned, they created them to begin with. This proposed law actually orders the SEC to raise the numbers to account for inflation, but it gives the SEC broad discretion on how to do it. But it is worth noting that the SEC have not changed the numbers from 1982, although they had the power to. Also from various SEC papers I have read it seems very unlikely they will suddenly double the requirements. Most likely, they will start accounting for inflation in the future.