The accredited investor (AI) definition is an extremely important component of the private placement market. A significant amount of capital is raised using Regulation D, and accredited investors participated in 89 percent of reported Regulation D offerings from January 2009 through December 2012. (In other words, only 11 percent of reported Regulation D offerings during this period involved non-accredited investors.)

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) requires that the Securities and Exchange Commission (SEC) review the AI definition for natural persons beginning in 2014 and every four years thereafter. The SEC has received a significant number of comment letters concerning the AI definition for natural persons and two SEC advisory committees have made recommendations to the SEC on this issue. Also, legislation concerning the AI definition has been introduced in the U.S. Congress.