SEC ‘Accredited Investor’ Definition Tweak Faces Equity Concerns

The SEC’s plan to reconsider who is eligible to invest in startups’ privately-held share offerings is stirring questions about equity and diversity.

The agency’s most recent regulatory agenda includes a planned proposal to redefine “accredited investor” status, potentially restricting the pool of investors who can participate in certain types of private offerings in an effort to boost investor protection.

That policy direction could limit opportunities for investors from underrepresented communities and put the agency at odds with the Biden administration’s broader focus on diversity and equity, some advocates say.

“The inclusion of more people also pushes economic development, ingenuity, returns ...