Advocacy | March 5, 2024

Image: Crowdfund Insider, SBCFAC meeting Feb 27, 2024

SBCFAC, SBIA, Peirce, and Uyeda Push for Inclusive Accredited Investor Criteria

As featured by Crowdfund Insider, the Securities and Exchange Commission’s (SEC) Small Business Capital Formation Advisory Committee (SBCFAC), the Small Business Investor Alliance (SBIA), Commissioner Hester M. Peirce, and Commissioner Mark T. Uyeda have collectively voiced strong opposition to the current restrictive wealth thresholds for accredited investors. Advocating for a more inclusive definition, these entities and individuals are against raising the current wealth thresholds for accredited investors, and are aiming to lower the barriers to investment opportunities, emphasizing the importance of knowledge, risk awareness, and the potential for broader economic participation over financial benchmarks alone.

• On February 27, 2024, the Securities and Exchange Commission’s (SEC) Small Business Capital Formation Advisory Committee (SBCFAC) met and voiced strong concern against raising the wealth thresholds for accredited investors. This recommendation aims to keep the door open for a broader spectrum of investors to participate in private securities offerings, challenging the traditional wealth-based criteria. The committee’s approach reflects a shift towards inclusivity and opportunity in the investment landscape, emphasizing the importance of knowledge and risk awareness over mere financial benchmarks.

See:  AOIP Advocates for Enhanced Capital Formation and Investment Opportunities for SMEs

Why It Matters

The collaborative push by the SBCFAC, SBIA, and Commissioners Peirce and Uyeda to expand the definition of accredited investors challenges the traditional wealth-based criteria, aiming to open up new avenues for wealth accumulation among a broader group of investors, reduce economic inequality, and provide early-stage companies with a wider pool of potential backers. This initiative reflects a shift towards a more democratic financial system.

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada’s Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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• Source: https://ncfacanada.org/united-efforts-to-expand-access-to-private-markets/