Selecting a Reliable Accredited Investor Verification Service

Are you an investor or issuer interested in participating in a generally solicited private offering? If so, obtaining investor validation is necessary to ensure that you’re complying with securities laws and the regulations of the U.S. Securities and Exchange Commission (SEC). In most private offerings under Rule 506 of the Regulation D, participating investors must be accredited investors. For Reg D offerings that are publicly solicited or advertised, further steps must be taken to verify that those investors are actually accredited investors. Issuers are responsible for obtaining proof via reasonable steps. The safest route is to utilize one of the SEC’s accepted methods, such as a reliable third-party accredited investor verification service. While the primary burden of compliance is on issuers, investors can also purchase self-verification through a third-party reviewer to make them more desirable investors.

General Solicitation & Accreditation


To comply with the provisions of Title II of the JOBS Act, the SEC amended Rule 506 of Reg D to lift the ban on general solicitation. Since the amendment became effective, startups and small business owners have been able to publically advertise and market their needs for capital. However, in addition to meeting the other requirements of Reg D, issuers must pay special attention to Rule 506(c) which outlines the requirements necessary in order to conduct a private offer that is generally solicited. The key requirement is that an issuer must take “reasonable steps” to verify that the investors are actually “accredited investors.”

Confirmation Steps


Employing SEC-approved methods to verify investors’ statuses is the safest route. When Rule 506 was amended, the SEC didn’t include a single mandated procedure, but instead provided a guideline to help issuers determine whether or not they’re implementing a verification method that’s legally compliant. Generally, the SEC suggests that an issuer looking to generally solicit while selling private securities focus on verifying an investor’s income, net worth, total assets, and/or relationship with the issuer. Among the recommended methods is the use of a reasonable reliable third-party reviewer that delivers thorough accredited investor verification service.

About Third-Party Reviewers


Businesses selling securities can prove they’ve taken reasonable steps to ensure an investor is accredited if they retrieve verification from a third party reviewers that they have a reasonable basis to rely upon. Therefore, it’s important to ensure that reliance on the third-party verification service is reasonable. Typically, a valid third-party review should be conducted by a registered investment adviser or broker-dealer, a certified public accountant, or licensed attorney. Third-party verifiers should then follow SEC’s guidelines to determine whether or not an investor is accredited, based on what sort of investor they are and their assets. investor can request self-verification through trusted third-party reviewers and obtain validation, allowing them to participate in exclusive investments only available to accredited investors.

For a third-party accredited investor verification service that is legally-compliant with all reviews conducted by licensed attorneys, choose https://VerifyInvestor.com.

Verifyinvestor.com

1 person likes this post.

Be Sociable, Share!

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    14 − twelve =