Yesterday the U.S. Securities and Exchange Commission adopted final rules that amend the definitions of “accredited investor” and “qualified institutional buyer” which are central to classifying investors that may participate in private offerings and investments under federal securities laws.

A company wishing to offer or sell securities to the public must register those securities with the SEC unless an exemption from registration is available under federal securities laws.  The registration process is intended to protect investors by providing regulatory oversight and requiring the public disclosure of key information about the offered securities, but it is often lengthy and costly.  As an alternative, many companies seek to raise capital with unregistered securities pursuant to an available exemption.