On Wednesday, the SEC finalized rule changes that will broaden its definition of “accredited investor” to encompass industry professionals who have earned certain FINRA licenses.
An accredited investor is an investor considered sophisticated enough to weigh an investment’s merits independently. Accredited investors have easier access to certain types of investments, such as private equity offerings.
Under the newly expanded definition, General Securities Representatives (Series 7), Private Securities Offerings Representatives (Series 82), and Licensed Investment Adviser Representatives (Series 65) are now accredited investors. The SEC indicated that it may add other FINRA licenses later. Note that passing the exam by itself does not make you an accredited investor – you must have and maintain the license.
The rule change also allows “spousal equivalents” such as domestic partners to qualify as accredited investors based on the total income and assets of both partners, a benefit previously limited to couples who are legally married. Native American tribes and foreign governments now qualify as accredited investors as well.
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Of those three tests, which is the easiest to pass?
Hello Mr. Kaufman,
Of the three, probably the Series 82 is the easiest to pass simply because it’s much shorter than the other exams. But, you have to have a firm sponsor you for the exam … and that means you have to have a job that requires the license. I would not choose the exam based on which is easiest. I would choose the exam based on what type of work you will be doing and what your firm believes is best for your position.
-Jeremy Solomon
Do you need to be sponsored by a firm
For every one of those exams.
Hi Jason, thanks for your question. For the Series 65, you do not need to be sponsored by a firm.
Does this apply for Canadians as well?
Hi Shayne, you actually need the 7, 65, or 82 license to qualify as an accredited investor in this way. This requires getting hired by a firm, which may be more difficult if you aren’t a U.S. resident.
Is it possible for a foreigner who is a non-US resident to take the test for the Series 65 License in order to qualify as an accredited investor?
Hi O.S.,
The exam by itself does not make someone an accredited investor. That person would have to become registered as the type of representative associated with the exam. In the case of the Series 65, the person would have to become an Investment Adviser Representative. This requires being hired by an Investment Adviser in the U.S. and registering at least one state.
We hope this helps. Thanks for your comment!
I am a registered investment adviser in Germany (also German citizen and resident). Can I qualify as an accredited investor by passing the Series 65 exam? Or is it impossible to attain that status as a non-US-citizen, non-US-resident with the broadened definition, as the types of representative that are associated with the exams are all strictly US-based?
Thank you for your question, Paul. According to the NASAA, you cannot qualify as an accredited investor just by passing the Series 65. The person has to pass the exam AND be licensed as an IAR in his/her U.S. state as well. In order to become a licensed investment adviser representative, a person must first apply through the investment adviser firm with which the individual is affiliated for registration with a state securities regulator. I hope this helps!