The SEC has closed a loophole that previously allowed individuals to artificially inflate net worth before investing in unregistered securities offerings. Advisors are generally supportive of the change.
The regulator on Wednesday said the value of a person’s primary residence must be excluded from net worth calculations used to determine qualifications to invest in unregistered securities offerings. These offerings range from hedge funds to derivatives and private debt, which often are viewed as less transparent and risky than publicly registered offerings.
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