Rule 501(a) defines accredited investors by wealth or income (over $1 million net worth excluding the primary residence, or over $200,000 income, $300,000 joint), by insider or professional status, and for entities by type or assets. Since 2020 holders of the Series 7, 65 and 82 licenses qualify, and on October 5, 2026 the SEC published notices asking for comment, due December 4, 2026, on whether to add a FINRA-developed exam, the CFA charter and the CFP certification; none of those has been adopted.
In this lesson you will
- State the Rule 501(a) financial tests for individuals.
- Identify the professional and entity categories of accredited investor.
- Explain how Rule 501(a)(10) credentials are designated, including the 2020 Series 7/65/82 order.
- Describe what the October 2026 notices would do and why they are not yet law.
Why the definition matters
For many companies, the accredited investor definition determines who is in their pool of potential investors, and for investors it determines whether they are eligible to invest at all [2]. Rule 506(c) sales may be made only to accredited investors, Rule 506(b) limits non-accredited participation, and both Regulation A and Regulation Crowdfunding cap how much a non-accredited investor may put in [3]. The SEC has said the definition is intended to capture persons whose financial sophistication makes the protections of registration unnecessary [3].
Accredited investors are the persons and entities that come within one of the enumerated Rule 501(a) categories, or that the issuer reasonably believes come within one [3]. That 'reasonably believes' language is why the verification practices covered in the next lesson matter: the issuer's diligence on an investor's status is part of what keeps the exemption available.
The financial tests for individuals
- Net worth over $1,000,000, alone or with a spouse or spousal equivalent, excluding the primary residence and debt secured by it up to the home's estimated value [1][3].
- Income over $200,000 in each of the two most recent years, or joint income with a spouse or spousal equivalent over $300,000, with a reasonable expectation of the same in the current year [1][3].
The rule states both tests as fixed dollar amounts [1]. Note the asymmetry: the net worth test excludes the primary residence, so a homeowner with most of their wealth in a house may not qualify even if their total net worth is far above $1 million.
Insider and professional categories
- Directors, executive officers and general partners of the issuer, or of a general partner of the issuer [1][2].
- Holders in good standing of SEC-designated professional certifications, designations or credentials under Rule 501(a)(10) [1][3].
- 'Knowledgeable employees' of a private fund issuer, for investments in that fund [1][2].
- 'Family clients' of a qualifying 'family office' whose investment is directed by that office [1][3].
Entities
Banks, registered broker-dealers, certain investment advisers, insurance companies, registered investment companies, business development companies, and small business or rural business investment companies qualify by status [1][2]. Corporations, partnerships, LLCs, business trusts and 501(c)(3) organizations not formed to acquire the securities qualify with total assets over $5 million, and any other entity type not formed for that purpose qualifies if it owns investments over $5 million [1][3]. An entity in which every equity owner is accredited also qualifies [1][2]. A qualifying family office needs more than $5 million in assets under management [3].
Rule 501(a)(10) and the 2020 license designation
Rule 501(a)(10), adopted in the SEC's August 26, 2020 amendments, confers accredited status on anyone holding in good standing a credential the Commission has designated by order after notice and an opportunity for public comment [3]. When it adopted the rule, the Commission designated the General Securities Representative license (Series 7), the Investment Adviser Representative license (Series 65) and the Private Securities Offerings Representative license (Series 82) [3]. When the SEC first proposed the rule, many commenters supported a dedicated accredited investor exam, and some argued that the Series 7, 65 and 82 exams were the wrong tool and preferred a purpose-built test [3]. The rule lists factors the Commission weighs, including whether the credential comes from an exam administered by a self-regulatory organization or industry body, whether the exam reliably demonstrates sophistication in securities and investing, and whether the holder's status is publicly verifiable [3].
The October 5, 2026 notices
On October 5, 2026, three SEC notices requesting comment were published in the Federal Register, each with comments due on or before December 4, 2026 [3][4][5]. Release No. 33-11445 says the Commission is considering whether to designate passage of an accredited investor exam to be developed by FINRA [3]. As described, that exam would have about 75 multiple-choice questions, about two hours of testing time, a fee expected to be similar to the $100 SIE exam fee and validity of ten years, after which a holder would need to pass again [3]. Release No. 33-11447 concerns holders of the Chartered Financial Analyst charter in good standing, and Release No. 33-11448 concerns holders of the Certified Financial Planner certification in the United States in good standing [4][5].
Key terms
- Accredited investor
- A person or entity within one of the Rule 501(a) categories, or that the issuer reasonably believes falls within one.
- Rule 501(a)(10)
- The category for holders in good standing of professional certifications, designations or credentials the SEC designates by order.
- Spousal equivalent
- A cohabitant in a relationship generally equivalent to a spouse; joint income and net worth may be combined with one.
- Primary residence exclusion
- The rule that a home's value, and debt secured by it up to that value, is left out of the $1 million net worth test.
- Knowledgeable employee
- Certain employees of a private fund who qualify as accredited for investments in that fund.
- Family office
- A qualifying single-family investment office with over $5 million under management; it and its family clients can be accredited.
- Notice and request for comment
- A Commission release seeking public views before it decides whether to act; it has no legal effect on its own.
Check your understanding
Sources
- [1]Electronic Code of Federal Regulations (eCFR), “17 CFR 230.501 -- Definitions and terms used in Regulation D.,” Accessed November 2026.
- [2]U.S. Securities and Exchange Commission, Capital-Raising Building Blocks, “Accredited Investors,” June 12, 2024 (last reviewed April 24, 2026).
- [3]U.S. Securities and Exchange Commission, “Potential Designation of Passage of an Accredited Investor Exam to Be Developed by FINRA as Qualifying Natural Persons for Accredited Investor Status (Release No. 33-11445),” October 5, 2026.
- [4]U.S. Securities and Exchange Commission, “Potential Designation of Chartered Financial Analyst Designation as Qualifying Natural Persons for Accredited Investor Status (Release No. 33-11447),” October 5, 2026.
- [5]U.S. Securities and Exchange Commission, “Potential Designation of Certified Financial Planner Certification as Qualifying Natural Persons for Accredited Investor Status (Release No. 33-11448),” October 5, 2026.
Educational content only — not legal, tax, or investment advice, or an offer to sell or a solicitation of an offer to buy any security. Rules and data are described as of November 2026 and may change. Securities offered through Umergence LLC, Member FINRA/SIPC.