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Rakhi Vasavada
Rakhi Vasavada, Financial Advisor
Category: Law
Satisfied Customers: 4545
Experience:  Attorney and Financial Expert. Have specialization in Financial Laws.Practice experience of over 13 years
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I need advice from an expert on UK and US securities law. I

Customer Question

I need advice from an expert on UK and US securities law.
I am a UK based certified 'sophisticated investor' intending to invest in an unregistered securities issue in the US needing clarifications about the relevant FCA/SEC exemption rules.
Submitted: 3 years ago.
Category: Law
Expert:  Rakhi Vasavada replied 3 years ago.
Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

To begin with, for you to invest in unregistered / unlisted securities in the US, you will need to be an "Accredited Investor" within the meaning of SEC (Securities and Exchange Commission)

It is defined as under:

(a) an individual (or married couple) whose (joint) net worth exceeds $1 million, excluding the value of the primary residence; or

(b) an individual with income exceeding $200,000 in each of the two most recent years, or a married couple with joint income exceeding $300,000 for those years, and a reasonable expectation of the same income level in the current year.

The basic purpose of the accredited investor concept is to identify persons who can bear the economic risk of investing in these unregistered securities.

Kindly refer the following document.

http://www.sec.gov/investor/alerts/ib_accreditedinvestors.pdf


You may please get in touch with SEC who would help you with a relatively short process of registering yourself as an Accredited Investor.

http://www.sec.gov/oacq


I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.

Warm Regards,


Expert:  Rakhi Vasavada replied 3 years ago.
Dear Friend,

I have something more to add.

Regarding the exemptions, such exemptions are available to the companies offering the shares, not to the investors.

Section 4(a)(5) of the Securities Act exempts from registration offers and sales of securities to accredited investors when the total offering price is less than $5 million.

The definition of accredited investor is the same as that used in Regulation D, which is explained in the above reply. Like the exemptions in Rule 505 and 506, this exemption does not permit any form of general solicitation or advertising. There are no document delivery requirements, but all transactions are subject to the antifraud provisions of the securities laws.

I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.

Warm Regards,