An accredited investor is an individual or entity that meets specific financial criteria defined by the SEC (in the US) or equivalent regulators in other jurisdictions, qualifying them to participate in private securities offerings that are exempt from full registration requirements. In the US under Regulation D, individuals qualify with income exceeding $200,000 ($300,000 jointly) for the past two years, or net worth exceeding $1 million excluding primary residence. Entities qualify with assets exceeding $5 million, or if all equity owners are accredited.
Accreditation Verification
For Regulation D offerings relying on Rule 506(c) (which permits general solicitation), issuers must take "reasonable steps" to verify accredited investor status — not merely rely on self-certification. Verification methods include reviewing tax returns, obtaining bank/brokerage statements, or using third-party verification services. Rule 506(b) offerings (no general solicitation) allow self-certification through questionnaires, but the issuer must have a "reasonable belief" that investors are accredited.
Automated Accreditation in Fund Onboarding
Digital investor onboarding platforms automate accreditation verification as part of the subscription workflow. Investors upload documentation, third-party verification services confirm status, and the results are recorded in the fund's compliance records. This is particularly important for tokenized funds, where accreditation status must be verified before tokens can be minted and must be re-verified before secondary market transfers — ensuring compliance at every point in the token's lifecycle.