To become an accredited investor the (SEC) requires certain wealth, income or knowledge requirements. The investor must fall into one of three categories. Firms selling unregistered securities must put investors through their own screening process to determine if investors can be considered an accredited investor.
The Verifying Individual or Entity should take reasonable steps to verify and determined that an Investor is an "accredited investor" as such term is defined in Rule 501 of the Securities Act, and hereby provides written confirmation. This letter serves to help the Entity determine status, take Investor statements regarding information, and waiver of claims."
Hawaii Accredited Investor Qualification and Verification Requirements for Reg D, Rule 506© Offerings In Hawaii, as in other parts of the United States, certain investor qualification and verification criteria must be met for individuals to qualify as accredited investors for Regulation D, Rule 506(c) offerings. Accredited investors are individuals or entities with a high net worth or significant investment experience, allowing them to participate in private securities offerings that are exempt from certain registration requirements. 1. Net Worth Requirement: One of the qualification criteria for accredited investor status in Hawaii is meeting the minimum net worth requirement. Individuals must have a net worth of at least $1 million, either alone or jointly with their spouse, excluding the value of their primary residence. 2. Income Requirement: Another criterion is meeting the minimum income threshold. An individual must have an annual income of at least $200,000 ($300,000 if jointly with a spouse) in each of the two most recent years, with a reasonable expectation of maintaining the same income level in the current year. 3. Entity-Based Accredited Investors: In addition to individuals, certain entities can also qualify as accredited investors in Hawaii. These include corporations, partnerships, limited liability companies (LCS), trusts with assets in excess of $5 million, and other entities with financial sophistication or professional investment knowledge. Hawaii does not mandate any specific verification requirements for determining accredited investor status but encourages issuers to exercise reasonable care in ensuring investors meet the necessary criteria. Issuers may conduct various verification methods to satisfy the requirement, such as reviewing an investor's tax returns, bank statements, credit reports, or obtaining written confirmation from a registered investment advisor, CPA, or attorney. It is important to note that Hawaii's rules align with the federal regulations set forth by the U.S. Securities and Exchange Commission (SEC). The SEC's rules under Regulation D provide a safe harbor for issuers who comply with the specific requirements, allowing them to engage in general solicitation and advertising while raising capital through private offerings. By adhering to Hawaii's accredited investor qualification and verification requirements, issuers can ensure compliance with both state and federal regulations, while attracting eligible investors to participate in their Rule 506(c) offerings.
