While a lot of the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act do not kick for months if not years, one element directly affecting hedge funds is effective immediately. Investors no longer will be able to use the value of their primary residence in the $1 million threshold to qualify as an accredited investor. The other requirements to qualify as an “accredited investor” have not changed according to Sadis Goldberg LLP.
The law firm noted in a financial service alert that they believe the new requirement only applies to new investors and existing investors adding to their contribution but left a little wiggle by qualifying it with, “absent further guidance from the Securities and Exchange Commission.”