The Securities and Exchange Commission (the “SEC”) recently completed the first of two Regulation D rulemakings mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”). The Dodd-Frank Act modified the net worth standard included in the definition of “accredited investor” under the Securities Act, as well as directed the SEC to adopt amendments disqualifying the offer or sale of securities in Rule 506 offerings by certain felons and similarly situated bad actors. In December 2011, the SEC adopted amendments to the net worth standard, with those changes effective on February 27, 2012. Meanwhile, the agency now expects to adopt amendments providing for disqualifications with respect to felons and bad actors in the first half of 2012.

As contemplated by Section 413(a) of the Dodd-Frank Act ? which was effective upon enactment on July 21, 2010 ? the SEC has amended the net worth standard included in the “accredited investor” definition specified in Securities Act Rules 215 and 501 to now exclude the value of an individual’s primary residence from the calculation used to determine if the individual (either alone, or jointly with the individual’s spouse) qualifies as an “accredited investor” on the basis of having a net worth in excess of $1 million, as measured at the time of exempt sale of the security to the individual.