You might be wondering how the SEC’s proposed regulations affect, if at all, prior SEC guidance on how to take into account debt on a primary residence in excess of the value of the residence for purposes of determining whether an investor meets the $1M net worth standard. And you might recall that following the passage of Dodd-Frank the SEC posted the following guidance on its web site:

Question: Under Section 413(a) of the Dodd-Frank Act, the net worth standard for an accredited investor, as set forth in Securities Act Rules 215 and 501(a)(5), is adjusted to delete from the calculation of net worth the “value of the primary residence” of the investor. How should the “value of the primary residence” be determined for purposes of calculating an investor’s net worth?