Accredited Investor: Definition and Requirements (2026)
Private funds can only accept certain investors. This guide explains the US accredited investor tests, how funds verify them, how they compare with qualified purchasers and qualified clients, and the equivalent rules in Singapore, Hong Kong, the UK and the EU.
Accredited investor status is not part of anti-money laundering law. It is a securities-law test of who may buy an investment that has not been registered or offered to the public. But for fund managers and administrators it sits in the same onboarding file as KYC: the investor states its eligibility in the subscription documents, and the fund checks and records it alongside identity, beneficial ownership and screening.
This guide sets out the rules as they stood on 23 October 2026. It is a summary, not legal advice; check the rule text and take advice for your own offering.
Who Is an Accredited Investor in the US?
The definition is in Rule 501(a) of Regulation D. A person qualifies if they fall within one of the categories, or the issuer reasonably believes they do, at the time of sale. The thresholds are "above" figures: exactly US$1 million of net worth does not qualify.
| Who | Test under Rule 501(a) |
|---|---|
| Individuals: income | Income above US$200,000, or joint income with a spouse or spousal equivalent above US$300,000, in each of the two most recent years, with a reasonable expectation of the same this year |
| Individuals: net worth | Net worth above US$1 million, alone or jointly with a spouse or spousal equivalent, excluding the primary residence |
| Individuals: credentials | Holders in good standing of the Series 7, Series 65 or Series 82 licence |
| Individuals: insiders | Directors, executive officers and general partners of the issuer, and "knowledgeable employees" of a private fund |
| Entities | Among others: banks, broker-dealers, registered and exempt reporting advisers, insurers; companies, partnerships, LLCs and certain trusts with total assets above US$5 million not formed to invest; entities owning investments above US$5 million; family offices with more than US$5 million under management; entities whose owners are all accredited investors |
For the net worth test, the primary residence is left out as an asset, and the mortgage on it is not counted as a liability up to the home's value. Any increase in that mortgage in the 60 days before the investment does count as a liability, unless it came from buying the home. The 2020 amendments added the "spousal equivalent", the professional credential route and the family office and knowledgeable employee categories.
How to Become an Accredited Investor
- Meet the income test in each of the two most recent years and expect to meet it again this year.
- Meet the net worth test, counting assets held jointly with a spouse or spousal equivalent.
- Hold a qualifying licence: the Series 7, Series 65 or Series 82, in good standing.
- Work in the fund as a director, executive officer, general partner or knowledgeable employee.
There is no registration or certificate. Status is assessed by each issuer at the time of each investment.
How Funds Verify Accredited Status
Rule 506 gives private funds two routes. Under Rule 506(b) the fund does not advertise; it can accept unlimited accredited investors and up to 35 non-accredited but sophisticated investors in any 90-day period, and it relies on a reasonable belief about status. Under Rule 506(c) the fund may advertise, but every purchaser must be accredited and the fund must take reasonable steps to verify it.
The rule lists non-exclusive ways to verify individuals:
- Income: review IRS forms for the last two years, such as Form W-2, 1099, Schedule K-1 or Form 1040, plus a written statement about the current year.
- Net worth: review asset statements dated within the last three months, and a consumer credit report for liabilities, plus a statement that all liabilities are disclosed.
- Third-party letter: written confirmation within the last three months from a registered broker-dealer, SEC-registered investment adviser, licensed attorney or CPA.
- Re-verification: if the fund verified the investor before, a written statement at the time of sale is enough for five years from that verification, provided the fund is not aware of information to the contrary.
Accredited Investor vs Qualified Purchaser vs Qualified Client
Three US tests often appear in the same subscription booklet. They answer different questions.
| Status | Main individual test | Where it matters |
|---|---|---|
| Accredited investor | Income above US$200,000 (US$300,000 joint) or net worth above US$1 million | Regulation D private placements, including most private funds |
| Qualified client | At least US$1.4 million managed by the adviser, or net worth above US$2.7 million (from 29 June 2026) | When an adviser charges a performance fee |
| Qualified purchaser | At least US$5 million in investments | Funds relying on section 3(c)(7) of the Investment Company Act (which may also accept knowledgeable employees) |
A qualified purchaser is a natural person, or family company, with at least US$5 million in investments; other entities generally need at least US$25 million invested on a discretionary basis. The qualified client figures were raised by an inflation order effective 29 June 2026.
Proposed US Changes
On 30 September 2026 the SEC published five notices seeking comment on six possible new designations that would make their holders accredited investors: a new FINRA accredited investor exam, a US CPA licence in good standing, the CFA charter, the CFP certification, the Series 79 licence and the Series 86/87 licences. Comments close on 4 December 2026, and nothing changes until the SEC issues an order. A separate proposal, published the same day with comments due by 7 December 2026, would replace the qualified client dollar tests with the accredited investor definition. In Congress, the INVEST Act, which would add exam and credential routes, passed the House of Representatives in December 2025.
Singapore: Accredited Investors and the Opt-In Regime
Section 4A of the Securities and Futures Act 2001 defines an accredited investor. An individual qualifies with net personal assets above S$2 million, of which the net value of their main home can count for at most S$1 million; net financial assets above S$1 million; or income of at least S$300,000 in the last 12 months. A corporation qualifies with net assets above S$10 million, based on its most recent audited balance sheet or, where it does not have to prepare audited accounts, a balance sheet it certifies, dated within the last 12 months. Certain trusts, partnerships and wholly owned companies also qualify.
Since 8 January 2019, eligible investors must generally opt in with each firm before being treated as accredited. The firm must assess eligibility, give the investor a written statement of the assessment, the right to withdraw, the prescribed general warning and a plain-language explanation of the consequences, and receive the investor's signed consent. Opt-in is specific to each firm. See our guide to MAS compliance.
Hong Kong: Professional Investors
Hong Kong uses the term "professional investor". Institutions such as banks and licensed intermediaries are professional investors by definition. Under the Securities and Futures (Professional Investor) Rules, an individual qualifies with a portfolio of at least HK$8 million, and a corporation or partnership with a portfolio of at least HK$8 million or total assets of at least HK$40 million. A trust corporation needs total assets of at least HK$40 million.
"Portfolio" means securities, certificates of deposit and money held by a custodian; property does not count. Status can be shown by an audited financial statement prepared within 16 months, or a custodian statement, auditor or accountant certificate, or public filing issued within 12 months. To rely on the SFC Code of Conduct exemptions for individual or corporate professional investors, a firm must explain the consequences and the right to withdraw, obtain the client's signed consent and repeat a confirmation every year; for corporate professional investors, a further assessment is needed before some exemptions apply.
United Kingdom and EU
In the UK, firms promoting unlisted company investments can rely on exemptions for high net worth individuals and self-certified sophisticated investors under the Financial Promotion Order. Since 27 March 2024 the high net worth statement requires income of £100,000 or more, or net assets of £250,000 or more, excluding the main home and pensions, signed within the 12 months before the promotion. Promotions of interests in unregulated funds rely on parallel exemptions in the Promotion of Collective Investment Schemes (Exemptions) Order 2001, or, for authorised firms, the FCA's rules, which were updated to the same thresholds. Separately, an individual can ask to be treated as an elective professional client under the FCA's rules if they pass qualitative and quantitative tests; the FCA has consulted on reforming that test (CP25/36, December 2025).
In the EU, MiFID II allows clients to be treated as professional on request if they meet two of three criteria: frequent significant transactions, a portfolio above €500,000, or relevant financial-sector experience. The firm must also assess the client's expertise and give written warnings. Under AIFMD, the marketing passport for alternative investment funds covers professional investors.
The Rules Side by Side
| Jurisdiction | Status | Individual thresholds | Corporate threshold |
|---|---|---|---|
| United States | Accredited investor | Income above US$200,000 (US$300,000 joint), or net worth above US$1 million excluding the main home | Total assets above US$5 million (most entity types) |
| Singapore | Accredited investor (opt-in) | Net personal assets above S$2 million (home counts for at most S$1 million), net financial assets above S$1 million, or income of at least S$300,000 in the last 12 months | Net assets above S$10 million |
| Hong Kong | Professional investor | Portfolio of at least HK$8 million | Portfolio of at least HK$8 million or total assets of at least HK$40 million |
| United Kingdom | High net worth individual (signed statement) | Income of £100,000 or more, or net assets of £250,000 or more, excluding the main home and pensions | Separate exemptions apply |
| European Union | Professional client (on request) | Two of three: frequent significant trades, a portfolio above €500,000, relevant financial-sector experience | Large undertakings are professional by default |
Where Eligibility Checks Sit in Investor Onboarding
Eligibility and AML checks are separate duties, but they rely on the same investor information and the same evidence trail. A typical onboarding file holds the investor's eligibility representation and supporting evidence next to the KYC record: identity, beneficial owners for entities, sanctions and PEP screening, and source of funds where the risk calls for it. Keeping both in one place makes it easier to show a regulator or auditor why an investor was accepted.
One Constellation handles the KYC and AML side of that file: an onboarding portal, identity checks, KYB and beneficial-ownership tracing, screening, risk assessment and case management. See investor onboarding, KYC for fund managers and our guide to fund subscription documents.
Frequently Asked Questions
What is an accredited investor?
In the US, an accredited investor is a person or entity that meets one of the tests in Rule 501(a) of Regulation D and may therefore invest in private offerings, including most private funds. Individuals qualify through income, net worth, a Series 7, 65 or 82 licence, or a role at the fund.
What are the accredited investor requirements for individuals?
Income above US$200,000, or US$300,000 jointly with a spouse or spousal equivalent, in each of the last two years with the same expected this year; or net worth above US$1 million excluding the main home; or a Series 7, 65 or 82 licence in good standing.
How do I become an accredited investor?
There is no application or certificate. You qualify by meeting one of the tests, and each fund or issuer assesses your status at the time you invest. Funds advertising under Rule 506(c) must also verify it, for example with tax forms, asset statements or a letter from a licensed attorney, a CPA, a registered broker-dealer or an SEC-registered investment adviser.
What is the difference between an accredited investor and a qualified purchaser?
A qualified purchaser is a higher test: individuals need at least US$5 million in investments. Funds relying on section 3(c)(7) of the Investment Company Act can only accept qualified purchasers (and knowledgeable employees), while most other private funds accept accredited investors.
What is an accredited investor in Singapore?
An individual with net personal assets above S$2 million (the main home counting for at most S$1 million), net financial assets above S$1 million, or income of at least S$300,000 in the last 12 months, or a corporation with net assets above S$10 million. Eligible investors must opt in with each firm before being treated as accredited.
Is accredited investor verification part of KYC?
No. It is a securities-law eligibility check, while KYC is an anti-money laundering duty. Funds usually collect and record both during investor onboarding, because they rely on the same information and documents.
Sources
- 17 CFR 230.501 (Regulation D definitions)
- 17 CFR 230.506 (Rule 506(b) and 506(c))
- SEC staff letter on minimum investment amounts (12 March 2025)
- SEC order adjusting qualified client thresholds (IA-6961)
- SEC notices on possible new accredited investor designations (33-11445 to 33-11449)
- Singapore Securities and Futures Act 2001, section 4A
- Securities and Futures (Classes of Investors) Regulations 2018
- Hong Kong Securities and Futures (Professional Investor) Rules, Cap. 571D
- UK Financial Promotion Order 2005, article 48
- FCA Handbook COBS 3.5 (elective professional clients)
This article is general information, not legal advice. Requirements change — check the current text with the regulator before relying on it.
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