Accredited Investor Law and Legal Definition

The term accredited investor shall mean:

"(i) a bank, whether acting in its individual or fiduciary capacity, an insurance company, an investment company or a business development company; a Small Business Investment Company licensed by the Small Business Administration; or an employee benefit plan, including an individual retirement account, which is subject to the provisions of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, which is either a bank, insurance company, or registered investment adviser; or

(ii) any person who, on the basis of such factors as financial sophistication, net worth, knowledge, and experience in financial matters, or amount of assets under management qualifies as an accredited investor under rules and regulations which the Commission shall prescribe." [15 USCS § 77b Title 15; Commerce and Trade; Chapter 2a. Securities and Trust Indentures Domestic Securities]