kaal:claim:1806252-032

The numerical wealth requirements used to define qualified hedge fund investors fail as a regulatory device, because investors who meet the wealth thresholds do not always have the knowledge, understanding, and sophistication needed to invest in highly complex financial instruments.

The policy fails to take into account investors who technically fulfill the numerical wealth requirements but lack an adequate level of financial sophistication.

Kaal, Hedge Fund Regulation Via Basel III (2011), III.2.d Revision of Accredited Investor Standards, p. 48
https://ssrn.com/abstract=1806252 · source PDF

Kaal, Hedge Fund Regulation Via Basel III (2011). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1806252

• accredited investor standards under Regulation D and PFIARA

failuresupport: arguedfailure: wealth-as-sophistication-proxyfamily: investor-protection-gapinstitutional-design

• extended_by kaal:claim:2998097-010 Investor suitability standards requiring independent verification of an investor's ability to evaluate complex...
• extends kaal:claim:1428387-030 Unless an investor's business is primarily to invest in hard-to-value assets, that investor's sophistication c...

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