What Investors Need to Know About New Qualified Client (QC) Thresholds
The SEC has issued its final order on Qualified Client (QC) thresholds, which take effect Sunday, June 29, 2026. The net worth threshold is increasing from $2,200,000 to $2,700,000 (including spousal assets; excluding primary residence). The assets under management (AUM) threshold is increasing from $1,100,000 to $1,400,000. Below are FAQs to help you understand if you need to take any action.
Q: The deal I’ve invested in has closed. Do I need to do anything?
No. A closed deal means your subscription agreement has been fully executed (i.e., signed by you and countersigned by the SPV). If that is the case, nothing changes. Your existing investment is not affected by the new thresholds.
Q: I’m in the process of investing right now. How does this affect me?
It depends on when the deal closes. Meaning, if your subscription agreement is fully executed (signed by you and countersigned by the SPV) before June 29, the current thresholds apply ($2.2M net worth or $1.1M AUM). If the deal closes on or after June 29, you’ll need to meet the new thresholds ($2.7M net worth or $1.4M AUM).
Q: I already signed my documents. Why would I need to re-sign?
The subscription agreement isn't fully executed until the SPV countersigns at close. If that takes place after the effective date, your investor qualification thresholds must reflect the new requirements. You would need to re-certify under the new thresholds and re-sign documents. This is a regulatory requirement, not a platform issue.
Q: I qualify as a Qualified Client under new thresholds and need to re-certify. How do I do that?
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If you have been invited to participate in a deal that requires all participants to be Qualified Clients:
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Navigate to the “Invest” tab (left sidebar) and click on the appropriate deal (see “Invited” status). You should see a page with a box titled “Invest in this deal” in the top left corner. Click on “Update Your Status” to update your certification status. Changes made here will be automatically applied to your investor profile.
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- If you have already invested in a deal that has not yet closed which requires all participants to be Qualified Clients:
- Navigate to your investor profile in “Profiles & Teams” page (left sidebar). Click on “Edit” at the top left corner of your investor profile, scroll down, and answer the questions in the “Are you a Qualified Client?” section.
- Navigate to your investor profile in “Profiles & Teams” page (left sidebar). Click on “Edit” at the top left corner of your investor profile, scroll down, and answer the questions in the “Are you a Qualified Client?” section.
Q: I qualified as a Qualified Client before. Why wouldn’t I qualify now?
The net worth threshold is increasing from $2.2M to $2.7M, and the AUM threshold from $1.1M to $1.4M. If your net worth or AUM falls between the old and new thresholds, you qualified under the prior rules but would not under the new ones.
Q: Does my primary residence count toward the net worth threshold?
No. As before, the value of your primary residence is excluded from the net worth calculation. Certain debt secured by the primary residence is also excluded. Spousal assets are included.
Q: Does this affect my Qualified Purchaser (QP) status?
No. The QP threshold ($5M+ in investments) is defined under a different section of the law and is not changing. If you qualify as a QP, this regulatory change does not affect your ability to invest.
Q: Why is this happening?
The Dodd-Frank Act requires the SEC to adjust Qualified Client thresholds for inflation every five years. The last adjustment was in 2021. This is a routine regulatory update, not a change in policy or a reaction to market conditions.
Q: When exactly does this take effect?
The new thresholds are in effect as of June 29, 2026.