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Accredited Investor

Trading Term

An accredited investor is an individual or entity that meets specific financial criteria set by the U.S. Securities and Exchange Commission (SEC), qualifying them to invest in private placements, hedge funds, venture capital, private equity, and other non-registered securities. These investments often carry higher risk and less regulatory protection but may offer potentially higher returns and earlier access to innovative opportunities.

The accredited investor designation allows access to private capital markets that are typically less regulated but often seen as having higher return potential. These investments can include pre-IPO companies, real estate syndications, or startup equity. However, because these opportunities lack the disclosures required in public markets, the SEC limits access to those presumed to have the financial sophistication and risk tolerance to evaluate and bear such risks responsibly.

This classification helps balance investor protection with capital formation, ensuring that only those with adequate resources or expertise participate in higher-risk, less liquid offerings.

The Investor Category page in IBKR’s Client Portal allows users to determine if they qualify as an Accredited Investor (AI) among other investment categories.

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