Clifford Chance

Impact of DOMA's unconstitutionality on the definitions of 'accredited investor' and 'qualified purchaser'

27 June 2013

The June 26, 2013 decision of the US Supreme Court in United States v. Windsor, by invalidating Section 3 of the Defense of Marriage Act ("DOMA"), among other things has the effect of changing the meaning of the term "spouse" in the definitions of "accredited investor" in Rule 501(a) of the SEC's Regulation D under the Securities Act of 1933 (the "1933 Act") and "qualified purchaser" in Section 2(a)(51) of the Investment Company Act of 1940 (the "1940 Act").  Effective immediately, an individual's "spouse" now includes anyone to whom the individual is married, including someone of the same sex.  The resulting expansion of eligibility for accredited investor and qualified purchaser status will have a positive impact on capital formation by emerging growth companies and other issuers and will broaden the base of potential investors in private equity and hedge funds.

Download PDF