Income verification
Review tax returns, W-2s, or other IRS documents for the past two years showing income exceeding $200,000 ($300,000 joint).
Documents
- Tax returns (Form 1040)
- W-2 statements
- K-1 forms
- 1099 forms
Regulation guide
Regulation D 506(c) Compliance Guide
The definitive guide to accredited investor verification requirements, reasonable-steps standards, and compliance best practices for 506(c) offerings.
Key takeaways
- 506(c) allows general solicitation but requires verification of all investors as accredited.
- Issuers must take 'reasonable steps' to verify accredited investor status.
- Neutral verification infrastructure provides strongest regulatory protection.
- Verification must be documented and retained for audit purposes.
Show me the regulation
The exact citation, snapshot fields, retention period, and OMINEX events that satisfy each rule covered in this guide.
Each panel below is the full structured detail for a regulation referenced in this guide — drawn from the OMINEX regulation registry. Expand any one to see the citation, what it requires in plain language, what fields the examiner reads from the snapshot, the retention period, and the specific OMINEX event types that produce the evidence.
What is Regulation D Rule 506(c)?
Rule 506(c) is a securities exemption under Regulation D that allows issuers to raise unlimited capital from accredited investors while using general solicitation and advertising. This exemption was created by the JOBS Act of 2012 and became effective in September 2013.
Unlike Rule 506(b), which prohibits general solicitation, 506(c) allows issuers to publicly market their offerings. However, this flexibility comes with a critical requirement: all purchasers must be verified accredited investors, and issuers must take 'reasonable steps' to verify their status.
This verification requirement is the key distinction from 506(b) offerings, where issuers could rely on investor self-certification. Under 506(c), actual verification is mandatory, and failure to properly verify can result in loss of the exemption and significant regulatory penalties.
The 'reasonable steps' standard
The SEC deliberately did not prescribe specific verification methods, instead adopting a principles-based 'reasonable steps' standard. The agency considers (1) the nature of the purchaser and the accredited investor category, (2) the amount and type of information already available about the purchaser, and (3) the nature of the offering itself, with higher scrutiny for general solicitation.
The SEC has indicated that obtaining written confirmation from a registered broker-dealer, SEC-registered investment adviser, licensed attorney, or CPA — that they have verified accredited status within the prior three months — is considered a 'reasonable steps' safe harbor. OMINEX provides this neutral verification surface with attestation records.
Verification methods
Net worth verification
Review statements from banks, brokerage firms, and other financial institutions showing net worth exceeding $1 million (excluding primary residence).
Documents
- Bank statements
- Brokerage statements
- Real estate appraisals
- Liability statements
Professional credentials
Confirm current FINRA licenses (Series 7, 65, or 82) through BrokerCheck or similar verification.
Documents
- FINRA BrokerCheck verification
- License certificates
- Firm confirmation letters
Neutral third-party verification
Obtain written confirmation from a registered broker-dealer, SEC-registered investment adviser, licensed attorney, or CPA — or use neutral verification infrastructure.
Documents
- Verification letter
- Professional certification
- Attestation record
Accreditation criteria
| Category | Requirement |
|---|---|
| Individual — income | $200,000+ annual income for past 2 years with reasonable expectation of same in current year. |
| Individual — joint income | $300,000+ joint annual income with spouse for past 2 years with reasonable expectation of same. |
| Individual — net worth | $1,000,000+ net worth excluding primary residence value. |
| Professional credentials | Holds Series 7, Series 65, or Series 82 license in good standing. |
| Entity — assets | $5,000,000+ in assets (trusts, corporations, partnerships, LLCs). |
| Entity — accredited owners | All equity owners are individually accredited investors. |
Frequently asked questions
From rule to operating fit
This rule is one part of the broader digital asset compliance picture your team still has to prove in front of buyers, auditors, and regulators.
The mandate map shows where verification and recordkeeping requirements already apply across digital assets, tokenized capital markets, and related infrastructure. The business case explains how OMINEX helps teams reduce manual proof gathering, answer diligence faster, and move deals forward with less operational drag.
Originally published September 2024 · Last reviewed January 2025