SEC may raise standard for hedge fund investors

The Securities and Exchange Commission said Tuesday that it was moving to increase the minimum net worth required for an investor to be eligible to invest in hedge funds to $2.5 million from $1 million.

The five-member SEC is expected to vote on the proposal at an open meeting today.

SEC Chairman Christopher Cox told reporters at a briefing that he expected approval to put the proposal out for public comment.

Final action by the investor protection agency would come later.

“We are going to be lifting the accredited investor standard from where it has been since 1982 at $1 million of net worth to $2.5 million,” Cox said.

The increase is approximately equal to an inflation adjustment from 1982 and reflects “our sense of what matters and what is meaningful,” Cox said.