In practice
Verification is often done by reviewing tax returns or bank and brokerage statements, or by obtaining a written confirmation from a registered broker-dealer, investment adviser, attorney or CPA. A signed questionnaire alone is not enough. Funds may also file Form D. It is often confused with 506(b), which bars general solicitation but lets investors self-certify.
An example
Round numbers, not a real fundSay a manager posts about its new fund online under 506(c). Before accepting an investor’s money, it must verify that investor is accredited, for instance through documents.
Why it matters
It is the route for managers who want to market openly, at the cost of checking each investor’s status.
A definition, not advice; where usage varies the entry says so. Something wrong? Tell the desk.