SEC proposes expanding retail investor access to private markets

October 1, 2026 at 06:29 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

The U.S. Securities and Exchange Commission voted Wednesday to propose rule amendments that would broaden individual investor access to private markets, including expanding performance-based compensation for registered investment advisers. The proposals would also modernize the interval fund framework and replace existing exemptive orders with a rules-based framework for regulated closed-end funds to issue multiple share classes. The SEC separately issued five notices seeking public comment on new ways for individuals to qualify as accredited investors without meeting existing financial thresholds.

Key Facts

The SEC voted Wednesday to propose rule amendments that would broaden individual investor access to private markets, including expanding performance-based compensation for registered investment advisers.
The proposals would permit advisers to charge performance fees calculated on capital gains or appreciation to a wider set of clients, including regulated funds.
The SEC also voted to modernize the interval fund framework and to replace existing exemptive orders with a rules-based framework for regulated closed-end funds to issue multiple share classes.
The SEC issued five notices seeking public comment on potential new ways for individuals to qualify as accredited investors without meeting existing financial thresholds, including passing a new FINRA exam or holding certain professional credentials.
Public comment periods will remain open for 60 days after publication in the Federal Register.

Performance Fee Expansion

The SEC's proposals would permit registered investment advisers to charge performance fees calculated on capital gains or appreciation to a wider set of clients, including regulated funds. The agency said this could draw private market managers — including those running hedge fund, private equity, and venture capital strategies — into offering products to retail investors through the registered fund channel. SEC Chairman Paul Atkins stated that investor demand for private market investment opportunities is growing and that a priority for the Commission is to explore ways to facilitate individual investor participation while protecting investors from bad actors and fraud.

Accredited Investor Qualification

The SEC is considering whether passing a new exam developed by the Financial Industry Regulatory Authority, or holding certain professional credentials, should qualify investors for accredited status. Credentials under consideration include a U.S. certified public accountant license, a Chartered Financial Analyst charter, a Certified Financial Planner certification, the FINRA Investment Banking Representative license, and the FINRA Research Analyst license. The proposals align with President Donald Trump's executive order aimed at opening alternative asset classes to 401(k) retirement savers, according to CNBC.

Retail Liquidity Pressures

The SEC's move comes as the private credit industry's expansion into retail channels has drawn scrutiny. Several large private credit funds have faced redemption requests that exceeded their standard quarterly repurchase caps. Blackstone's BCRED fund capped investor withdrawals at 5% of shares outstanding after second-quarter redemption requests reached 10%. Morgan Stanley's North Haven Private Income Fund fulfilled roughly 43% of second-quarter withdrawal requests after investors sought to redeem 11.6% of units outstanding, more than double the fund's 5% quarterly repurchase cap.