Key facts
- The SEC is proposing new rules to expand access to private markets for investors.
- A new exam is being considered as a way for individuals to qualify as accredited investors.
- The proposed exam would be developed by FINRA and modeled on its Securities Industry Essentials Exam.
- Current accredited investor rules primarily rely on net worth or income thresholds.
- A 2025 SEC-sponsored study found 12.6% of the population qualified as accredited investors under current rules.
- Other proposals include changes to business development company share classes and interval fund redemption rules.
The Securities and Exchange Commission (SEC) announced on Wednesday a series of proposed rules and regulatory actions aimed at broadening investor access to private markets, including private equity, credit, and other private-market funds. These funds have historically been restricted to accredited investors, defined by specific net worth or income thresholds, or professional licenses.
One significant proposal involves introducing an exam, to be developed by the Financial Industry Regulatory Agency (FINRA), as an alternative pathway to accredited investor status. This exam would test basic securities industry knowledge, such as definitions, risks, and disclosures, and would be open to individuals 18 or older for a fee of $100.50. SEC Chair Paul Atkins expressed support for the idea that accredited investor access should not be limited solely to financial thresholds, acknowledging the inherent risks involved.
These proposed changes align with President Trump's executive order from 2020, which directed agencies to explore ways to expand access to private markets. The Department of Labor had previously taken steps to facilitate the inclusion of private assets in 401(k) plans.
Additional proposals from the SEC include allowing business development companies to offer multiple share classes to potentially increase advisor compensation and adjusting redemption rules for interval funds, which have faced scrutiny amid recent liquidity concerns in private credit. The commission is also proposing to ease restrictions on financial advisors charging performance fees, previously limited to 'qualified clients' with substantial assets under management.