SEC proposes broader private-market access for non-wealthy investors

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SEC expands private-market access

Highlights

SEC proposes rule changes expanding private-market access to non-wealthy investors through additional professional licenses and a FINRA-developed exam, with a $100.50 fee.
Under current rules, only 12.6% of the population qualify as accredited investors; new measures could increase eligibility significantly but minimum investment thresholds persist.
SEC seeks to allow business development companies to offer multiple share classes, and make performance fee charges easier for advisers managing accounts above $1.4 million.

Proposed access changes and exam pathway

As reported by Business Insider, the Securities and Exchange Commission announced on Wednesday a package of proposed rules and regulatory actions aimed at making it easier for investors to enter private equity, private credit, and other private-market funds.

These funds are currently mostly limited to accredited investors, a category that generally includes people with more than $1 million in net worth excluding a primary home, individuals earning more than $200,000 a year, couples earning more than $300,000, or certain licensed investment professionals. Under one proposal, the SEC would expand eligibility to more professional licenses, including accountants, financial planners, investment bankers, and research analysts, while also creating a possible new route through an exam.

The test has not yet been developed, but it would be created by the Financial Industry Regulatory Agency, or FINRA. SEC Chair Paul Atkins says the goal is to let investors qualify based on knowledge rather than wealth alone, while still recognizing the risks involved in private offerings.

A 2025 study sponsored by the SEC found that 12.6% of the population qualifies as an accredited investor under the current rules. The proposed exam would be modeled largely on FINRA's Securities Industry Essentials Exam and would cover subjects such as securities structures, investment risks, disclosures, and conflicts of interest, but it would not qualify a person to work in the securities industry.

It would be open to anyone aged 18 or older and would carry a fee similar to the SIE exam, $100.50. Investors seeking access through that route would need to take the test in person.

Broader push into private markets

The SEC's proposals follow President Trump's executive order directing agencies to expand access to private markets, as well as subsequent action by the Department of Labor to make it easier to include private assets in 401(k) plans.

Other proposed SEC changes pursue similar objectives. One would allow all business development companies, the structure used by many retail private credit funds, to offer multiple share classes that can increase compensation for advisers selling the products. Another would revise redemption rules for interval funds, a structure that drew attention during this spring's private credit redemption pressures.

The commission is also proposing to make it easier for financial advisers to charge performance fees on client accounts. At present, such fees are generally limited to qualified clients with more than $1.4 million in assets managed by the adviser or a net worth above $2.7 million.

Research firm Cerulli Associates says U.S. financial advisers currently allocate $1.9 trillion to fully liquid private-market strategies and expects that figure to rise to $3.7 trillion through 2029. Even if the exam route is eventually adopted, however, minimum investment thresholds for many funds are likely to remain a practical barrier for smaller investors.

Our earlier coverage of the SEC’s proposed rule changes to broaden retail access to private markets explained how the package would reshape retail investment vehicles by revising interval-fund redemption mechanics and allowing multiple share classes. We also noted the SEC’s push to permit performance-fee arrangements in certain retail fund structures, while highlighting that wider access could come with higher fees and less liquidity for individual investors.

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