United States: SEC Moves to Open Private Markets to Retail Investors
By: Jon-Luc Dupuy, Timothy C. Foley, Hannah J. Munro, and Jordan A. Knight
On 30 September 2026, the SEC proposed rule amendments advancing Chairman Paul S. Atkins’ “responsible retailization” of private markets, expanding retail access to private-market strategies while adding key investor safeguards.
Two Proposals to Broaden Private Market Access
The first proposal would permit registered investment advisers to receive performance-based compensation from a broader range of clients, including registered management investment companies and business development companies (collectively, “regulated funds”) such as mutual funds, ETFs, interval funds, and other closed-end funds, subject to board oversight, governance requirements, and enhanced disclosure. It would also revise the qualified client definition so accredited investors automatically qualify for performance-fee arrangements, eliminating the separate net worth and assets-under-management tests. Historically, performance-based fee arrangements have largely been limited to private funds and other qualified clients. The proposal is designed to expand retail access to private-market and alternative investment strategies.
The second proposal would modernize interval and closed-end fund structures by extending the period before an interval fund’s initial repurchase offer, permitting monthly repurchase options, streamlining repurchase requirements, allowing deferred sales loads, and extending Rule 18f-3 to regulated closed-end funds, including BDCs, to permit multiple share classes without exemptive relief.
A Third Track: Redefining Who Qualifies
Separately, the SEC requested comment on additional pathways to accredited investor status based on tested knowledge or professional expertise, including a FINRA-developed examination for the general public and recognition of CPA, CFA, CFP, Series 79, and Series 86/87 credentials. These pathways would supplement existing income and net worth tests to further expand investor access to private markets.
Why It Matters
Together, the initiatives would expand retail participation through performance-based fee arrangements, modernized fund structures, and broader accredited investor eligibility. The SEC also emphasized safeguards addressing fee complexity, illiquid asset valuation, liquidity management, and investor disclosure. The proposals will be subject to a 60-day public comment period following Federal Register publication and could affect how private-market strategies are structured, distributed, and offered to retail investors. We will provide additional analysis in future client alerts and updates.