The US Securities and Exchange Commission has proposed new rules aimed at giving retail investors broader access to private assets, Reuters reported on Wednesday. The proposals also cover performance fees for retail funds operating in private markets, according to the Financial Times. Bloomberg reported that the regulator is moving to widen access to private funds.
The proposals arrive amid what Better Markets, a financial reform group, described as turmoil in the private markets. Better Markets said the SEC was responding to that turmoil by making it easier to sell private market assets to retail investors — a framing that signals the changes may draw scrutiny from investor-protection advocates.
A separate element of the review concerns who qualifies as an accredited investor. GlobeNewswire reported that KoreInside welcomed the SEC's examination of new paths to accredited investor status. That question matters because accredited investor definitions determine which individuals may take part in offerings that are otherwise restricted.
Taken together, the proposals touch on two long-running debates: how much risk individual investors should be permitted to take on in less liquid markets, and how fund managers are paid when those investments are held in retail products. Reuters characterized the package as new proposals for retail investors in private assets.
The proposals are not final. What to watch next is the public comment process and whether the SEC's accredited investor review produces concrete changes to eligibility standards, along with how investor groups such as Better Markets respond to the final text.
