SEC proposes widening retail access to private markets

The US Securities and Exchange Commission has proposed a series of rule changes that could make it easier for private equity and other private markets managers to raise capital from retail investors, according to a report by The Wall Street Journal.

The regulator approved three proposals aimed at widening access to private funds. One would allow individuals to qualify for private fund investments by passing a test demonstrating financial sophistication or by holding certain professional qualifications, such as accounting or financial analyst credentials.

The SEC is also seeking to expand the types of funds permitted to charge performance fees, potentially making it easier for private equity managers to offer products to a broader investor base while retaining fee structures that include a share of investment profits.

A third proposal would give managers of interval funds greater flexibility over when they repurchase shares from investors.

All three measures were approved unanimously by the SEC’s three commissioners and will now enter a 60-day public comment period.

SEC chairman Paul Atkins said the proposals were intended to provide individual investors with greater access to private market opportunities while maintaining investor protections.

The changes come as expanding retail participation in private markets remains a priority for the Trump administration. Earlier this year, the US Department of Labor introduced measures aimed at facilitating the inclusion of private equity and other alternative assets in 401(k) retirement plans.

For private equity managers, a broader retail investor base could provide an additional source of capital at a time when fundraising from traditional institutional investors has become more challenging.

Private equity fundraising has fallen each year since 2023, according to PitchBook, as weaker distributions and slower exits have limited investors’ capacity to make new commitments. US private equity firms raised around $160bn in the first half of 2026, broadly in line with the subdued pace recorded in 2025.

The industry is also reportedly dealing with a large backlog of portfolio companies after a prolonged slowdown in exits, increasing pressure on managers to generate liquidity and find new sources of fundraising capital.

Will Dunham, president and chief executive of industry body the American Investment Council, welcomed the SEC’s proposals, pointing to the long-standing role of private markets in institutional pension portfolios.

However, Rajib Chanda, partner and global head of asset management at Simpson Thacher & Bartlett, said further regulatory changes would be required before private markets could be considered fully accessible to ordinary investors.

Questions also remain over the level of retail demand for private assets. A recent survey cited by the Journal found that only 10% of Americans were dissatisfied with their existing 401(k) investment choices and wanted access to alternatives such as private equity.

Consumer and investor groups have also raised concerns around lower disclosure requirements, liquidity constraints and the level of legal protection available to investors in private funds compared with public markets.