SEC Seeks Broader Access for Individual Investors in Private Markets

The Securities and Exchange Commission (SEC) has proposed reforms to widen individual access to private markets. The move aims to increase the pool of capital available to private-equity, early-stage, and alternative-asset managers.

One key proposal would allow registered investment advisers to charge performance-based fees of up to 20% based on fund results. This change could give more managers access to a fee structure commonly used by some hedge funds while serving individual investors.

The SEC also wants to expand the definition of an accredited investor, which currently allows individuals with certain qualifications or income thresholds to participate in private-market offerings. The revised criteria would include more holders of professional qualifications, such as certified public accountants and chartered financial analysts.

According to SEC Chair Paul Atkins, the commission wants to examine ways to broaden individual participation while protecting investors from fraud and misconduct. The proposals could affect fundraising channels for private and alternative-asset strategies, including those connected to crypto markets.