SEC Proposes Rules to Expand Retail Access to Private Equity, Credit and Venture Capital

The US Securities and Exchange Commission on Sept. 30 proposed rules to broaden retail investor access to private assets such as private equity, private credit, real estate and venture capital, part of the Trump administration's push to "democratize" investments traditionally reserved for professionals. The three-member SEC, which currently has no Democratic commissioners, issued five notices proposing that accountants, chartered financial analysts, certified financial planners, investment banking license holders and licensed research analysts qualify as accredited investors, a status now requiring wealth and income tests. A separate proposal would let closed-end funds redeem investor shares monthly and offer more share classes, which SEC attorney Susan Ali said would boost shareholder liquidity. The agency also proposed changes to performance fees for investment advisers, letting them charge based on clients' capital gains. Critics, including financial advisers, warn the changes could expose retail investors to higher, harder-to-price risk. The proposals require public comment before adoption.