SEC Proposes Amendments to Expand Retail Access to Private Markets
SEC Releases
Introduction
On September 30, 2026, the SEC proposed Amendments intended to expand retail investor access to Private Market Investments and modernize Regulated Fund structures.
The proposals address performance-based compensation for Investment Advisers, Interval Fund repurchases, and multiple Share Classes for certain Closed End Funds and BDCs. Separately, the SEC is seeking public comments on additional ways individuals could qualify as accredited investors.
Key Takeaways
- Performance Based Compensation: The SEC proposed expanding the ability of RIAs to receive Performance Based Compensation from certain clients, including Regulated Funds, subject to conditions. The proposal would allow eligible Advisers to calculate compensation based on net capital gains or capital appreciation, potentially making Private Market Strategies more accessible through Regulated Funds.
- Additional Compensation Disclosures: The proposals would amend certain Fund registration and reporting forms to require disclosure of Performance Based Compensation paid to Advisers, increasing transparency around these arrangements.
- Interval Fund Repurchases: The SEC proposed modernizing Interval Fund rules to provide greater flexibility in scheduling share repurchases. Proposed changes include allowing monthly repurchase intervals, extending the time before a Fund’s first repurchase offer, and permitting more frequent discretionary repurchases. The proposal would also replace certain prescriptive liquidity requirements with a principles-based framework.
- Multiple Share Classes: The SEC proposed allowing Regulated Closed End Funds and BDCs to issue multiple Share Classes under a rules-based framework, subject to conditions. This would replace the existing approach that relies on exemptive orders and provide Fund Managers with greater flexibility in structuring their offerings.
- Potential Changes to Accredited Investor Qualifications: Separately, the SEC requested public comment on additional ways individuals could qualify as accredited investors. Potential pathways include passing a FINRA-developed examination or holding certain credentials, including CPA, CFA, CFP, Series 79, or Series 86 and 87 qualifications. These options are under consideration and are not yet adopted changes.
Vigilant’s Conclusion
These proposed Amendments reflect the SEC’s effort to expand individual investors’ access to Private Market opportunities through Regulated Investment Funds while maintaining appropriate investor protections.
The SEC Chairman emphasized expanding investor choice, while Commissioner Uyeda highlighted the importance of ensuring that investment opportunities are understandable, fairly priced, and subject to appropriate governance.
If adopted, the Proposals could affect Investment Advisers, RICs, BDCs, and other Fund Managers by changing Performance Based Compensation arrangements, disclosure obligations, Fund structures, and Liquidity Management practices.
Firms should monitor the rulemaking process and evaluate how the proposed changes could affect their existing operations. This includes reviewing Performance Based Compensation arrangements, assessing potential changes to Fund registration and reporting disclosures, and considering how proposed Interval Fund repurchase and liquidity provisions could affect Fund Operations. Managers considering multiple share classes should also monitor the proposed framework and its conditions.
The SEC’s separate consideration of additional accredited investor qualifications is also worth monitoring, as changes could broaden the ways individuals demonstrate the financial sophistication needed to participate in certain Private Offerings. However, these potential qualifications remain under consideration and should not be treated as current eligibility requirements.
Importantly, the Amendments remain proposals, not final Rules. Firms should continue complying with existing requirements, monitor SEC developments, and assess the impact of any final rules once adopted.