SEC sends a proposal to widen retail access to private markets to the White House for review
The SEC has sent a proposal to the White House Office of Management and Budget that would expand retail investor access to private markets and allow advisers to charge performance fees to a broader set of clients.
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SEC Proposal Heads to White House
The @SECGov has sent a formal proposal to the White House for review that would open private markets to a wider pool of retail investors. The plan would expand access for retail investors to private markets and allow investment advisers to charge performance fees to a wider set of clients, with the proposal received by the White House Office of Management and Budget on Monday. OMB review is a standard procedural step before a rule can be published for public comment.
The item had already appeared on the SEC's July rulemaking agenda under the heading "Enhancing Retail Exposure to Private Markets." Among its objectives, the SEC said it is seeking to "facilitate retail investor exposure to private markets through registered investment companies."
Performance Fees and the Qualified Client Threshold
A central element of the proposal concerns who advisers can bill on a performance basis. Under the Investment Advisers Act, advisers are currently permitted to charge performance-based fees only to clients deemed "qualified clients," meaning investors with at least $1.4 million under an adviser's management or a net worth exceeding $2.7 million. The SEC's agenda signals a possible reduction of that threshold or an outright removal of the restriction.
The SEC indicated that facilitating retail investor access to private markets through registered funds and expanding performance-fee eligibility could provide additional opportunities for investors seeking greater diversification consistent with their investment objectives, investment time horizons and risk tolerance, in light of the significant growth of private markets over the past two decades.
SEC Chairman Paul Atkins has consistently argued that private markets "should not be reserved for wealthy insiders," and has said the agenda includes a proposal to better facilitate retail investor participation in private markets "while preserving their protection with appropriate safeguards." The proposal remains subject to OMB review before it can proceed to a formal public comment period.
Sources:
Bloomberg: Retail Investors Could Gain Private Market Access Under SEC Plan
SEC.gov: Chairman Atkins Statement on the 2026 Regulatory Agenda
American Banker: SEC Pushes Private Market Access
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