SEC Proposes Expanding Retail Access to Private Markets

The US Securities and Exchange Commission submitted a proposal to the White House Office of Management and Budget on Monday to expand retail investor access to private markets. The plan seeks to modernize the performance fee framework by amending the Investment Company Act of 1940 and the Investment Advisers Act of 1940, which would allow investment advisers to charge performance fees to a wider array of clients.

SEC Chairman Paul Atkins described the move as a matter of "freedom and fairness," arguing that the dynamism of both public and private markets should not be reserved for wealthy insiders. The commission intends to release the proposal for public comment following the White House review before the commission votes on a final version.

Advocacy groups, including Better Markets, have raised concerns regarding the proposal. They warn that private investments carry higher risks for retail investors because they are subject to fewer disclosure requirements than those found in public markets.