SEC Proposal to Expand Retail Access to Private Markets

TL;DR: The SEC voted on Sept. 30, 2026 to propose rules that would loosen performance-fee limits, ease interval fund repurchase rules, and seek comment on new ways to qualify as an accredited investor. Nothing is in effect. Comments run 60 days after Federal Register publication.

The Securities and Exchange Commission announced the vote as a way to expand retail investor choice in private markets. According to Foley & Lardner, private fund assets reported on Form ADV grew from $11.9 trillion to $36.8 trillion over the 10 years ending in 2025, and the SEC ties the initiative to Executive Order 14330 on democratizing access to alternative assets for 401(k) investors.

What did the SEC actually propose?

There are three tracks: how advisers to registered funds get paid, how interval funds handle repurchases, and who counts as an accredited investor. The proposing releases and Federal Register notices were published on October 5 and 6, 2026, so by simple count the 60-day comment windows run to about December 4 and 5.

The table below sets the three tracks side by side. Look at the middle row first if you own an interval fund.

Track	What would change
Performance fees	Advisers to registered funds and business development companies (BDCs) could charge up to 20% of net gains, including unrealized gains, without investor net worth requirements
Interval funds	First repurchase offer could be deferred up to two years, repurchases as often as monthly, and a principles-based liquidity standard
Accredited investor	Comment sought on an exam or on holding certain credentials

The table follows Gunster's summary of the proposals. A fund that can wait two years before its first repurchase offer is making a different liquidity promise from one that has to offer sooner.

How would performance fees change?

Registered funds could charge a share of gains that haven't been realized. Foley & Lardner says registered funds have historically been limited to fulcrum fees, used by only about 1% of registered funds, or for BDCs a statutory exception for fees of up to 20% of net realized capital gains. The proposal would widen that to unrealized gains.

A fee on paper gains puts more weight on how the fund values its holdings. That's worth knowing before you compare one fund's reported returns with another's. Our earlier piece on the qualified client threshold covers the separate rule on who can be charged performance fees by private fund advisers.

What would change for interval funds?

Interval funds would get more room on timing and less rigid liquidity rules. According to Gunster, new interval funds could defer their first repurchase offer for up to two years, offer repurchases as often as monthly without an exemptive order, and manage liquidity under a board-approved, principles-based standard rather than holding liquid assets equal to 100% of each repurchase offer.

More frequent offers sound like good news for exits. The catch is the liquidity cushion. Replacing a fixed asset requirement with a board judgment means you're trusting that judgment in a stressed market, when the cash is needed most. Commissioner Mark Uyeda cautioned, per Gunster, that interval funds "provide periodic liquidity; they are not a promise of frequent redemption." Our interval fund guide walks through the fine print, and the liquidity risk analysis shows where strain has already appeared.

Could you qualify as an accredited investor under this?

Possibly, but only if the SEC adopts something, and it hasn't. The SEC is seeking comment on additional ways to qualify. Gunster lists the ideas: passing an accredited investor exam developed by the Financial Industry Regulatory Authority (FINRA), or holding in good standing a CPA license, CFA charter, CFP certification, or a FINRA Series 79, 86, or 87 license.

That would let a professional with the right credential qualify without meeting an income or net worth test. A credential shows you passed a test. It doesn't show you can judge a sponsor. The separate legislative route is covered in our look at the INVEST Act.

Who benefits, and who doesn't?

The proposal is built to widen the pool of buyers for private-market products. Reuters reported that critics say the effort would help Wall Street, at the expense of retail investors. Both readings can be partly right. More access helps an investor who can't reach these strategies today, and it also gives fund sponsors a larger customer base for products with higher fees.

Downside first: under the fee track you could pay a share of gains that exist only on paper, under the interval track you could wait longer for your money, and under the accreditation track more people could buy products that are hard to sell. Access is not the same as a good deal.

If you want the 401(k) side of the push, we covered Trump's regulatory push on 401(k) alternatives, and our explainer on access through an adviser shows how that route differs from buying on your own.

Common mistakes

The most common error is treating a proposal as a rule, when final text can change after comments. A second is reading "monthly repurchases" as a promise you can exit monthly. The fund still decides how much it will buy back.

A third is judging a fund by its headline returns when performance fees may sit on unrealized gains. Ask how the fund values its assets and who signs off on those values.

FAQ

How would a performance fee on unrealized gains work? According to Gunster, advisers to registered funds and BDCs could charge up to 20% of a fund's net gains, including unrealized gains, without investor net worth requirements. That ties the fee to the fund's own valuations.

Will I be able to become an accredited investor by passing an exam? That's one idea the SEC is asking about. It is seeking comment on an exam developed by FINRA and on credentials such as a CPA license, CFA charter, or CFP certification. Nothing is adopted.

Do interval funds have to let me out monthly? No. Under the proposal a fund could offer repurchases as often as monthly, but it isn't required to. Commissioner Uyeda cautioned that interval funds are not a promise of frequent redemption.

Who can comment on the proposals? Gunster tells investors to consider participating in the comment process before the 60-day window closes. The sources we reviewed don't set an eligibility test, so the filing instructions in the SEC's proposing releases are the place to confirm how to submit.

What to do this week

If you hold or are weighing an interval fund, open its prospectus and find three things: how often it makes repurchase offers, what share of assets it has to keep liquid, and how it values its holdings. Noting those now gives you a baseline to compare against if the final rule looks like the proposal. And if you want the next rule change explained the same way, the free AIN briefing sends it to your inbox.

Educational content only. Not investment, tax, or legal advice. Not an offer or solicitation to buy or sell securities. Past performance does not guarantee future results. Private-market investments are illiquid and involve risk of loss, including total loss of capital. Consult qualified advisers. Angel Investors Network is not a broker-dealer or investment adviser.