SEC Prepares Plan to Open Private Markets to Retail Investors

The US Securities and Exchange Commission has sent a proposal to the White House that would widen retail investors' access to private markets and let investment advisers charge performance fees to a broader range of clients. The plan, submitted to the Office of Management and Budget this week, would amend the Investment Advisers Act of 1940 and the Investment Company Act of 1940.

What happened

The SEC's proposal would let registered investment vehicles, such as mutual funds and exchange-traded funds, hold private equity, private credit and other illiquid assets that have traditionally been reserved for institutions and accredited investors. The regulator plans to publish a formal Notice of Proposed Rulemaking in October, open the plan to public comment, then vote on a final rule.

Chairman Paul Atkins framed the move as a matter of access rather than deregulation. "Exposure to the full dynamism of our markets, both public and private, should not be reserved for wealthy insiders," the SEC said in a statement.

Key facts:

• Amends two Depression-era statutes: the Investment Advisers Act of 1940 and the Investment Company Act of 1940
• Notice of Proposed Rulemaking expected in October 2026
• Runs alongside a separate Department of Labor proposal that would ease 401(k) plan access to private equity, private credit, real estate and crypto

Why it matters

Private equity and venture capital have delivered returns unavailable to most retail portfolios simply because access has been restricted by minimum investment sizes and accreditation rules. If the SEC's plan clears rulemaking, more investors could hold private-market exposure inside a standard brokerage account rather than through a specialised fund structure.

The change also complicates portfolio tracking. Private holdings are harder to price than listed stocks: valuations update quarterly rather than by the second, and disclosure requirements are lighter. Investor advocates have already flagged that retail buyers may not have the information needed to judge the risk of a private credit fund the way they can judge a public company's quarterly filing.

What to watch next

The SEC's timeline points to an October filing, followed by a comment period that typically runs 60 to 90 days before a final vote. In parallel, the EU is moving in the same direction: asset managers including EQT, Hamilton Lane and Apollo have launched evergreen ELTIF funds this year to give European retail and high-net-worth investors access to private equity, and the CFA Institute called this week for stronger investor protections as the EU expands that access.

For portfolio holders, the practical shift is not immediate. The October filing is a proposal, not a rule, and a final vote is unlikely before 2027. Tracking tools that already combine listed holdings with private stakes and manual assets are better placed to absorb this shift than those built around a single custodian feed.