Private Markets | Retail Guardrails
Craig Moreshead, Managing Director & CCO
On July 7, the SEC released its 2026 Regulatory Agenda, which includes an item titled “Enhancing Retail Exposure to Private Markets.” In announcing the agenda, Chair Atkins said the proposal would “better facilitate retail investor participation in private markets while preserving their protection with appropriate safeguards.”
Under the initiative, the SEC plans to propose amendments to existing rules, and potentially new rules under the Advisers Act and the Investment Company Act of 1940, by October 2026. The goal is to facilitate retail investor exposure to private markets through registered vehicles such as closed-end funds, including interval and tender offer funds. The initiative would also allow investment advisers to charge performance fees to an expanded set of clients by loosening the qualified client limits.
While the details of the anticipated rulemaking are still unclear, the SEC's prior statements offer some insight. In September 2025, the SEC's Investor Advisory Committee recommended that any expansion of retail access be paired with basic investor protection guardrails, and suggested that registered funds, including closed-end investment companies and interval funds, remain the most appropriate vehicle for that access. The guardrails under discussion include:
An expanded focus on investor sophistication, rather than income or wealth, when determining accredited investor status
Limits on the amount that retail investors, who don't meet sophistication or wealth criteria, can invest
Enhanced filing requirements and stricter enforcement of existing requirements
Improved disclosure and transparency to support investor decision-making
Momentum toward this goal has been building for some time. In May 2025, Chair Atkins announced that the SEC would no longer enforce its longstanding position, in place since 2002, that unlisted closed-end funds investing in underlying private funds limit such investments to 15% of assets. In August 2025, the White House issued an executive order directing the Department of Labor to reexamine its fiduciary duty guidance on asset allocation funds containing alternative assets, and to clarify safe harbors fiduciaries can rely on when recommending such funds. The DOL responded by immediately rescinding its Supplemental Private Equity Statement, which had previously warned fiduciaries against including alternative-asset allocation funds.
With the 2026 Regulatory Agenda, the SEC appears ready to move from informal signals to formal rulemaking. In its own words, facilitating “retail investor exposure to private markets through registered funds and modernizing the performance fee framework would provide needed investment opportunities for retail investors seeking to diversify their investment allocation in line with their investment time horizon and risk tolerance and open more opportunities for retail investors.”
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