SEC Proposes Performance Fees, Interval Fund Overhaul to Widen Retail Access to Private Markets
A separate comment request asks whether a FINRA exam, or credentials like the CFA and CFP, should qualify individuals as accredited investors.
October 1, 2026
The Securities and Exchange Commission voted on Sept. 30 to propose a package of rule changes aimed at bringing private market strategies into registered funds. The package targets the economics and mechanics that have kept many of those strategies out of the retail channel: it would let advisers to regulated funds earn performance fees, rework the interval fund framework, and codify multiple share classes for closed-end funds.
Alongside the proposals, the Commission opened a separate comment request on new, non-financial routes to accredited investor status. None of it is final. Comment periods will run for 60 days after the proposing releases and notices appear in the Federal Register.
Incentives at the Center
The Commission's reasoning starts with pay. Performance-based compensation has long been a defining feature of hedge fund, private equity, and venture capital strategies. Because those arrangements have been tied to private funds, the agency said, access to the strategies has in practice been confined to a narrow pool of eligible investors. Permitting similar incentives for advisers to regulated funds, it reasoned, could make those advisers more willing to offer private market strategies through registered vehicles.
The four proposed changes would:
- expand the ability of registered investment advisers to receive performance-based compensation calculated on capital gains or capital appreciation from certain client categories, including regulated funds;
- require disclosure of performance-based compensation in certain fund registration and reporting forms;
- modernize the interval fund framework, including by letting funds schedule repurchases at times that better match the liquidity profile of the portfolio; and
- replace existing exemptive orders with a rules-based exemptive framework allowing regulated closed-end funds to issue multiple share classes.
Widening the Accredited Investor Gate
Separately, the Commission is asking whether passing an accredited investor exam, to be developed by FINRA, should qualify an individual as an accredited investor. The agency described such an exam as a non-financial way for investors to show enough sophistication to weigh the merits and risks of an investment.
It is also seeking comment on whether holding certain credentials in good standing should qualify. The designations under consideration are:
- a U.S. certified public accountant license;
- the Chartered Financial Analyst charter;
- the Certified Financial Planner certification in the United States;
- the FINRA Series 79 investment banking representative license; and
- the FINRA Series 86 and Series 87 research analyst licenses.
The Policy Backdrop
SEC Chairman Paul S. Atkins said in a statement that helping individual investors participate in private markets, while protecting them from bad actors and fraud, is among his priorities. He framed the effort as focused on investors' post-tax, pre-retirement savings and as complementary to work under President Trump's executive order on access to alternative assets for 401(k) investors.
The proposals arrive days after SEC staff issued a set of reminders on how BDCs, interval funds and other registrants should value and disclose private credit holdings as retail access widens.
