At a public meeting, the U.S. Securities and Exchange Commission considered proposals to expand when registered investment advisers may receive performance based compensation and to modernize the framework for interval funds, which allow regulated closed end funds to offer periodic share repurchases at net asset value. The measures advance the SEC’s previously articulated approach of widening individual investors’ access to private market strategies through regulated channels while retaining investor safeguards. The performance compensation proposal is intended to encourage advisers offering private market or complex public market strategies to make them available to a broader range of clients and regulated funds. The interval fund proposal seeks to simplify and enhance that structure to support wider use by managers providing retail exposure to private markets. The SEC also considered five notices on additional nonfinancial routes to accredited investor status. Potential qualifying routes include passing an examination to be developed by the Financial Industry Regulatory Authority, holding specified accounting, financial analyst or financial planning credentials, or holding FINRA Investment Banking Representative or Research Analyst licenses. These routes would build on existing recognition of certain professional credentials as evidence that an individual can assess the merits and risks of unregistered offerings.
U.S. Securities and Exchange Commission considers proposals to widen retail access to private markets and accredited investor status
The U.S. Securities and Exchange Commission considered proposals to expand performance based compensation for investment advisers and modernize interval funds, with the aim of broadening regulated retail access to private market strategies. It also considered additional routes to accredited investor status based on an examination or specified professional credentials and licenses rather than financial thresholds alone.