On September 11, 2025, the Securities and Exchange Commission’s (“SEC”) Investor Advisory Committee (“IAC’) released a draft report titled Retail Investor Access to Private Market Assets. The report adds to the growing policy momentum favoring reform of the eligibility criteria for investors in private offerings and reform of the regulatory framework applicable to pooled investment funds. The report recognizes the increasing size and importance of private markets while emphasizing the need for enhanced investor protections if retail access to these markets will be expanded. The IAC’s recommendations will be discussed during its upcoming September 18 meeting.
The report notes that enhanced access can be achieved either indirectly through exposure to registered investment vehicles or directly through individual investments. For indirect access, the IAC encourages the SEC to revisit longstanding interpretations that restrict how much registered closed-end funds and interval funds can invest in private funds or other illiquid assets. Until this spring, the SEC staff had prohibited registered funds from investing more than 15% of net assets in privately offered funds, unless the fund’s shares were limited only to accredited investors who made minimum initial investments of at least $25,000. The IAC also recommends requiring more robust valuation disclosures and clearer liquidity terms so retail investors can better assess redemption rights and limitations.
For direct individual investments, the IAC recommends reassessment of the accredited investor definition under Regulation D. Instead of relying primarily on income or net worth thresholds, the IAC suggests incorporating investor sophistication and credentialing, such as financial licenses or education. The report also recommends imposing reasonable limits for investors who do not meet wealth-based thresholds, such as caps on the percentage of income or net worth that can be allocated to private offerings. The IAC also proposes that the SEC evaluate whether retirement assets should continue to count toward the accredited investor calculation.
As we have previously blogged, private capital markets have grown significantly in recent years, now representing over $28 trillion in U.S. assets under management according to the IAC report. As a consequence many high-growth companies have access to private capital and delay or avoid public listings; this leaves retail investors with limited opportunity to invest in potentially high-performing assets. The IAC report seeks to balance access with the realities of liquidity risk, valuation opacity and investor understanding.
The IAC’s recommendations are likely to inform SEC staff considerations and potential rulemaking. Market participants, including fund sponsors, advisers and compliance teams, should monitor the evolution of these proposals. If adopted, they could pave the way for new types of permanent capital vehicles or expanded fund offerings aimed at retail investors. The outcome of the September 18 meeting may offer early signals on the direction of future SEC rulemaking proposals.
A link to the IAC report can be found here. An agenda for the IAC’s September 18 meeting can be found here.