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The Securities and Exchange Commission has approved broad proposals intended to give individual investors greater access to private markets. The decision arrives as asset managers increasingly pursue retail money and face growing scrutiny over whether private investments can meet ordinary investors’ expectations for liquidity.

SEC Chairman Paul Atkins said demand for private market opportunities is increasing. He argued that exposure to “one of the great engines of American enterprise” should “not be reserved for the wealthiest or for those deemed to be the most sophisticated.”

The proposals, approved Wednesday by the U.S. regulator, would expand the number and types of pathways through which individuals may qualify as accredited investors. That status can determine whether a person is permitted to participate in certain private investment opportunities.

Atkins has made broader individual participation in private markets one of his priorities at the commission. He also emphasized the regulator’s responsibility to protect investors as it considers opening those markets more widely.

“One of my priorities for the Commission is to explore ways to facilitate the ability of individual investors to participate in private markets, while at the same time protecting those investors from bad actors and fraud,” Atkins said in a statement.

The SEC proposals would permit registered investment advisers to charge performance fees of as much as 20%. That level is comparable with fees historically charged in the hedge fund and alternative investment sectors.

Allowing those fees could encourage more private asset managers to enter the retail wealth market. The proposed changes therefore address both investor eligibility and the financial incentives facing managers that might offer private market products to individuals.

The Trump administration has sought to loosen regulatory guardrails surrounding private markets while expanding access for ordinary investors. Last August, President Donald Trump signed an executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors.”

That order allows Americans to place more of their retirement plan assets into private equity and other alternative investments. The SEC proposals represent another step toward broadening the range of private assets available beyond wealthy or institutionally connected investors.

Yet the expansion is unfolding while the private assets industry faces questions about liquidity. Private investments can be harder to sell, even when they offer higher yields, and those features may conflict with retail investors’ expectations that their money will remain readily accessible.

Some private credit business development vehicles described as “semi-liquid” experienced a surge in redemption requests earlier this year. Investors, including retail clients, sought to withdraw money amid concerns about risky software debt.

In February, Blue Owl Capital paused regular quarterly cash redemptions in its U.S. retail focused Blue Owl Capital Corporation II fund. The pause followed an increase in investor withdrawal requests.

Other private credit managers also encountered pressure from investors seeking cash. Blackstone and Apollo received repurchase requests that exceeded the existing quarterly limits imposed by their funds.

Those limits have become central to the debate over whether private market products are suitable for a broader retail audience. Investors may be able to request repurchases, but the structure of a fund can restrict how much money leaves during a particular quarter.

Blackstone Chief Operating Officer and President Jon Gray defended such restrictions in a March interview with CNBC. Gray said gating measures are “really a feature, not a bug” of private credit vehicles.

The SEC’s plans could substantially widen access while giving managers more freedom to collect performance fees from retail oriented products. At the same time, this year’s redemption pressure shows why access to private markets does not necessarily carry the same liquidity profile as publicly traded investments.

The regulator is now pursuing both objectives described by Atkins: making private market participation easier for individuals and protecting those investors from fraud and bad actors. The proposals place that balancing act at the center of Washington’s widening push to bring private assets into retail portfolios.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.