Sharpen your pencils. If you weren’t rich enough to invest in private equity before, you soon may just have to pass a test to put your money into the private markets.
The Securities and Exchange Commission announced on Wednesday a suite of proposed rules and regulatory actions to make it easier for people to invest in private equity, credit, and other private-market funds.
These funds are mostly only open to accredited investors, which has historically meant people with a net worth of more than $1 million, excluding their primary home, those who make more than $200,000 a year individually or $300,000 with a spouse, or certain licensed financial investing professionals.
One proposed regulatory change would open up accredited investing to more professional licenses — accountants, financial planners, investment bankers, and research analysts — but also add a new potential way to become an accredited investor: an exam.
The exam, yet to be developed, would be created by the brokerage-industry agency, Financial Industry Regulatory Agency, or FINRA. The idea, said SEC Chair Paul Atkins, is to allow investors to invest in private markets without having to prove their purse is big enough, even though he notes there are still “risks.”
“I agree with the fundamental notion ingrained in today’s notices that accredited investor access to private offerings should not be limited solely to individuals satisfying financial thresholds and that such thresholds are not the sole indicators of a person’s ability to assess the merits and risks of an investment,” Atkins said in commentary at the SEC public meeting.
A 2025 study sponsored by the SEC found that 12.6% of the population qualified as an accredited investor under the current rules.
What an exam might look like
While the exam is still in the works, it would be largely modeled on FINRA’s existing Securities Industry Essentials Exam, which tests on basic securities-industry knowledge. Proposed topics include definitions and structures of securities, investment risks, disclosures, and conflicts of interest. Unlike the exam taken by aspiring financial professionals, passing it would not qualify someone to work in the securities business.
It would be open to anyone 18 or older and would have a fee similar to the SIE exam, $100.50. Those wanting to get access to private markets would have to do the test in person.
A push to private
These changes follow President Trump’s executive order asking agencies to expand access to private markets and subsequent moves by the Trump administration’s Department of Labor to make it easier to put private assets in 401(k) plans.
The other potential rules announced by the SEC have similar goals. One proposal would make it so that all business development companies, the structure behind many retail private credit funds, can offer multiple share classes that help advisors make more money selling the funds. Another rule would adjust redemption rules on controversial interval funds that were part of the focus of this spring’s private credit redemption rush.
Finally, the Commission is proposing to make it easier for financial advisors to charge performance fees on their clients’ accounts. Previously, they could only charge these fees on “qualified clients” with over $1.4 million in assets under management with the advisor, or those with a net worth of over $2.7 million.
US financial advisors currently allocate $1.9 trillion to private market strategies that are fully liquid, according to research firm Cerulli Associates. It expects that number to grow to $3.7 trillion through 2029.
This exam is still a long way off. But under the proposal, studying up and passing an exam could be enough to open the private markets to investors without seven-figure net worths — though fund minimums mean you may need more than pennies to actually invest.
