The U.S. Securities and Exchange Commission (SEC) is considering a rule to increase retail exposure to private markets, according to official materials.
This ruling would amend existing and/or add new rules under the Investment Advisers Act of 1940 and the Investment Company Act of 1940. It would also allow advisers to charge performance fees to an expanded set of clients. This change would let advisers apply the performance-based fee structures typical of private funds to the broader base of retail investors the rule aims to reach.
As private markets have grown rapidly, the SEC is looking to give retail investors greater access to them. According to the materials, increasing retail investor exposure to private markets through registered funds and modernizing the performance fee framework would let investors diversify their portfolios according to their own risk tolerance and investment timelines.
Read the proposed ruling
