SEC to Broaden Retail Access to Private Equity
US Securities and Exchange Commission (SEC) Chair Paul Atkins indicated that retail investors may soon gain opportunities to invest in private equity. The move would align retail access with that of large institutions, pension funds, and endowments.
Trump’s Order Sparks Regulatory Shift
Atkins linked the initiative to a recent executive order from President Donald Trump allowing crypto and alternative assets in 401K retirement plans. Speaking with Fox Business, he noted:
“It’s not really great to have a situation where large endowments and pension funds can be diversified in the public and private markets, while the 401Ks cannot.”
Atkins added that the SEC and the Department of Labor would coordinate efforts to bring parity to retail investors.
Guardrails for Alternative Investments
While supporting broader access, Atkins stressed the importance of investor protections. He warned against opening markets without safeguards, emphasizing the need for “proper guardrails” around risk-heavy alternative assets.
Crypto and Private Equity Access
The SEC has recently prioritized digital asset regulation to strengthen US leadership in crypto markets. Expanding private equity access could give retail investors entry into early-stage crypto projects and token sales typically limited to accredited investors.
Accreditation Rules and Risks
The SEC last updated accredited investor rules in 2020, shifting focus toward financial knowledge rather than only net worth. Still, current regulations exclude most retail investors from private equity opportunities.
Industry leaders argue that these restrictions prevent wider participation, while the SEC maintains they exist to protect investors from illiquid and high-risk markets. Critics warn that unchecked access could expose retail investors to financial instability and contagion risks during crises.
