US market regulator proposes fund rule reforms and investor exam
The Securities and Exchange Commission (US SEC) has moved to adjust regulations governing investment vehicles and capital generation, aiming to widen access for non-institutional participants and encourage development in regulated fund structures while retaining investor safeguards.
Under the draft measures, registered investment advisers would be permitted to receive performance-linked fees tied to capital growth or appreciation from specified client groups, including regulated funds.
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Corresponding updates to fund registration and reporting paperwork would make the disclosure of these remuneration terms mandatory.
The regulator plans to revise the operating structure for interval funds by permitting redemption timetables that correspond more closely with portfolio liquidity.
In addition, existing case-by-case exemptive orders would be replaced with a standardised framework enabling regulated closed-end funds to issue multiple share classes.
According to the Commission, these changes are intended to expand public access to varied investment options, heighten transparency, and align commercial incentives across the advisory sector.
In a separate consultation, the regulator is evaluating new routes for individuals to attain accredited investor status.
One proposal under consideration is an assessment administered by the Financial Industry Regulatory Authority (FINRA), offering a non-financial route for candidates to prove their knowledge of securities, investments, and commercial matters.
The agency is also reviewing whether individuals can qualify by maintaining specified professional certifications, designations, or licences in good standing.
Interested parties have 60 days to submit feedback once the proposals and notices appear in the Federal Register.
SEC chairman Paul S. Atkins said: “Investor demand for private market investment opportunities is growing, and 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.
The Commission’s efforts in this regard — focused on expanding opportunities for investors’ post-tax, pre-retirement dollars — complement efforts undertaken pursuant to President Trump’s Executive Order on Democratising Access to Alternative Assets for 401(k) Investors.”
