Private Markets Go Public: Inside The SEC's Push For Retail Participation

Expanding retail access to private markets and alternative investments is top of mind for the current administration and Congress. To this end, the Securities and Exchange Commission (SEC), under the leadership of Chairman Paul S. Atkins, has been exploring ways to facilitate the ability of individual investors to participate in the private markets. In furtherance of this policy shift and changing regulatory landscape, on March 4, 2026, the SEC's Division of Investment Management (Division) hosted a Private Markets Roundtable to discuss the retailization of private markets, with a focus on governance, valuation, liquidity and investor protection considerations.

SEC Chairman Atkins' opening remarks, consistent with his statements in September of last year,¹ emphasized the SEC's focus on the "'responsible retailization' of post-tax, pre-retirement dollars for investors" and noted that the SEC would embrace "growth and innovation across all asset classes while protecting investors through guardrails that guide proper investment into these private assets."² Two panel discussions followed,³ which included participants from asset management firms, the Big Four accounting firms, rating agencies and representatives from the Division. The following are key takeaways:

1. Valuation - Practices and Governance

   The valuation process in private markets differs from public markets because there is less price discovery in private markets. Fair value determinations in private markets rely heavily on model assumptions and require implementing robust controls to help ensure that assets are valued properly. Fund managers and advisors must gain a clear understanding of their valuation obligations, which may differ depending on the asset class. Panelists specifically referenced valuation guidance of Rule 2a-5 under the Investment Company Act of 1940 (1940 Act) and recommended, pursuant to the rule, that fund boards: (a) create clear valuation policies and procedures; (b) engage in monitoring to ensure valuation policies and procedures are properly implemented; (c) assess on a regular basis the appropriateness of valuation methodologies; (d) diligence and use pricing services in the valuation process; and (e) involve multiple stakeholders, such as auditors and consultants, in asset valuations.

2. Clear Disclosure, Transparency and Education

   As private markets become more accessible to retail investors, panelists highlighted the importance of transparent, fulsome disclosures that help retail investors better understand their investments. These issues, including liquidity concerns, are especially amplified in the context of semi-liquid private market products such as business development companies (BDCs), interval funds, and tender offer funds, which may offer limited redemption windows.

3. Retail Pathways to Private Markets

   Panelists gave an overview of the private markets landscape, including: 1940 Act products such as BDCs, interval funds and tender offer funds; non-1940 Act structures like REITs; private funds registered under the Securities Exchange Act of 1934; collective investment trusts (CITs); and illiquid sleeves in mutual funds. Panelists also emphasized the importance of understanding how various regulatory regimes apply to different financial instruments. Katten's prior post, SEC's Strategic Shift to Expand Retail Investors' Access to Private Assets Provides New Opportunities: An Overview and Key Considerations, analyzes key features of many of these vehicles.

4. Emerging Trends

   Panelists identified several potential trends, predicting that artificial intelligence and other technological advancements could revolutionize valuations by synthesizing data more rapidly and enabling more frequent valuations. Panelists also predicted that the expansion of private market access in the 401(k) space could also increase scrutiny into valuation practices, noting that CITs now represent over half of the retirement market. Potential changes to the accredited investor definition could also further broaden access to private markets, making enhanced disclosures even more important.⁴

Footnotes

1. Chairman Atkins stated at an Investor Advisory Committee Meeting on September 18, 2025, that the SEC was "exploring ways to facilitate the ability of individual investors to participate in the private markets" and that "appropriate guardrails" were needed to protect investors from bad actors. Katten addressed the changing regulatory landscape in the wake of the current administration and the SEC's push to "democratize" access to alternative investments in a prior post. See SEC's Strategic Shift to Expand Retail Investors' Access to Private Assets Provides New Opportunities: An Overview and Key Considerations (October 24, 2025), https://katten.com/secs-strategic-shift-to-expand-retail-investors-access-to-private-assets-provides-new-opportunities-an-overview-and-key-considerations.

2. See Paul S. Atkins, Chairman of the Securities and Exchange Commission, Remarks at the Private Markets Roundtable (March 4, 2026) https://www.sec.gov/newsroom/speeches-statements/atkins-remarks-im-private-markets-roundtable-030426.

3. See https://www.sec.gov/newsroom/meetings-events/private-markets-roundtable.

4. Congress is considering legislative changes to the accredited investor standard, which is one of the most common gateways to accessing alternative investments, including private funds. While the accredited investor standard was last substantively revised in 2020, there is bipartisan support for legislation that would expand the accredited investor definition to include investors who invest through certain certified/licensed professionals and direct the SEC to engage in rulemaking intended to deem natural persons that have sufficient and demonstrable education or job experience as accredited investors, as verified by a self-regulatory organization. See H.R. 3394, Fair Investment Opportunities for Professional Experts Act (119th Congress) (Introduced May 14, 2025), https://www.congress.gov/bill/119th-congress/house-bill/3394/text .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.