SEC Proposes $100 Exam to Open Private Market Investing to Retail Investors
The Securities and Exchange Commission has proposed a new qualification exam that would allow individuals to invest in private companies without meeting traditional wealth thresholds. Under current regulations, individuals must have a net worth of at least $1 million or an annual income of $200,000 to qualify as accredited investors. The proposal would introduce an in-person test administered by FINRA costing roughly $100, which would grant accredited status for 10 years.
If adopted, the rule could broaden access to private equity and venture-stage startups for ordinary Americans, particularly as private-fund fundraising experiences a downturn. The proposal also includes automatic qualification options for certified public accountants, chartered financial analysts, and certified financial planners. However, reaction remains mixed. Brian Armstrong praised the proposal as a major step forward, while critics, including SEC Commissioner Hester Peirce and Noah Damsky, argued that requiring a test maintains the government's role as a gatekeeper and may not suit typical retail investors.
The public comment period for the proposal remains open until December 4. Market participants and investors will be watching to see if the SEC modifies the proposal based on feedback before finalizing the rule.
Key points
- The SEC proposed a $100 test administered by FINRA to grant accredited investor status for 10 years.
- The exam would let individuals without a $1 million net worth or $200,000 salary invest in private firms.
- CPAs, CFAs, and CFPs could receive automatic qualification as private-fund fundraising slows down.
- Critics contend that an exam still leaves regulatory gatekeepers in control of retail investor access.
- The public comment window for the proposed rule closes on December 4.
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What is the SEC proposed accredited investor exam?
It is a proposed $100 in-person exam built by FINRA that would allow individuals without $1 million in net worth or a $200,000 income to invest in private companies. Qualification would last for 10 years.
When is the public comment deadline for the SEC accredited investor rule?
The public comment period for the SEC accredited investor exam proposal is open until December 4.
Who qualifies automatically under the SEC accredited investor proposal?
The SEC is considering automatic qualification for Certified Public Accountants (CPAs), Chartered Financial Analysts (CFAs), and Certified Financial Planners (CFPs).