SEC Proposes Investor Exam for Private Market Access — SkimNews
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- SEC proposed expanding accredited investor status to include individuals who pass a new exam, with Chairman Paul Atkins saying at an open meeting that access "should not be solely" based on income or net-worth thresholds
- FINRA would develop the test — a roughly 75-question multiple-choice exam with a two-hour time limit, open to anyone 18 or older, priced around $100 and administered at testing sites nationwide
- Passed results would be valid for 10 years, after which individuals would need to retake the test or qualify under another part of the accredited-investor definition
- The SEC is considering adding certified public accountants, certified financial planners and chartered financial analysts in good standing as alternative qualifying credentials
- The proposal opens a 60-day public comment period, with TD Cowen analysts expecting the SEC to issue a final order by spring of next year
- Proponents like Willow Wealth CEO Mitchell Caplan say younger investors with knowledge but not wealth shouldn't be locked out, while Better Markets' Benjamin Schiffrin warned the private funds industry is "desperate" for retail capital as institutional investors scale back
Why it matters: The roughly 75-question, ~$100 FINRA exam could supplant the current $200,000 individual-income / $1 million net-worth thresholds that gate private equity, venture capital and hedge fund access. Critics argue the proposal funnels retail savings into less liquid, higher-fee private funds even as institutions pull back, and the 60-day comment window — with a final order expected by spring — will determine whether knowledge-based guardrails or broader access prevail.
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