The SEC has proposed an accredited investor exam that could expand private market access beyond wealthy individuals. Currently, only those with at least $1 million in net worth or $200,000 in annual salary can invest in most startups and private funds before they go public.
The Financial Industry Regulatory Authority (FINRA) would develop the test under the SEC proposal. Anyone aged 18 or older could take it, with roughly 75 multiple-choice questions completed in person over approximately two hours. The exam fee would likely be $100, matching FINRA's entry-level broker exam price, with passing scores valid for 10 years.
Test Content and Alternative Pathways
Investment risks would comprise 20% to 28% of the exam, with additional coverage of financial statements, conflicts of interest, and corporate governance. The SEC is also considering whether certain credentials should grant automatic qualification, including CPA, CFA charter, and CFP certifications.
Support and Opposition
Coinbase CEO Brian Armstrong endorsed the plan, stating it would address long-standing barriers that have prevented retail investors from accessing private deals. Crypto firms have already begun moving toward private markets, with MoonPay agreeing in September to acquire North Capital, a Utah-based broker specializing in private stock transactions.
However, opposition exists. SEC Commissioner Hester Peirce acknowledged the proposal nudges the gate open but expressed reservations about government gatekeeping. Noah Damsky, a principal at Marina Wealth Advisors, criticized the exam idea, arguing that many private-market products are poorly suited for ordinary investors.
Market Context
The timing coincides with a broader shift in private capital markets. Private fund fundraising is on track to decline for a fifth consecutive year, according to PitchBook data. With exits and payouts declining, institutional investors have less capital available for new funds.
Financial reform group Better Markets linked the SEC's proposal to this institutional pullback, with its securities policy director noting that private funds increasingly need retail savings as institutional investors withdraw from the market.
The public comment period runs through December 4. The exam proposal is part of SEC Chair Paul Atkins' broader initiative to open private markets to retail savers, which also includes a proposal allowing more funds to charge performance fees.
