The U.S. Securities and Exchange Commission (SEC) is considering a significant change to the criteria for accredited investor status, which currently limits access to private investments like private equity and hedge funds to individuals meeting specific income or net worth thresholds.
The proposed solution includes an exam developed by FINRA, allowing individuals aged 18 and older to demonstrate their understanding of investment risks and regulatory requirements. This initiative aligns with efforts to increase access to alternative investments, which proponents argue could offer greater diversification and higher returns.
However, there are concerns about the complexity and risks associated with private investments, as well as the adequacy of a test that only assesses financial knowledge without considering an investor's capacity to absorb losses. The SEC is also contemplating recognizing certain professional credentials as qualifying criteria.
A public comment period will follow, with a final decision expected in spring 2027