SEC to Reconsider Closed-End Fund Retail Restrictions
Securities and Exchange Commission Chair Paul Atkins said Monday he is directing the agency to reconsider two decade-old rules that prohibit retail investors from tapping into closed-end funds, such as interval funds and business development companies.
Atkins said the SEC will reexamine a 23-year-old practice in which closed-end funds that allocate 15% or more to alternatives require $25,000 initial investment minimums and are open only to accredited investors.
“[M]any retail investors have missed out on opportunities to invest in closed-end funds that invest in private investment funds, like hedge funds and private equity funds,” Atkins said at the SEC Speaks event in Washington, D.C. “Much has changed since 2002 – including the growth of private markets and the increased oversight and enhanced reporting by both private fund advisers and registered funds.”
Atkins’ remarks are aimed at fostering innovation and “rebuilding trust between the SEC and market participants,” Cynthia Kelly, a senior compliance consultant at STP Investment Services, told FundFire in an email.
“The broader message points to a meaningful regulatory recalibration with clear implications for compliance teams,” she said.
Read what Cynthia and other subject matter experts had to say in FundFire here.
