On March 4, 2026, the SEC held a Private Markets Roundtable on the accelerating retailization of private markets, with an emphasis on the appropriate valuation practices, liquidity management frameworks, and relevant investor protection considerations. The event was hosted by the Division of Investment Management with opening remarks from Chairman Paul Atkins and Director Brian Daly, and featured two panels that provided valuable insights into how regulators and industry leaders view the expansion of retail access to alternatives.

Here is a high-level overview of the main topics discussed:

1 - Direct and indirect retail pathways to private markets
The discussion highlighted the shift toward broader retail exposure through vehicles like 40 Act products (e.g., interval funds, BDCs, tender-offer funds), non-40 Act structures (REITs, CITs, Exchange Act-registered private funds), and illiquid sleeves in mutual funds/target-date funds. Panelists stressed choosing wrappers based on asset class (e.g., real estate favoring REITs) and distribution channels, with significant crossover of 40 Act-style rigor to non-40 Act products on large platforms. Panelists noted that 401(k)/retirement market growth could be achieved outside of SEC-regulated funds via CITs and highlighted the need for "appropriate updates" to front, middle and back-office processes to accommodate additional retail participation.

2 - Valuation practices and governance, with a focus on SEC Rule 2a-5 
Both panels delved into the key challenges in fair value determinations of private assets under Rule 2a-5, including board ownership, fund-specific policies, annual risk assessments, back testing of methodologies, independent pricing-service input, valuation committees, and NAV pricing discipline for illiquid assets. Public vs. private market volatility differences were debated (e.g., smoother private marks based on intrinsic price versus the potential for pricing lags), alongside the growing role of AI data standardization for accuracy. Secondary-market purchases and ASC 820 step-up issues were flagged as emerging distortions. Strong governance, transparency, and repeatable processes were seen as essential for credibility in retail products.

3 - Liquidity management, structuring, and investor education
Liquidity must align with underlying asset turnover (e.g., direct lending supports 5% quarterly redemptions, but PE or VC funds need lower frequencies) to prevent mismatches. Interval funds were positioned as a strong fit for illiquid assets under 40 Act rules. Panelists underscored uniform economics, fee compression, expense documentation, and clear prospectus language on redemptions or credit lines for retail access. Retail advice should focus on long-term horizons, due diligence, and understanding volatility vs. true risk. Advisors should emphasize the need to read and understand the fine print, which highlights the need for managers to provide accessible, transparent disclosures as access expands to smartphone-based investors.

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