Key Takeaways
- • Executive Order 14330, signed August 7, 2025, directs the Department of Labor to reduce regulatory and litigation barriers so 401(k) plans can more easily offer alternative assets such as private equity to more than 90 million defined-contribution plan participants.
- • The DOL proposed a rule titled "Fiduciary Duties in Selecting Designated Investment Alternatives" on March 30, which would presume fiduciaries satisfy ERISA's duty of prudence when selecting alternatives; the proposal remains pending.
- • The SEC issued a rule proposal on September 30 that would let individuals become accredited investors by passing a FINRA-developed exam or by holding certain licenses or credentials, with public comment open until late November.
- • As of June 30, more than 13,500 U.S. companies were owned by private equity firms, nearly half held for over five years and more than a quarter held for at least seven, according to the column.
- • Per The Wall Street Journal, Blackstone's net realizations fell 34% year over year, with its private equity division down 49%, which the Journal attributed to rising interest rates.
Summary
Patricia Foster, a corporate and securities law attorney, and Jesse Cramer, a partner and advisor at Rialto Wealth, examine recent federal initiatives aimed at widening retail investor access to private securities markets in this Rochester Business Journal column published October 27, 2026. The column frames the trend against the Sarbanes-Oxley Act of 2002, which added compliance costs for public companies and, in the authors' account, has contributed to more capital moving into private markets.
The Trump administration has sought to relax current rules to expand retail access. Executive Order 14330, signed August 7, 2025, directs the Department of Labor to reduce regulatory and litigation barriers so 401(k) plans can more easily offer alternative assets such as private equity, targeting more than 90 million defined-contribution plan participants. The column notes that this raises significant fiduciary issues, since such options differ markedly from the typical funds in 401(k) lineups. The DOL proposed a rule on March 30 titled "Fiduciary Duties in Selecting Designated Investment Alternatives," which would allow a plan fiduciary to be presumed to satisfy ERISA's duty of prudence in selecting investment alternatives. That proposal is still pending.
On the securities side, some private offerings are restricted to accredited investors. The SEC issued a proposal on September 30 seeking comment on an additional route to accredited status: passing an exam developed by FINRA that would test sophistication in securities, investing, and financial and business matters. Currently, individuals qualify on financial criteria alone, without any demonstration of sophistication. The SEC also requested comment on whether holding certain licenses, certifications, or other credentials in good standing should qualify. Public comment periods remain open until late November.
The column also describes headwinds in private equity. As of June 30, more than 13,500 U.S. companies were owned by PE firms, nearly half held for over five years and more than a quarter for at least seven. According to The Wall Street Journal, cited in the column, Blackstone's net realizations, which reflect proceeds from asset sales, fell 34% from a year earlier, with a 49% decline in its private equity division. The Journal attributed this to rising interest rates that complicate pricing agreement between buyers and sellers and raise transaction borrowing costs.
The authors caution that private equity carries risk and return characteristics unfamiliar to investors accustomed to stocks, bonds and mutual funds. Capital is locked up for the fund's timeframe, management receives little outside scrutiny, and neither the fund nor its interests are registered with the SEC, limiting transparency on expenses, sponsor compensation and performance. Unlike mutual funds, private equity funds need not benchmark against a broad securities index. Investors are advised to study the asset class, read offering materials carefully and consult knowledgeable professionals. The column is provided for educational purposes and does not constitute legal or investment advice.
The Trump administration has sought to relax current rules to expand retail access. Executive Order 14330, signed August 7, 2025, directs the Department of Labor to reduce regulatory and litigation barriers so 401(k) plans can more easily offer alternative assets such as private equity, targeting more than 90 million defined-contribution plan participants. The column notes that this raises significant fiduciary issues, since such options differ markedly from the typical funds in 401(k) lineups. The DOL proposed a rule on March 30 titled "Fiduciary Duties in Selecting Designated Investment Alternatives," which would allow a plan fiduciary to be presumed to satisfy ERISA's duty of prudence in selecting investment alternatives. That proposal is still pending.
On the securities side, some private offerings are restricted to accredited investors. The SEC issued a proposal on September 30 seeking comment on an additional route to accredited status: passing an exam developed by FINRA that would test sophistication in securities, investing, and financial and business matters. Currently, individuals qualify on financial criteria alone, without any demonstration of sophistication. The SEC also requested comment on whether holding certain licenses, certifications, or other credentials in good standing should qualify. Public comment periods remain open until late November.
The column also describes headwinds in private equity. As of June 30, more than 13,500 U.S. companies were owned by PE firms, nearly half held for over five years and more than a quarter for at least seven. According to The Wall Street Journal, cited in the column, Blackstone's net realizations, which reflect proceeds from asset sales, fell 34% from a year earlier, with a 49% decline in its private equity division. The Journal attributed this to rising interest rates that complicate pricing agreement between buyers and sellers and raise transaction borrowing costs.
The authors caution that private equity carries risk and return characteristics unfamiliar to investors accustomed to stocks, bonds and mutual funds. Capital is locked up for the fund's timeframe, management receives little outside scrutiny, and neither the fund nor its interests are registered with the SEC, limiting transparency on expenses, sponsor compensation and performance. Unlike mutual funds, private equity funds need not benchmark against a broad securities index. Investors are advised to study the asset class, read offering materials carefully and consult knowledgeable professionals. The column is provided for educational purposes and does not constitute legal or investment advice.
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