Private Markets

A Practical Step Toward Expanding Access to Private Markets Through Regulated Funds

Dinesh Khanna — Tue, 31 Mar 2026 19:06:41 +0000

A Practical Step Toward Expanding Access to Private Markets Through Regulated Funds Dinesh Khanna March 31, 2026

Public

Authors:

Wed, 04/01/2026 - 07:30

Policymakers across Washington are focused on expanding access to private markets—particularly for retirement savers. The August 2025 Executive Order encouraging broader access to private market investments for 401(k) investors reflects a growing recognition that capital markets have evolved and that long-term investors should be able to participate more fully in that evolution.

The Department of Labor took an important step this week, proposing a rule to give retirement plan sponsors a clearer process for including private market assets in their plan lineups. But that addresses which investments plans can offer. The Securities and Exchange Commission (SEC) has a distinct and equally important role: expanding the way regulated funds can access private markets in the first place. A practical starting point is expanding principles-based co-investment relief to open-end funds.

Finishing What Was Started

A co-investment is a negotiated transaction in which a regulated fund makes a private investment in a company alongside an affiliated private fund managed by the same firm. Done properly, it can help regulated funds access larger or more bespoke opportunities on stronger terms, at better prices, or both, than they otherwise would receive if they were to negotiate these transactions alone—all while existing guardrails ensure retail investors receive equal treatment.

In other words, co-investment relief helps expand investor choice and diversification opportunities to private market assets within the regulated fund framework.

In April 2025, the SEC approved a modernized, principles-based framework for closed-end funds and business development companies (BDCs) that co-invest alongside affiliated private funds in negotiated transactions. That framework recognizes that regulated funds can benefit from participating in larger, more complex private market transactions—provided that strong investor protections are in place.

Notably, open-end funds were included in early versions of the co-investment application but were removed before final approval. In a recent letter, ICI urged the SEC to correct that omission and allow open-end funds to participate under the same conditions that apply to closed-end funds and BDCs as there is no persuasive policy case for excluding open-end funds from this framework.

Investor Protections Remain Intact

Some have expressed concern that allowing open-end funds to co-invest in private transactions could increase the risk that they might not be able to satisfy redemption requests. But liquidity in open-end funds is already governed by the SEC’s Liquidity Risk Management Rule, which limits illiquid investments and requires funds to have robust risk-management programs, overseen by a fund’s board, including its independent directors.

Expanding co-investment relief to open-end funds would not alter those requirements. Open-end funds would remain subject to the same liquidity thresholds and oversight processes that apply today. The change would simply allow them to invest alongside affiliates in negotiated private transactions—on the same terms, at the same price, and in the same class of securities.

Far from weakening safeguards, such relief would help ensure that retail fund investors receive equal treatment and are not disadvantaged in favor of private-funds.

How Open-End Fund Co-Investment Would Work

An adviser managing both a private fund and an open-end fund could allocate a negotiated private market investment across both funds. Here’s how:

The adviser sources a private market opportunity and allocates a portion to each fund under pre-established policies designed to ensure fairness.
Both funds invest in the same securities, at the same time, at the same price, and on the same terms.
The open-end fund remains subject to all existing regulatory requirements—including SEC limits on illiquid holdings, board oversight, valuation standards, and fiduciary duties.

Why this matters for individual investors:

Open-end funds are the primary regulated funds that most Americans utilize for retirement and are often the building blocks of target date funds, which nearly seven in ten 401(k) participants hold.
Unlike closed-end funds or BDCs, open-end funds offer daily liquidity at net asset value and are broadly accessible through standard retirement plans and brokerage platforms.
Including them in the co-investment framework would help extend private market access to everyday retirement savers.

Why This Matters for Retirement Savers

If policymakers are serious about expanding private market access in defined contribution plans, open-end funds must be part of the solution.

Open-end mutual funds remain a primary building block for target date funds and other core retirement offerings, particularly across much of the defined contribution marketplace. Without including open-end funds in the co-investment framework, retail investors’ access to private market opportunities will remain constrained.

Private markets now represent a multi-trillion-dollar segment of global capital and continue to expand as companies stay private longer and leverage alternative funding sources. For long-term investors, including retirement savers, access to these markets can enhance diversification and broaden the opportunity set within professionally managed portfolios.

An Efficient Path Forward

The SEC has already approved a principles-based co-investment framework for closed-end funds and BDCs that many sponsors now operate under. The SEC could build upon this framework by allowing firms that have received principles-based co-investment relief to include affiliated open-end funds under standardized exemptive or no-action relief. This would provide clarity and consistency across the industry without requiring firms to request and obtain individualized amendments.

ICI has recommended that the SEC take this structural approach in expanding co-investment relief to open-end funds. Doing so would streamline implementation, reduce unnecessary procedural burdens, promote administrative efficiency, and allow the agency to focus its resources where they are most needed.

Aligning Policy With Market Reality

Capital markets have shifted meaningfully over the past two decades. Companies are staying private longer, and private markets are playing a larger role in financing economic growth. At the same time, retirement savers continue to rely primarily on regulated funds for diversified, professionally managed market exposure.

Expanding principles-based co-investment relief to open-end funds would not weaken investor protections or alter liquidity standards. It would simply allow open-end funds to participate in negotiated transactions on equal footing with affiliated private funds—consistent with safeguards the SEC has already deemed appropriate for other regulated funds.

If the goal is to broaden access to private markets responsibly, this expanded relief does so in a thoughtful and pragmatic way.

The SEC has an opportunity to take a measured step that enhances diversification, supports capital formation, and aligns regulation with the realities of today’s markets—all while preserving the strong investor protections at the core of the agency’s mission.

Off

New Industry Data Standard Aims to Remove an Operational Barrier to Retail Access to Private Markets

Dinesh Khanna — Wed, 18 Mar 2026 13:13:36 +0000

New Industry Data Standard Aims to Remove an Operational Barrier to Retail Access to Private Markets Dinesh Khanna March 18, 2026

Public

Wed, 03/18/2026 - 09:13

Washington, DC; March 18, 2025— The Investment Company Institute (ICI) today released a proposed industry data standard designed to address the lack of communication standards and governance that support subscription processing and client onboarding for alternative investment products. This data standard will help overcome a critical operational barrier to expanding retail investor access to private markets.

Today’s retail alternative investment processes are often customized and fragmented, limiting scalability, increasing operational risk, and creating inefficiencies across asset managers, intermediaries, and service providers, with subscription processing still largely manual.

The paper, Subscription Data Framework for Retail Alternative Investments, establishes common data elements, definitions, and structures for subscription documentation, beginning with products such as business development companies (BDCs), tender offer funds, and real estate investment trusts (REITs). By standardizing how core investor and account data are defined and structured, while remaining platform agnostic, the paper is intended to support interoperability across recordkeeping, trading, and distribution systems.

“Robust data standardization is foundational to achieving scalable operations for retail alternative investments. Interoperable systems are essential to delivering improved service quality, faster processing, and lower costs for investors, while enabling firms to better manage operational risk and support broader distribution,” said ICI Chief of Industry Operations Jeff Naylor.

The ICI Retail Alternatives Working Group, comprising firms across asset management, distribution, and servicing, developed the paper. This paper builds on ICI's more than 40-year history leading industry operational standardization, including its role as the sponsoring entity behind the creation of NSCC Fund/SERV—the shared infrastructure that made mutual fund distribution at scale possible.

ICI is inviting manufacturers, distributors, and service providers involved in retail alternative investments to review the framework, evaluate potential applications within their operating environments, and engage with the Working Group as it considers next steps to promote broader adoption and interoperability across the industry. The framework is designed to evolve over time. Its straightforward, flexible format supports collaboration and consistency across diverse systems and technologies to encourage widespread adoption.

Read the full paper here.

Off

Alternative Investment Funds

Private Markets

News Release

Subscription Data Framework for Retail Alternative Investments

Dinesh Khanna — Tue, 17 Mar 2026 19:07:51 +0000

Subscription Data Framework for Retail Alternative Investments Dinesh Khanna March 17, 2026

Public

Wed, 03/18/2026 - 22:20

Broker/Dealer Advisory

Retail alternative investment operations today are largely bespoke and highly customized, limiting their ability to scale efficiently for mass‑affluent and retail investors. Expanding access to private market products will require thoughtful application of technology and reengineered processes that enable distribution at scale. In doing so, retail investors benefit from faster, higher‑quality service at lower cost, while providers gain the ability to scale operations and more effectively manage operational risk.

The paper proposes an industry data standard designed to address the lack of communication standards and governance that support subscription processing and client onboarding for alternative investment products. This data standard will help overcome a critical operational barrier to expanding retail investor access to private markets.

Expanding Access to Private Markets

Kevin Coroneos — Tue, 30 Sep 2025 19:40:39 +0000

Expanding Access to Private Markets Kevin Coroneos Tue, 09/30/2025 - 15:40

Public

ICI supports giving retail investors more opportunities to invest in private markets.

Institutions, college endowments, pension funds, and wealthy investors have long invested in private markets and benefited from stable, strong returns. Yet, the middle class has largely been boxed out from these wealth-generating opportunities.

Key Takeaways:

Asset classes like private credit and private equity shouldn’t be walled off from retail investors saving for a more secure future.
Regulated funds are the natural bridge for safely integrating retail investors into private markets. They are the ideal wrapper because they must follow strict legal requirements that include oversight from an independent board, limitations on leverage and transactions with affiliates, among other built-in protections.
More fund managers should be allowed to invest in private markets, tailoring funds to investors’ financial goals.
ICI advocates for regulatory reforms and policies that open private markets to a broader range of investors.

The number of publicly listed companies has declined dramatically over the past few decades. Fewer public companies mean less choice for individual investors. But private markets, which have experienced sustained growth for the past decade, are filling the gap left by the contracting public market and fostering capital formation in the US.

These markets are the next frontier, full of boundless opportunities for Americans who want to save for a home, their children’s education, and their retirement. Our goal, and our job, is to help them seize those opportunities, so they can achieve their American Dream.

Eric J. Pan

President & CEO, ICI

Retail investors should be able to invest in the next generation of potentially transformative companies, because getting in earlier could lead to much bigger returns later. Investors deserve the freedom to take whatever approach works best for them.

We believe Americans should have the opportunity to safely invest in private asset classes through regulated funds—established financial vehicles with a robust regulatory framework and strong built-in investor protections. Regulated funds are the ideal wrapper because they must follow strict legal requirements that include oversight from an independent board, limitations on leverage and transactions with affiliates, among other protections.

The SEC’s recent actions on allowing closed-end funds (CEFs) to invest more than 15% of their net assets in private funds and principles-based co-investment relief were steps in the right direction, but there is more to be done.

Executive Order on Democratizing Access to Alternative Assets for 401(k) Investors

The most direct way to fulfill the President’s call for greater access to alternative asset investments is promoting exchange-listed products offering exposure through 401(k)s. Listed CEFs, in particular, can provide efficient, transparent access to private markets and are available through these brokerage windows. The SEC should approve the pending Cboe and NYSE exchange rule proposals that would end the annual meeting requirement for listed CEFs, which would help stop activist takeovers of the products.

The SEC can also encourage ’40 Act funds providing alternative asset access through more flexible co-investment and fund-of-fund relief. Since target date funds in 401(k) plans will likely access alternatives through ’40 Act funds, this regulatory flexibility is essential. These changes would help sponsors launch well-regulated alternative asset funds, expanding allocation options for 401(k) target-date funds.

Increasing Investor Opportunities Act

We strongly support the INVEST Act and its provision, the Increasing Investor Opportunities Act, which would:

codify recent SEC actions to allow SEC-regulated, retail CEFs to invest in private funds; and

help prevent predatory activist attacks against listed CEFs.

The bipartisan INVEST Act passed the House in December 2025.

Key Resources:

Speech

Playing a Bigger Game: Why ICI Is Moving Into Private Markets

Eric J. Pan President and CEO Investment Company Institute ICI Leadership Summit Washington D.C May 1, 2025 Thank you, Carol, for your remarks, and thank you for chairing this summit. But most of all, thank you for your decades of principled leadership at MFS. You are a champion of retail investors and a credit to the entire industry. We’re sad to see you retire next year, but rest assured, your impact will be felt for decades to come. Thank you for leaving such a remarkable legacy! I’d like to build off Carol’s remarks. She said we need to “play a bigger game,” and at ICI, we couldn’t agree...

May 1, 2025

One Pager

How ’40 Act Funds Can Safely Open Private Markets to Main Street

August 14, 2025

Fact Sheet

The Increasing Investor Opportunities Act

October 8, 2025

News Release

ICI to SEC: Principles-Based Co-Investment Framework Key for Expanding Retail Access to Private Markets

Washington, DC; March 4, 2025—The Investment Company Institute (ICI) wrote to the Securities and Exchange Commission (SEC) today to encourage the agency to approve a principles-based co-investment framework that would provide more flexibility for retail investment products. This would remove unnecessary barriers and allow everyday Americans to better access private markets. ICI President and CEO Eric Pan commented that “this relief would be an important move towards expanding retail access to private market investment opportunities while maintaining the underlying protections of the Investment...

March 4, 2025

Private Markets

Converging Pressures, Emerging Solutions: What’s Ahead at ICI’s Tax and Accounting Conference

Anonymous — Mon, 29 Sep 2025 14:01:12 +0000

Converging Pressures, Emerging Solutions: What’s Ahead at ICI’s Tax and Accounting Conference Anonymous (not verified) September 29, 2025

Public

Authors:

Michael Horn

Jason Nagler

Mon, 09/29/2025 - 10:01

Behind every successful fund launch, every accurate daily NAV calculation, and every seamless dividend or tax calculation lies the meticulous work of accounting and tax professionals. These are the stewards who ensure the operational backbone of the regulated funds industry remains strong, adaptable, and focused on the investor.

That expertise takes center stage at ICI’s Tax and Accounting Conference, convening October 5th through the 8th in Palm Desert, California. The event will bring together accountants, treasurers, tax professionals, auditors, and service providers to address the new product trends and operational complexities reshaping how funds serve investors.

ETF Trends and Share Class Reform: Operation Readiness at the Finish Line

The industry has reached a watershed moment with the SEC’s announcement Monday that it intends to grant exemptive relief to offer ETF share classes. This marks the first approval among more than 70 share-class applications pending before the SEC. As fund complexes race to achieve operational readiness, this decision opens the door for what could be one of the most significant product innovations in years.

The operational implications extend far beyond product development. Tax-free conversion mechanics, NAV oversight procedures, reporting workflows, and system infrastructure all require fundamental reimagining. These are not theoretical challenges—they demand practical solutions from the professionals who will implement them.

Conference sessions will examine the accounting and tax complexities that make ETF share classes both promising and challenging. From transfer agency systems to regulatory reporting, the devil is in the operational details that can make or break successful implementation. As ETF trends continue to evolve, we’ve included a general panel on ETF trends and a breakfast session on ETF tax issues.

Private Assets: Square Pegs and Round Holes

The democratization of private markets represents another frontier where operational excellence will determine success. As private credit, real estate, and other alternative strategies increasingly find their way into registered funds, accounting and valuation professionals face unprecedented challenges.

The core issue is fundamental: registered funds were built for publicly traded securities with daily pricing, transparent markets, and standardized reporting. Private assets operate on quarterly valuations, limited liquidity, and complex structures that challenge every assumption underlying traditional fund administration.

ICI is developing new frameworks to help navigate these complexities, building on the work of working groups that are examining best practices for private asset valuation in daily-priced funds. The operational solutions emerging from this work will shape how the industry adapts traditional fund structures to accommodate non-traditional assets.

Technology and the Post-Manual World

Artificial intelligence and automation are reshaping fund administration, creating opportunities to enhance efficiency while raising new questions about controls, oversight, and risk management. The promise is significant: reduced manual processes, enhanced accuracy, and the ability to handle growing complexity without proportional increases in operational costs.

The reality is more nuanced. Implementing new technology requires careful consideration of internal controls, audit trails, and regulatory compliance. As funds embrace more technology to enhance oversight than ever before, accounting and tax professionals must ensure that efficiency gains don't compromise the accuracy and oversight that underpin investor confidence.

The Human Factor: Ethics, Leadership, and Purpose

Amid technological transformation and regulatory complexity, the conference will spotlight the human dimension of fund administration and tax. Keynote speaker Cynthia Cooper, whose courage in exposing the WorldCom fraud exemplifies the highest standards of professional integrity, will address the ethical foundations that guide the profession. Christina Ho, PCAOB board member, and Jody Jonsson, Vice Chair of Capital Group, will also add their perspectives on the future of the accounting profession and the broader asset management industry, respectively, in today’s evolving landscape.

The work of tax and accounting professionals often operates behind the scenes, but its impact on individual investors is profound. Every operational improvement, every compliance enhancement, and every technological advancement ultimately serves the millions of Americans building financial security through fund investments.

The conference will balance substantive technical content with the networking and community-building that strengthen professional relationships. The return of the popular tax and accounting game show highlights how the industry combines serious professional development with collegiality. Join us right after Wednesday opening remarks to watch as last year’s champion, Fidelity’s Marc Spector, dons the gold jacket to host our crop of new challengers, who will compete in a format that makes complex technical knowledge both engaging and memorable.

A Gathering for the Backbone of the Industry

The Tax and Accounting Conference serves a specialized but essential audience: the professionals who ensure that fund operations meet the highest standards of accuracy, compliance, and investor protection. Their work may not capture headlines, but it forms the foundation upon which the entire industry builds.

As funds navigate ETF share class implementation, more private assets in retail funds, technological transformation, and regulatory evolution, the expertise of tax and accounting professionals becomes more valuable than ever. The conference provides a forum for these professionals to share insights, address challenges, and prepare for an industry future that depends on their operational excellence.

In an era of rapid change and growing complexity, this annual gathering of fund administration's finest couldn't come at a more crucial time.

Off

Tax and Accounting Conference

Exchange-Traded Funds (ETFs)

Private Markets

ICI Viewpoints

Implementing the Executive Order on Democratizing Access to Alternative Assets for 401(k) Investors

Anonymous — Thu, 14 Aug 2025 19:21:54 +0000

Implementing the Executive Order on Democratizing Access to Alternative Assets for 401(k) Investors Anonymous (not verified) August 14, 2025

Public

Authors:

Paul Cellupica

Thu, 08/14/2025 - 15:21

President Trump recently issued an executive order (EO) directing the U.S. Secretary of Labor to review fiduciary guidance on private market investments in 401(k) and other defined contribution plans governed by ERISA. The EO also instructs the SEC to explore ways to expand access to alternative assets for participants in those plans. This is a significant step forward, and ICI looks forward to working with the White House, Congress, the SEC, and the DOL to carry out these directives. The following reforms, which utilize funds regulated under the Investment Company Act of 1940 (’40 Act) and the many investor protections that come with the ’40 Act, are a perfect place to start. (Learn more about these protections here).

DOL Reforms for ’40 Act Funds on Retirement Platforms

Many retirement plan sponsors are interested in offering target-date funds and other diversified products that include a sleeve of assets in ’40 Act funds holding private assets. These sponsors are fiduciaries under ERISA, and including such diversified funds can be consistent with their duties when selection and monitoring processes are followed. ICI was pleased to see the DOL rescind guidance that discouraged fiduciaries from considering alternative assets in 401(k) investment lineups in response to the EO. We also support DOL guidance clarifying that target-date funds with allocations to ’40 Act funds investing in private assets are permissible in 401(k) plans.

SEC Reforms to Encourage Capital Formation and Investor Choice

The quickest and most direct way to fulfill the EO’s call for greater access to alternative asset investments is to promote capital formation in exchange-listed products that offer retail investors diversified exposure to these assets and are purchasable through self-directed brokerage accounts (also known as brokerage windows) available in many 401(k) plans. Listed closed-end funds, in particular, can provide efficient, transparent access to private markets and are available through these brokerage windows.

A major barrier, however, is the chilling effect of predatory activist campaigns, which have all but frozen the IPO market for listed closed-end funds. These activists exploit mandatory annual meeting requirements to undermine funds and their shareholders. Exchange listing proposals currently pending before the SEC could address this today by making annual meetings optional for listed closed-end funds, and thereby align their governance rules with those for open-end funds. Such a change would significantly reduce activist disruption, reopen the CEF IPO market, and advance the President’s directive.

Beyond this, the SEC can take additional steps to encourage the launch of ’40 Act funds that provide access to alternative assets. Since target-date funds in 401(k) plans are likely to achieve much of their exposure to alternatives through investment in such ’40 Act funds, fostering capital formation is essential to give plan sponsors more choice.

The SEC’s recent removal of the informal 15% limit on private fund investments by public closed-end funds was an important step, but further reforms are warranted. ICI recommends:

Further expanding exemptive relief to allow more flexible co-investment between ’40 Act funds and affiliated private funds, while maintaining safeguards against conflicts of interest.
Revising the fund-of-funds rule and/or issuing interpretive guidance to permit ’40 Act target date funds to allocate to ’40 Act funds holding securities of private funds or structured investments, such as structured private credit.

These changes would make it easier for sponsors to launch ’40 Act funds that offer retail investors well-regulated access to alternative asset strategies, which in turn would increase allocation options and choices for target date funds.

Expanding Access Without Sacrificing Protections

Any discussion of expanding access to private markets should begin with the principles and safeguards of the ’40 Act. This framework already serves 127 million U.S. shareholders and oversees nearly $40 trillion in assets. Decades of SEC oversight and built-in investor protections make ’40 Act funds a responsible way to open private market opportunities to individual investors without compromising transparency or safeguards.

Off

Department of Labor

Fiduciary Issues

Investment Company Act of 1940

Private Markets

ICI Viewpoints

Domain Access Text

www_ici_org,

ICI Applauds DOL Action On Including Alternatives In 401(k) Plans

admin — Tue, 12 Aug 2025 21:35:49 +0000

ICI Applauds DOL Action On Including Alternatives In 401(k) Plans admin August 12, 2025

Washington, DC; August 12, 2025—Today, Investment Company Institute (ICI) President and CEO Eric J. Pan released the following statement regarding the Department of Labor’s (DOL) announcement today that the Employee Benefits Security Administration (EBSA) has rescinded a December 2021 supplemental statement that discouraged fiduciaries from considering alternative assets in 401(k) investment lineups.

“ICI welcomes the Department of Labor’s announcement today rescinding a 2021 supplemental statement which had chilled the adoption of alternative assets in retirement plans. The decision marks a welcome return from the Department to the principles-based approach that fiduciaries have always followed under the Employee Retirement Income Security Act (ERISA).

“The speed at which the Department has moved following President Trump’s recent executive order is an encouraging sign of its commitment to implementing the order in full and offering millions of American retirees the chance to participate in private market offerings through their professionally managed workplace retirement plans.”

Public

Tue, 08/12/2025 - 17:33

Off

401(k)

Private Markets

News Release

Domain Access Text

www_ici_org,