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# The SEC Just Proposed Six New Ways Around the Wealth Test
- URL: https://www.freemarketsreport.com/the-sec-just-proposed-six-new-ways-around-the-wealth-test/
- Published: 2026-10-05T12:09:47.000Z
- Updated: 2026-10-05T12:09:47.000Z
- Description: CPA, CFA, CFP, Series 79, Series 86/87, and a new FINRA exam: the knowledge test is quietly replacing the money test, and a companion proposal opens the performance fee door too.
- Author: Michael A. Gayed, CFA

## KEY HIGHLIGHTS

- **The proposal:** The SEC published notices today in the Federal Register seeking comment on **six new pathways** to accredited investor status: CPA, CFA, CFP, Series 79, Series 86/87, and a new FINRA exam, per [Morrison Foerster's summary](https://www.mofo.com/resources/insights/261001-sec-seeks-comment-new-pathways?ref=freemarketsreport.com) and the [Federal Register notice](https://www.govinfo.gov/content/pkg/FR-2026-10-05/pdf/2026-20307.pdf?ref=freemarketsreport.com).
- **The reach:** Roughly **57,000 Series 79 holders** and **5,900 Series 86/87 holders** would gain a knowledge-based route past the wealth test, per the [SEC's own release](https://www.sec.gov/files/rules/other/2026/33-11449.pdf?ref=freemarketsreport.com) (August 2026 estimates).
- **The precedent:** Only three credentials (Series 7, 65, 82) have ever been designated, in an order dated **August 26, 2020**, per the [SEC's 2020 press release](https://www.sec.gov/newsroom/press-releases/2020-191?ref=freemarketsreport.com).
- **The stakes:** Regulation D offerings raised **$2.39 trillion across 34,553 offerings in 2025**, per [SEC statistics](https://www.sec.gov/data-research/statistics-data-visualizations/regulation-d-offerings?ref=freemarketsreport.com).
- **The quiet companion:** A same-day proposal would fold every accredited investor into the Rule 205-3 **qualified client** definition, removing the separate $2.7 million and $1.4 million tests, per [Fox Rothschild](https://www.foxrothschild.com/publications/the-100-test-that-could-change-who-pays-carry?ref=freemarketsreport.com).

At 8:45 in the morning on the last day of September, the Securities and Exchange Commission held an open meeting with three items on its agenda. Chairman Paul Atkins framed the session as being about the ["responsible retailization of private markets."](https://www.sec.gov/newsroom/speeches-statements/atkins-statement-open-meeting-proposals-expand-responsible-retailization-private?ref=freemarketsreport.com) The item that matters most to anyone who has ever been told they are not wealthy enough to invest in a private fund was a set of notices asking the public a simple question: should professional knowledge, proven by exam, count as much as money?

Today the first of those notices landed in the [Federal Register](https://www.govinfo.gov/content/pkg/FR-2026-10-05/pdf/2026-20307.pdf?ref=freemarketsreport.com). The document, Release No. 33-11449, proposes designating two FINRA licenses as qualifying credentials for accredited investor status: the Investment Banking Representative license, known as the Series 79, and the paired Research Analyst licenses, the Series 86 and Series 87\. Comments are due within 60 days of publication, which lands on December 4, 2026.

To understand why a notice about three securities exams deserves attention, you have to understand what the accredited investor definition actually is: a wall around the private markets that has been raised exactly once in forty-four years, and never for the reason people assume.

## THE GATE THAT NEVER MOVED

![Timeline of the accredited investor definition from 1982 to the September 2026 proposals](https://storage.ghost.io/c/be/1b/be1bb8f3-f534-4eb9-b00d-09ff49598e5f/content/images/2026/10/chart1_timeline-1.png)

The accredited investor definition was written into Rule 501 of Regulation D in 1982\. The drafters set the bar at $200,000 in annual income for two years, or $1 million in net worth, and they made a choice that would shape four decades of American capital formation: they wrote the numbers in fixed dollars and provided no inflation adjustment. A threshold meant to isolate the genuinely wealthy in 1982 still stands at the same nominal figure today, when the Consumer Price Index has multiplied several times over. The gate did not move; the river rose around it.

The consequence is a definition that has drifted from a wealth screen into something closer to an age-and-inheritance screen. A homeowner in a coastal metro who bought a house in the 1990s can clear the net worth test on equity alone, primary residence excluded or not, while a 32-year-old machine learning engineer earning $195,000 a year does not. The rule does not ask whether you understand a private placement memo. It asks whether you have money, and it asks in 1982 dollars.

Congress noticed once. The Dodd-Frank Act in 2010 directed the SEC to revisit the definition, and the Commission responded by excluding the primary residence from the net worth calculation, a change that made the test marginally harder rather than easier. The deeper reform, untethering the thresholds from 1982, was never seriously attempted. Neither party wanted to be responsible for the headline about letting ordinary people into private markets.

The 2020 amendments were the first genuine widening. In adopting them on August 26, 2020, the Commission created a new category under Rule 501(a)(10): natural persons who hold certain professional certifications, designations or credentials. The Commission then used its new order authority immediately, designating holders in good standing of the Series 7, Series 65 and Series 82 licenses, per the [SEC's press release](https://www.sec.gov/newsroom/press-releases/2020-191?ref=freemarketsreport.com). The principle established was quietly radical: demonstrated knowledge of securities could substitute for demonstrated wealth.

That principle has sat mostly dormant for six years. Three licenses designated in 2020, nothing since. This week's notices propose multiplying that number by three.

## SIX DOORS AT ONCE

![Comparison table of credentials designated in 2020 versus six proposed in September 2026](https://storage.ghost.io/c/be/1b/be1bb8f3-f534-4eb9-b00d-09ff49598e5f/content/images/2026/10/chart2_ledger.png)

According to [Morrison Foerster's analysis](https://www.mofo.com/resources/insights/261001-sec-seeks-comment-new-pathways?ref=freemarketsreport.com) of the September 30 meeting, the SEC issued notices on six potential designations: the CPA license, issued by state boards of accountancy across 55 jurisdictions; the CFA charter from CFA Institute; the CFP certification from the CFP Board, United States certifications only; the Series 79; the paired Series 86 and 87; and, most interesting of all, passage of a new FINRA-administered accredited investor examination that is still in development.

Each notice walks through the four criteria the Commission established under Rule 501(a)(10). The examination must be administered by a self-regulatory organization or industry body. It must reliably demonstrate sophistication in securities and investing. Credential holders must reasonably be expected to have sufficient financial and business knowledge to evaluate merits and risks. And the credential must be publicly verifiable. For the FINRA licenses, the SEC points to [BrokerCheck](https://www.sec.gov/files/rules/other/2026/33-11449.pdf?ref=freemarketsreport.com), FINRA's free public database, as the verification mechanism, which is one of the more elegant features of the whole design: the same tool an investor uses to check whether their broker has disciplinary history also proves the license qualifies them to invest.

The Series 79 and Series 86/87 notices carry the most concrete numbers the SEC has disclosed. Approximately 57,000 people hold the Series 79 in good standing, and approximately 5,900 hold the paired Series 86 and 87, both estimated as of August 2026, per the [release itself](https://www.sec.gov/files/rules/other/2026/33-11449.pdf?ref=freemarketsreport.com). Add in the CPA, CFA and CFP populations, for which the SEC did not state counts in the release, and the population touched by the six notices runs well into the hundreds of thousands of working financial professionals.

The scope has limits worth noting. A designated license qualifies the holder personally. The SEC states in the release that a person "could not rely on their status as accredited investors to purchase securities on behalf of another person." The license must be in good standing; inactive, terminated or suspended licenses do not count. And the designations, if they come, would arrive by Commission order under existing rule text, not by a new rulemaking. The SEC could act on some designations and not others, or attach conditions.

Commissioner Hester Peirce, who has spent her tenure arguing against the accredited investor gate altogether, put it with her usual economy on the day of the meeting: "I'm not a fan of accredited investor gating, but at least we're proposing to nudge the gate open a bit." Her [prepared remarks](https://www.sec.gov/newsroom/speeches-statements/peirce-the-other-ai-remarks-at-the-open-commission-meeting?ref=freemarketsreport.com), titled "The Other AI," trace the argument that knowledge tests are a poor substitute for eliminating the gate entirely.

Structurally, none of this requires a new rule. As [Morrison Foerster notes](https://www.mofo.com/resources/insights/261001-sec-seeks-comment-new-pathways?ref=freemarketsreport.com), the notices are not proposed rule amendments; the Commission would implement any designation by issuing an order under the existing Rule 501(a)(10) text that the 2020 amendments created. That is why the process can move in pieces. The SEC has explicitly not decided to designate any of the six credentials, and nothing takes effect until one or more orders are issued. The comment period exists to inform a decision the Commission has already built the machinery to make quickly.

## THE QUIET COMPANION DOCUMENT

![Rule 205-3 qualified client tests today versus the proposed single accredited investor standard](https://storage.ghost.io/c/be/1b/be1bb8f3-f534-4eb9-b00d-09ff49598e5f/content/images/2026/10/chart3_205_3.png)

Here is where the story gets more interesting than the headline. On the same September 30 agenda sat a second proposal that has received far less attention: folding the accredited investor definition into the **qualified client** standard under Rule 205-3, the rule that governs who can be charged performance fees by an investment adviser.

Per [Fox Rothschild's analysis](https://www.foxrothschild.com/publications/the-100-test-that-could-change-who-pays-carry?ref=freemarketsreport.com), the proposal would make every accredited investor a qualified client, and would strike the separate tests that currently govern Rule 205-3: $2.7 million in net worth, or $1.4 million in assets under management, along with the five-year inflation adjustment mechanism. Read the two proposals together and the architecture is visible. The first moves the entry gate from wealth to knowledge. The second removes the second, higher gate that applied only to performance fee arrangements.

The practical consequence lands in one phrase: carried interest. Private fund managers charge performance fees to qualified clients. If both proposals are finalized, a Series 79 holder who today cannot invest in most private funds at all would tomorrow be able to invest in them and be charged performance fees, including the 20 percent carry that defines the economics of the industry. The two documents together do not just widen the door into private markets. They widen the door into the fee structure on the other side of it.

That is the quiet second document that matters more than the headline. The credential notices are about who gets to invest. The 205-3 proposal is about who can be charged. And the population affected by the second is exactly the population created by the first.

## WHAT THE MARKET IS PRICING

The scale on the other side of the gate is easy to underestimate because most of it never touches a public exchange. Regulation D offerings raised $2,391.5 billion across 34,553 offerings in 2025, per [the SEC's own statistics](https://www.sec.gov/data-research/statistics-data-visualizations/regulation-d-offerings?ref=freemarketsreport.com), and total Form D filings including amendments numbered 56,254\. The SEC's release also notes that roughly $400 billion was raised in Regulation D offerings excluding pooled investment funds in the twelve months ended June 30, 2025\. The private market is not a corner of the capital markets. Measured by dollars raised, it is one of the largest capital markets in the world, and the accredited investor definition is the only passport most Americans are ever offered to it.

The argument for the change is the one Peirce has been making for years, and it is a serious one. A Series 79 holder has passed a FINRA examination covering financial analysis, valuation, securities offerings and industry knowledge, holds a license requiring continuing education, and is publicly verifiable in a free database. It is genuinely odd, as a matter of policy, that this person is presumed competent to sell private placements to clients all day and presumed incompetent to buy one for their own account unless they also happen to have a million dollars. The credential pathway treats the definition as what it claims to be, a sophistication screen, rather than what it functions as, a wealth screen.

The argument against is the mirror image. Series 79 holders skew young, employed and salary-bound rather than wealthy, which is precisely the point for access advocates and precisely the risk for those who note that sophistication in underwriting does not equal capacity to absorb a total loss in an illiquid vehicle. The SEC's answer, in the release, is the good standing requirement, the personal-use limitation, and the fact that the designations are merely proposed. The comment period, running to December 4, will test whether the market sees six doors or six liability exposure.

## WHAT COMES NEXT

Three things to watch. First, the comment letters, due December 4, 2026, will reveal where the industry actually stands; expect the credentialing bodies, which gain relevance overnight, to file enthusiastic support, and expect plaintiff-side groups to focus on the 205-3 fold-in rather than the credential designations, because that is where the fee risk concentrates. Second, the order-by-order structure means the SEC can move incrementally; the CPA and CFA designations, with large and well-documented populations, are separable from the FINRA licenses, and a partial grant is a live possibility. Third, the new FINRA examination in development is the long game. A purpose-built accredited investor exam converts the definition from a credential proxy into an open test anyone can study for, which is the closest thing to abolition of the gate that the current statute allows.

The gate that was built in 1982, raised once in 2010, and cracked open in 2020 is now looking at six new hinges at once. The direction of travel is no longer in doubt. Only the speed is.

Know someone tracking market structure like this? Forward this one along.

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*The Free Markets Report is provided by Lead-Lag Publishing, LLC. All opinions and views mentioned in this report constitute our judgments as of the date of writing and are subject to change at any time. Information within this material is not intended to be used as a primary basis for investment decisions and should also not be construed as advice meeting the particular investment needs of any individual investor. Trading signals produced by the Free Markets Report are independent of other services provided by Lead-Lag Publishing, LLC or its affiliates, and positioning of accounts under their management may differ. Please remember that investing involves risk, including loss of principal, and past performance may not be indicative of future results. Lead-Lag Publishing, LLC, its members, officers, directors and employees expressly disclaim all liability in respect to actions taken based on any or all of the information on this writing.*