SEC staff have been directed to open talks with FINRA about an accredited investor examination
Buried in a report about a one-day meeting in March is a sentence about something that has not happened yet.
The Securities and Exchange Commission published its report to Congress on Monday on the 45th Annual Government-Business Forum on Small Business Capital Formation. The forum itself met on March 9. The document is the statutory record of it: a summary of the proceedings, the policy recommendations forum participants voted to prioritise, and, alongside each one, a written response from the Commission.
The responses are the part worth reading. The forum's top early-stage recommendation asks the Commission to expand the accredited investor definition to include additional measures of sophistication, including through an investor test and experience. The Commission's answer says that in an effort to increase investor access to private markets while ensuring adequate investor protections, Chairman Paul S. Atkins has directed the staff of the Division of Corporation Finance to begin discussions with the Financial Industry Regulatory Authority about the possibility of creating an accredited investor examination.
That is a small number of words for a large idea. Accreditation today runs on thresholds, and an examination would run on something else.
The report is careful about what the rest of it is. The recommendations were developed by forum participants, are not endorsed by the Commission, and each response says only that the Commission will consider the recommendation alongside other public comments in connection with initiatives already under way. Several of those initiatives are named and dated, which makes the document a usable map of where the Commission's small-company agenda actually stands. The 2026 Regulatory Agenda carries items on exempt offerings, on Rule 144, on the offer and sale of crypto assets, on trading crypto assets on alternative trading systems and exchanges, and on the transfer agent regime. On January 7 the Commission proposed raising the Regulatory Flexibility Act small entity thresholds to $1 billion for registered investment advisers and $10 billion for registered investment companies. On May 19 it proposed a Registered Offering Reform rule that would revise Form S-3 eligibility so that more public companies can run shelf offerings.
Some of the asks are outside the Commission's reach and the report says so plainly. Raising the number of investors permitted in a fund relying on Section 3(c)(1) above 100 would require Congressional action. On the recommendation that the forum simply advance the INVEST Act, the entire response is that Congressional action aimed at improving capital formation is a welcome complement to the work the SEC is undertaking.
Other prioritised recommendations include a federal friends and family exemption that would preempt state blue sky laws, raising the annual Regulation Crowdfunding ceiling from $5 million to $20 million, preempting blue sky laws for off-exchange secondary trading in companies that publish Regulation A Tier 2 style information, allowing at-the-market offerings for all small public companies current in their filings, and easing compliance costs for fund managers below $100 million in assets.
The forum drew more than 125 people in the room from 39 states, more than 700 webcast viewers from 10 countries, and 12 speakers. One statistic the report prints without comment explains why the meeting exists at all. In 2024, initial public offerings by small companies were 44 percent of all IPOs and 3 percent of the capital raised.
