(Article from Registered Funds Regulatory Update, January 2026)
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At an ICI Conference held on November 20, 2025, SEC Commissioner Mark Uyeda delivered remarks on the SEC’s plan to expand retail access to private investments. Uyeda outlined what he characterized as a “diversification deficit” within the current 401(k) system and asserted that most retirement savers lack access to private market investments that might improve their long-term investment outcomes. He proposed that the existing regulatory framework needs a significant overhaul as the U.S. retirement system has moved away from traditional defined-benefit pensions toward defined-contribution plans in which individuals bear responsibility for their investment choices. He explained that expanding 401(k) plan access to private equity, private credit, real estate, and other private-market strategies could strengthen portfolio diversification. He also emphasized the importance of regulatory coordination, calling on the SEC and the DOL to align their approaches to facilitate responsible private-market access in 401(k) plans.
In his remarks, Uyeda also stated that the SEC plans to expand retail access to private investments by reducing the litigation risks to plan fiduciaries under ERISA by, among other things, heightening the pleading requirements for plaintiffs bringing private securities class actions. Uyeda noted that this approach would emphasize ERISA’s standards of prudence and loyalty in an effort to “ensur[e] that fiduciaries who act responsibly are not punished,” stressing that it “is not about shielding bad actors” (emphasis added). Further, Uyeda argued that, although private investments have more illiquidity risk, they provide diversification and long-term value to a portfolio, and plan fiduciaries under ERISA should be able to make prudent decisions related to risk optimization and investment selection.
Former SEC Commissioner Caroline Crenshaw, in a speech made before her term expired on January 3, 2026, however, criticized the SEC’s policy choice to create greater access to private market investment strategies, calling it an “irresponsible departure from [the] foundational pillars of the securities laws.” Crenshaw further stated that private markets lack the “same guardrails that make our public markets a level playing field for retail investors” thereby exposing retail investors to more risky investments.
Mark T. Uyeda, SEC Commissioner, Speech, The Diversification Deficit: Opening 401(k)s to Private Markets (Nov. 20, 2025), available at: https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-diversification-deficit-opening-401ks-private-markets-112025.
Caroline A. Crenshaw, Former SEC Commissioner, Speech, The Rubble and the Rebuild: The Future of Financial Regulation Series at The Brookings Institution (Dec. 11, 2025), available at:
https://www.sec.gov/newsroom/speeches-statements/crenshaw-remarks-future-financial-regulation-series-brookings-institute-121125.