On September 30, 2026, the SEC proposed amendments to Advisers Act Rule 205-3 that would broaden when advisers may charge performance-based compensation. Separately, the SEC is weighing new ways for individuals to qualify as accredited investors. Key points:

• One eligibility standard: The “qualified client” definition would adopt the Regulation D accredited investor standard, replacing separate net worth and AUM tests. This is a notable shift for 3(c)(1) funds and separately managed accounts.
• Registered funds and BDCs: Could pay performance fees, subject to board approval and added disclosure.
• New accredited investor pathways: The SEC is seeking comment on qualifying CPAs, CFAs, CFPs, and certain FINRA registrants, plus a possible FINRA-administered exam.

Until any changes take effect, current requirements still apply. In the meantime, advisers should review eligibility procedures, offering documents, and fee arrangements. Comments on the performance-compensation proposal are due December 7, 2026.

To help you make sense of what this means for you and your clients, read the full article from our friends at SEC³ here.