The U.S. Securities and Exchange Commission (SEC) wants to allow more individuals and entities to invest in regulated financial instruments.

According to a press release issued Wednesday, the SEC intends to add a list of new qualifications to become an accredited investor. At present, accredited investors are defined as individuals with more than $1 million in net worth (or who earn more than $200,000 per year), an organization with more than $5 million in assets, banks and institutions which meet certain legal definitions or entities that match certain other restricted terms.

Being an accredited investor allows entities and individuals access to a greater number of private investments, including riskier investments and hedge funds, according to Bloomberg.

Under the SEC amendment, the term would expand to include new categories of “natural persons,” individuals who qualify as “knowledgeable employees” of certain private funds, companies which meet certain restrictions, entities which “own ‘investments'” defined under the Investment Company Act, family offices with a minimum of $5 million in assets, and spousal equivalents who can pool finances to qualify.

The SEC published a concept paper earlier this year with other suggestions on expanding the definition. The document noted that past suggestions included a knowledge-based test to determine whether an individual could become an accredited investor.

According to Wednesday’s release, the proposed amendment would “more effectively identify institutional and individual investors that have the knowledge and expertise to participate” in private capital markets.

SEC Chairman Jay Clayton explained in a statement that the existing definition only provides “a binary approach” to who does or does not qualify for the status.

“Modernization of this approach is long overdue,” he said. “The proposal would add additional means for individuals to qualify to participate in our private capital markets based on established, clear measures of financial sophistication.”

Clayton noted that the amendment would also recognize Native American governments as entities which should have access to U.S. capital markets.

The amendment is open to public comment for 60 days after the proposal is published in the Federal Register, the official government record.

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