The Securities and Exchange Commission (SEC) Chairman Paul Atkins said they are "closely monitoring the emerging pressures" in the private credit market amid ongoing market jitters.

The $3.5 trillion private credit market is facing increasing scrutiny amid rising concerns about liquidity, valuations, and risks tied to AI. Major banks have reported more than $108 billion in exposure.

Asset managers such as Blue Owl Capital (NYSE:OWL), Morgan Stanley (NYSE:MS), and BlackRock (NYSE:BLK) have all recently limited withdrawals after investors sought higher redemptions.

"Let me be clear that opacity in this space can be an issue. That valuation, transparency, and credit quality are key," Atkins said in remarks ahead of an interview with David Rubenstein at the Economic Club of Washington, DC, Bloomberg reported.

Atkins also noted that the SEC is looking to support the broader administration’s goal of expanding retail investors' access to private credit under the "guidance of their fiduciaries."

Earlier this month, the Department of Labor (DOL) issued a proposed regulation that would allow retirement plans to include investments in alternative assets, specifically cryptocurrencies and private markets.

“The overarching goal of the proposed regulation is to alleviate certain regulatory burdens and litigation risk that interfere with the ability of American workers to achieve, through their retirement accounts, the competitive returns and asset diversification necessary to secure a dignified and comfortable retirement,” the executive summary read.

The proposal comes after President Donald Trump’s executive order, released last year, instructed the DOL to reexamine its guidance surrounding employers and plan administrators on incorporating these assets into retirement plans.

Photo: Shutterstock