The Small Entity Update Act requires the Securities and Exchange Commission (SEC) to study and update its definition of "small entity" under securities laws, starting within one year of the bill's enactment and again every five years after that. The SEC must examine whether its current small entity definition keeps pace with U.S. financial market growth and recommend ways to expand the number of companies and organizations covered by that definition. Following each study, the SEC must revise its rules accordingly through a public comment process, and must adjust the dollar thresholds in the definition every five years to account for inflation. This legislation primarily affects small businesses, startups, and small organizations that interact with the SEC, as updating the definition could expand regulatory relief and compliance flexibility for more entities. No specific funding is appropriated in the bill.
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