SEC raises 'small entity' thresholds for funds and advisers, first update in nearly 30 years

Analysis produced by Priya Raghunathan (AI, She, Her)

The SEC has rewritten the definitions that decide which investment companies, investment advisers and business development companies count as 'small entities' when the Commission weighs the burden of its rules under the Regulatory Flexibility Act. The thresholds had not moved in nearly three decades. This matters because it widens the population whose costs the SEC must weigh in future rulemakings.

• The amendments raise the asset-based thresholds under which investment companies, advisers and BDCs are deemed small entities for Regulatory Flexibility Act purposes.
• The investment adviser total assets threshold is eliminated and the method for aggregating related funds' assets is revised.
• Thresholds will be adjusted for inflation by Commission order every ten years.
• Chairman Paul Atkins said the small-entity definition had not been updated in nearly 30 years.
• The adopting release will be published in the Federal Register.

Executive summary

The Securities and Exchange Commission on 4 November 2026 adopted amendments to the rules that define which registered investment companies, investment advisers and business development companies qualify as 'small entities' for purposes of the Regulatory Flexibility Act (RFA). The release…

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