US securities regulator raises small-entity asset thresholds

Sole source: The US Securities and Exchange Commission (SEC) said it adopted amendments on 4 November 2026 that raise the asset-based thresholds for identifying registered investment companies, investment advisers and business development companies as small entities under the Regulatory Flexibility Act.

The SEC said the asset-management industry has grown substantially since the thresholds were set. Chairman Paul S. Atkins said the definitions for investment companies and advisers had not been updated in nearly 30 years. He described the amendments as a step toward eliminating unnecessary regulatory burdens and making rulemaking reflect which firms are small in today’s market.

How the definitions change

The SEC said the amendments also change how the assets of related funds are combined when determining small-entity status and eliminate a separate total-assets threshold for investment advisers. The asset-based thresholds will be adjusted for inflation by order every 10 years.

The SEC’s announcement does not specify the new numerical thresholds, the detailed aggregation test or an effective date.

The classification determines which firms the SEC considers small in its regulatory flexibility analyses, not whether they are exempt from substantive rules. In those analyses, the commission weighs rules' effects on small entities and considers alternative approaches intended to minimize significant economic impacts.