Small Entity Update Act

Summary

Requires the Securities and Exchange Commission to study and revise how it defines a "small entity" for its regulatory work, update any dollar thresholds for inflation, report findings and recommendations to Congress, and adopt rule changes through notice-and-comment rulemaking. The SEC must complete an initial study and report within 1 year of enactment, repeat the study and report five years later, and thereafter adjust dollar thresholds for CPI‑U inflation every five years after final rule changes are adopted.

• Directs the SEC to study and reassess its definition of "small entity" used in its regulatory activities.
• Requires an initial study and report to Congress within 1 year and a repeat study and report five years later.
• Each study must examine alignment with the Regulatory Flexibility Act, market growth, and ways to ensure a meaningful number of entities qualify as "small."
• Mandates notice-and-comment rulemaking before the SEC modifies its small-entity definition based on the study.
• Requires periodic inflation adjustments to any dollar thresholds (CPI‑U) every five years after the SEC adopts final rule changes.
• Does not set or change specific dollar thresholds directly in the statute—changes occur through SEC rulemaking after study.
• Aims to ensure the small-entity definition remains responsive to market changes and inflation.
• Applies only to SEC rulemaking and agency definitions, not to state or local governments.