Small Entity Update Act

This bill tells the Securities and Exchange Commission (SEC) to review and update how it defines a “small entity” under its rules. The SEC must study the current definition, look at market growth, and figure out how to define “small” so that a meaningful number of businesses are covered. It must send Congress detailed recommendations and then update its own rules to match those findings .

To keep the definition current, the SEC must also adjust any dollar amounts in that definition for inflation every five years. The first study is due within one year after the law takes effect, with another review five years later; rule updates happen with or after each study.

• Who is affected: Small businesses and other small entities that deal with SEC rules.
• What changes: Study the definition of “small entity,” recommend ways to reduce unnecessary burdens and expand who counts, update SEC rules, and adjust dollar amounts for inflation every five years .
• When: First study within one year; another in five years; inflation updates every five years after the SEC updates its rules.