Sponsors (8)
The bill modernizes and expands SEC small‑entity relief and ties thresholds to inflation—benefiting many small firms and improving oversight—while risking weaker investor protections, creating periodic regulatory changes, and adding administrative costs borne by taxpayers.
Small businesses would be more likely to qualify for SEC small-entity regulatory relief because the bill updates and expands the small-entity definition to reflect market growth, allowing more firms to access reduced regulatory burdens.
Small businesses and financial firms would avoid arbitrary loss of small-entity status due to inflation because numeric dollar thresholds would be periodically adjusted to the CPI‑U.
Congress and taxpayers would receive regular, detailed reports and recommendations on SEC small-entity policy, increasing transparency and legislative oversight of how thresholds and relief are applied.
Retail investors and taxpayers could face greater risk because expanding the small-entity definition may exempt larger or faster-growing firms from protections or reporting that previously safeguarded investors.
Small businesses and financial firms could face short-term regulatory uncertainty because periodic rulemaking and threshold adjustments every five years may change which entities qualify for relief.
Taxpayers could bear additional costs because revising definitions and conducting studies will increase SEC administrative and compliance expenses funded from the federal budget.
Based on analysis of 2 sections of legislative text.
Requires the SEC to study and, if appropriate, revise its definition of "small entity", report to Congress, complete rulemaking, and adjust dollar thresholds for inflation every five years.
Introduced May 14, 2025 by Ann Wagner · Last progress July 22, 2025
Requires the Securities and Exchange Commission to review and, if appropriate, revise how it defines "small entity" for rules it issues. The SEC must complete an initial study within one year of enactment, provide a report with recommendations to Congress, carry out notice-and-comment rulemaking consistent with the study, repeat the study five years later, and after issuing final rule changes adjust any dollar thresholds for inflation every five years.