SEC Redefines 'Small Business' for Investment Firms with Inflation Tweaks
Published Date: 1/12/2026
Proposed Rule
Summary
The SEC wants to update the rules that decide what counts as a "small business" or "small organization" for investment companies and advisers by raising the asset limits. They’re also planning to adjust these limits regularly for inflation. If you’re an investment adviser or company, these changes could affect your filing rules, so get ready to comment by March 13, 2026!
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
Fund small-entity cutoff jumps to $10B
If you run or manage an investment company, the SEC proposes increasing the "small entity" net asset threshold from $50 million to $10 billion. The proposal would also require aggregating assets using a "family of investment companies" as defined in Form N-CEN, which changes which funds count as "small entities" for Regulatory Flexibility Act analyses.
Adviser RAUM cutoff raised to $1 billion
If you are an investment adviser, the SEC proposes raising the regulatory assets under management (RAUM) threshold from $25 million to $1 billion for purposes of defining a "small entity." The proposal would also conform the Control Relationship Threshold to this revised RAUM level.
10-year automatic inflation updates
The SEC proposes a mechanism to allow the Commission to adjust the asset-based thresholds for small-entity definitions for inflation by order every 10 years. The adjustment mechanism would apply to the revised asset thresholds in rule 0-10 and rule 0-7.
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Key Dates
Department and Agencies
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