# 2026-22741: SEC Redraws the Meaning of Small for Investment Firms 2026-22741, Amendments to the “Small Business” and “Small Organization” Definitions for Investment Companies and Investment Advisers for Purposes of the Regulatory Flexibility Act, is a Federal Register rule from Securities and Exchange Commission published 2026-11-06, effective 2027-02-04; PRIA reads it as touching household money (as of 2026-11-06). - Canonical: https://policyrisk.com/federal-register/2026-22741 - As of: 2026-11-06 - Plain-text twin of the page above; the HTML and this file carry the same facts. ## Facts - Document number: 2026-22741 - Title: Amendments to the “Small Business” and “Small Organization” Definitions for Investment Companies and Investment Advisers for Purposes of the Regulatory Flexibility Act - Type: Rule - Agencies: Securities and Exchange Commission - Citation: 91 FR 69955 - Published: 2026-11-06 - Effective: 2027-02-04 - Comments close: not stated - Significant: no - Touches household money: yes - Regulation identifier numbers: 3235-AN39 - Last updated: 2026-11-06 ## In one line SEC Redraws the Meaning of Small for Investment Firms ## Summary The SEC is updating the rules that define what counts as a 'small business' or 'small organization' for investment companies and advisers. They’re raising asset limits and removing some outdated rules to keep things fair and current, with changes kicking in February 2027. This helps small investment firms better understand their regulatory responsibilities without unnecessary burdens. ## Abstract The Securities and Exchange Commission (the "Commission" or the "SEC") is amending the definitions of "small business" and "small organization" (collectively, "small entities") that are used in connection with Commission rulemaking under the Investment Company Act of 1940 (the "Investment Company Act") and the Investment Advisers Act of 1940 (the "Advisers Act"). These definitions concern regulatory requirements applicable to registered investment companies and business development companies (collectively, "funds") as well as investment advisers. The definitions are used specifically for purposes of the Regulatory Flexibility Act (the "RFA"), which requires the Commission to consider the impact of its regulations on small entities. The amendments are designed to modernize the definitions, by increasing certain asset-based thresholds, including a mechanism for periodic future inflation adjustments, and eliminating the threshold based on total assets for advisers. In connection with these amendments, the Commission is making conforming amendments to Form ADV as well as the rule that allows certain small SEC-registered advisers to apply for a continuing hardship exemption from making Advisers Act filings electronically. ## Effects PRIA read - Funds: 'Small' threshold raised to $10 billion: benefit, low. If you run a registered investment company or business development company, the SEC raised the net asset threshold used to call a fund a "small entity" from $50,000,000 to $10,000,000,000. This change is part of the SEC's RFA definitions and is effective February 4, 2027. - Funds: Use Form N-CEN 'family' for aggregation: benefit, low. For deciding whether an individual fund is "small," the SEC will now aggregate net assets using the term "family of investment companies" as reported on Form N-CEN instead of the prior "group of related investment companies." This change is effective February 4, 2027 and leverages existing Form N-C… - Advisers: RAUM threshold raised to $1 billion: benefit, low. If you run an SEC-registered investment adviser, the SEC increased the Regulatory Assets Under Management (RAUM) threshold for being a "small entity" from $25,000,000 to $1,000,000,000. This amendment is effective February 4, 2027 and is used for Regulatory Flexibility Act analyses. - Advisers: $5 million total-assets test removed: benefit, low. The SEC removed the $5,000,000 total assets threshold from the Advisers Act small-entity definition, effective February 4, 2027. Rule 0-7 will no longer use that total-assets test when determining whether an adviser is a "small entity." - Form ADV and hardship exemption updated: benefit, low. The SEC made conforming amendments to Form ADV (Item 12, Part 1A) and to Advisers Act rule 203-3(b) so that Form ADV instructions and the continuing hardship exemption from electronic filing reflect the new $1 billion RAUM threshold and the elimination of the $5 million total-assets test. These cha… - Thresholds can be inflation-adjusted every 10 years: benefit, low. The SEC added an inflation-adjustment mechanism allowing it to adjust the asset thresholds in rule 0-10 and rule 0-7 by order every 10 years. This mechanism is part of the final rules effective February 4, 2027. - Control-relationship threshold clarified for advisers: benefit, low. The SEC amended the adviser Control Relationship Threshold to conform to the higher $1 billion RAUM threshold and stated it modified the rule to help advisers understand how to calculate that threshold. These amendments are effective February 4, 2027. ## Related documents - [2026-21037](https://policyrisk.com/federal-register/2026-21037): Investment Company Cross Trading, 2026-10-15 - [2026-20466](https://policyrisk.com/federal-register/2026-20466): Adviser and Regulated Fund Custody Rules; Crypto Custody Rules, 2026-10-06 - [2026-19260](https://policyrisk.com/federal-register/2026-19260): Rescission of Rule 14a-8's Federal Regulation of Shareholder Proposals and Amendments to Rule 14a-4, 2026-09-21 - [2026-18424](https://policyrisk.com/federal-register/2026-18424): Political Contributions by Certain Investment Advisers, 2026-09-10 - [2026-18190](https://policyrisk.com/federal-register/2026-18190): Transfer Agent Rules, 2026-09-04 - [2026-17183](https://policyrisk.com/federal-register/2026-17183): Regulation Crypto Assets, 2026-08-21 ## Sources - [2026-22741 on federalregister.gov](https://www.federalregister.gov/documents/2026/11/06/2026-22741/amendments-to-the-small-business-and-small-organization-definitions-for-investment-companies-and) - [2026-22741 as published (PDF)](https://www.govinfo.gov/content/pkg/FR-2026-11-06/pdf/2026-22741.pdf) ## Related - [Previous: 2026-22739, Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgic…](https://policyrisk.com/federal-register/2026-22739) - [Next: 2026-22787, Anti-Communism Week, 2026](https://policyrisk.com/federal-register/2026-22787) - [All Federal Register documents](https://policyrisk.com/federal-register) Source: PRIA, https://policyrisk.com/federal-register/2026-22741 (as of 2026-11-06).