SEC Rethinks What Qualifies as a 'Small Entity'
On January 7, 2026, the SEC proposed amendments to the definitions of small entities for registered investment advisers, investment companies, and BDCs under the Regulatory Flexibility Act.
On January 7, 2026, the SEC proposed amendments to the definitions of small entities for registered investment advisers, investment companies, and BDCs under the Regulatory Flexibility Act.
What's in the proposal:
- Higher asset thresholds for advisers and funds deemed "small."
- Updated aggregation rules for related fund assets.
- Inflation-based adjustments to thresholds every 10 years.
Why it matters:
The Regulatory Flexibility Act is intended to reduce the regulatory burden on smaller firms. Expanding who qualifies as a small entity could directly influence how future SEC rules are analyzed, scoped, and calibrated.
Comments will be due 60 days after Federal Register publication. ICS is actively reviewing this proposal and helping firms assess whether, and how, it may affect their regulatory profile and future compliance obligations.
ICS advises financial institutions navigating regulatory changes of this type. If your firm needs to assess the impact of this development on your compliance program, contact us to discuss.
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