UNITED STATES: SEC Adopts Amendments to Update Definitions of Small Entity

Thursday November 5 2026

On 4^th November 2026, the Securities and Exchange Commission (SEC) adopted amendments to the rules that define which registered investment companies, investment advisers, and business development companies qualify as small entities for purposes of the Regulatory Flexibility Act (RFA).

The Commission has a longstanding commitment to understanding and addressing the concerns of small entities. The adopted amendments recognize the substantial growth in the asset management industry over the decades since the asset-based thresholds for identifying “small entities” were initially set. By helping to ensure the Commission’s RFA analyses capture a more meaningful population of investment companies, investment advisers, and business development companies that are considered “small entities,” the adopted amendments are therefore intended to minimize the significant economic impact of the Commission’s rules on these market participants.

Specifically, the amendments:

• Increase the asset-based thresholds under which investment companies, investment advisers, and business development companies are deemed small entities.
• Update the way that related funds’ assets are aggregated for purposes of defining small entities.
• Eliminate the investment adviser total assets threshold.
• Provide for inflation adjustments to the asset-based thresholds by order every 10

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