The U.S. Securities and Exchange Commission (SEC) has adopted amendments broadening which investment advisers and investment companies qualify as small entities under the Regulatory Flexibility Act (RFA), following its January 2026 proposal. The regulatory assets under management (RAUM) threshold for advisers increases from USD 25 million to USD 1 billion. For funds, the net asset threshold rises from USD 50 million to USD 10 billion. These definitions determine which entities are covered when the SEC assesses whether rulemaking is likely to have a significant economic impact on a substantial number of small entities. The thresholds were last updated in 1998. The Dodd-Frank Act of 2010 subsequently raised the SEC registration threshold for advisers to USD 100 million, leaving most SEC-registered advisers outside the existing small entity definition. The new USD 1 billion threshold would capture 75% of advisers but less than 3% of total industry RAUM. The amendments expand the population considered in the SEC’s regulatory impact analysis without changing any firm’s substantive requirements.
SEC raises small entity thresholds to USD 1 billion for advisers and USD 10 billion for funds for regulatory impact analysis
The U.S. Securities and Exchange Commission has broadened its small entity definitions for regulatory impact analysis under the Regulatory Flexibility Act. The threshold rises to USD 1 billion in regulatory assets under management for advisers and USD 10 billion in net assets for funds. The amendments do not alter firms’ substantive obligations.