SEC Proposes Raising Thresholds For Small Investment Companies & Advisers

The Securities and Exchange Commission (SEC) has proposed amendments to the rules defining which registered investment companies, investment advisers, and business development companies qualify as small entities under the Regulatory Flexibility Act (RFA).

The RFA requires federal agencies to assess and minimise the economic impact of rulemaking on small entities. The proposal would raise asset-based thresholds for investment companies and advisers, update the aggregation of related funds’ assets, and introduce ten-year inflation adjustments for these thresholds. The SEC said the amendments would allow it to better tailor analyses and rulemaking to the challenges faced by smaller investment entities.

SEC Chairman Paul S. Atkins said the proposal reflects the Commission’s ongoing effort to account for small entities and to make regulatory requirements more effective and efficient. The proposed amendments will be published in the Federal Register, with a public comment period open for 60 days from the date of publication.