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S. 2924Senate119th Congress (2025-2027)In Committee

A bill to require the Securities and Exchange Commission to carry out a study and rulemaking on the definition of the term "small entity" under the securities laws for purposes of chapter 6 of title 5, United States Code, and for other purposes.

Sponsored by Katie Boyd BrittSen. Katie Boyd Britt (R-AL)
Introduced September 29, 2025

AI-Generated Summary

Updated November 23, 2025 at 8:17 PM UTC

The Small Entity Update Act directs the Securities and Exchange Commission to review and possibly change how it defines a “small entity” under the securities laws. It requires the SEC to study the current definition, report its findings to Congress, and update its rules accordingly, with the goal of keeping the definition relevant and ensuring many small businesses, organizations, and local governments are covered. The bill also mandates inflation‑adjusted updates to any monetary thresholds every five years.

Key Provisions

  • The SEC must conduct a study of how it defines “small entity” for securities law purposes, looking at how the current definition matches the Regulatory Flexibility Act, how markets have grown, and how to keep the definition inclusive.
  • Within one year of the bill’s enactment and again five years later, the SEC must submit a report to Congress with study results and detailed recommendations for updating the definition.
  • After each study, the SEC must go through the normal notice‑and‑comment process to revise its rules on the “small entity” definition.
  • Every five years, the SEC must adjust any dollar thresholds in the definition for inflation using the Consumer Price Index.

Legislative Activity

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SenateIntro Referral Latest Action

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Banking, Housing, and Urban Affairs Committee

September 29, 2025

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SenateIntro Referral

Introduced in Senate

September 29, 2025

SenateIntro Referral

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Banking, Housing, and Urban Affairs Committee

September 29, 2025

Bill Text

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Introduced in SenateIssued September 29, 2025

II

119th CONGRESS

1st Session

S. 2924

IN THE SENATE OF THE UNITED STATES

September 29, 2025

Mrs. Britt (for herself and Mr. Kim) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To require the Securities and Exchange Commission to carry out a study and rulemaking on the definition of the term small entity under the securities laws for purposes of chapter 6 of title 5, United States Code, and for other purposes.

1.

Short title

This Act may be cited as the Small Entity Update Act.

2.

Studies, reports, and rules regarding small entities

(a)

Definitions

In this section—

(1)

the term Commission means the Securities and Exchange Commission; and

(2)

the term small entity—

(A)

has the meaning given the term in section 601 of title 5, United States Code, with respect to the activities of the Commission; and

(B)

includes any definition established by the Commission of the term small business, small organization, small governmental jurisdiction, or small entity under paragraph (3), (4), (5), or (6), respectively, of section 601 of title 5, United States Code, with respect to the activities of the Commission.

(b)

Studies and reports

Not later than 1 year after the date of enactment of this Act, and again 5 years thereafter, the Commission shall—

(1)

conduct a study of the definition of the term small entity with respect to the activities of the Commission for the purposes of chapter 6 of title 5, United States Code, which shall consider—

(A)

the extent to which the definition of the term small entity, as in effect during the period in which the study is conducted, aligns with the findings and declarations made under section 2(a) of the Regulatory Flexibility Act (5 U.S.C. 601 note);

(B)

the amount by which financial markets in the United States have grown since the last time the Commission amended the definition of the term small entity, if applicable; and

(C)

how the Commission should define the term small entity to ensure that a meaningful number of entities would fall under that definition; and

(2)

submit to Congress a report that includes—

(A)

the results of the applicable study conducted under paragraph (1); and

(B)

specific and detailed recommendations on the ways in which the Commission could amend the definition of the term small entity to—

(i)

be consistent with the results described in subparagraph (A); and

(ii)

expand the number of entities covered by such definition.

(c)

Rulemaking

Concurrently with, or after the completion of, each study required under subsection (b), the Commission shall, subject to public notice and comment, revise the rules of the Commission consistent with the results of such study.

(d)

Inflation adjustments

After the Commission issued the final rule revisions required under subsection (c), and every 5 years thereafter, the Commission shall adjust any dollar figures under the definition of small entity established by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.