The full House passed Tuesday the Small Entity Update Act, legislation that requires the Securities and Exchange Commission to update the definition of "small business" for the purpose of securities regulation.
The bill, introduced by Rep. Ann Wagner, R-Mo., requires the SEC to report on and revise the definition of small entity every five years. Agencies are required to consider the impact of their rules on small entities under the Regulatory Flexibility Act.
Specifically, the bill would direct the SEC to conduct a study, followed by a rulemaking every five years, including defining the term "small entity" under the Regulatory Flexibility Act.
The SEC currently defines a small business as having less than $100 million in annual revenue.
Under the bill, "the SEC must provide specific and detailed recommendations to Congress on how the SEC can revise the definition of small entity to (1) align with specified statutory goals, including reducing unnecessary burdens on small entities; and (2) to expand the number of entities covered," the bill explains.
This legislation directs the SEC "to assess regulatory costs of compliance for small and growing businesses, ensuring that regulations placed on these businesses are not overly burdensome," Wagner said in a statement.
