The U.S. Securities and Exchange Commission (SEC) on January 7 proposed to substantially raise the asset-based thresholds under which an investment company or investment adviser would be deemed a “small business” or “small organization” for purposes of the Regulatory Flexibility Act (RFA).[1] The RFA requires federal agencies to conduct certain analyses, with the goal of minimizing the significant economic impact of federal rulemaking on small entities. If the proposal is adopted, a substantially larger number of investment companies and investment advisers potentially would be subject to reduced regulatory and compliance burdens. The proposal also would permit the SEC to make periodic future inflation adjustments. In addition, the SEC published a list of rules to be reviewed under the RFA that have had a significant economic impact on small entities, including certain amendments to Form ADV, certain investment company disclosures, swing pricing and liquidity risk management programs.[2]
