Small Entity Update Act

Subjects: Finance and Financial Sector, Administrative law and regulatory procedures, Congressional oversight, Government studies and investigations, Securities and Exchange Commission (SEC), Small business

Summary:  <p><b>Small Entity Update Act </b></p> <p>This bill requires the Securities and Exchange Commission (SEC) to report on and revise the definition of <i>small entity</i> every five years. Agencies are required to consider the impact of their rules on small entities under the Regulatory Flexibility Act. </p> <p>Under the bill, the SEC must provide specific and detailed recommendations to Congress on how the SEC can revise the definition of <i>small entity</i> to (1) align with specified statutory goals, including reducing unnecessary burdens on small entities; and (2) expand the number of entities covered. </p> <p>The SEC must also issue a proposed rule to implement these recommendations. </p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2792 Introduced in House (IH)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                H. R. 2792

To require the Securities and Exchange Commission to carry out a study 
   and rulemaking on the definition of the term ``small entity'' for 
        purposes of the securities laws, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 20, 2023

 Mrs. Wagner introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To require the Securities and Exchange Commission to carry out a study 
   and rulemaking on the definition of the term ``small entity'' for 
        purposes of the securities laws, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

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

SEC. 2. STUDIES, REPORTS, AND RULES REGARDING SMALL ENTITIES.

    (a) Definitions.--In this section--
            (1) the term ``Commission'' means the Securities and 
        Exchange Commission;
            (2) the term ``Committee'' means the Small Business Capital 
        Formation Advisory Committee established under section 40 of 
        the Securities Exchange Act of 1934 (15 U.S.C. 78qq);
            (3) the term ``Office'' means the Office of the Advocate 
        for Small Business Capital Formation established under section 
        4(j) of the Securities Exchange Act of 1934 (15 U.S.C. 78d(j)); 
        and
            (4) 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'', or ``small governmental jurisdiction'' 
                under paragraph (3), (4), or (5), 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 once every 5 years thereafter, the 
Commission shall--
            (1) in consultation with the Committee, the Office, and the 
        Office of Advocacy of the Small Business Administration, 
        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.--
            (1) Proposed rules.--Not later than 180 days after the date 
        on which the Commission submits to Congress a report required 
        under subsection (b)(2), the Commission shall issue a proposed 
        rule that implements the recommendations described in 
        subsection (b)(2)(B).
            (2) Final rules.--Not later than 180 days after the date on 
        which the Commission publishes a proposed rule under paragraph 
        (1) in the Federal Register, the Commission shall issue a final 
        version of that rule.
                                 &lt;all&gt;
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