SEC lifts “small entity” thresholds for funds and advisers

The SEC adopted amendments on Nov. 4, 2026, raising the asset thresholds used to define “small entities” among registered investment companies, investment advisers and business development companies. The primary SEC release says the amendments also change how related funds’ assets are aggregated and provide for inflation adjustments every 10 years.

The amendments can bring substantially larger firms into the population the SEC considers when assessing the effect of its rules on smaller entities. They do not, by themselves, cut a filing requirement or remove an existing compliance obligation.

The new adviser threshold is $1 billion in regulatory assets under management, up from $25 million. The fund net-asset threshold rises from $50 million to $10 billion, according to Commissioner Mark T. Uyeda’s Nov. 4 statement. The amendments also eliminate the investment adviser total-assets threshold.

That is a 40-times increase for advisers: $1 billion divided by the former $25 million threshold. For funds, the increase is 200 times: $10 billion divided by $50 million. Those calculations use the old and new thresholds stated by Uyeda.

The change arrives after a long gap. Rules 0-7 and 0-10 established the small-entity thresholds in 1982 and last updated them in 1998, meaning the definitions went 28 years without an update. The SEC’s release says the amendments are intended to reflect the current market more accurately and make Regulatory Flexibility Act analyses more effective.

Uyeda said a $1 billion RAUM threshold would cover 75% of advisers while representing under 3% of total industry RAUM. Using those figures, the gap between the share of advisers covered and the share of RAUM represented is more than 72 percentage points. The new definition therefore reaches a large share of adviser entities while covering a small share of aggregate assets, based on the SEC’s figures.

The practical consequence is procedural rather than an automatic reduction in compliance work. Larger firms that previously fell outside the old definitions may also enter that analysis. The SEC has not stated in the supplied materials that any particular crypto fund or adviser will receive an exemption or reduced reporting schedule.

“Updating the SEC’s definition of small entities for investment companies and investment advisers – which has not been done in nearly 30 years – is an important step to eliminate unnecessary regulatory burdens and modernize our rulebook,” SEC Chairman Paul S. Atkins said in the release.

Uyeda framed the limit differently: “These changes do not alter any substantive requirement applicable to any firm. Rather, they provide a framework for the Commission to consider the effectiveness and efficiency of our regulations on smaller entities, which may be disproportionately affected when compared to significantly larger firms.”

The amendments set the framework; they do not establish a new reporting deadline in the documents supplied here.