S-4400 : Still Just a Bill

The Small Entity Update Act (S. 4400) directs the Securities and Exchange Commission (SEC) to review and update the definition of "small entity" used in securities laws. Key provisions include:

• Studies and Reports: The SEC must conduct studies within one year of enactment and every five years thereafter to assess the current definition of "small entity." These studies will consider alignment with the Regulatory Flexibility Act, growth in U.S. financial markets, and ways to ensure a meaningful number of entities qualify as "small entities." The SEC will then submit reports to Congress with recommendations for amending the definition.
• Rulemaking: Following each study, the SEC is required to revise its rules, based on public notice and comment, to align with the study's findings.
• Inflation Adjustments: The SEC must adjust dollar figures in the "small entity" definition to account for changes in the Consumer Price Index, starting soon after enactment and continuing every five years.

In essence, this bill aims to ensure the SEC's definition of "small entity" remains relevant and that a sufficient number of businesses can benefit from regulations tailored for smaller entities.