Rep. Ann Wagner, R-Mo., has introduced legislation that would direct the Securities and Exchange Commission to conduct a study, followed by a rulemaking, to update the agency's definition of a "small entity" under the Regulatory Flexibility Act.
The Investment Adviser Association said Thursday that it "strongly supports" the Small Entity Update Act.
"Currently, the SEC’s definition of a small adviser includes only those with less than $25 million in assets under management (AUM)," IAA said. "However, the threshold for SEC registration is $100 million AUM — with limited exceptions — effectively excluding small advisers from the protections and considerations intended by the Regulatory Flexibility Act."
It's "critically important that the SEC consider the unique challenges facing small advisers, as well as the cumulative impact of regulatory decisions on their operations and their ability to serve the investing public," IAA said.
Under the Regulatory Flexibility Act, small entities "receive special consideration during federal rulemaking to ensure that agency regulations do not impose disproportionate burdens on them," said William Nelson, IAA's director of public policy and associate general counsel, in an email.
The RFA requires the SEC to assess the impact of proposed rules on small entities and to consider less burdensome alternatives.
"The idea is to promote fairer, right-sized regulation for businesses with fewer resources to absorb compliance costs," Nelson said.
Having worked "closely with members of Congress for several years to support bipartisan efforts aimed at achieving this much-needed update," IAA added, introducing the Small Entity Update Act "is a welcome and meaningful step forward" and urged Congress "to move swiftly to pass this important measure."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.