HR 2792 United States House · 118th Congress

Small Entity Update Act

HR 2792, the Small Entity Update Act, requires the Securities and Exchange Commission (SEC) to periodically review and update its definition of "small entity" for regulatory purposes. The bill mandates that the SEC, working with advisory committees, conduct a study every five years to assess whether the current definition aligns with existing rules, reflects market changes, and ensures a meaningful number of entities qualify as "small." After each study, the SEC must submit a report to Congress with specific recommendations for updating the definition, followed by a proposed rule within 180 days and a final rule 180 days after that. This process directly affects SEC-regulated entities (like small businesses and organizations in capital markets) by potentially expanding their eligibility for certain regulatory exemptions.

Tags: Small Business

Bill status passed 3 of 5 stages cleared

Introduction

Apr 2023

Committee Review

May 2023

House Passage

May 2023

Senate Passage

President

Introduced Apr 20, 2023 Last action May 31, 2023

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What changed between versions

Introduced in House → Engrossed in House · 4 edits · May 30, 2023

MODERATE

The Engrossed version of HR 2792 removes the requirement for the SEC to consult with the Small Business Capital Formation Advisory Committee, the Office of the Advocate for Small Business Capital Formation, and the SBA's Office of Advocacy when conducting its small entity study. It replaces strict 180-day rulemaking deadlines with a more flexible obligation to revise rules after each study, and adds a new provision requiring automatic inflation adjustments to dollar thresholds in the small entity definition every 5 years.

REQUIREMENT

The requirement that the SEC conduct its small entity study 'in consultation with the Committee, the Office, and the Office of Advocacy of the Small Business Administration' was removed, eliminating mandatory interagency coordination.

A new subsection (d) requires the SEC to adjust all dollar figures in the small entity definition every 5 years based on changes in the Consumer Price Index for All Urban Consumers (CPI-U), providing automatic inflation indexing of thresholds.

TIMELINE

The rulemaking process changed from a rigid two-step deadline (proposed rule within 180 days of report, final rule within 180 days of proposal) to a single flexible requirement that the SEC revise its rules after each study, subject to public notice and comment.

The study frequency language changed from 'once every 5 years thereafter' to 'again 5 years thereafter,' which is less clearly recurring and could be read as requiring only one additional study rather than an ongoing cycle.

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Full legislative history

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Committee

Amendments

May 31, 2023

Committee

Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

upper

May 30, 2023

Introduced

On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 367 - 8 (Roll no. 238). (text: CR H2652)

lower

May 30, 2023

Lower · Passed

Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 367 - 8 (Roll no. 238). (text: CR H2652)

lower

May 30, 2023

Introduced

Mrs. Wagner moved to suspend the rules and pass the bill, as amended.

lower

May 30, 2023

Lower · Passed

Reported (Amended) by the Committee on Financial Services. H. Rept. 118-80.

lower

Apr 26, 2023

Introduced

Ordered to be Reported in the Nature of a Substitute (Amended) by the Yeas and Nays: 42 - 0.

lower

Apr 26, 2023

Lower · Passed

Committee Consideration and Mark-up Session Held.

lower

Apr 20, 2023

Committee

Referred to the House Committee on Financial Services.

lower

Apr 20, 2023

Introduced

Introduced in House

lower

1 primary · 5 co-sponsors