H.R.3382 - Small Entity Update Act (119th Congress)
Summary
H.R.3382, the Small Entity Update Act, directs the Securities and Exchange Commission (SEC) to conduct studies and potentially revise its definition of "small entity" under securities laws. This re-evaluation is intended to align the definition with the Regulatory Flexibility Act and account for financial market growth. The bill mandates regular reviews and inflation adjustments to ensure the definition remains relevant.
Expected Effects
The bill aims to expand the number of entities that qualify as "small entities" under SEC regulations. This could lead to reduced regulatory burdens for these entities. The SEC will be required to conduct studies and potentially revise its rules based on these studies.
Potential Benefits
- Reduced Regulatory Burden: More businesses may qualify as "small entities," leading to fewer regulatory requirements.
- Increased Access to Capital: Easier compliance may encourage investment in small businesses.
- Regular Review: Mandated studies and inflation adjustments ensure the definition remains current.
- Alignment with Regulatory Flexibility Act: Ensures consistency with existing regulations.
- Transparency: Public notice and comment are required during the rulemaking process.
Most Benefited Areas:
Potential Disadvantages
- Increased SEC Workload: The SEC will incur costs associated with conducting studies and rule revisions.
- Potential for Regulatory Loopholes: A broader definition of "small entity" could create opportunities for larger entities to avoid stricter regulations.
- Uncertainty: The impact depends on how the SEC revises the definition, which is subject to change.
- Complexity: The definition of "small entity" may become more complex due to inflation adjustments and other factors.
- Limited Direct Impact: The bill primarily affects regulatory definitions and may not have immediate, tangible benefits for the general public.
Constitutional Alignment
The bill appears to align with the Constitution, particularly Article I, Section 1, which grants legislative powers to Congress. The bill directs the SEC, an executive agency, to conduct studies and rulemaking, which falls under Congress's authority to regulate commerce. There are no apparent infringements on individual rights or liberties as defined in the Bill of Rights.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).