2 versions

SubstantiveWhat changed in REPORTED IN HOUSEcompared with INTRODUCED IN HOUSE (Jun 3, 2025)

A substantive modification. v2 directly increases the exemption threshold for certain private fund investment advisers from $150 million to $175 million. Additionally, the inflation adjustment mechanism is revised, changing the adjustment frequency from annual to every five years and adding a new instruction to round the adjusted amount to the nearest million.

H.R. 3673119th CongressIntroduced Jun 3, 2025

Small Business Investor Capital Access Act

Reported To HouseFinance and Financial SectorSubstantive

View bill text

Sponsor: Rep. Barr, Andy [R-KY-6]
Committees: Financial Services Committee (primary)
Last action: Sep 8, 2025

Bottom line

This bill increases the regulatory exemption threshold for certain private fund investment advisers and introduces a mechanism for future inflation adjustments, potentially reducing regulatory burden for smaller private funds.

What it actually does

This bill amends the Investment Advisers Act of 1940 to raise the asset under management (AUM) threshold for private fund advisers to be exempt from Securities and Exchange Commission (SEC) registration from $150 million to $175 million. It also mandates that the SEC adjust this threshold every five years to account for inflation, using the Consumer Price Index for All Urban Consumers (CPI-U).

Proponents argue

Proponents argue that the current $150 million threshold, established in 2010, has been eroded by inflation, disproportionately burdening smaller private fund advisers with registration requirements intended for larger entities. Raising the threshold and implementing automatic inflation adjustments will ensure that the regulatory framework remains appropriate for its original intent, allowing smaller advisers to focus on capital formation and investment without unnecessary compliance costs, thereby supporting small businesses and investors.

Opponents contend

Opponents might contend that increasing the exemption threshold could reduce oversight of a segment of the financial industry, potentially exposing investors to greater risks. They may argue that even smaller private funds can pose systemic risks or engage in practices that warrant SEC scrutiny, and that reducing regulatory reach could diminish investor protection and market transparency.

The bill text is very short and straightforward, allowing for quick comprehension of its direct effects.

Section 2, Paragraph (1)

Increase Private Fund Adviser Exemption Threshold

prominently featuredstraightforward

This provision directly increases the dollar amount in Section 203(m)(1) of the Investment Advisers Act of 1940 from $150,000,000 to $175,000,000. This means that investment advisers solely advising private funds, who manage less than $175 million in assets, will continue to be exempt from registration with the Securities and Exchange Commission (SEC).

GroupImpactMechanismScale

GroupInvestment Advisers of Private FundsImpactReduced regulatory burdenMechanismExemption from SEC registration requirements (e.g., filing Form ADV, compliance programs).ScaleAffects advisers managing between $150 million and $175 million in assets.

GroupInvestors in Private FundsImpactPotentially reduced oversight (opponents' view) or increased access to capital (proponents' view).MechanismLess direct SEC scrutiny for funds managed by advisers below the new threshold.ScaleIndirectly affects investors in funds managed by newly exempt advisers.

Supporters argue

Supporters argue that the previous $150 million threshold, set over a decade ago, no longer accurately reflects the size of "small" private funds due to inflation. Raising it to $175 million appropriately recalibrates the exemption, reducing unnecessary compliance costs for smaller advisers and allowing them to allocate more resources to investment activities rather than regulatory overhead, which can benefit capital formation.

Critics contend

Critics might argue that increasing the threshold removes a segment of the private fund industry from direct SEC oversight, potentially creating a regulatory gap. They may contend that even funds between $150 million and $175 million warrant SEC registration to ensure investor protection and market integrity, and that reducing oversight could lead to increased risks for investors.

Tradeoffs

The provision balances the desire to reduce regulatory burden on smaller financial entities, potentially fostering growth and capital access, against the need for robust investor protection and market oversight.

Section 2, Paragraph (2)

Automatic Inflation Adjustment for Exemption Threshold

mentioned in summarystraightforward

This provision directs the Securities and Exchange Commission (SEC) to automatically adjust the $175 million exemption threshold every five years. The adjustment will be based on changes in the Consumer Price Index for All Urban Consumers (CPI-U), published by the Bureau of Labor Statistics, and rounded to the nearest $1,000,000. This ensures the threshold's value is maintained against inflation over time.

About this analysis. AI-Generated from the official bill text and available committee reports. Gaps in available data are noted explicitly. Verify important details with the official Congress.gov record.