Is the SEC's private fund exemption rule about to change?

A new bill introduced in the House of Representatives would require the Securities and Exchange Commission to adjust a key exemption threshold for certain investment advisors to account for inflation.

H.R. 3673, titled the Small Business Investor Capital Access Act, was introduced on June 3, 2025. The legislation proposes to amend Section 203(m) of the Investment Advisers Act of 1940.

The 2010 Dodd-Frank Act replaced the old “private adviser” exemption so that advisors that advise exclusively to venture capital funds and solely to private funds are exempt only if they have less than $150 million in assets under management in the United States. Advisors who manage more than this are required to register with the SEC or the states. The change meant many advisors who were previously exempt had to register.

According to the new bill text, the $150 million threshold would be adjusted for inflation and affect a number of advisors' registration requirements with the SEC.

The bill instructs the Commission to adjust the threshold in two steps. First, the adjustment must reflect the change in the Consumer Price Index for All Urban Consumers between the enactment of the Private Fund Investment Advisers Registration Act of 2010, part of the Dodd-Frank Act, which was a response to the 2008 financial crisis, and the date the new amendment is enacted. Second, beginning after enactment, the SEC must apply an annual adjustment using the same index.

“The Commission shall adjust the dollar amount described under paragraph (1)… upon enactment of this paragraph,” the bill states, and “annually thereafter.”

The inflation data used for these adjustments would be published by the Bureau of Labor Statistics, under the Department of Labor.

The bill does not define the initial threshold amount or include projections of how the adjustment would change adviser registration obligations. It was referred to the House Committee on Financial Services following introduction.

The measure is focused solely on how regulatory thresholds apply to private fund advisers under existing law.