This legislation, known as the Small Entity Update Act , mandates the Securities and Exchange Commission (SEC) to undertake a comprehensive study of its definition of "small entity" for purposes of the Regulatory Flexibility Act. Within one year of enactment, and again five years later, the SEC must evaluate how well its current definition aligns with the Regulatory Flexibility Act's findings, consider the growth of financial markets since its last amendment, and determine how to define "small entity" to encompass a meaningful number of businesses. Following each study, the Commission is required to submit a report to Congress detailing its findings and providing specific recommendations for amending the definition to expand its coverage. Concurrently with or after completing each study, the SEC must revise its rules regarding the "small entity" definition, incorporating the study's results, after a period of public notice and comment. To ensure the definition remains relevant over time, the bill further requires the Commission to adjust any dollar figures within the established small entity definition every five years. These adjustments will reflect changes in the Consumer Price Index for All Urban Consumers, helping to maintain the definition's accuracy and applicability in a changing economic landscape.