In two companion releases—Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies (Release No. 33-11419) and Registered Offering (Reform Release No. 33-11418)—the SEC proposes to simplify the public company reporting framework by reducing the existing five partially overlapping filer statuses into two primary categories—large accelerated filers (LAFs) and non-accelerated filers (NAFs)—while extending nearly all disclosure accommodations currently available to emerging growth companies (EGC) and expand shelf registration access to substantially all reporting companies, replace the well-known seasoned issuer (WKSI) construct with a new tiered framework for listed companies, preempt state blue sky registration for all registered offerings, and broaden research report safe harbors.
The number of Securities Exchange Act of 1934 (the “Exchange Act”) reporting companies filing on domestic forms fell from 6,996 in 2004 to 5,976 in 2024, and private markets have regularly outpaced public markets in capital raised.1 Chairman Atkins, in his statement2 accompanying the proposals, framed the package as part of a broader agenda to reduce the costs of being a public company and to incentivize companies to “go and stay public.”
This note summarizes the filer status reform proposal and our preliminary observations. A companion note addresses the Registered Offering Reform rule proposal.
Background
Currently, public companies are categorized as large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies, or emerging growth companies, with some companies falling into more than one of those categories. Companies must annually reevaluate their status at the end of each fiscal year by considering both their public float and annual revenue and comparing those figures to thresholds that vary based on whether a registrant is entering or exiting a particular filer status. EGCs must additionally determine whether they otherwise met any disqualifying provisions throughout the year, such as issuing more than USD1 billion in non-convertible debt securities over the prior rolling three-year period.
Summary of the proposed rule
- Two cumulative requirements for LAF Status. Under the proposal, a company would qualify as a LAF only if it satisfies both of the following requirements:
- A public float of USD2bn or more for two consecutive fiscal years, calculated under the new measurement methodology described below
- At least 60 consecutive calendar months of Exchange Act reporting
- A company that fails either prong would be classified as a NAF. The two elements of the new LAF definition are discussed below.
- Raising the LAF threshold. The proposal would raise the public float threshold for becoming a LAF from the current USD700 million to USD2bn—a threshold that has not been raised since 2005. The public float would be computed by reference to a listed company’s total outstanding voting and non-voting common shares held by non-affiliates as of the last day of its second fiscal quarter and the average stock price over the last 10 trading days of that quarter—replacing the current single-day measurement as of the last business day of the most recently completed second fiscal quarter. A change in status would occur only if the public float threshold was met (or not met) for two consecutive fiscal years. This would create more stability in filer status and limit the swings in status that can result for some companies. The SEC also proposes to eliminate the separate, lower exit threshold currently used for departing LAF status (currently USD560m). In its place, the same USD2bn public float threshold for two consecutive years would apply. According to the SEC, this two-year lookback would more meaningfully address the volatility concerns that originally motivated the separate exit threshold, while giving companies more visibility of a possible change in filer status.
- A minimum five-year post-IPO on-ramp. The proposal would require at least 60 consecutive calendar months of Exchange Act reporting before a company becomes a LAF, regardless of the size of its public float. This expands upon the five-year on-ramp for EGCs created through the JOBS Act by making the five-year on-ramp available to every newly public company—not just those qualifying as EGCs—and by tying it solely to length of Exchange Act reporting rather than to revenue, debt or public float triggers that can cut short EGC status.
- Consolidation into two filer categories. The proposal would eliminate the categories of “accelerated filer” and “smaller reporting company”—together with their separate eligibility tests—so that all companies that are not LAFs would be classified as NAFs. EGC status is mandated by statute, so the SEC cannot unilaterally eliminate it, but the proposed amendments would generally make separate reliance on EGC provisions unnecessary in most circumstances. Certain EGC-specific accommodations, however, such as confidential submission of draft registration statements under Section 6(e) of the Securities Act and exemptions from certain PCAOB standards (e.g., the requirement to communicate critical audit matters), would not be extended to non-EGC NAFs.
- Extension of EGC and SRC accommodations to all NAFs. NAFs could avail themselves of the significantly scaled disclosure requirements and other accommodations currently only available to SRCs and EGCs (except as noted above regarding certain statutory EGC benefits). Key accommodations that would be extended to all NAFs include:
- Exemption from the internal control over financial reporting (ICFR) auditor attestation requirement under Section 404(b) of the Sarbanes-Oxley Act
- Exemption from the say-on-pay, say-on-frequency and “golden parachute” compensation arrangements shareholder advisory vote requirements
- Significantly reduced executive compensation disclosure, with disclosure regarding three (instead of five) named executive officers, two years of historical compensation disclosure (rather than three), and no requirement of pay-versus-performance disclosure, Compensation Discussion and Analysis, or CEO pay ratio disclosure
- Scaled financial statement disclosure under Article 8 of Regulation S-X, including two (instead of three) years of audited statements of comprehensive income, cash flows, and changes in stockholders’ equity, with reduced form and presentation requirements
- Two (instead of three) years of MD&A
- A more limited description of the business and the ability to omit certain disclosures from periodic reports, including risk factor disclosures in Forms 10-K and 10-Q (noting that risk factor disclosures in registration statements would remain required), performance graph disclosure, and quantitative and qualitative disclosures about market risk
- For newly public NAFs in their first five years after initial registration, the option to defer compliance with new or revised financial accounting standards issued by the Financial Accounting Standards Board (FASB) until non-issuers are required to comply (extending the current EGC accommodation). This election would be irrevocable.
Small non-accelerated filers. A new subcategory of “small non-accelerated filers” (SNFs) would be created for companies that are NAFs that report total assets of USD35m or less as of the end of each of their two most recent second fiscal quarters (i.e., the end of the second quarter in each of the two most recent fiscal years). SNFs would have an additional 30 days to file Form 10-K annual reports (extending the deadline from 90 to 120 days after the fiscal year) and an additional five days to file Form 10-Q quarterly reports (extending the deadline from 45 to 50 days after the fiscal quarter). The SEC has issued a parallel rule to permit optional semiannual reporting, rather than quarterly reporting, which we outline here on new Form 10-S. If these proposed amendments are also adopted, an SNF that elects semiannual reporting would file one Form 10-S in lieu of three Form 10-Qs, with the same five-day SNF extension applying—making the Form 10-S due 50 days (rather than 45 days) after the end of the first semiannual period.
Transition mechanics
Under the proposal, filer status would continue to be assessed annually as of the last day of a company’s fiscal year, drawing on different measurement inputs. When a company qualifies for a new status, the corresponding requirements and accommodations would apply beginning with the company’s annual report on Form 10-K for the fiscal year in which the revised filer status was determined. For existing registrants as of the effective date of any final rules, the SEC proposes that they assess their LAF or NAF status as of the end of their fiscal year prior to effectiveness and complete such assessment no later than the day prior to the last day of their fiscal year in which the final rules go into effect. A registrant that qualifies as a NAF after its initial filer status assessment could avail itself of the scaling and other accommodations available to NAFs in its next Securities Act or Exchange Act filing made following the assessment.
Practical implications and key takeaways
For companies considering an IPO
For small and mid-sized private companies, the proposal could enhance the attractiveness of going public. The five-year NAF classification provides certainty—unlike current EGC status, which can terminate earlier based on revenue, debt issuance, or LAF qualification.
For existing public companies
Companies that are already public have to consider whether and how they implement these new disclosure standards. Certain companies currently classified as accelerated filers with a public float below USD2bn could transition to NAF status and enjoy the proposed scaled disclosure accommodations, thus reducing compliance costs. The SEC estimates that the proposed amendments would extend disclosure scaling and other accommodations to approximately 81% of current reporting companies. On the one hand, while it is unclear whether companies that are near the fifth anniversary of an IPO or that are close to qualifying as a LAF would avail themselves of scaled disclosure for a short period of time, but for other, smaller companies the change should be welcomed.
On the other hand, while the proposed accommodations for NAFs relating to executive compensation matters—such as the elimination of the requirement to provide a CD&A and to hold a say-on-pay vote—would relieve compliance burdens, NAFs would not have a forum to explain their compensation philosophy and investors will not have a “safer” avenue through which to communicate dissatisfaction with executive pay practices, which could result in increased negative director voting recommendations.
Regarding the ICFR auditor attestation
Similarly, more companies would be exempt from the requirement to provide a registered public accounting firm’s attestation report on ICFR. The Sarbanes-Oxley requirement has long been challenged for the costs associated with implementing the necessary testing. The SEC estimates that the proposed amendments would expand by approximately 26.7% the number of registrants qualifying as NAFs and that therefore would not be subject to ICFR auditor attestation.
For SPAC and deSPAC
The proposal provides that a SPAC would determine its filer status as an operating company, meaning the 60-month seasoning period would begin to run from the SPAC’s own initial public offering, rather than from the close of deSPAC business combination. As a result, a deSPACed operating company could reach LAF status sooner than it would under a framework that restarted the clock at the time of the business combination. Existing differential treatment of deSPACed companies under Rule 144(i) would, however, continue to apply.
For foreign private issuers
Foreign private issuers that report on Form 20-F or Form 40-F would generally remain outside the proposed LAF/NAF framework (including those that elect to voluntarily comply with U.S. style disclosures).
Next steps
The comment period for the proposed rule is open until July 20, 2026. Given that the proposal appears to have the support of the current SEC and aligns with Chairman Atkins’s stated priority to “Make IPOs Great Again,” market participants should begin to assess the potential impact on their disclosure processes, compliance costs, and capital markets strategies.
Footnotes
1 See SEC, Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies, Release No. 33-11419 at 13-14 (May 19, 2026), available at https://www.sec.gov/files/rules/proposed/2026/33-11419.pdf (“Proposed Rule on Filer Status Framework”).
2 Paul S. Atkins, Chairman, SEC, Statement on Proposing Registered Offering Reform and Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies (May 19, 2026), https://www.sec.gov/newsroom/speeches-statements/atkins-statement-on-proposing-releases-for-enhancement-of-emerging-growth-company-accommodations-and-simplification-of-filer-status-for-reporting-companies-and-registered-offering-reform-051926.
