# Conformed to Federal Register Version > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3A6fb40b6d487d5780 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text Conformed to Federal Register Version SECURITIES AND EXCHANGE COMMISSION 17 CFR Parts 210, 229, 230, 232, 239, 240, and 249 [Release Nos. 33-11419; 34-105515; File No. S7-2026-18] RIN 3235-AN40 Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies AGENCY: Securities and Exchange Commission. ACTION: Proposed rule. SUMMARY: The Securities and Exchange Commission (“Commission”) proposes amendments to streamline filer statuses for Securities Exchange Act of 1934 (“Exchange Act”) reporting companies into two primary categories: large accelerated filers and non-accelerated filers. The Commission further proposes to raise the threshold and seasoning requirements for large accelerated filer status and extend certain existing accommodations and scaled disclosures, including those for smaller reporting companies and emerging growth companies, to all nonaccelerated filers, while continuing to require compliance with non-scaled disclosure from large accelerated filers. The Commission also proposes to extend the deadlines to file periodic reports for the smallest non-accelerated filers, as measured by total assets. Finally, the Commission also proposes to update the rules that define which issuers are considered small entities for purposes of the Regulatory Flexibility Act (“RFA”). DATES: Comments should be received on or before July 20, 2026. ADDRESSES: Comments may be submitted by any of the following methods: Electronic comments: o Use the Commission’s internet comment form (https://www.sec.gov/comments/s7-2026-18/enhancement-emerging-growthcompany-accommodations-simplification-filer-status-reporting-companies#noback); or o Send an email to rule-comments@sec.gov. Please include File Number S7-202618 on the subject line. Paper comments: o Send paper comments to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number S7-2026-18. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method of submission. The Commission will post all comments on the Commission’s website (https://www.sec.gov/rules-regulations/publiccomments/s7-2026-18). Do not include personally identifiable information in submissions; you should submit only information that you wish to make available publicly. The Commission may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. Studies, memoranda, or other substantive items may be added by the Commission or staff to the comment file during this rulemaking. A notification of the inclusion in the comment file of any such materials will be made available on the Commission’s website. To ensure direct electronic receipt of such notifications, sign up through the “Stay Connected” option at www.sec.gov to receive notifications by email. 2 A summary of the proposal of not more than 100 words is posted on the Commission’s website (https://www.sec.gov/rules-regulations/2026/05/s7-2026-18). FOR FURTHER INFORMATION CONTACT: Nabeel Cheema, Special Counsel, and Stephanie Sullivan, Associate Chief Accountant, Division of Corporation Finance, at (202) 5513430, and Angela Mokodean, Senior Special Counsel, Division of Investment Management, at (202) 551-6792, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549. SUPPLEMENTARY INFORMATION: The Commission is proposing to amend or add the following rules and forms: Commission Reference Regulation S-X 1 Regulation S-K 2 1 17 CFR 210.1-01 through 210.15-01. 2 17 CFR 229.10 through 229.1610. Rule 2-02 Rule 3-01 Rule 3-02 Rule 3-09 Rule 3-12 Rule 3-19 Rule 8-01 Rule 8-02 Rule 8-03 Rule 8-04 Rule 8-05 Rule 8-06 Rule 8-07 Rule 8-08 Item 10 Item 101 Item 201 Item 302 Item 303 Item 305 3 CFR Citation (17 CFR) § 210.2-02 § 210.3-01 § 210.3-02 § 210.3-09 § 210.3-12 § 210.3-19 § 210.8-01 § 210.8-02 § 210.8-03 § 210.8-04 § 210.8-05 § 210.8-06 § 210.8-07 § 210.8-08 § 229.10 § 229.101 § 229.201 § 229.302 § 229.303 § 229.305 Regulation S-T 3 Securities Act of 1933 (“Securities Act”) 4 Securities Exchange Act of 1934 (“Exchange Act”) 5 3 17 CFR 232.10 through 232.501. 4 15 U.S.C. 77a et seq. 5 15 U.S.C. 78a et seq. Item 308 Item 402 Item 404 Item 407 Item 504 Item 1011 Rule 405 of Regulation S-T Securities Act Rule 157 Securities Act Rule 405 Form S-1 Form S-3 Form S-4 Form S-8 Form S-11 Form 1-A Rule 0-10 Rule 10A-3 Rule 10C-1 Rule 12b-2 Rule 13a-10 Rule 13a-13 Rule 13q-1 Rule 14a-3 Rule 14a-20 Rule 14a-21 Rule 15d-2 Rule 15d-10 Rule 15d-13 Form 10 Form 20-F Form 8-K Form 10-Q Form 10-K 4 § 229.308 § 229.402 § 229.404 § 229.407 § 229.504 § 229.1011 § 232.405 § 230.157 § 230.405 § 239.11 § 239.13 § 239.25 § 239.16b § 239.18 § 239.90 § 240.0-10 § 240.10A-3 § 240.10C-1 § 240.12b-2 § 240.13a-10 § 240.13a-13 § 240.13q-1 § 240.14a-3 § 240.14a-20 § 240.14a-21 § 240.15d-2 § 240.15d-10 § 240.15d-13 § 249.210 § 249.220f § 249.308 § 249.308a § 249.310 Table of Contents I. INTRODUCTION ................................................................................................................... 8 A. Exchange Act Reporting Prior to 2002 .............................................................................. 18 B. Accelerated Filer Status; Sarbanes-Oxley Act ................................................................... 19 C. ICFR Requirements ............................................................................................................ 22 D. Actions Related to Smaller Reporting and Emerging Growth Companies ........................ 26 1. Establishment of SRC Status ........................................................................................... 26 2. The JOBS Act and EGC Status ....................................................................................... 30 3. Recent Amendments and Filer Status Complexity.......................................................... 33 II. DISCUSSION OF PROPOSED RULES .............................................................................. 35 A. Large Accelerated Filer Status Amendments ..................................................................... 39 1. Public Float Threshold .................................................................................................... 40 2. Public Float Determination ............................................................................................. 43 3. Seasoning......................................................................................................................... 47 B. Non-Accelerated Filer Amendments .................................................................................. 54 1. Non-Accelerated Filer Definition .................................................................................... 55 2. ICFR and the Auditor Attestation Requirement .............................................................. 60 3. Extension of SRC and EGC Accommodations and Disclosure Requirements ............... 64 a. Application of SRC Accommodations........................................................................ 64 i. Scaled Disclosures under Regulation S-K and Other Accommodations .............. 65 ii. Scaled Financial Statement Requirements under Regulation S-X ........................ 70 b. Application of Certain EGC Accommodations .......................................................... 79 4. Application to Other Filer Types..................................................................................... 86 5. Summary of Requirements for LAFs and NAFs under the Proposal .............................. 89 C. Small Non-Accelerated Filers .......................................................................................... 103 D. Proposed Transition Period .............................................................................................. 114 E. Updating Small Entity Definitions ................................................................................... 117 F. Other Amendments........................................................................................................... 120 III. OTHER MATTERS ............................................................................................................ 124 IV. ECONOMIC ANALYSIS ................................................................................................... 124 A. Baseline and Affected Parties........................................................................................... 127 5 1. Regulatory Baseline ...................................................................................................... 127 a. Filer Statuses ............................................................................................................. 127 b. Reporting Requirements; Scaled Disclosures and Other Accommodations ............. 128 c. Proposed Rules.......................................................................................................... 130 2. Affected Parties ............................................................................................................. 131 3. Registrant Characteristics .............................................................................................. 133 a. Public Float ............................................................................................................... 133 b. Assets ........................................................................................................................ 135 c. Timing of Filings ...................................................................................................... 137 d. Internal Controls and Restatements .......................................................................... 138 e. Regulatory Burden .................................................................................................... 143 B. Economic Benefits and Costs ........................................................................................... 145 1. General Economic Effects of the Proposed Amendments ............................................ 146 2. Amendments to LAF Definition.................................................................................... 149 3. Exemption from ICFR Auditor Attestation ................................................................... 152 a. Potential Benefits of Eliminating the ICFR Auditor Attestation Requirement for Affected Registrants........................................................................................................ 153 b. Potential Costs of Eliminating the ICFR Auditor Attestation Requirement for Affected Registrants........................................................................................................ 157 4. The Expansion of the Subset of Registrants Eligible for Extended Periodic Report Filing Deadlines............................................................................................................................. 162 5. Extending SRC and Certain EGC Accommodations to All NAFs ............................... 166 a. Scaled Financial Disclosures .................................................................................... 170 b. Scaled Non-Financial and Business Disclosures ...................................................... 173 c. Scaled Executive Compensation and Corporate Governance Disclosures and Related Accommodations ............................................................................................................ 174 6. Extending Filing Deadlines for the Smallest NAFs ...................................................... 184 7. Updating Small Entity Definition.................................................................................. 187 8. Additional Considerations ............................................................................................. 189 a. Differential Impacts Across Industries ..................................................................... 189 b. Other Commission Proposals.................................................................................... 192 c. Auditing Industry Impact .......................................................................................... 194 9. Aggregate Monetized Benefits and Costs ..................................................................... 195 6 a. Annual Monetized Benefits and Costs...................................................................... 195 b. Present Values and Annualized Values of Monetized Benefits and Costs ............... 197 C. Anticipated Effects on Efficiency, Competition, and Capital Formation ........................ 200 D. Reasonable Alternatives ................................................................................................... 206 1. LAF Public Float Threshold .......................................................................................... 206 2. Seasoning Requirement ................................................................................................. 207 3. Regulatory Accommodations for NAFs ........................................................................ 208 4. SNFs .............................................................................................................................. 208 E. Request for Comment ....................................................................................................... 210 V. PAPERWORK REDUCTION ACT ................................................................................... 212 A. Summary of the Collections of Information..................................................................... 212 B. Estimated Paperwork Burden Effects of the Proposed Amendments .............................. 214 C. Incremental and Aggregate Burden and Cost Estimates .................................................. 215 D. Request for Comment ....................................................................................................... 221 VI. CONGRESSIONAL REVIEW ACT .................................................................................. 222 VII. INITIAL REGULATORY FLEXIBILITY ACT ANALYSIS ........................................... 223 A. Reasons for, and Objectives of, the Proposed Action ...................................................... 223 B. Legal Basis ....................................................................................................................... 223 C. Small Entities Subject to the Proposed Amendments ...................................................... 224 D. Projected Reporting, Recordkeeping, and Other Compliance Requirements .................. 225 E. Duplicative, Overlapping, or Conflicting Federal Rules .................................................. 225 F. Significant Alternatives .................................................................................................... 225 STATUTORY AUTHORITY .................................................................................................... 228 7 I. INTRODUCTION From their inception, the U.S. securities laws have sought to require full and fair disclosure by companies seeking to raise capital from investors and access the public markets. 6 In enacting broad investor protections and disclosure requirements under the securities laws, Congress also recognized the need to take into account the burdens of registration. 7 A core function of the Exchange Act is to extend disclosure-based investor protections that are provided for public offerings of securities under the Securities Act to post-distribution trading in the secondary markets. This is accomplished primarily by sections 12, 8 13(a), 9 and 15(d) 10 of the Exchange Act, which impose periodic and current reporting requirements on companies: with exchange-listed securities (section 12(b)); with widely held classes of equity securities (section 12(g)); or that have completed a public offering registered under the Securities Act (section 15(d)). 11 These registrants 12 must file reports prescribed by the Commission, which generally 6 See, e.g., the preamble of the Securities Act, which sets forth the purpose of the Act: “[t]o provide full and fair disclosure of the character of securities sold in interstate and foreign commerce and through the mails, and to prevent frauds in the sale thereof, and for other purposes.” The antifraud provisions of the Securities Act necessitate application of a materiality standard to disclosure. See Basic Inc. v. Levinson, 485 U.S. 224 (1988). Information is material “if there is a substantial likelihood its disclosure would have been considered significant by a reasonable investor.” Id. (citing TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976)). 7 See, e.g., Securities Act section 28, 15 U.S.C. 77z-3 (providing general exemptive authority to the extent that such exemption is necessary or appropriate in the public interest); Jumpstart Our Business Startups Act, Pub. L. No. 112–106, 126 Stat. 306 (2012) (easing the compliance burden for newly registered companies). 8 15 U.S.C. 78l. 9 15 U.S.C. 78m(a). 10 15 U.S.C. 78o(d). 11 In addition, any company that has voluntarily registered a class of equity securities under section 12(g) of the Exchange Act and any company that has succeeded to the obligation of another reporting company (17 CFR 240.12g-3 and 240.15d-5) are subject to the reporting requirements of the Exchange Act. 12 We use the terms “public companies,” “registrants,” and “issuers” interchangeably in this release. Unless explained in the text, the use of different terms in different places is not meant to connote a substantive difference. 8 include annual reports on Form 10-K and quarterly reports on Form 10-Q. 13 With respect to investment companies, business development companies (“BDCs”) and face-amount certificate companies are also subject to these reporting requirements. 14 Over time, the Commission and Congress have adopted various “filer statuses” to establish tiers of registrants and offer certain accommodations by tier, including as to the timing and content of this periodic reporting. Current filer statuses include: • Large accelerated filer (“LAF”), accelerated filer 15 (“AF”), and non-accelerated filer (“NAF”). o Filing deadlines for periodic reports depend on whether a registrant is classified as an LAF, an AF, or neither of these, which we refer to as an NAF. 16 13 The Exchange Act and related rules impose additional requirements on registrants that are not foreign private issuers (“FPIs”), including obligations to provide current reports (on Form 8-K pursuant to section 13 or 15(d)) and certain proxy information and soliciting materials in connection with a shareholder meeting (on Schedule 14A or 14C pursuant to section 14). The Commission has recently proposed to allow all registrants the option to report semiannually rather than quarterly on Form 10-Q. See Semiannual Reporting, Release No. 33-11414 (May 5, 2026) [91 FR 24968 (May 7, 2026)] (“Semiannual Proposing Release”). FPIs, by contrast, already have more limited filing requirements, unless they elect to file on domestic issuer forms. See Concept Release on Foreign Private Issuer Eligibility, Release No. 33-11376 (June 4, 2025) [90 FR 24232 (June 9, 2025)]. FPIs are defined in 17 CFR 240.3b-4. While FPIs may file annual reports on Form 20-F or Form 40-F, FPIs are exempt from the proxy rules, and their obligation to file current reports on Form 6-K is largely limited to circumstances in which FPIs have already made a public filing or disclosure in their home country jurisdiction. 14 BDCs are a type of closed-end investment company that is not registered under the Investment Company Act of 1940 (“Investment Company Act”). Face-amount certificate companies are a type of registered investment company that are engaged or propose to engage in the business of issuing face-amount certificates of the installment type, or that have been engaged in such business and have any such certificate outstanding. In general, other registered investment companies are subject to separate reporting requirements under the Investment Company Act and are not affected by the filer statuses or other provisions discussed in this release. 15 “Accelerated filer” and “large accelerated filer” are defined in 17 CFR 240.12b-2. 16 While undefined currently in the rules, we generally refer to registrants that are not AFs or LAFs as NAFs. 9 o Only LAFs and AFs are required to have the registered public accounting firm that prepares or issues their financial statement audit report attest to, and report on, management’s assessment of the effectiveness of internal control over financial reporting (“ICFR”) (“ICFR auditor attestation”) under section 404(b) of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”). 17 • Smaller reporting company 18 (“SRC”) is a regulatory status that applies to smaller registrants permitting those registrants to comply with a number of scaled disclosure requirements, discussed in detail below, 19 which notably include scaled financial statement disclosure and scaled executive compensation disclosure, among other accommodations. • Emerging growth company (“EGC”) is a statutorily-defined status that applies to registrants for the first five years after their initial public offering so long as they do not become an LAF or surpass revenue and debt issuance limitations. 20 The EGC accommodations are described more fully below 21 and notably include scaled financial statement disclosure in an EGC’s initial public equity offering registration 17 15 U.S.C. 7262(b) and (c). 18 The term “smaller reporting company” is defined in 17 CFR 230.405 and 17 CFR 240.12b-2. 19 See section II.B below. 20 Section 101(a) of the JOBS Act amended section 2(a) of the Securities Act and section 3(a) of the Exchange Act to define an “emerging growth company.” The JOBS Act initially defined “emerging growth company” as an issuer with less than $1 billion in total annual gross revenues, indexed to inflation. Pursuant to the statutory requirements, the current threshold is $1,235,000,000. See Inflation Adjustments Under Titles I and III of the JOBS Act, Release No. 33-11098 (Sept. 9, 2022) [87 FR 57394 (Sept. 20, 2022)] (adopting amendments to adjust the threshold to account for inflation). 21 See discussion of EGCs in section I.D.2 below. 10 statement, deferred adoption of certain new or revised financial accounting standards, scaled executive compensation disclosure, and an exemption from the ICFR auditor attestation requirement. 22 The table below lists the periodic reporting deadlines that currently apply to LAFs, AFs, and NAFs. 23 Table 1. Filing Deadlines by Filer Status Category of Filer Calendar Days after the Period End Annual Report on Form 10-K Quarterly Report on Form 10-Q Non-Accelerated Filer 90 days 45 days Accelerated Filer 75 days 40 days Large Accelerated Filer 60 days 40 days The filer status framework that has developed is layered and complex. 24 Under the current system, registrants must annually reevaluate their filer status at the end of their fiscal year. To do so, they consider both their public float 25 as of the end of their second fiscal quarter 22 See 15 U.S.C. 7262(b). 23 See General Instruction A.2 of Form 10-K and General Instruction A.1 of Form 10-Q for the filing deadlines. 24 See, e.g., Fun in the Summer – Navigating the Filer Status Maze, THE CORPORATE COUNSEL (May-June 2021), at 1-10 (suggesting that “the SEC and Congress have created what is often a bewildering maze of filer status tests that are used to determine when a company files its reports with the SEC and the content of those reports”). See also Transcript, U.S. Securities and Exchange Commission, Small Business Forum (Apr. 10, 2025), at 139-49, https://www.sec.gov/files/2025-SBF-508-Transcript.pdf (counsel panelist noting that “when I have to sit there and explain to somebody how to navigate . . . whether you’re an emerging growth company or a smaller reporting company or an [accelerated] filer, their eyes glaze over and they’re just like, ‘what are you talking about?’ And I think that sort of complexity just adds to the compliance costs, it adds to the concern, and then sometimes I think it adds to the inability to access the market and report and do things in a way that is most effective for those companies”). 25 As used herein, “public float” is the aggregate worldwide market value of the voting and non-voting common equity held by the issuer’s non-affiliates. 17 CFR 240.12b-2(i). 11 and their annual revenue, and compare those figures to thresholds that vary based on whether a registrant is entering or exiting a particular filer status. Additionally, registrants qualifying as EGCs must evaluate whether they met any of the disqualifying provisions of an EGC throughout the year. The table below illustrates the combinations of filer statuses that are possible today, highlights the overlap that can occur among filer statuses, and provides the entry thresholds for each status and the proportion of registrants in each permutation: 26 Table 2. Filer Status Thresholds and Proportions Filer Status Public Float Proportion of Registrants CY 2024 35.4% Proportion of Total Public Float CY 2024 98.82% 12.7% 0.51% $100M or more $100M or more $100M to < $1.235B $100M to < $1.235B 7.1% 0.36% 3.5% 0.08% 1.3% 0.06% 0.8% 0.02% 51.9% 0.67% < $75M $75M to $700M No public float N/A < $100M < $100M 5.5% 0.23% 0.20% < $75M < $1.235B 2.1% Large $700M or more Accelerated Filer Accelerated Filer $75M to < $700M AF Only $250M to < $700M AF + SRC Only AF + EGC Only AF + SRC + EGC Non-accelerated Filer NAF Only NAF + SRC Only $75M to < $250M NAF + EGC Only 26 $250M to < $700M $75M to < $250M Annual Revenues N/A 26.0% 0.03% The data used in preparing this table is based on registrants’ self-reported filer statuses on the cover page of their calendar year (“CY”) 2024 annual filings and excludes asset-backed issuers and FPIs not filing on domestic forms. While current NAFs may qualify as SRCs, registrants with no public float and annual revenues of $100 million or more do not qualify as SRCs. The SRC definition also excludes any registrant that is an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not an SRC. See 17 CFR 229.10(f)(1). 12 NAF + SRC + < $75M EGC No public float < $1.235B < $100M 18.3% 0.22% The table reflects the current thresholds for initially entering into a particular status, but, under existing rules, the thresholds are often different for determining when a registrant transitions out of that status. Under current rules, LAFs transition to AF status when their public float falls below $560 million, and AFs and LAFs transition out of either such status when their public float falls below $60 million or they determine that they are eligible to use the requirements for SRCs under the revenue test in paragraph (2) or (3)(iii)(B) of the smaller reporting company definitions in 17 CFR 230.405 and 17 CFR 240.12b-2. Similarly, once a registrant exits SRC status, the registrant will only transition back into SRC status if its public float falls below $200 million, or its public float falls below $560 million and its revenues fall below $80 million. 27 In addition, because the definitions for the accelerated filer statuses rely in part on SRC status, these transition thresholds also affect accelerated filer status determinations. In addition to the complexity of the current filer status framework, we note that the number of Exchange Act reporting companies filing on domestic forms fell from 6,996 in 2004 to 5,976 in 2024. 28 Unsurprisingly, a similar time period (2009-2017) saw significant growth in 27 For an SRC whose prior annual revenues were less than $100 million, the SRC may transition as long as it meets the public float requirement and its current annual revenues are less than $100 million. See 17 CFR 230.405 and 17 CFR 240.12b-2. 28 This number of registrants is estimated as the number of unique registrants, identified by Central Index Key (“CIK”), that filed a Form 10-K, or an amendment thereto, during each year. This estimate excludes registrants that have not filed a Form 10-K and FPIs filing on Forms 20-F and 40-F. The estimate also excludes assetbacked issuers, because the disclosure and other accommodations addressed in the proposed amendments do not apply to these issuers. 13 private markets, with private markets regularly outpacing public markets in capital raised. 29 Recent studies point to a variety of conditions influencing companies that might previously have gone public to remain private, with the regulatory burdens and costs of being a public company consistently considered to be among the factors that have led to this trend. 30 The Commission’s two most recent Small Business Forums explored the obstacles facing smaller companies trying to go public. In 2025, the issues discussed included having to produce three years of audited financial statements, having to produce reports on a quarterly basis, the volume of disclosure requirements, and the complexity of the filer status framework. 31 In 2026, many of the same themes were explored, with notable discussion on the cost of compliance with section 404(b) of the Sarbanes-Oxley Act, the impact on a registrant’s ability to plan for those costs in light of an AF public float threshold that is based on a single measurement date, and the limited personnel 29 See Scott Bauguess, Rachita Gullapalli & Vladimir Ivanov, Capital Raising in the U.S.: An Analysis of the Market for Unregistered Securities Offerings, 2009-2017, Division of Economic and Risk Analysis, U.S. Securities and Exchange Commission (Aug. 2018), https://www.sec.gov/files/dera-white-paper_regulationd_082018.pdf . 30 See Rongbing Huang & Donghang Zhang, Initial Public Offerings: Motives, Mechanisms, and Pricing THE OXFORD RSCH. ENCYCLOPEDIA OF ECON. & FIN. (Feb. 5, 2022) (surveying prior research on companies’ decisions on whether and how to go public citing conditions including: cash flow considerations and economies of scope that favor mergers with larger companies, particularly in globalized industries; the centrality of intellectual property to many new companies, which attracts venture capital; alternative exit strategies and private capital availability more generally; and regulatory burden). See also Marshall Lux & Jack Pead, Hunting High and Low; The Decline of the Small IPO and What to Do About It, (M-RCBG Associate Working Paper Series No. 86), MOSSAVAR-RAHMANI CTR. FOR BUS. AND GOV’T (Apr. 2018) (exploring the factors causing the decline in small company IPOs and finding motivating causes may include: reduced sell-side coverage; the growth of institutional investors on the buy-side; the shift from active to passive investing; growth in private capital; and increased regulatory pressures). 31 Transcript, U.S. Securities and Exchange Commission, Small Business Forum (Apr. 10, 2025), at 129-49, https://www.sec.gov/files/2025-SBF-508-Transcript.pdf. See U.S. Securities and Exchange Commission, Report on the 44th Annual Small Business Forum (Apr. 2025), at 22, https://www.sec.gov/files/2025-oasb-annualforum-report.pdf (recommendation that the Commission streamline the registration process for smaller businesses). 14 and resources small companies can devote to such costs. 32 Similar recommendations came out of prior years’ forums and other roundtables. 33 We are also aware of continued concerns regarding the cost of compliance with the ICFR auditor attestation requirement under section 404(b) of the Sarbanes-Oxley Act. 34 Some comments on the 2019 Accelerated Filer Release stated that the ICFR auditor attestation requirement is the most costly aspect of being an AF and indicated that, in relative terms, it is 32 Transcript, U.S. Securities and Exchange Commission, Small Business Forum (Mar. 9, 2026), https://www.sec.gov/files/transcript-45th-sb-forum.pdf 33 See, e.g., U.S. Securities and Exchange Commission, Report on the 43rd Annual Small Business Forum (Apr. 2024), at 27, https://www.sec.gov/files/2024-oasb-annual-forum-report.pdf (recommendation to increase AF public float threshold “so that only larger filers are required to provide an auditor attestation”); U.S. Securities and Exchange Commission, Report on the 40th Annual Small Business Forum (May 2021), at 25, https://www.sec.gov/files/2021_OASB_Annual_Forum_Report_FINAL_508.pdf (recommendation to increase SRC and AF public float thresholds); U.S. Securities and Exchange Commission, Report on the 39th Annual Small Business Forum (Jun 2020), at 30, https://www.sec.gov/files/2020-oasb-forum-report-final_0.pdf (recommendation to align the SRC and NAF definitions); U.S. Securities and Exchange Commission, Office of the Advocate for Small Business Capital Formation, Small Cap Policy Roundtable: Reassessing the Framework for Small Public Companies (July 2025), at 9-15, https://www.sec.gov/files/small-cap-policy-roundtabletranscript.pdf (discussion of the complexities of filer status designations with one participant suggesting, among other things, to increase the LAF threshold up to “a $2 billion market cap” and to “eliminate the accelerated filer status completely”); U.S. Securities and Exchange Commission, Office of the Advocate for Small Business Capital Formation, IPO Policy Roundtable: Reexamining the IPO On-Ramp (July 2025), at 42, https://www.sec.gov/files/ipo-roundtable-transcript.pdf (discussion about trying to “keep the costs of accessing public markets proportionate for smaller companies”); U.S. Securities and Exchange Commission, Investor Advisory Committee Meeting (Mar. 12, 2026), at 56:18-59:12, https://www.youtube.com/watch?v=y0ZrTZuUg0 (discussion related to reforming the categories of companies that are afforded the ability to provide scaled disclosure). The Commission’s Office of the Advocate for Small Business Capital Formation has made similar observations and recommended that the Commission “consider ways to harmonize the frameworks governing Smaller Reporting Company (SRC) and Accelerated Filer definitions.” See U.S. Securities and Exchange Commission, Office of the Advocate for Small Business Capital Formation, Annual Report Fiscal Year 2023 at 84, https://www.sec.gov/files/2023-oasb-annual-report.pdf. Additionally, the Commission’s Small Business Capital Formation Advisory Committee has written that the Commission should “[e]nsure public company rules are mindful of the unique circumstances of small public companies, so that these small companies can attract capital, spur innovation, and create jobs.” Letter from U.S. Securities and Exchange Commission, Small Business Capital Formation Advisory Committee (Feb. 28, 2023), at 2, https://www.sec.gov/files/committeeperspectives-letter-022823.pdf. 34 See section I.C. 15 particularly costly for low-revenue registrants. 35 In addition, a recent Government Accountability Office (“GAO”) study found that Section 404(a) and (b) compliance costs are more burdensome in relative terms for smaller companies. 36 At the same time, the ICFR auditor attestation requirement has benefits for investors, including that it enhances the reliability of management’s disclosure related to ICFR and may help a registrant identify a significant deficiency or identify and disclose a material weakness in ICFR that had not been identified or properly characterized by management. 37 While registration and entry into the public capital markets is not always necessary or appropriate for smaller or emerging companies, 38 a robust pipeline of companies joining the public markets benefits investors by providing them with a more diverse set of investment opportunities and greater transparency. It also benefits companies in various ways, including by providing them new sources of capital at a potentially lower cost. The Commission has long considered the regulatory burdens of public company registration and ongoing compliance with the regulations that apply to public companies. Indeed, the Commission has previously taken steps with the aim of increasing the viability of entry into the public markets to more companies, 35 See Accelerated Filer and Large Accelerated Filer Definitions, Release No. 34-88365 (Mar. 12, 2020) [85 FR 17178, 17183 (Mar. 26, 2020)]. See also comments on the SRC Proposing Release described in the 2019 proposing release suggesting that these costs can divert capital from core business needs. Amendments to the Accelerated Filer and Large Accelerated Filer Definitions, Release No. 34-85814 (May 9, 2019) [84 FR 24876, 24880 (May 29, 2019)] (“2019 Accelerated Filer Release”). 36 U.S. GOV’T ACCOUNTABILITY OFF., Sarbanes-Oxley Act: Compliance Costs are Higher for Larger Companies but More Burdensome for Smaller Ones (June 2025), https://www.gao.gov/assets/gao-25-107500.pdf. 37 See infra notes 67, 170, and 175. 38 See, e.g., Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets, Release No. 33-10763 (Mar. 4, 2020) [85 FR 17956, 17957 (Mar. 31, 2020)] (“In various circumstances, registration is not necessary, nor is it the most effective means, to achieve the objectives of the Securities Act or the Commission’s mission more broadly. In recognition of the fact that registration is not always necessary or appropriate, the Securities Act contains a number of exemptions from its registration requirement and the Commission is authorized to adopt additional exemptions.”). 16 by adopting simplified registration rules and processes for issuers while carefully balancing investors’ need for timely and appropriate disclosure. For example, in a series of actions spanning decades, the Commission has routinely simplified and tailored smaller issuers’ disclosure obligations. 39 In 2005, the Commission reformed the securities offering process by, among other actions, liberalizing permitted offering communications, updating prospectus delivery requirements, and modernizing the shelf registration provisions. 40 Nonetheless, changes in the securities laws have resulted in an increasingly complicated regulatory framework that warrants reconsideration, including a reassessment of whether the disclosure burdens faced by registrants are properly balanced with the corresponding benefits to investors and markets. We are therefore proposing amendments to our regulations to rationalize the existing Exchange Act filer status framework, which will simplify reporting and disclosure requirements and reduce burdens on most reporting companies, while continuing to seek full and fair disclosure for investors. To provide context to our proposed amendments, we briefly trace the evolution of the current filer status framework below. 39 See, e.g., Simplified Registration and Reporting Requirements for Small Issuers, Release No. 33-6049 (Apr. 3, 1979) [44 FR 21562 (Apr. 10, 1979)]; Small Business Initiatives, Release No. 33-6949 (July 30, 1992) [57 FR 36442 (Aug. 13, 1992)] (adopting Regulation S-B); and Smaller Reporting Company Regulatory Relief and Simplification, Release No. 33-8876 (Dec. 19, 2007) [73 FR 934 (Jan. 4, 2008)] (adopting the “smaller reporting company” definition) (“SRC Adopting Release”). 40 Securities Offering Reform, Release No. 33-8591 (July 19, 2005) [70 FR 44722 (Aug. 3, 2005)] (“Offering Reform Adopting Release”). See also Registered Offering Reform, Release No. 33-11418 (May 19, 2026) (“Registered Offering Reform Proposal”). 17 A. Exchange Act Reporting Prior to 2002 The Commission adopted the “integrated disclosure system” in 1982 following several years of analysis of the disclosure rules under the Securities Act and the Exchange Act. 41 Prior to the adoption of the integrated disclosure system, separate disclosure regimes applied to Securities Act registration statements and Exchange Act registration and periodic reporting, which often resulted in overlapping and duplicative requirements. At the time the integrated disclosure system was adopted, the Commission stated that the “goal of the Commission’s integrated disclosure program has been to revise or eliminate overlapping or unnecessary disclosure and dissemination requirements wherever possible, thereby reducing burdens on registrants while at the same time ensuring that security holders, investors and the marketplace have been provided with meaningful nonduplicative information upon which to base investment decisions.” 42 Under the integrated disclosure system, most registration and reporting forms under the Securities Act and the Exchange Act refer to common disclosure requirements codified in Regulation S-K and Regulation S-X. In recognition of the difficulties that smaller issuers were facing in accessing the capital markets, the Commission adopted Regulation S-B in 1992, an integrated disclosure system tailored specifically to a set of “small business issuers,” as defined 41 See Adoption of Integrated Disclosure System, Release No. 33-6383 (Mar. 3, 1982) [47 FR 11380 (Mar. 16, 1982)]. 42 Id. at 11382. 18 by revenues and public float, and provided specialized forms under the Securities Act and Exchange Act that referenced simplified disclosure requirements for these issuers. 43 As a result of these accommodations, prior to 2002, there were effectively two Exchange Act filer statuses: a “default” category of issuers that filed periodic reports on Forms 10-K and 10-Q under Regulation S-K, and a small business issuer category that filed periodic reports on Forms 10-KSB and 10-QSB under Regulation S-B. Commission rules applied uniform filing deadlines to all Exchange Act reporting companies’ periodic reports: 90 days after fiscal year end for annual reports, and 45 days after quarter end for quarterly reports. B. Accelerated Filer Status; Sarbanes-Oxley Act Following a series of corporate and accounting scandals in the early 2000s that led to financial restatements and bankruptcies and resulted in significant adverse effects on shareholders, the Commission established “accelerated filer” status by adopting accelerated filing deadlines for certain registrants. Congress subsequently enacted the Sarbanes-Oxley Act, 44 which included ICFR requirements intended to improve the accuracy and reliability of corporate disclosures. The Commission’s adoption of AF status was motivated in part by advances in communication technology and companies’ growing practice of releasing quarterly earnings well 43 See Small Business Initiatives, Release No. 33-6949 (July 30, 1992) [57 FR 36442 (Aug. 13, 1992)]. Note that in 2007 the Commission adopted amendments that moved the scaled disclosure requirements for smaller issuers from Regulation S-B into Regulation S-K, as discussed below. See SRC Adopting Release. 44 Pub. L. No. 107–204, 116 Stat. 745 (2002). 19 before the Form 10-Q deadline. 45 The new “accelerated filer” status therefore accelerated the periodic report filing deadlines for registrants with a public float of $75 million or more, who had been subject to Exchange Act reporting requirements for at least 12 months, and had previously filed at least one annual report. 46 In acting to further categorize the filer statuses in this way, the Commission sought to “balance the market’s need for information with the time companies need to prepare that information without undue burden.” 47 The Commission again amended the filer status rules in 2005 by introducing the LAF status. 48 The Commission sought to avoid applying the shortest filing deadlines to registrants with less than $700 million in public float by further dividing filers into LAFs (registrants with $700 million or more in public float) and AFs (registrants with at least $75 million in public float but less than $700 million). All remaining registrants with less than $75 million in public float have become known as NAFs. While the Commission acknowledged the incremental benefit of more timely accessibility to periodic reports, it was concerned with the added burdens associated 45 See Acceleration of Periodic Report Filing Dates and Disclosure Concerning Website Access to Reports, Release No. 33-8089 (Apr. 12, 2002) [67 FR 19896, 19897 (Apr. 23, 2002)] (“[A]dvances in communications and information technology have made it easier for companies to process and disseminate information swiftly. Many large seasoned reporting companies capture and evaluate information and announce their quarterly and annual financial results well before they file their formal reports with the Commission. These earnings announcements are generally less complete in their disclosure than quarterly or annual reports and can emphasize information that is less prominent in quarterly or annual reports. Investors also process, evaluate and react to information on a much shorter timeframe. The delayed filing of reports, however, means investors often make decisions without access to the more extensive disclosure in the company’s Exchange Act reports.”). 46 Acceleration of Periodic Report Filing Dates and Disclosure Concerning Web Site Access to Reports, Release No. 33-8128 (Sept. 5, 2002) [67 FR 58480 (Sept. 16, 2002)]. 47 Id. The Commission did not propose to accelerate the filing deadlines for newly public companies and smaller issuers, recognizing that such companies need to develop experience with the preparation and filing of periodic reports or may not have the resources or infrastructure to prepare their reports on a shorter timeframe without undue burden or expense. 48 Revisions to Accelerated Filer Definition and Accelerated Deadlines for Filing Periodic Reports, Release No. 33-8644 (Dec. 21, 2005) [70 FR 76626 (Dec. 27, 2005)] (“Accelerated Filer Revisions Adopting Release”). 20 with the increased acceleration of the deadlines. 49 The Commission determined to limit the shortest deadlines to the largest registrants, reasoning that LAFs, “are more likely than smaller companies to have a well-developed infrastructure and financial reporting resources to support further acceleration of the annual report deadline.” 50 As a result of this and later developments, 51 under the current definition in Rule 12b-2, an LAF is a registrant that: (1) has a public float of $700 million or more, as of the last business day of its most recently completed second fiscal quarter, calculated using either the closing price or the average of the bid and ask prices that day; (2) has been subject to the requirements of Exchange Act section 13(a) or 15(d) for at least 12 calendar months; (3) has filed at least one annual report pursuant to the Exchange Act; and (4) is not eligible to be an SRC under the SRC revenue test. LAFs’ periodic reporting deadlines are 60 days for Form 10-K, and 40 days for Form 10-Q, while AFs’ deadlines are 75 and 40 days, respectively; and the deadlines for NAFs remain at 90 and 45 days, respectively. 52 49 See Revisions to Accelerated Filer Definition and Accelerated Deadlines for Filing Periodic Reports, Release No. 33-8617 (Sept. 22, 2005) [70 FR 56862, 56865 (Sept. 29, 2005)]. 50 Id. The Commission confirmed this view in the Accelerated Filer Revisions Adopting Release. See supra note 48, at 76629. 51 The LAF definition was amended in 2020 to exclude certain low revenue registrants. Accelerated Filer and Large Accelerated Filer Definitions, Release No. 34-88365 (Mar. 12, 2020) [85 FR 17178 (Mar. 26, 2020)]. See discussion infra notes 108,109, and 110 and accompanying text. 52 See Accelerated Filer Revisions Adopting Release. Also in 2005, the Commission adopted a requirement that AFs (and well-known seasoned issuers, as that term is defined in Securities Act Rule 405) disclose on Form 10-K or Form 20-F material outstanding staff comments that were issued more than 180 days before the end of the fiscal year covered by the report. See Offering Reform Adopting Release. The Commission subsequently extended that disclosure requirement to LAFs as well. See Accelerated Filer Revisions Adopting Release. 21 C. ICFR Requirements In 2002, less than two months before the Commission adopted the rules for AFs, Congress enacted the Sarbanes-Oxley Act. 53 One aspect of the Sarbanes-Oxley Act’s reforms was the adoption of section 404. Section 404(a) mandates Commission rules requiring Exchange Act reporting companies to include in their annual reports an internal control report that states the responsibility of management for establishing and maintaining ICFR and that contains an assessment of the effectiveness of the registrant’s ICFR as of the end of each fiscal year. 54 Section 404(b) requires that each registered public accounting firm that prepares or issues the registrant’s financial statement audit report attest to, and report on, management’s assessment of the effectiveness of the ICFR. 55 As discussed below, Congress took further action in the DoddFrank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) 56 and the Jumpstart Our Business Startups (“JOBS”) Act, 57 to exempt from section 404(b): (1) any registrant that is not an LAF or an AF and (2) any registrant that is an EGC, respectively. As mandated by section 404, the Commission adopted rules in 2003 requiring registrants that are subject to Exchange Act reporting requirements to include in their annual reports a report of management on the registrant’s ICFR and an attestation report by the registrant’s auditors on 53 Pub. L. No. 107–204, 116 Stat. 745 (2002). 54 15 U.S.C. 7262(a). 55 15 U.S.C. 7262(b). 56 Pub. L. No. 111–203, 124 Stat. 1376 (2010), sec. 989G(a). Section 404(c), codified at 15 U.S.C. 7262(c), provides that section 404(b) does not apply with respect to an audit report prepared for an issuer that is neither an LAF nor an AF as defined by the Commission. 57 Pub. L. No. 112–106, 126 Stat. 306 (2012), sec. 103 (codified at 15 U.S.C. 7262(b)). 22 management’s assessment of the internal controls. 58 Although section 404 generally requires and directs the Commission to adopt rules regarding ICFR that apply to every issuer that is required to file reports pursuant to Exchange Act section 13(a) or 15(d), registered investment companies (“RICs”) under section 8 of the Investment Company Act 59 are specifically exempted from section 404 by section 405. 60 In addition, the Commission’s rules implementing section 404 exempted other types of issuers, such as asset-backed issuers, from the ICFR obligations. 61 The Commission also determined that FPIs and Canadian multijurisdictional disclosure system (“MJDS”) issuers must have their management assess and report annually on the effectiveness of their ICFR as of the end of their fiscal year and include an auditor attestation report on ICFR in their annual report form if the FPI or MJDS issuer is an AF or LAF, other than an EGC. 62 BDCs, however, are subject to the rules adopted by the Commission to implement section 404. 63 Through a series of actions from 2003 through 2009, the Commission delayed compliance with section 404 for NAFs, acknowledging that “non-accelerated filers, including 58 17 CFR 229.308. See also Management’s Report on Internal Control over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reporting, Release No. 33-8238 (June 5, 2003) [68 FR 36636 (June 18, 2003)] (“ICFR Adopting Release”). 59 15 U.S.C 80a-8. 60 15 U.S.C. 7263. RICs are subject to Sarbanes-Oxley Act section 302, which requires management certifications, including with respect to management’s responsibility for establishing and maintaining ICFR. See 17 CFR 270.30a-2 and 270.30a-3; see also ICFR Adopting Release. RICs that are management companies, other than small business investment companies, are also required to file a copy of their independent public accountant’s report on internal controls. See Form N-CEN (17 CFR 274.101); see also Investment Company Reporting Modernization, Release No. IC-32314 (Oct. 13, 2016) [81 FR 81870, n.879-81 and accompanying text (Nov. 18, 2016)]. 61 See Asset-Backed Securities, Release No. 33-8518 (Dec. 22, 2004) [70 FR 1506, 1510 n. 41. (Jan. 7, 2005)] (“Regulation AB Adopting Release”). See also 17 CFR 240.13a-15(a) and 17 CFR 240.15d-15(a) and General Instruction J to Form 10-K. 62 See Items 15(b) and (c) of Form 20-F and General Instruction B(6)(c) and (d) of Form 40-F. 63 BDCs are not registered under the Investment Company Act and, therefore, not within the exemption provided by Sarbanes-Oxley Act section 405. See 17 CFR 230.405. 23 smaller companies and foreign private issuers, may have greater difficulty in preparing the management report on internal control over financial reporting.” 64 Ultimately, Congress enacted section 989G of the Dodd-Frank Act, which added section 404(c) to the Sarbanes-Oxley Act to exempt issuers that are neither LAFs nor AFs, as defined by the Commission, from the ICFR auditor attestation requirement of section 404(b). 65 Section 404(c) also directed the Commission to conduct a study to determine how the Commission could reduce the burden of complying with the section 404(b) ICFR auditor attestation requirement for companies with public float between $75 million and $250 million. Congress further extended relief from section 404(b) in the JOBS Act when it exempted EGCs from the requirement. 66 64 See ICFR Adopting Release. As initially adopted, AFs were to comply with the requirements for their first fiscal year ending on or after June 15, 2004, and issuers that were not AFs on or after April 15, 2005. Through a series of releases the Commission extended compliance for accelerated and non-accelerated filers. See, e.g., Management’s Report on Internal Control over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, Release No. 33- 8392 (Feb. 24, 2004) [69 FR 9722 (Mar. 1, 2004)] (extending compliance dates for accelerated and non-accelerated filers); Management’s Report on Internal Control over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports of Non-Accelerated Filers and Foreign Private Issuers; Extension of Compliance Dates, Release No. 33-8545 (Mar. 2, 2005) [70 FR 11528 (Mar. 8, 2005)]; Management’s Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports of Companies that Are Not Accelerated Filers, Release No. 33-8618 (Sept. 22, 2005) [70 FR 56825 (Sept. 29, 2005)] (further postponing compliance dates for NAFs); Internal Control over Financial Reporting in Exchange Act Periodic Reports of Foreign Private Issuers that Are Accelerated Filers, Release No. 33-8730A (Aug. 9, 2006) [71 FR 47056 (Aug. 15, 2006)] (postponing compliance dates for FPIs and NAFs). See also Internal Control over Financial Reporting in Exchange Act Reports of Non-Accelerated Filers and Newly Public Companies, Release No. 33-8760 (Dec. 15, 2006) [71 FR 76580 (Dec. 21. 2006]; Internal Control over Financial Reporting in Exchange Act Periodic Reports of NonAccelerated Filers, Release No. 33-8934 (June 26, 2008) [73 FR 38094 (July 2, 2008)]; and Internal Control over Financial Reporting in Exchange Act Reports of Non-Accelerated Filers, Release No. 33-9072 (Oct. 13, 2009) [74 FR 53628 (Oct. 19, 2009)] (further postponing compliance dates for NAFs). 65 15 U.S.C. 7262(c). 66 See supra note 57. 24 In April 2011, the Commission staff published the required study and recommendations relating to section 404(b). 67 The study found that, while initial implementation of section 404 resulted in a steep increase in audit fees, there was a statistically significant decrease in compliance costs (including audit fees) for registrants subsequent to the issuance of PCAOB Auditing Standard No. 5 68 and related Commission guidance 69 on management’s report on ICFR. Based on the study’s findings, the staff did not recommend changing the scope of the ICFR auditor attestation requirement at that time, but encouraged activities to further improve the effectiveness and efficiency of implementation of the ICFR requirements. 70 As discussed in more detail below, the Commission modified the definition of AF in 2020 to exclude a registrant that is eligible to be an SRC and has annual revenues of less than $100 million. 71 In excluding low-revenue SRCs from AF status, the Commission also exempted those registrants from the ICFR auditor attestation requirement. In the adopting release, the Commission found that the ICFR auditor attestation requirement is disproportionately costly to 67 See Staff of the Office of the Chief Accountant, U.S. Securities and Exchange Commission, Study and Recommendations on Section 404(b) of the Sarbanes-Oxley Act of 2002 for Issuers with Public Float Between $75 and $250 Million (Apr. 2011), https://www.sec.gov/news/studies/2011/404bfloat-study.pdf (“Staff Study”). 68 See PCAOB Auditing Standard No. 5, An Audit of Internal Control over Financial Reporting that Is Integrated with an Audit of Financial Statements, https://pcaobus.org/oversight/standards/archived-standards/prereorganized-auditing-standards-interpretations/details/Auditing_Standard_5. 69 See Commission Guidance Regarding Management‘s Report on Internal Control over Financial Reporting Under Section 13(a) and 15(d) of the Securities Exchange Act of 1934, Release No. 33-8810 (June 20, 2007) [72 FR 35324 (June 27, 2007)]. 70 The staff noted that section 404(c) exempted approximately 60% of reporting issuers at that time and found strong evidence that the auditor’s role in auditing the effectiveness of ICFR improves the reliability of internal control disclosures and financial reporting overall and is useful to investors. See Staff Study. 71 Accelerated Filer and Large Accelerated Filer Definitions, Release No. 34-88365 (Mar. 12, 2020) [85 FR 17178 (Mar. 26, 2020)]. In expanding this exclusion, the Commission suggested, as a general matter, there may be greater costs and relatively lower benefits in including these issuers as accelerated filers, in part because these issuers may, on average, be less susceptible to certain types of restatements, such as those related to revenue recognition. 25 small issuers, noting that the fixed costs of compliance are not scalable for smaller issuers and that low-revenue issuers have limited access to internally generated capital such that the costs may more directly constrain their ability to invest and hire. 72 Commentators and registrants continue to express concerns regarding the costs of implementation of section 404 and the disproportionate effect on smaller issuers. 73 D. Actions Related to Smaller Reporting and Emerging Growth Companies 1. Establishment of SRC Status Through the course of implementing the enhanced disclosure and other requirements of the Sarbanes-Oxley Act, the Commission recognized the increased regulatory burden faced by registrants. 74 This eventually led in 2007 to the Commission reworking its regulatory framework for smaller registrants by establishing the “smaller reporting company” filer status. 75 As part of the revisions, the Commission rescinded Regulation S-B and the “small business issuer” 72 Id. at 17188. However, the release also acknowledged concerns that eliminating the requirement for these registrants may adversely affect the effectiveness of ICFR and the reliability of the financial statements of the affected issuers with data showing that, among low-revenue issuers, accelerated filers other than EGCs (filers that are required to obtain an auditor’s attestation of ICFR) have fewer Item 4.02 restatements than nonaccelerated filers that are not required to comply with section 404(b). 73 See, e.g., Stephen M. Bainbridge, Sarbanes-Oxley § 404 at Twenty, Law-Econ Research Paper No. 22-05, UCLA SCHOOL OF LAW (2022). See also Peter Iliev, The Effect of SOX Section 404: Costs, Earnings Quality, and Stock Prices, 65 J. FIN. 1163 (2010) (seeking to measure the costs, benefits, and overall value impact of Sarbanes-Oxley Act requirements on small firms and finding the ICFR auditor attestation requirement imposes significant costs for small firms and suggesting that the costs associated with section 404 compliance outweigh the benefits for small firms). See also Transcript, U.S. Securities and Exchange Commission, Small Business Forum (Mar. 9, 2026), https://www.sec.gov/files/transcript-45th-sb-forum.pdf, at 141-143, 154 (participants identified section 404(b) costs as an obstacle to companies going and staying public, and observed that, in practice, the public float trigger for becoming subject to the ICFR auditor attestation requirement can be unpredictable). 74 See, e.g., Revisions to Accelerated Filer Definition and Accelerated Deadlines for Filing Periodic Reports, Release No. 33-8617 (Sept. 22, 2005) [70 FR 56862, 56863-64 (Sept. 29, 2005)] (acknowledging the burdens registrants faced in complying with the section 404 requirements and recounting the compliance postponements the Commission instituted in response). 75 See SRC Adopting Release. 26 definition. 76 Under the 2007 rules, all filers that were not AFs or LAFs—i.e., those with less than $75 million in public float 77—were designated as SRCs, and granted most of the scaled disclosure accommodations that had previously been provided to “small business issuers.” 78 The SRC definition excludes asset-backed issuers, RICs, BDCs, and majority-owned subsidiaries of issuers that do not qualify as an SRC. Additionally, FPIs are not eligible to use the requirements for SRCs unless they use the forms and rules designated for domestic issuers and provide financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). 79 The revised streamlined regulatory framework moved all disclosure requirements back into Regulation S-K and Regulation S-X, consolidated smaller issuers and NAFs into the same filer status, and expanded the number of registrants eligible to use scaled disclosure requirements. 80 The amendments effectively established a three-tier filer status framework: 76 Id. 77 Registrants without a calculable public float were accorded SRC status if their annual revenues were below $50 million. 78 See SRC Adopting Release. 79 The Commission has solicited comments on the definition of FPIs and is considering whether the current FPI definition should be revised so that it better represents the issuers that the Commission intended to benefit from current FPI accommodations while continuing to protect investors and promote capital formation. See Concept Release on Foreign Private Issuer Eligibility, Release No. 33-11376 (June 4, 2025) [90 FR 24232 (June 9, 2025)] (“FPI Concept Release”). Further, concurrently with the proposed amendments outlined in this release, the Commission separately is proposing amendments to revise, among other things, the eligibility requirements for Forms S-3 and S-1. See Registration Offering Reform Proposal. Pursuant to the ongoing evaluation of the issues raised in the FPI Concept Release, the Commission is proposing to prohibit FPIs from using Forms S-3 and S-1. See id. 80 Id. at 935. At the time of adoption, the Commission estimated that approximately 42% of registrants would be eligible to use the scaled disclosure requirements (4,976 out of 11,898 reporting companies). Id. The amendments also moved certain scaled financial statement requirements from Regulation S-B into Regulation S-X. Id. 27 • LAFs having a public float of $700 million or more, subject to the most accelerated filing deadlines and the most comprehensive disclosure requirements; • AFs having a public float of $75 million or more, but less than $700 million, subject to less accelerated filing deadlines and the most comprehensive disclosure requirements; and • SRCs having a public float of less than $75 million (or, if without a calculable public float, annual revenues below $50 million), subject to non-accelerated filing deadlines and scaled disclosure requirements. At the time of initial adoption of SRC status, LAFs and AFs were generally subject to the same disclosure requirements as each other. SRCs, however, were (and currently remain) permitted to avail themselves of certain scaled disclosure accommodations, which currently include: • To provide two (instead of three) years of audited financial statements, and prepare their financial statements in accordance with Article 8 of Regulation S-X; 81 • To provide two (instead of three) years of summary compensation table information and tabular and other compensation disclosure for three (instead of five) named executive officers; • To omit the compensation discussion and analysis, compensation policies and practices related to risk management, pay ratio disclosure, grants of plan-based 81 In conjunction with the two years of audited financial statements registrants are also permitted to provide a twoyear (instead of three-year) comparison in their Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”). See 17 CFR 240.14a-3(b)(1), 17 CFR 210.8-01 et seq., and 17 CFR 229.303. 28 awards table, pension benefits table, option exercises and stock vested table, and nonqualified deferred compensation table; 82 • To provide scaled golden parachute and pay versus performance disclosure; 83 • To omit disclosure relating to risk factors in periodic reports; 84 a stock performance graph; 85 quantitative and qualitative disclosure about market risk; 86 supplementary financial information relating to the disclosure of material quarterly changes and information about oil and gas activities; 87 policies and procedures for the review, approval, or ratification of related party transactions; 88 and certain payments made by resource extraction issuers; 89 and • To provide a simplified description of business. 90 By contrast, Item 404 of Regulation S-K, which addresses related-party transaction disclosure, includes in Item 404(d) certain requirements for SRCs that are more rigorous than those for other filers, 91 namely: 82 See 17 CFR 229.402. In addition, SRCs are only required to provide three (instead of five) years of pay versus performance disclosure. See 17 CFR 229.402(v). 83 SRCs are only required to provide golden parachute disclosure generally for three executive officers (instead of five). See 17 CFR 229.402(t). See also infra note 221 regarding golden parachute votes. SRCs are only required to provide three (instead of five) years of pay versus performance disclosure and are permitted to omit peer group total shareholder return and company selected measure disclosure. See 17 CFR 229.402(v). 84 See Form 10-K, Item 1A; Form 10-Q, Item 1A. 85 See 17 CFR 229.201(e). 86 See 17 CFR 229.305. 87 See 17 CFR 229.302. 88 See 17 CFR 229.404(b)(1); 17 CFR 229.404(d). 89 See 17 CFR 240.13q-1. 90 See 17 CFR 229.101(h). 91 See SRC Adopting Release at 941 (noting that one percent of an SRC’s total assets may not exceed $120,000 to justify the lower threshold for SRCs). 29 • Rather than a flat $120,000 threshold for the disclosure of related-party transactions, the threshold is the lesser of $120,000 or one percent of total assets; • Disclosures are required about underwriting discounts and commissions where a related person is a principal underwriter or a controlling person or member of a firm that was or is going to be a principal underwriter; • Disclosures are required about the issuer’s parent(s) and their basis of control; and • An additional year of disclosures is required regarding transactions with related persons. 92 2. The JOBS Act and EGC Status In 2012, Congress enacted the JOBS Act, which established a new “emerging growth company,” or EGC, filer status and provided disclosure and other accommodations to EGCs. 93 Currently, a company qualifies as an EGC if it has total gross revenues of less than $1.235 billion during its most recently completed fiscal year and continues to qualify as an EGC until the earliest of: (1) the last day of the fiscal year of the issuer during which it has total annual gross revenues of $1.235 billion or more; (2) the last day of its fiscal year following the fifth anniversary of the first sale of its common equity securities pursuant to an effective registration statement; (3) the date on which the issuer has, during the previous three-year period, issued 92 17 CFR 229.404(d). 93 Pub. L. No. 112–106, 126 Stat. 306 (2012). The EGC provisions of the JOBS Act were informed by a report containing recommendations made by the IPO Task Force to the U.S. Department of the Treasury. See IPO TASK FORCE, Rebuilding the IPO On-Ramp: Putting Emerging Companies and the Job Market Back on the Road to Growth (Oct. 20, 2011). The task force was formed after a 2011 Department of the Treasury conference on Access to Capital. The task force members spanned the emerging growth company ecosystem, including venture capitalists, executives, investors, securities lawyers, accountants, academics, and investment bankers. Its purpose was to examine the challenges facing emerging companies and develop recommendations to improve their access to capital, with a goal of generating jobs and growth. 30 more than $1 billion in nonconvertible debt; or (4) the date on which the issuer is deemed to be an LAF (as defined in Exchange Act Rule 12b-2). 94 Congress supplemented the JOBS Act by enacting the Fixing America’s Surface Transportation (“FAST”) Act, 95 which provided for targeted additional accommodations for EGCs and required the Commission “to further scale or eliminate requirements of Regulation S-K, in order to reduce the burden on emerging growth companies, accelerated filers, smaller reporting companies, and other smaller issuers, while still providing all material information to investors.” 96 EGC status provides a registrant with accommodations that lower the costs and burdens of registration and reporting and is generally seen as an “on-ramp” for newly public companies to ease the burdens of transitioning from a private to a public company. 97 While there are overlaps between the EGC and SRC populations and their respective accommodations, EGCs are entitled to a similar but distinct set of accommodations. EGCs are: 94 See 15 U.S.C. 77b(a)(19) and 15 U.S.C. 78c(a)(80). Section 101(a) of the JOBS Act amended section 2(a) of the Securities Act and section 3(a) of the Exchange Act to define an “emerging growth company.” Section 101(a) initially defined “emerging growth company” as an issuer with less than $1 billion in total annual gross revenues. Pursuant to the statutory definition, the Commission is required every five years to index to inflation the annual gross revenue amount used to determine EGC status to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics. In 2017, the Commission increased the annual gross revenue amount from $1,000,000,000 to $1,070,000,000. Inflation Adjustments and Other Technical Amendments Under Titles I and III of the Jobs Act, Release No. 33-10332 (Mar. 31, 2017) [82 FR 17545 (Apr. 12, 2017)]. In 2022, the Commission increased it to $1,235,000,000. Inflation Adjustments Under Titles I and III of the JOBS Act, Release No. 33-11098 (Sept. 9, 2022) [87 FR 57394 (Sept. 20, 2022)]. 95 Pub. L. No. 114-94, 129 Stat. 1312 (2015). 96 Id., secs. 72002 and 72003. The Commission adopted amendments to modernize and simplify disclosure requirements in Regulation S-K in 2019. FAST Act Modernization and Simplification of Regulation S-K, Release No. 33-10618 (Mar. 20, 2019) [84 FR 12674 (Apr. 2, 2019)]. 97 See supra note 93. 31 • Exempt from the ICFR auditor attestation requirement, 98 the requirement to hold shareholder advisory votes on executive compensation, 99 pay ratio disclosure, 100 and pay versus performance disclosure; 101 • Permitted to provide two (instead of three) years of audited financial statements in the registration statement for an initial public offering of common equity securities, and to defer compliance with new or revised financial accounting standards until a company that is not an issuer is required to comply with such standards, if such standard applies to private companies; 102 • Permitted to provide executive compensation disclosure to match the information required from issuers with less than $75 million in public float (the SRC threshold at the time of adoption of the JOBS Act); 103 and • Permitted to submit certain draft registration statements to the Commission on a confidential basis. 104 98 See 15 U.S.C. 7262(b). 99 EGCs are exempt from the requirement to hold shareholder advisory votes to approve executive compensation (“say-on-pay”), frequency of say-on-pay voting, and “golden parachute” compensation arrangements. See 15 U.S.C. 78n-1(e); Jumpstart Our Business Startups Act, Pub. L. No. 112–106, 126 Stat. 306 (2012), sec. 102(a)(1). See infra notes 219 through 221 for a discussion of these shareholder advisory votes. 100 Investor Protection and Securities Reform Act of 2010, Pub. L. No. 111–203, 124 Stat. 1904, sec. 953(b)(1); Pub. L. No. 112–106, 126 Stat. 306 (2012), sec. 102(a)(3). 101 See 15 U.S.C. 78n(i); Pub. L. No. 112–106, 126 Stat. 306 (2012), sec. 102(a)(2). 102 See 15 U.S.C. 77g(a)(2); 15 U.S.C. 78m(a)(2). 103 See section 102(c) of the JOBS Act and 17 CFR 229.402(m) through (r). 104 See infra notes 222 through 227 and accompanying text. 32 3. Recent Amendments and Filer Status Complexity While a registrant cannot be both an EGC and an LAF, 105 as shown in the table in section I above, a registrant can be both an EGC and an SRC, or both an EGC and an AF. When the Commission updated the SRC, AF, and LAF thresholds in 2018, the SRC public float threshold was raised to $250 million, and the SRC revenue threshold was raised to $100 million. 106 Along with the increase of these thresholds, the Commission removed the automatic exclusion of SRCs from the definition of AF and LAF. As a result of these changes, SRCs went from being exclusively NAFs to a separate, additional status (like EGC status) that could attach to either NAFs or AFs. Further, SRCs can also be EGCs, and these statuses involve largely overlapping but distinct obligations and accommodations. When adopting the 2018 amendments to the SRC definition, the Commission acknowledged the “regulatory complexity” created by this potential overlap between the SRC and AF definitions. 107 Subsequently, in 2020, the Commission adopted amendments to the definitions of AF and LAF seeking to tailor the types of issuers included in those filer statuses. 108 The rules, as amended, now exclude low-revenue SRCs (those with under $100 million in annual revenues and either no public float or a public float of less than $700 million) from the 105 See 15 U.S.C. 77b(a)(19) and 15 U.S.C. 78c(a)(80). 106 Smaller Reporting Company Definition, Release No. 33-10513 (June 28, 2018) [83 FR 31992 (July 10, 2018)] (“2018 SRC Adopting Release”). Additionally, qualification via the revenue test was extended to registrants with a public float of less than $700 million, rather than only applying in the case of no public float. 107 Id. The adopting release noted that the Chairman had directed the staff to consider, among other things, the historical and current relationship between the SRC and AF definitions as part of its consideration of possible changes to the AF definition. 108 Accelerated Filer and Large Accelerated Filer Definitions, Release No. 34-88365 (Mar. 12, 2020) [85 FR 17178 (Mar. 26, 2020)]. 33 definitions of AF and LAF, increasing the number of registrants that qualify as NAFs. 109 As NAFs, these registrants, among other things, are not required to obtain an ICFR auditor attestation. The amendments were intended to thereby reduce compliance costs for these registrants while maintaining investor protections by more appropriately tailoring the types of registrants that are included in the categories of AF and LAF. 110 While the amendments increased the number of SRCs that qualify as NAFs, the Commission determined not to fully align the statuses. 111 The Commission acknowledged that such alignment would promote greater regulatory simplicity and reduce friction or confusion associated with registrants’ determination of their filer status or reporting regime. 112 It expressed concerns, however, that such alignment could result in adverse effects on the reliability of the financial statements and the ability of investors to make informed investment decisions about those issuers. 113 Thus, the amendments reduced the overlap between AF status and SRC status by including low-revenue SRCs as NAFs (i.e., those with a public float of $75 million or more but less than $250 million, regardless of annual revenues, and those with public float of less than 109 Id. The Commission also set the transition thresholds for exiting LAF and AF status at $560 million and $60 million, respectively (80% of the initial public float thresholds matching the 80% exit threshold for SRC status), and added the SRC revenue test to the LAF and AF transition thresholds. 110 Id. at 17193. In making its determination the Commission noted that imposition of the ICFR auditor attestation requirement has been associated with benefits to issuers and investors, such as reduced rates of ineffective ICFR and more reliable financial statements, but also acknowledged that the affected registrants may find the costs of these requirements to be particularly burdensome given certain fixed costs and limited access to internallygenerated capital. Although exempting low-revenue registrants may result in an increased prevalence of ineffective ICFR and restatements, in mitigation of these concerns the Commission noted the relatively low rates of restatements for low-revenue registrants and provided evidence that the market value of low-revenue registrants was not as associated with contemporary financial statements as for higher-revenue registrants (potentially implying that low-revenue registrants’ valuations are driven to a greater degree by future prospects). Id. at 17193-94. 111 Id. 112 Id. 113 Id. at 17189. 34 $700 million and annual revenues of less than $100 million), but added an additional determination for SRC status. We are proposing to revise the current rules to streamline and further scale disclosure and reporting requirements. Among our objectives is to reduce compliance costs and create a more attractive on-ramp for newly public companies, thereby reducing regulatory impediments that may be deterring companies from participating in the public market and encouraging more companies to go and stay public, while ensuring that investors have the information necessary to inform their investment and voting decisions. II. DISCUSSION OF PROPOSED RULES As detailed above, the Commission’s rules currently set forth five filer statuses that correspond to varying levels of disclosure and other requirements, which are sometimes overlapping and often complex for issuers to determine. 114 LAFs are subject to the most stringent requirements, and NAFs that are also both SRCs and EGCs are afforded the most accommodations. LAFs in 2024 accounted for 35.4 percent of registrants and 98.8 percent of total market public float. 115 In contrast, in 2024, while NAFs, including NAFs that are also SRCs or EGCs (or both), accounted for 51.9 percent of registrants, they accounted for only 1.2 percent of total market public float. 116 We are proposing amendments with the goal of streamlining the overlapping Exchange Act filer statuses and further scaling disclosures and other accommodations while ensuring that 114 Supra Table 2. 115 See infra note 339 on calculating total market public float. 116 See section IV.A.2. 35 investors continue to receive timely and material information. To do so, the proposed amendments seek to align disclosure and other reporting requirements and reporting deadlines with registrants’ public float. As a result of the proposed amendments, companies that collectively make up the majority of the U.S. equity market capitalization would be subject to the most comprehensive requirements and earliest filing deadlines, while all other issuers would be afforded the proposed scaled disclosure and other accommodations. The proposed amendments would provide for simplified compliance and reduced costs for a majority of registrants. Additionally, we are proposing to extend the filing deadlines for the smallest companies in order to reduce the burden on these companies and further accommodate their ability to efficiently comply with Exchange Act reporting. As described in more detail below, the proposed amendments would: • Revise the LAF filer status to: o Raise the threshold for becoming an LAF from the current $700 million to $2 billion in public float, which would represent 93.5 percent of the current total market public float; 117 o Establish a new, more stable, public float calculation window that provides for the determination of public float based on the average price of the registrant’s voting and non-voting common equity held 117 See discussion in section II.A.1 below 36 by non-affiliates over the last 10 trading days of the second quarter of a registrant’s fiscal year; 118 o Establish that a registrant will only transition into or out of a status after the registrant has been above or below the public float threshold for two consecutive years; 119 and o Increase the seasoning threshold for becoming an LAF to 60 consecutive calendar months. 120 • Establish the NAF filer status and consolidate and extend to NAFs currently available scaled disclosure and other accommodations by: o Establishing an NAF definition that encompasses all registrants that are not LAFs; 121 and o Applying to NAFs the current disclosure requirements applicable to SRCs and EGCs, including not requiring an ICFR auditor attestation. 122 • Extend to NAFs the requirement currently applicable to LAFs and AFs to disclose on Form 10-K or Form 20-F the substance of material unresolved staff comments 118 As noted above, the Commission has recently proposed to allow registrants to report semiannually rather than quarterly on Form 10-Q. See Semiannual Proposing Release. If that rule is adopted, semiannual filers would determine public float over the last 10 trading days of the first semiannual period. See also infra note 296 and accompanying text. 119 See section II.A.1. 120 See section II.A.2. 121 See section II.B.1. 122 See sections II.B.2, 3 and 4. As discussed below, these requirements would generally extend to all NAFs, with some exceptions. 37 regarding the registrant’s periodic or current reports received at least 180 days before a registrant’s fiscal year end. 123 • Eliminate AF and SRC filer statuses as unnecessary in light of the amendments described above. 124 • Create a sub-category consisting of the smallest NAFs (“SNFs”), comprising NAFs reporting total assets of $35 million or less as of the end of an issuer’s two most recent second fiscal quarters, that would be eligible for extended deadlines for filing their Form 10-K and Form 10-Q periodic reports. 125 Consistent with the Commission’s history of considering how its regulatory regime can serve investors while avoiding unnecessary regulatory burdens to registrants, we believe the time is ripe to again rebalance the disclosure and other requirements applicable to issuers of given sizes. Evidence shows that regulatory changes over the last two decades, which increased the costs of public company reporting, have contributed to a decline in the number of public companies in the United States. 126 We believe the proposed amendments are a meaningful step in making the public markets more attractive, which would encourage more companies to go and stay public while ensuring that investors remain equipped to make informed investment and 123 See section II.B.3.a.i. 124 EGC filer status was created by the JOBS Act. As this is a statutory status, the Commission is not proposing to eliminate the EGC filer status. We are proposing to permit NAFs to apply the disclosure requirements that currently apply to EGCs, which we believe would practically make reliance on EGC status unnecessary in most circumstances. We note, and discuss below, that we are not proposing to extend to NAFs the accommodation available to EGCs to exclude a nonpublic draft registration statements from being produced in response to a Freedom of Information Act (“FOIA”) request. See section II.B.3.b. 125 See section II.C. 126 See section IV.B.1. 38 voting decisions, which would in turn improve investment opportunities and the information available to investors in such companies. In this regard, the proposed scaling and accommodations would in many cases apply to disclosures, such as in the area of executive compensation and corporate governance matters, where the associated potential benefits may not be commensurate with their costs to registrants. Further, we believe any loss of information and assurance or increased costs to investors in registrants that would newly receive certain accommodations would be justified by the expected reduction in costs to those registrants, as well as by effects that may encourage more companies to go and stay public, which ultimately would benefit investors in those companies. 127 Finally, to the extent that these accommodations contribute to a company choosing to go or stay public, we also believe that is ultimately a benefit to investors, including through the resulting greater diversification and more efficient capital allocation within investor portfolios. 128 A. Large Accelerated Filer Status Amendments We are proposing to revise the definition of LAF to mean an issuer that as of the end of each of the issuer’s two most recent second fiscal quarters, had an aggregate worldwide market value of the voting and non-voting common equity held by non-affiliates of $2 billion or more. In addition, we are proposing to extend the seasoning requirement for LAF status such that an issuer would be an NAF until it has been subject to the requirements of section 13(a) or 15(d) of 127 See sections IV.B.2.a.1 and B.3. 128 See section IV.C. 39 the Exchange Act for a period of at least the preceding 60 consecutive calendar months. 129 Consistent with our current rules, an issuer would be required to assess its filer status annually, as of the last day of its fiscal year. 130 These proposed amendments would apply the LAF requirements to only the largest registrants, which comprise the vast majority of the equity market capitalization in the U.S. public markets, with those companies currently representing approximately 93.5 percent of total market public float. 131 We believe that registrants with the largest U.S. equity market capitalization have a heightened investor demand for more comprehensive information sooner, and these registrants are likewise the most capable of bearing the costs and burdens of compliance with shorter disclosure deadlines and non-scaled disclosure and other requirements. We estimate these proposed conditions would result in 19.2 percent of existing Exchange Act reporting companies being LAFs, as compared to 35.4 percent today. 132 1. Public Float Threshold We are proposing to raise the public float threshold for purposes of determination of LAF status from $700 million to $2 billion. The Commission has historically looked to public float as 129 As part of these revisions, we are proposing to eliminate the SRC filer status (see section II.B.1) and as a result are also proposing to eliminate the provision in 17 CFR 240.12b-2 that provides an exclusion from LAF status for a registrant that is eligible to be an SRC under the SRC revenue test. 130 As proposed, a registrant’s filer status would only change on the date of assessment (i.e., the last day of its fiscal year), regardless of when the registrant chooses to calculate its public float. As discussed below, under the proposed rules, once a registrant enters a status, it would remain in that status for at least two years as meeting or not meeting the conditions of LAF. See section II.A.2. 131 See section IV.B.2. 132 See section IV.B.2. As proposed, registrants who no longer meet the conditions for LAF status would be permitted to continue to voluntarily comply with the reporting rules as they apply to LAFs. 40 a proxy for demonstrated market following 133 and used public float in determining filer status and appropriate disclosure requirements and accommodations. When the Commission created the LAF filer status in 2005, it emphasized that “companies with a public float of $700 million or more represent nearly 95 percent of the U.S. equity market capitalization and are more closely followed by the markets and by securities analysts than other issuers,” and that “larger issuers generally have sufficient financial reporting resources and sufficiently robust infrastructures to comply with the [accelerated filing deadlines].” 134 We continue to believe that public float is a reasonable indicator of which companies the markets follow most closely. 135 We further believe that it is most appropriate to subject registrants with the higher public float to non-scaled disclosure requirements. In addition, we believe that companies with a public float of $2 billion or more should be sufficiently resourced to be able to comply with the highest level of burden associated with registration and the obligations of being a public company. 133 See, e.g., Offering Reform Adopting Release at 44727 (“[T]he ‘public float[]’ of a reporting issuer can be used as a proxy for whether the issuer has a demonstrated market following”). See also Small Business Initiatives, Release No. 33-6949 (July 30, 1992) [57 FR 36442 (Aug. 13, 1992)]; and SRC Adopting Release. 134 See Accelerated Filer Revisions Adopting Release at 76629-30. See also Acceleration of Periodic Report Filing Dates and Disclosure Concerning Web Site Access to Reports, Release No. 33-8128 (Sept. 5, 2002) [67 FR 58480, 58482 (Sept. 16, 2002)] (“[A] public float test serves as a reasonable measure of size and market interest.”). 135 As noted in the Registered Offering Reform Proposal, our proposed elimination in that release of the minimum public float requirement in Form S-3 and with respect to eligibility for the Enhanced Registration and Communication Benefits (as defined in that release) is consistent with our proposed retention of public float in this proposal. See supra note 40. Our proposed elimination of a minimum public float requirement in the Registered Offering Reform Proposal is based on our belief that that eligibility to use Form S-3 and the Enhanced Registration and Communication Benefits should not depend on the extent of an issuer’s market following, including analyst coverage (e.g., by reference to its public float or initial Exchange Act seasoning). That proposal is not intended to suggest that public float is an inappropriate indicator of an issuer’s market following. See id. at n. 230 (“We continue to believe that public float is relevant for determining an issuer’s filer status and deadlines for filing Exchange Act reports. As we have previously stated, public float can serve as a reasonable measure of a company’s size and market interest and, in turn, where investor interest in accelerated filing is likely to be highest” (citation omitted)). 41 At the time the Commission adopted LAF filer status in 2005, it was estimated that “companies with a public float of over $700 million represent approximately 18 percent of the total number of companies on these markets and nearly 95 percent of the total public float on these markets.” 136 We note that since the adoption of the LAF filer status, the $700 million threshold has not been updated. Today, we estimate that the current threshold captures 98.8 percent of total market public float and 35.4 percent of registrants. 137 We are proposing to raise the threshold to continue to cover the largest registrants and reestablish the relationship to the number of companies covered and total market public float that existed when the filer status was adopted. 138 We therefore propose to reestablish a public float requirement that would capture nearly 95 percent of total market public float and estimate that setting the threshold at $2 billion would capture approximately 93.5 percent of total market public float, and cover approximately 20 percent of the total number of existing registrants. Other than the proposed single public float threshold, we are not proposing additional or alternative LAF status determination thresholds, as we believe doing so could complicate the regulatory framework without commensurate benefits. 136 See Accelerated Filer Revisions Adopting Release at 76636 (using data for companies listed on NYSE, Amex, NASDAQ, the Over-the-Counter Bulletin Board, and Pink Sheets LLC). 137 See section IV.C.2. Over the period from the open of trading on Jan. 3, 2006 to the close of trading on Jan. 2, 2026, the S&P 500 Index increased from 1,248 to 6,858, an approximately 450% increase. A proportionate increase to the $700 million threshold would result in a $3.85 billion threshold. Alternatively, adjusting for inflation would result in a $1.15 billion threshold. See CPI Inflation Calculator, https://www.bls.gov/data/inflation_calculator.htm (measuring from Jan. 2006 to Jan. 2026, retrieved Apr. 15, 2026). 138 When adopting the LAF filer status, the Commission indicated that “companies with a public float of $700 million or more . . . are more closely followed by the markets and by securities analysts than other issuers” and that, “[b]ased on our experience with the accelerated filing deadlines, we continue to believe that larger issuers generally have sufficient financial reporting resources and sufficiently robust infrastructures to comply with the 60-day deadlines . . . .” See Accelerated Filer Revisions Adopting Release at 76629-30. 42 2. Public Float Determination We are proposing amendments to the way a registrant determines its public float for purposes of the LAF definition. Under the current rules, a registrant assesses whether it meets LAF status as of the end of each fiscal year based on its public float as of the last business day of an issuer’s most recently completed second fiscal quarter, using either the closing price or the average of the bid and ask prices on that day. As a result, a registrant may become an LAF at the end of its fiscal year based on a single day of volatility, even if the registrant’s overall public float may quickly stabilize below the threshold. While we recognize that the circumstances in which such swings can cause a shift in filer status may be limited or relatively rare, to the extent they do occur, the consequences can be significant in terms of regulatory burden on affected registrants. To minimize the impact of swings in share price in a limited period or on a single day, the proposed amendments would require that, before a registrant would transition either into or out of LAF status as of the end of its fiscal year, the registrant’s public float, calculated based on the average of the registrant’s stock price over the last 10 trading days of each of the second quarter of such fiscal year and the immediately prior fiscal year, multiplied respectively by the aggregate worldwide number of shares of the issuer’s voting and non-voting common equity held by non-affiliates as of the last day of the issuer’s second fiscal quarter of such fiscal year, remain either at or above, or below, the public float threshold. By requiring that the public float threshold be met (or not met) for two consecutive years, a registrant would change filer status as of the end of its fiscal year only if its public float has been relatively stable consistently either above or below the threshold. This would mean that a registrant, and investors, would always have at least one year of visibility regarding the possibility of a status transition before any transition could occur. The proposed rules also clarify 43 that meeting or not meeting the conditions of LAF status for a single year would not suffice to change filer status from NAF to LAF or vice versa. Thus, once a registrant enters a status, it would remain in that status for at least two years. The proposed rules also base the calculation each year on the average of the closing prices over the last 10 trading days of the second quarter of the registrant’s fiscal year (or, if there is no closing price on a day, the average of the bid and ask prices that day), using the number of shares on the last day of the second quarter of the registrant’s fiscal year, in order to address the risk that a single day’s market volatility could result in unexpected changes to filer status. An average over 10 trading days would provide at least two calendar weeks of data, which we believe would mitigate the impact of short-term volatility, including spikes and drops in stock price that may be temporary, such as those based on short-term news and events. We are proposing that the number of shares be based on a single date in an effort to simplify the calculation. Additionally, we believe the proposed transition criteria, by accounting for the potential for volatility, would eliminate the need for distinct criteria for transitioning out of a particular filer status as provided for in the current rules. As the Commission stated when adopting separate transition thresholds for exiting AF or LAF status, the purpose of the transition thresholds “is to avoid situations in which an issuer frequently enters and exits accelerated and large accelerated filer status due to small fluctuations in public float” which could cause confusion for issuers and investors as to the issuer’s status. 139 While we agree that addressing volatility in setting a market 139 See Accelerated Filer and Large Accelerated Filer Definitions, Release No. 34-88365 (Mar. 12, 2020) [85 FR 17178, 17191 (Mar. 26, 2020)]. The Commission set the threshold for AFs and LAFs becoming NAFs at $60 million, and the threshold for exiting LAF status at $560 million. Id. 44 price-based threshold should remain an important consideration, the Commission’s existing separate thresholds for exiting a filer status have contributed to the complexity of the current rules. Accordingly, we are also proposing to eliminate the separate, lower threshold for exiting LAF status in favor of a definition with a single public float criterion and a two-year lookback determination (i.e., public float of $2 billion or more for two consecutive fiscal years). While the lower exit threshold was intended to maintain stability in status so that registrants with public floats near the entry threshold do not frequently move in and out of a filer status, we believe requiring the threshold be met in two consecutive years based in each year on a longer calculation window would more meaningfully address these concerns while being easier for registrants to implement and providing earlier notice of a possible change in filer status. A potential drawback of the two-year lookback is that some registrants that would become LAFs would have to provide non-scaled disclosure even if their public float falls below the LAF threshold for a year. Conversely, a potential drawback for investors is that they would not receive the benefits of non-scaled disclosure following an NAF’s single-year increase in public float, as they would with a one-year lookback. However, a registrant remaining “in status” for at least two years before potentially changing to a new filer status could provide more consistency to the disclosure regime and more comparable period-to-period information, to the benefit of both registrants and investors. To demonstrate how these proposed changes would work in practice, consider a hypothetical NAF that is assessing its annual filer status as of the last day of its fiscal year, or December 31, 2026, for a calendar-year end registrant. Assuming the proposed rules were in effect, if an NAF’s public float, as determined by the average stock price over the last 10 trading days of the second quarter of each fiscal year being measured (i.e., the 10 trading days ending on 45 or before June 30), for fiscal year 2025 was $1.9 billion and for fiscal year 2026 is $2.3 billion, the registrant would remain an NAF for purposes of its December 31, 2026 Form 10-K (filed in 2027) because it crossed the LAF threshold in only one year of the two-year lookback period. That is, when performing the test as of the last day of its fiscal year, the registrant looks back to the last 10 trading days of the second quarter of the fiscal year for each of fiscal year 2026 and 2025, and in the example, it only exceeded the threshold in fiscal 2026. If the registrant then determines that its public float as of the measurement period of the second quarter for fiscal year 2027 is $1.9 billion (dropping back below the LAF threshold), the registrant would remain an NAF as of the end of fiscal 2027. The earliest it could become an LAF would be at the end of its fiscal year 2029 (assuming its public float crosses the LAF threshold for the relevant measurement period of the second quarter for both fiscal years 2028 and 2029), and if so it would be required to comply with the requirements of LAF status beginning with its Form 10-K for fiscal year 2029 filed in 2030. On the other hand, if that registrant determines its public float for fiscal year 2027 is $2.5 billion (while the fiscal year 2026 public float remains at $2.3 billion as in the example above), it would become an LAF as of the last day of its fiscal year 2027, and would be required to comply with the requirements of LAF status beginning with its Form 10-K for fiscal year 2027 (filed in 2028). If the registrant’s public float falls to $1.9 billion as of the relevant measurement period in the second quarter of fiscal year 2028, the registrant would remain an LAF for purposes of its Form 10-K for fiscal year 2028 because its public float will have been below the LAF threshold for only one fiscal year. The earliest it could become an NAF would be as of the end of its fiscal year 2029 (assuming its public float is below the LAF threshold in the relevant measurement 46 period in the second quarters of both fiscal years 2028 and 2029), and if so would be able to transition to NAF status beginning with its Form 10-K for fiscal year 2029, filed in 2030. As proposed, once a registrant qualifies for a change in filer status, the requirements and any applicable accommodations of the new filer status would apply beginning with the filing of its annual report on Form 10-K for the fiscal year in which the filer status was determined. As a result, the possibility of both entering LAF status and transitioning to NAF status are foreseeable further in advance than is the case currently, allowing companies to more predictably plan their disclosure controls and procedures and associated costs. Similarly, the first time an LAF’s public float falls below the LAF threshold (or an NAF’s public float rises above the threshold) as of one of its second fiscal quarter ends, investors would know that, even if that trend were to continue, the registrant would be required to file at least one more Form 10-K subject to the LAF disclosure requirements and deadlines (or subject to the NAF disclosure requirements and deadlines, as the case may be). 3. Seasoning We are proposing to expand the seasoning period for LAFs—i.e., the requisite period after which registrants could potentially qualify as LAFs—to 60 consecutive calendar months from when the registrant became subject to the Exchange Act reporting requirements, with the assessment made as of the last day of its fiscal year. 140 Under current rules, a registrant must be an Exchange Act reporting company for at least 12 calendar months before it can be classified as 140 The proposed 60-calendar month seasoning period means 60 full, consecutive calendar months and any portion of a month immediately preceding the relevant measurement date. For example, a registrant that became subject to the Exchange Act’s reporting requirements on July 19, 2025 would satisfy the seasoning requirement for purposes of assessing whether it is an LAF on Aug. 1, 2030. 47 an LAF. 141 In adopting the current 12-calendar month seasoning period, the Commission noted that, along with the public float requirement, the seasoning period was “designed to include the companies that are least likely to find [accelerated deadlines] overly burdensome and where investor interest in accelerated filing is likely to be highest.” 142 When the Commission adopted the 12-calendar month seasoning period, it was focused on existing registrants that would become subject to accelerated filing deadlines and recognized that there would be an increased burden for these issuers. Since the adoption of the acceleration of periodic reporting in 2002, Congress and the Commission have expanded the disclosure requirements for registrants, especially for LAFs. Given the additional requirements that apply to LAFs, we believe that a longer seasoning period would be appropriate before a registrant should be required to comply with non-scaled ongoing disclosure and timing requirements. This change would effectively create a minimum five-year on-ramp for every new registrant, regardless of public float. While we recognize that this five-year on-ramp would, for a small subset of registrants, 143 delay compliance with respect to non-scaled disclosure requirements, accelerated reporting deadlines, and ICFR auditor attestation as compared to the current rules, we believe allowing all newer registrants ample time to adjust to the disclosure and filing requirements of a public company may encourage more companies to go public and stay 141 17 CFR 240.12b-2. In connection with these proposed changes, we are also proposing to eliminate paragraph (iii) of the “large accelerated filer” definition, which requires that the issuer have filed at least one annual report pursuant to section 13(a) or 15(d) of the Exchange Act, as unnecessary because a registrant would have filed several annual reports before becoming an LAF under the proposed 60 consecutive month seasoning requirement. 142 Acceleration of Periodic Report Filing Dates and Disclosure Concerning Web Site Access to Reports, Release No. 33-8128 (Sept. 5, 2002) [67 FR 58480, 58487 (Sept. 16, 2002)]. 143 As noted in section IV below, absent the proposed five-year on-ramp, the percentage of current registrants continuing on as LAFs under the proposal would increase from 19.2 % to 20.7 %. 48 public, which may ultimately improve overall market transparency and provide investors with more investment opportunities with the greater transparency afforded by Exchange Act reporting. In addition, even if a particular requirement does not apply to a registrant, that registrant may elect to voluntarily comply, such as by obtaining an ICFR auditor attestation, if the registrant believes it would benefit the registrant to do so, such as if doing so were viewed favorably by investors. When Congress enacted the JOBS Act, in order to encourage more companies to go and stay public, it created an on-ramp of up to five years in EGC status, reducing registrants’ compliance burdens in their early years as public companies. In our experience, this on-ramp has been a meaningful accommodation to newer public companies and generally has not resulted in investor protection concerns. 144 A similar on-ramp before a registrant would potentially enter LAF status would be consistent with and effectively expand the benefits of EGC status, and would provide all newer registrants ample time to, among other things, prepare for the increased costs and reporting burdens on company staff and enlist third party advisors or service providers needed to satisfy the non-scaled disclosure requirements and accelerated reporting timelines. Finally, providing a sixty calendar month on-ramp complements Congress’ intent with its establishment of EGC status and would help to simplify filer status determinations by ensuring that all registrants that meet the statutory definition of EGCs will necessarily qualify as NAFs when making their filer status determinations. 145 144 For evidence of the favorable effects of EGC accommodations on IPOs, see, e.g., Michael Dambra, Laura Casares Field & Matthew T. Gustafson, The JOBS Act and IPO Volume: Evidence that Disclosure Costs Affect the IPO Decision, 116 J. FIN. ECON. 121 (2015) (“Dambra et al. (2015)”). 145 Under the proposed rules, an EGC that has lost its EGC status in less than five years would continue to be considered an NAF until the proposed LAF 60 consecutive calendar month on-ramp ends for that registrant. 49 Request for Comment 1) Does public float continue to be a reasonable indicator of which companies the markets follow most closely? Does public float continue to be a good indicator of the most significant need for more extensive public disclosure? Why or why not? As an alternative, in view of the increasing prevalence of dual class share structures, should non-publicly traded common equity securities held by non-affiliates through dual class share or other multi-class share structures be included in determining whether the threshold is met? If so, how should registrants determine the value of those securities for purposes of the determination? 2) Does public float provide a reasonable indicator of a registrant’s ability to sustain the burdens associated with LAF status under the proposed rules, including non-scaled disclosure requirements, accelerated reporting timelines, and compliance with the ICFR auditor attestation requirement in section 404(b)? If not, are alternative thresholds or other measures more appropriate to evaluate a registrant’s ability to sustain the burdens of being an LAF? 3) Is the proposed LAF threshold of $2 billion in public float, which would capture approximately 93.5 percent of the total market public float and would result in approximately 20 percent of existing public companies being classified as LAFs, appropriate? If not, what other threshold should the Commission consider and why? For example, should the Commission update the threshold to $3.85 billion to mirror the increase in the S&P 500 Index? Do the proposed changes to the LAF status public float threshold and calculation methodology appropriately balance the goals of capital formation and investor protection? Should the Commission instead adopt a different threshold, and if so, what? Would the proposed approach result in any impacts to investors and the public market, 50 including benefits or burdens that might result from the proposed scaling of disclosure associated with the revisions to the filer status categories? Would the proposed approach impact investors’ ability to make informed investment and voting decisions? 4) We have proposed to adjust the public float threshold not based on inflation, but rather to cover the registrants that comprise the vast majority of the total market public float and that are most able to comply with the highest level of burden associated with registration. Should the Commission instead update the current threshold for inflation? Alternatively, should the Commission establish a mechanism to update the proposed $2 billion public float threshold for inflation? For example, the JOBS Act requires that the revenue threshold in definition of EGC be indexed to inflation at five-year intervals. Should the proposed public float threshold be similarly indexed to inflation? Are there alternative methodologies for updating the threshold that would be preferable? 5) Would the proposed average public float calculation period (consisting of the registrant’s stock price over the last 10 trading days of the second quarter of each relevant fiscal year) and the proposed use of the number of shares held by non-affiliates as of the last day of the second fiscal quarter achieve the intended goal of avoiding a result where a company’s public float determination is anomalous due to short-term volatility? Why or why not? Should it be more or fewer than 10 trading days? Should the number of shares be based on the average number of shares during the same 10 trading day period instead of at the last day of the second fiscal quarter or should the number of shares be based on the number of shares as of a date selected by the registrant within a given period (such as any date within the last 10 trading days of the second fiscal quarter)? Why or why not? Are there costs or benefits associated with extending the public float calculation methodology to 10 trading days? 51 6) We considered multiple calculation windows for the public float calculation, including: retaining the existing calculation date of the last trading day of the second fiscal quarter; allowing a registrant to choose a date within a given period (such as any date within the last 10 trading days of the second fiscal quarter); or reducing the number of days comprising the average to, for example, the last five trading days of the second fiscal quarter. Are any of these or other alternatives preferable to the proposed 10-day average methodology, and if so, why? 7) Is the proposed LAF threshold effective for all types of issuers, or should the threshold differ for certain types of issuers? For example, should LAF status for investment companies (i.e., BDCs and face-amount certificate companies) use a different public float threshold, a different seasoning period, or a different approach altogether (e.g., a threshold based on assets or annual investment income)? If so, what threshold would be appropriate for investment companies? 8) Is a 60-calendar month on-ramp (seasoning period) before LAF status can attach to a registrant appropriate? Would this create a beneficial on-ramp for newer public companies before they could be subject to LAF status? Would a shorter period, such as 24 calendar months, or no seasoning period at all, be more appropriate considering that public companies that meet the proposed public float threshold to be an LAF likely have the resources to comply with the more extensive requirements? Do the very largest new registrants need a 60-calendar month seasoning period, or should certain registrants be required to comply with LAF requirements sooner? If a seasoning period is adopted, should the largest new registrants nevertheless be required to comply sooner with certain of the LAF requirements, such as auditor attestation on ICFR? If so, what would be an appropriate 52 time period for such registrants? Are the proposed mechanics around assessment of the seasoning period sufficiently clear, or would any modification to the proposed amendments or any clarifying guidance be needed? 9) In order to minimize variation in disclosure obligations and ensure a level of predictability, the proposal contemplates a two-year period after transitioning into or out of LAF status during which a registrant’s filer status cannot change. Should we adopt this two-year minimum period, as proposed? Would this have the intended effect of providing registrants and investors with some consistency and predictability as to the disclosure and other requirements a registrant is subject to? Is comparability with respect to a registrant’s disclosure over a two-year (or longer) period an important consideration for investors? Would another period be more appropriate? Alternatively, should we consider other ways of addressing these concerns? For example, under the current rules a registrant must fall below a separate, lower threshold to exit AF status than to enter that status; should we retain this approach? If so, why and what lower threshold would be appropriate for exiting LAF status? 10) Are there any other issues relating to filer status transitioning that the Commission should clarify or address in any final rules? For example, if a registrant deregisters its securities and later re-enters the reporting system, should that registrant be considered a new registrant for purposes of the 60-calendar month seasoning period? 11) When an issuer qualifies for a new filer status, which under the proposal would only happen at the end of a fiscal year, should the requirements and/or accommodations of that new status apply to the issuer beginning with the annual report for the fiscal year in which the change in filer status occurred, as proposed? Should issuers have the option to apply a change in filer status earlier than as proposed? 53 B. Non-Accelerated Filer Amendments We are proposing to define “non-accelerated filer” to mean an issuer 146 that is not an LAF. As proposed, every registrant would be an NAF beginning at the time of its initial public offering or registration and for at least five years following, as a result of the proposed 60 consecutive calendar months on-ramp requirement before a registrant could become an LAF. An issuer would then remain an NAF unless and until it had an aggregate worldwide market value of the voting and non-voting common equity held by its non-affiliates, or public float, of at least $2 billion for two consecutive years. After an NAF qualifies as an LAF and thereby loses its NAF status, it could regain its NAF status if its public float is less than $2 billion for two consecutive years. We also propose to extend to NAFs the disclosure requirements and other accommodations currently applicable to SRCs and EGCs. 147 While we estimate that the proposed NAF filer status would account for approximately 81 percent of reporting companies currently, they would account for only 6.5 percent of total market public float. We therefore believe it is appropriate and in the public interest to leverage the accommodations and requirements that have been effective for registrants that are currently SRCs and/or EGCs, which compose over 52 percent of current registrants, in resetting our disclosure framework to be better tailored to market following. We anticipate that this change will help rebalance the costs and 146 As proposed, asset-backed issuers would be excluded from the filer status definitions. See section II.B.4 for further discussion of the applicability of the proposal to asset-backed issuers. 147 But see section II.B.3.b. In addition, we note that the current rules applicable to SRCs and EGCs are not applicable to asset-backed issuers. Further, as discussed below, we are proposing to extend a limited set of these accommodations to NAFs that are BDCs or face-amount certificate companies, to recognize differences in the activities and characteristics of these investment companies relative to other NAF issuers. 54 benefits associated with public company status with the intention of faci [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3A6fb40b6d487d5780. Public record. Not legal advice.