On May 19, 2026, the SEC proposed two separate rule changes that together would significantly improve the registered offering process, and ongoing SEC reporting compliance for almost all public companies. Operating under Chairman Paul S. Atkins’s mandate to simplify capital formation and “rightsizer” public market entry, the proposed amendments seek to eliminate long-standing paper-era regulatory frictions that have disproportionately burdened small- and mid-sized public companies. These rule proposals follow the much anticipated recent proposed rule change to provide domestic public companies with the option to transition to a semi-annual reporting framework. For a summary of that rule proposal, see HERE.
The SEC has proposed registered offering reforms that would: (i) increase access to shelf registrations on Form S-3; (ii) allow the use of offering communications that currently are limited to use by well-known seasoned issuers; (iii) expand the ability for broker-dealers to provide research report coverage; (iv) expand state law preemption to cover all registered offerings; and (v) expand the availability of incorporation by reference into Form S-1.
Separately, the SEC has proposed new rules that will extend disclosure scaling and accommodations utilized by smaller or emerging companies to approximately 81% of all current public companies. In particular, the proposed amendments will: (i) increase the time for the smallest public companies to file their annual and other periodic reports; (ii) amend the definition of a large accelerated filer from $700 million to $2 billion and increase the time following an IPO to reach such status from 12 months to 60 months; (iii) recategorize all public companies to non-accelerated filers and provide them with nearly all the disclosure scaling and other accommodations currently only available to smaller reporting companies and emerging growth companies; and (iv) exempt all non-accelerated filers from Sarbanes Oxley Act Rule 404(b) compliance.
In two multi-part blog series, I will provide a deep dive into both of these rule proposals starting with the registered offering reform proposal. In this Part 1 of the series I will provide a summary of the new rule proposal followed by a deep dive into each aspect of the proposal.
INTRODUCTION
The statutory foundations of the Securities Act of 1933 and the Securities Exchange Act of 1934 balanced investor protection with the administrative burdens of registration. The SEC’s landmark 2005 Securities Offering Reform established a tiered disclosure system predicated on the assumption that only the largest, most widely followed issuers possessed a sufficient market presence to justify immediate, unrestricted market access without prior SEC staff review.
This historical framework, which relied on public float and seasoning as proxies for information dissemination, has been rendered obsolete by technological progress. In the early 1980s, when the Form S-3 framework was conceived, and in the mid-1990s, when electronic filings on EDGAR were first mandated, physical and administrative dissemination barriers were substantial. Today, high-speed internet, digital investment platforms, and instantaneous data dissemination allow investors to access and analyze the financial filings of a micro-cap or newly public issuer with the same speed and ease as those of a mega-cap multinationals.
By maintaining rigid seasoning requirements and public float thresholds for shelf eligibility, historical rules have penalized smaller public companies, forcing them to seek capital through more expensive, highly dilutive private placements. The proposed reforms address these market distortions, aligning the regulatory framework with the reality of modern information dissemination and providing smaller public companies with direct, lower-cost access to public capital.
SUMMARY OF PROPOSED RULE CHANGES
As indicated above, the SEC has proposed registered offering reforms that would: (i) increase access to shelf registrations on Form S-3; (ii) allow the use of offering communications that currently are limited to use by well-known seasoned issuers; (iii) expand the ability for broker-dealers to provide research report coverage; (iv) expand state law preemption to cover all registered offerings; and (v) expand the availability of incorporation by reference into Form S-1. The proposed rules also include modifications for investment companies and insurance products, which I will not cover in the blog series.
Expanding Form S-3 and Shelf Registration Eligibility
The proposed amendments eliminate the primary structural barriers to utilizing Form S-3 for unrestricted primary shelf offerings. Under current regulations, an issuer must possess a minimum public float of $75 million and have a twelve-month reporting history under the Exchange Act to file a primary offering on Form S-3. The proposed framework completely eliminates both the public float requirement and the twelve-month seasoning period and in the process renders the current “baby shelf” rule and all other transaction related eligibility requirements obsolete. For a summary of current Form S-3 eligibility requirements, see HERE.
Under the proposed rules, Form S-3 eligibility will depend almost entirely on whether the issuer has filed all required Exchange Act reports on time. This change effectively makes timely filing compliance the primary operational gatekeeper for shelf registration.
| Operational Metric | Current Form S-3 Framework | Proposed Form S-3 Framework |
| Minimum Public Float | $75 Million | None (Eliminated) |
| Seasoning Requirement | 12 Calendar Months of Reporting History | None (Eliminated) |
| Filing Compliance | Timely filed all required reports for the past 12 months | Timely filed all required reports |
| Primary Offering Limitations | Limited to 1/3 of public float in any 12-month period if float is under $75 million (Rule 504/Form S-3 “Baby Shelf” limits) | None (Eliminated by virtue of float threshold removal) |
The elimination of the public float threshold has a significant secondary effect: it repeals the “baby shelf” limitation and each of the other transaction related eligibility requirements. Historically, issuers with a public float below $75 million were restricted by Instruction I.B.6 of Form S-3, which capped their primary shelf sales at one-third of their public float within any trailing twelve-month period. Removing this ceiling allows smaller public companies to establish flexible At-the-Market (ATM) equity programs and execute rapid secondary offerings without artificial regulatory constraints.
Further, the proposed amendments eliminate the “Certain Failures to Make Payments and Defaults,” and the “EDGAR and XBRL” filing requirements. The SEC believes each of these requirements are outdated. For example, there is no way to file a report with the SEC other than on EDGAR in today’s world. Likewise, all companies are accustomed to using XBRL.
However, to maintain investor protections, the SEC will rely on the “ineligible issuer” concept to exclude bad actors and certain other companies from S-3 eligibility. To accomplish this, the SEC will add a general instruction prohibiting the use of Form S-3 by certain “ineligible issuers.” The SEC is also proposing to add other general prohibitions against using the form including by foreign governments, foreign private issuers and asset backed issuers.
Expanded Offering Communications – New Eligible Listed Issuers and Seasoned Eligible Listed Issuers
Historically, well-known seasoned issuer “WKSI” status—and the offering flexibilities that accompany it—was reserved for large accelerated filers (for a review of the current definition of a large accelerated filer see HERE. The proposed rules democratize these advantages by extending nearly all WKSI benefits to domestic issuers with a class of common equity listed on a national securities exchange, completely independent of their public float, market capitalization, or seasoning history.
For domestic operating companies, the legacy WKSI designation, which relied heavily on a $700 million public float threshold, is slated for elimination. If enacted, the WKSI definition will only be available to foreign private issuers (FPI’s). In its place, the SEC is introducing a tiered framework of including (i) S-3 eligible issuers; and for exchange-listed issuers (ii) Eligible Listed Issuers (ELIs); and Seasoned Eligible Listed Issuers (SELIs).
An issuer qualifies as an ELI if it meets the proposed Form S-3 registrant eligibility requirements and has at least one class of common equity securities listed on a national securities exchange. Under the proposal, ELIs are granted nearly all the communication and registration benefits currently restricted to WKSIs, with the sole exception of utilizing an automatic shelf registration statement.
To qualify as a SELI, an issuer must meet the definition of an ELI and have been subject to the reporting requirements of the Exchange Act for at least twelve calendar months. SELIs are granted the full suite of enhanced benefits, including the highly prized ability to utilize automatic shelf registration statements under Rule 462, which become effective immediately upon filing with the SEC without staff review.
By retaining the twelve-month reporting history as a prerequisite for automatic effectiveness, the SEC maintains a regulatory gatekeeping mechanism. This ensures that the SEC staff retains the opportunity to review and comment on the initial registration statements of newly public exchange-listed companies before they can execute immediate, unreviewed public offerings. Despite this seasoning requirement for automatic shelf eligibility, the transition to the ELI/SELI framework is projected to increase the number of issuers eligible for these enhanced registration and communication benefits by over 200 percent.
The proposal extends the “Pay-As-You-Go” filing fee structure to ELIs and SELIs, allowing companies to defer registration fees until securities are actually sold to the public. The rules also expand the use of Free Writing Prospectuses (FWPs). For a review of FWPs see HERE.
Under the revised framework, any Form S-3 eligible issuer will be permitted to distribute FWPs at any time, including prior to the formal filing of a registration statement, facilitating structured pre-filing discussions with prospective institutional investors without violating “gun-jumping” rules.
In addition, broker dealers will be able to issue research reports and coverage for all Form S-3 eligible issuers.
State Law Preemption
The SEC is proposing federal preemption of state securities law registration and qualification requirements for all registered offerings. Currently, under Section 18 of the Securities Act of 1933, state-level “Blue Sky” registration is preempted only for “covered securities,” which are primarily those listed on major national exchanges or sold to “qualified purchasers.” For a review of Section 18 see my blogs HERE and HERE.
Smaller companies trading on over-the-counter (OTC) markets, as well as secondary transactions for certain unlisted issuers, have historically remained subject to a patchwork of state-level registrations. This multi-state process frequently subjects issuers to “merit reviews” by state administrators, which can result in unpredictable delays, high legal expenses, and transactional uncertainty.
By extending Section 18 preemption to all registered offerings, the SEC will establish a single, uniform federal registration standard. This change will reduce the administrative friction and legal costs associated with multi-state offerings, allowing unlisted and OTC-traded companies to execute registered public capital raises with the same speed and efficiency typically found in the private placement markets.
Form S-1 Modernization
The SEC is proposing significant modernizations to Form S-1 by expanding the ability to utilize incorporation by reference and to allow all companies that qualify for backward incorporation by reference to also utilize forward incorporation by reference. For more in incorporation by reference, see HERE.
Historically, Form S-1 issuers were generally required to file prospectus supplements and post-effective amendments to update their prospectuses with subsequent periodic reports. The proposed amendments will allow Form S-1 issuers to forward-incorporate their Exchange Act filings up until the date they file their next Form 10-K, reducing the administrative costs of maintaining an active registration statement.
The proposal also introduces mechanical simplifications designed to streamline the registration process. Most notably, the SEC proposes to eliminate the requirement to include a “delaying amendment” under Rule 473 on the cover page of a registration statement.
STRATEGIC IMPLICATIONS
If adopted, these proposals will transform the capital-raising landscape for public companies in the us. Board of directors, executive management teams, and investment banks should consider several strategic adjustments:
Evaluating Capital-Raising Blueprints: Smaller and mid-sized listed issuers should prepare to integrate Form S-3 shelf registrations and ATM equity programs into their standard capital management planning. The ability to utilize ASR and access public markets instantly without SEC staff pre-review shifts the balance between public and private capital raises. This access allows smaller public companies to capture rapid market windows on equal footing with larger corporate peers.
Recalculating the Public vs. Private Equation: The combination of registered offering reform and filer status simplification reduces the compliance and administrative costs of being a public company. Companies that have remained private to avoid immediate SOX 404(b) compliance or the rigidity of Form S-1 registration should re-evaluate their IPO timetables, taking into account the advantages of the five-year IPO on-ramp.
- Revising Diligence and Underwriting Frameworks: Because ASR and expanded S-3 eligibility will facilitate rapid, “overnight” transactions, underwriters must adapt their due diligence frameworks. Under Section 11 of the Securities Act, underwriters face strict liability for material misstatements in a registration statement unless they establish a “due diligence” defense. To manage this compressed execution window, underwriters and their counsel should establish continuous due diligence programs for issuers they plan to sponsor in rapid-draw or ATM offerings.
Upgrading Disclosure Controls and Procedures: As the regulatory framework shifts from ex-ante transaction review to ex-post periodic review, the quality of continuous disclosures becomes critical. Because Form S-3 eligibility and WKSI benefits depend on timely filing compliance, issuers must ensure that their internal disclosure controls and procedures are robust, as any late filing could disqualify them from these expanded offering benefits.
Monitoring Blue Sky Preemption Litigation: Although federal preemption of state Blue Sky laws will streamline transaction execution, it may face legal challenges from state regulators and groups like the North American Securities Administrators Association (NASAA). Issuers and underwriters should monitor these developments during the rulemaking process.
The Author
Laura Anthony, Esq.
Founding Partner
Anthony, Linder & Cacomanolis
A Corporate and Securities Law Firm
Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size private companies, public companies as well as private companies going public on the Nasdaq, NYSE American or over-the-counter market, such as the OTCQB and OTCQX. For more than two decades Anthony, Linder & Cacomanolis, PLLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker-dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions, securities token offerings and initial coin offerings, Regulation A/A+ offerings, as well as registration statements on Forms S-1, S-3, S-8 and merger registrations on Form S-4; compliance with the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers; applications to and compliance with the corporate governance requirements of securities exchanges including Nasdaq and NYSE American; general corporate; and general contract and business transactions. Ms. Anthony and her firm represent both target and acquiring companies in merger and acquisition transactions, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The ALC legal team assists Pubcos in complying with the requirements of federal and state securities laws and SROs such as FINRA for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the small-cap and middle market’s top source for industry news, and the producer and host of LawCast.com, Corporate Finance in Focus. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Ms. Anthony is a member of various professional organizations including the Crowdfunding Professional Association (CfPA), Palm Beach County Bar Association, the Florida Bar Association, the American Bar Association and the ABA committees on Federal Securities Regulations and Private Equity and Venture Capital. She is a supporter of several community charities including the American Red Cross for Palm Beach and Martin Counties, Susan Komen Foundation, Opportunity, Inc., New Hope Charities, the Society of the Four Arts, the Norton Museum of Art, Palm Beach County Zoo Society, the Kravis Center for the Performing Arts and several others.
Ms. Anthony is an honors graduate from Florida State University College of Law and has been practicing law since 1993.
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