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. 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. For my four part blog series on these proposals see HERE, HERE, HERE, & HERE.
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 that are not large accelerated filers 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.
By seeking to collapse a convoluted multi-tiered reporting structure into a streamlined two-tier system, the proposed rules aim to ease compliance burdens, lower ongoing reporting costs, and expand access to capital for small and mid-sized public issuers.
INTRODUCTION
A public company with a class of securities registered under Section 12 or which is subject to Section 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) must file Section 13 reports with the SEC (10-K, 10-Q and 8-K). A company becomes subject to Section 15(d) by filing a registration statement under the Securities Act of 1933, as amended (“Securities Act”) such as a Form S-1. A company registers securities under Section 12 by filing an Exchange Act registration statement such as on Form 10, Form 20-F or Form 8-A.
Regulation S-K provides a single regulatory source related to non-financial statement disclosures and information required to be included in registration statements and reports filed under the Exchange Act and the Securities Act.
The SEC disclosure requirements are scaled based on company size. The SEC categorized companies as non-accelerated, accelerated and large accelerated and smaller reporting companies (SRC). The SEC last amended the definition of a smaller reporting company in June 2018 – see HERE and the definitions of accelerated and large accelerated filers in March 2020 – see HERE.
The only difference between the requirements for accelerated and large accelerated filers is that large accelerated filers are subject to a filing deadline for their annual reports on Form 10-K that is 15 days shorter than the deadline for accelerated filers.
The filing deadlines for each category of filer are:
| Filer Category | Form 10-K | Form 10-Q |
| Large Accelerated Filer | 60 days after fiscal year-end | 40 days after quarter-end |
| Accelerated Filer | 75 days after fiscal year-end | 40 days after quarter-end |
| Non-Accelerated Filer | 90 days after fiscal year-end | 45 days after quarter-end |
| Smaller Reporting Company | 90 days after fiscal year-end | 45 days after quarter-end |
Both accelerated filers and large accelerated filers are required to have an independent auditor attest to and report on management’s assessment of internal control over financial reporting in compliance with Section 404(b) of SOX. Non-accelerated filers are not subject to Section 404(b) requirements. Under Section 404(a) of SOX, all companies subject to SEC Reporting Requirements, regardless of size or classification, must establish and maintain internal controls over financial reporting (ICFR), have management assess such ICFR, and file CEO and CFO certifications regarding such assessment
Smaller reporting companies have the benefit of scaled disclosure requirements compared to their larger counterparts.
Separately Title I of the JOBS Act, initially enacted on April 5, 2012, created a new category of issuer called an “emerging growth company” (“EGC”). Today an EGC is defined as a company with total annual gross revenues of less than $1.235 billion during its most recently completed fiscal year that first sells equity in a registered offering after December 8, 2011. An EGC loses its EGC status on the earlier of (i) the last day of the fiscal year in which it exceeds $1.235 billion in revenues; (ii) the last day of the fiscal year following the fifth year after its IPO; (iii) the date on which it has issued more than $1.235 billion in non-convertible debt during the prior three-year period; or (iv) the date it becomes a large accelerated filer. EGC’s also have the benefit of a scaled disclosure regime. Adding complexity, the scaled disclosure benefits for SRC’s and EGC’s are not exactly the same – see HERE for a summary of each.
While the EGC framework successfully facilitated public offerings, it introduced a steep regulatory “cliff”. Upon the expiration of the five-year on-ramp period, or when an issuer exceeded the statutory revenue or public float limits, the sudden transition to full accelerated reporting and SOX 404(b) auditor attestation requirements often resulted in sharp, disruptive compliance cost increases.
The burden of complying with the internal control over financial reporting auditor attestation requirement under Section 404(b) has remained a primary concern for market participants and public companies. Over the years, small business advocacy groups, SIFMA, and the U.S. Chamber of Commerce have repeatedly pointed to Section 404(b) as one of the most burdensome requirements of public registration, arguing that its compliance costs do not offer a commensurate benefit to investors when applied to smaller, low-revenue companies.
Moreover, even determining filer status is complex with differing thresholds for entering into and exiting a category. Under the current system, issuers must evaluate their public float as of the end of their second fiscal quarter and compare it against highly complex entry and exit thresholds that vary depending on whether they are entering or exiting a status. For instance, a Large Accelerated Filer only transitions down to Accelerated Filer status if its public float falls below $560 million, while an Accelerated Filer only exits accelerated status if its float falls below $60 million or if it meets specific Smaller Reporting Company revenue tests. This methodology has historically subjected registrants to sudden, volatile status transitions triggered by short-term market fluctuations on a single measurement date.
PROPOSED NEW RULES: STREAMLINING INTO TWO PRIMARY CATEGORIES
To resolve these long-standing complexities and reduce ongoing compliance costs, the Commission proposes to collapse the current system of five partially overlapping categories into a streamlined, two-tier framework. Under this simplified system, the Accelerated Filer and Smaller Reporting Company filer statuses are completely eliminated. Emerging Growth Company status remains as a distinct statutory category, but its key accommodations are extended to all Non-Accelerated Filers, effectively smoothing out the historical regulatory cliff.
The proposed rules significantly raise the thresholds and seasoning requirements needed to qualify for Large Accelerated Filer status, ensuring that only the most mature and widely held issuers are subjected to the most demanding reporting obligations.
- Elevated Public Float Threshold: The public float threshold required to qualify as a Large Accelerated Filer is raised from the current $700 million to $2 billion.
- Stabilized Public Float Determination: To prevent temporary market swings from causing unintended, disruptive transitions in and out of Large Accelerated Filer status, the proposal changes how public float is calculated. Instead of a single-day measurement, an issuer’s public float will be determined using the average price of the issuer’s voting and non-voting common equity held by non-affiliates over the last 10 trading days of its second fiscal quarter, multiplied by the shares held by non-affiliates as of the last day of that second fiscal quarter. If a related proposal allowing semiannual reporting on Form 10-S is adopted, semiannual reporting issuers would calculate this average price over the last 10 trading days of their first semiannual period.
- Two-Year Transition Window: Transitioning into or out of Large Accelerated Filer status will require an issuer to meet or fall below the $2 billion threshold for two consecutive fiscal years. This consecutive-year requirement adds long-term stability and predictability to corporate compliance planning.
- Extended Seasoning Requirement: The seasoning period required to qualify as a Large Accelerated Filer is extended from 12 consecutive calendar months of Exchange Act reporting history to 60 consecutive calendar months. This amendment guarantees that all newly public companies receive a minimum five-year operational runway before they can be classified as Large Accelerated Filers, effectively aligning the seasoning process with the statutory duration of the Emerging Growth Company on-ramp.
| Filer Status Metric | Current Large Accelerated Filer Framework | Proposed Large Accelerated Filer Framework |
| Public Float Threshold | $700 million or more | $2.0 billion or more |
| Measurement Methodology | Single-day value (last business day of Q2) | 10-day average ending last business day of Q2 |
| Seasoning Requirement | 12 consecutive calendar months of reporting | 60 consecutive calendar months of reporting |
| Transition Rule | Single-year threshold breach | Consecutive two-year threshold breach |
Non-Accelerated Filer Status: The New Default and Consolidated Accommodations
Under the simplified framework, the “Non-Accelerated Filer” category serves as the default classification for any reporting company that does not meet the revised criteria for Large Accelerated Filer status. Any company with a public float below $2 billion, or any company that has been public for fewer than 60 consecutive calendar months, will be classified as a Non-Accelerated Filer. The Commission estimates that approximately 80.8% of all public companies filing on domestic forms will be classified as Non-Accelerated Filers.
The primary operational benefit of this change is the exemption from the Section 404(b) auditor attestation requirement for all Non-Accelerated Filers. Under the new framework, only Large Accelerated Filers will remain subject to Section 404(b) independent audits. For mid-sized, seasoned issuers with a public float between $700 million and $2 billion, this extension represents a major cost-saving development, eliminating expensive compliance requirements and resolving the historical EGC “attestation cliff”.
Beyond the Section 404(b) auditor attestation exemption, Non-Accelerated Filers will benefit from a comprehensive array of scaled disclosure rules currently restricted only to Smaller Reporting Companies and Emerging Growth Companies :
- Audited Financial Statements: Non-Accelerated Filers will only be required to present two years of audited financial statements, rather than the three years required for Large Accelerated Filers.
- Management’s Discussion and Analysis (MD&A): Issuers will only be required to provide two years of MD&A disclosure, allowing them to align their narrative discussion directly with their scaled financial statements.
- Scaled Executive Compensation: Registrants will be eligible for simplified executive compensation disclosures, which include presenting data for fewer executive officers and being exempt from both the “pay-versus-performance” and “pay ratio” disclosure requirements.
- Advisory Shareholder Votes: Non-Accelerated Filers will be exempt from mandatory shareholder advisory votes on executive compensation, including “say-on-pay,” “say-when-on-pay” (frequency of say-on-pay votes), and “golden parachute” compensation disclosures.
- Risk Factors: The proposed amendments eliminate the requirement for Non-Accelerated Filers to include mandatory risk factor disclosures in their annual and quarterly reports on Forms 10-K and 10-Q.
- Market Risk Disclosures: Issuers will be exempt from providing quantitative and qualitative disclosures about market risk under Item 305 of Regulation S-K.
- Supplementary Financial Information: Non-Accelerated Filers will no longer be required to provide supplementary financial information under Item 302 of Regulation S-K.
- Regulation S-X Article 8: NAFs will generally be permitted to prepare their financial statements in accordance with the simplified standards of Article 8 of Regulation S-X, subject to certain distinct rules for business development companies.
Despite the substantial disclosure relief granted to Non-Accelerated Filers, the proposed rules introduce one notable new disclosure obligation for this category :
- Disclosure of Unresolved Staff Comments: All Non-Accelerated Filers will now be required to disclose the substance of any material, unresolved SEC staff comments received on their periodic or current reports at least 180 days prior to the end of the fiscal year covered by their Form 10-K or Form 20-F. This disclosure obligation, which was previously restricted only to Large Accelerated Filers and Accelerated Filers, is intended to provide transparency and ensure that smaller issuers remain diligent in responding to regulatory inquiries.
Small Non-Accelerated Filers: Asset-Based Thresholds and Extended Filing Deadlines
To provide further relief to the smallest public companies, the proposal creates a new subcategory within the Non-Accelerated Filer classification, termed “Small Non-Accelerated Filers”.
A Small Non-Accelerated Filer is defined as any Non-Accelerated Filer that reports total assets of $35 million or less as of the end of each of its two most recent second fiscal quarters. The SEC estimates that approximately 17.9% of all public companies (representing 22.2% of all Non-Accelerated Filers) would qualify for this subcategory. Small Non-Accelerated Filers will be granted extended timelines to prepare and file their periodic reports, helping them manage limited administrative resources and lower preparation costs. Their extended filing deadlines compare with standard Non-Accelerated Filer deadlines as follows :
| Periodic Report Type | Standard Non-Accelerated Filer Deadline | Small Non-Accelerated Filer Deadline | Net Compliance Extension |
| Form 10-K (Annual Report) | 90 days after fiscal year-end | 120 days after fiscal year-end | 30 additional days |
| Form 10-Q (Quarterly Report) | 45 days after fiscal quarter-end | 50 days after fiscal quarter-end | 5 additional days |
Specific Rules and Forms Slated for Amendment
To execute this structural modernization, the Commission proposes to add or amend a wide range of rules and forms across Regulation S-X, Regulation S-K, Regulation S-T, the Securities Act of 1934, and the Securities Exchange Act of 1934.
Amendments to Regulation S-X and Regulation S-K
Under Regulation S-X, the Commission proposes amending Rules 2-02, 3-01, 3-02, 3-09, 3-12, 3-19, and Rules 8-01 through 8-08. The amendment to Rule 2-02 alters auditor attestation requirements, ensuring that independent internal control audits under Section 404(b) are only required for Large Accelerated Filers. Revisions to Rules 3-01 and 3-02 scale the number of years of audited financial statements required for Non-Accelerated Filers to two years, down from three. Amendments to Rules 8-01 through 8-08 expand the eligibility of Non-Accelerated Filers to utilize the simplified financial statement requirements of Article 8.
Under Regulation S-K, proposed amendments affect Items 10, 101, 201, 302, 303, 305, 308, 402, 404, 407, 504, and 1011. These modifications streamline and scale non-financial disclosures for Non-Accelerated Filers. Item 402 is amended to permit scaled executive compensation reporting, including the elimination of the pay ratio and pay-versus-performance disclosures. Item 303 is amended to reduce the required MD&A historical coverage to two years, matching the scaled financial statements. Item 302 and Item 305 are amended to exempt Non-Accelerated Filers from supplementary financial information and quantitative/qualitative market risk disclosures, respectively.
Amendments to Regulation S-T and Securities Act Rules and Forms
In Regulation S-T, Rule 405 is amended to align electronic data tagging and XBRL/Inline XBRL standards with the simplified filer classifications.
For Securities Act rules and forms, the Commission proposes amendments to Rule 157, Rule 405, Form S-1, Form S-3, Form S-4, Form S-8, Form S-11, and Form 1-A. Rule 405 is amended to revise the definition of a “small entity” under the Regulatory Flexibility Act. Form S-1, Form S-3, Form S-4, Form S-8, and Form S-11 are updated to reflect the new, streamlined filer status categories on their cover pages and to align their respective registration and disclosure instructions with the scaled accommodations available to Non-Accelerated Filers.
Amendments to Exchange Act Rules and Forms
For Exchange Act rules and forms, the Commission proposes amendments to Rules 0-10, 10A-3, 10C-1, 12b-2, 13a-10, 13a-13, 13q-1, 14a-3, 14a-20, 14a-21, 15d-2, 15d-10, 15d-13, Form 10, Form 20-F, Form 8-K, Form 10-Q, and Form 10-K.
The amendment to Rule 12b-2 is of fundamental importance, as it removes the definitions of “Accelerated Filer” and “Smaller Reporting Company” as distinct filer categories, replacing them with the single, simplified definition of a “Non-Accelerated Filer”. Rules 13a-13 and 15d-13, alongside Form 10-Q, are amended to reflect the extended quarterly filing deadline for Small Non-Accelerated Filers. Similarly, Rules 13a-10 and 15d-10 are modified to address transition reports for issuers changing their fiscal year-end under the new filer categories.
Rules 14a-20 and 14a-21, which govern proxy disclosures and shareholder advisory votes, are amended to exempt all Non-Accelerated Filers from the requirement to conduct say-on-pay, say-when-on-pay, and golden parachute advisory votes. Form 10-K and Form 20-F are amended to include the new requirement to disclose material, unresolved SEC staff comments received at least 180 days prior to the fiscal year-end.
Professional Counsel and Strategic Corporate Governance Implications
The proposed transition to a simplified two-tier filer status system requires careful strategic planning by corporate boards, management, and late-stage private companies.
Pre-IPO Readiness and Structural Capital Planning
For high-valuation private enterprises preparing for an initial public offering, the proposed framework provides significant long-term stability. Under the current system, a newly public company with a post-IPO public float exceeding $700 million could quickly be forced into Large Accelerated Filer status and Section 404(b) compliance by its second annual report. By raising the Large Accelerated Filer public float threshold to $2 billion and establishing a strict 60-month seasoning requirement, the proposed rules offer a highly stable, five-year planning window.
This extended runway allows management to focus on business growth, operational execution, and long-term capital allocation, rather than dedicating excessive administrative resources to immediate, complex internal control audits.
Pre-IPO companies should begin structuring their internal controls and financial disclosure roadmaps around this prospective 60-month transition period. This five-year seasoning window should be utilized to build out internal audit functions systematically, ensuring that the eventual transition to Large Accelerated Filer status and full Section 404(b) compliance is smooth and well-managed rather than a costly, immediate hurdle.
Audit Fee Negotiations and Disclosure Choices for Mid-Sized Issuers
For existing public companies with a public float between $700 million and $2 billion, transitioning from Large Accelerated Filer (or Accelerated Filer) status to Non-Accelerated Filer status will yield immediate and substantial cost savings. Management and audit committees should proactively review their auditor engagement letters to prepare for the elimination of Section 404(b) auditor attestation fees.
However, transitioning companies should carefully evaluate whether to voluntarily maintain certain disclosure standards to preserve investor relationships. While the proposed rules permit Non-Accelerated Filers to present only two years of audited financial statements and scaled executive compensation, some institutional investors may still prefer more comprehensive disclosures. Audit committees must balance the immediate financial savings of scaled disclosures against the potential impact on capital costs and investor relations.
Proactive Management of SEC Staff Comments
While the proposed framework offers substantial disclosure relief, Non-Accelerated Filers must remain mindful of the new requirement to disclose unresolved SEC staff comments. Under this proposed rule, any material comment received from the Division of Corporation Finance that remains unresolved for 180 days or more prior to the end of the fiscal year must be disclosed in the issuer’s Form 10-K or Form 20-F.
This requirement raises the stakes for responding to SEC comment letters. To avoid the negative market signaling associated with disclosing unresolved regulatory comments, management and corporate counsel must actively monitor outstanding inquiries and ensure that responses are prepared, submitted, and resolved well within the proposed 180-day window. This requirement emphasizes that the proposed rules represent a carefully balanced regulatory compromise: the Commission is willing to scale back broad, prescriptive disclosure rules, but will require heightened transparency regarding specific, unresolved regulatory concerns.
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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