SEC Proposes Dramatic Changes to Public Company Reporting Framework

At a Glance

• In light of this proposal and the SEC's other recent rulemaking initiatives, companies may want to carefully evaluate the potential changes in the scope and timing of their reporting obligations that could result from adoption of this proposed rule in any form.
• Existing accelerated filers and large accelerated filers that may be eligible to transition to non-accelerated filer status under the new criteria should consider the practical implications of the proposed rule.

On May 19, 2026, the Securities and Exchange Commission (SEC) unveiled the most significant proposed changes to its public company filer status definitions and disclosure regime in decades. SEC Chair Paul Atkins identified the rulemaking as part of a larger effort to "make IPOs great again," noting that "incentivizing more companies to go and stay public ultimately serves to protect and benefit investors."

If adopted, the proposed rule would dramatically expand the number of public companies eligible for scaled disclosure requirements and provide additional accommodations to the smallest filers. See the SEC’s Fact Sheet for additional information.

Proposed Rule Highlights

Updated Filer Status Framework

• Eliminate "accelerated filer" and "smaller reporting company" (SRC) statuses in favor of an expanded non-accelerated filer (NAF) status
• Reduce the number of "large accelerated filers" (LAFs) by:
  • Increasing the LAF public float threshold to $2 billion
  • Measuring public float using the average stock price over the last 10 trading days of the second fiscal quarter
  • Extending the seasoning requirement from 12 to 60 consecutive calendar months of Exchange Act reporting
• Granting "small non-accelerated filer" (SNF) status to filers with total assets of $35 million or less as of the end of each of the two most recent second fiscal quarters
  • SNFs would enjoy extended filing deadlines of 120 days and 50 days after period-end for Form 10-Ks and Form 10-Qs, respectively.

Disclosure Relief

• Expand existing SRC and emerging growth company (EGC) disclosure relief to all NAFs, including:
  • Two years of annual financial statements
  • Elimination of say-on-pay and say-on-frequency vote requirements
  • Reduced executive compensation disclosure — instead of Compensation Discussion and Analysis (CD&A) — with only three (rather than five) named executive officers and limited tables
  • No pay versus performance (PvP) disclosure
  • No CEO pay ratio disclosure
  • Exemption from the internal control over financial reporting (ICFR) auditor attestation requirement under Section 404(b) of the Sarbanes-Oxley Act
• Eliminate expanded related-party disclosure requirements currently applicable to SRCs, including the two-year lookback and the lower transaction threshold under Item 404(d) of Regulation S-K

Transition Mechanics

Under the proposed rule, companies would reassess their filer status as of the end of the fiscal year preceding the fiscal year in which the final rules become effective. For example, if the new rules become effective at any time in 2027, a company would reassess its filer status as of December 31, 2026, at any time between the effective date and December 30, 2027, and begin utilizing the new NAF or SNF accommodations immediately upon completion of the assessment.

The SEC is requesting comments on the proposed rule within 60 days following its publication in the Federal Register, which period may be extended.

Key Takeaways

The rulemaking proposal marks the start of the rulemaking process, and any final rules will be published and made available for analysis before they take effect. That said, in light of this proposal and the SEC's other recent rulemaking initiatives (including proposals for semiannual reporting and registered offering reform), companies may want to carefully evaluate the potential changes in the scope and timing of their reporting obligations that could result from adoption of this proposed rule in any form.

Existing accelerated filers and LAFs that may be eligible to transition to NAF status under the new criteria should consider the practical implications of the proposed rule, including potential changes to auditor engagements, internal control over financial reporting, and disclosure controls such as compensation disclosure workflows.