SEC Proposes Public Company Reporting Reform: Two-Tier Filer Status Framework, Five-Year IPO On-Ramp and Expanded Scaled Disclosure

On May 19, 2026, as part of its "Make IPOs Great Again" agenda, the Securities and Exchange Commission proposed two sets of transformative amendments to its rules and forms intended to encourage companies to become and remain public.^[1] The first set of amendments is a Registered Offering Reform package that would materially expand access to registered offerings for public companies and certain funds. The second set, titled Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies, would simplify the SEC's existing categories of filers and extend scaled disclosure accommodations to a broader set of reporting companies. The proposals are designed to address a widely documented decline in the number of U.S. public companies, which fell from approximately 6,996 Exchange Act reporting companies in 2004 to 5,976 in 2024, and to growing evidence that regulatory burdens and compliance costs have contributed to that trend.

This Venable client alert addresses the Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies proposal. For our discussion of the Registered Offering Reform, see our client alert available here.

Introduction

If adopted, the reporting proposal would be the most consequential recalibration of public-company reporting status since the JOBS Act. The proposed amendments would leave only two primary categories of domestic filers: large accelerated filers (LAFs) and non-accelerated filers (NAFs), removing the current categories of smaller reporting companies (SRCs) and accelerated filers from the filers' classification. The amendments would also raise the public-float threshold for LAFs from $700 million to $2 billion (a threshold that has remained unchanged since the LAF category was created in 2005), require 60 consecutive calendar months (five years) of Exchange Act reporting before large accelerated filer status could attach, measure public float using a 10-trading-day average rather than a single-day measurement approach, and require the relevant threshold to be met for two consecutive years before a company enters or exits LAF status.

The SEC estimates that, if the proposed amendments were in effect today, LAFs would represent approximately 19.2% of current public companies, down from 35.4%, while NAFs would represent approximately 80.7% of current public companies. The SEC also estimates that the LAF population would represent approximately 93.5% (down from approximately 98.8%) of total market public float, while small non-accelerated filers (SNFs) would represent 17.9% of current public companies and 22.2% of NAFs.

Key Takeaways

• The domestic filer-status framework would become binary. The proposal would eliminate accelerated filer and SRC status as separate categories. A covered domestic registrant would be either a LAF or a NAF, with a new SNF subcategory for the smallest NAFs. Statutory emerging growth company (EGC) status would remain, but most of EGC accommodations would become available to NAFs.
• The LAF threshold would nearly triple and would require seasoning. A company could become a LAF only if it has at least $2 billion in public float at each of its two most recent second fiscal quarter measurement dates and has been subject to Exchange Act reporting for at least 60 consecutive calendar months.
• The public-float test would be less dependent on short-term trends. Instead of using a single-day market price, the proposal would use the average closing price over the last 10 trading days of the second fiscal quarter, multiplied by non-affiliate shares held as of the last day of that quarter. Entry into and exit from LAF status would require two consecutive annual measurements, and the current separate lower exit thresholds would be eliminated.
• Every newly public company would receive a minimum five-year reporting on-ramp. A newly public company could not become a LAF during its first 60 consecutive calendar months of Exchange Act reporting, regardless of public float or revenue. Unlike the JOBS Act's EGC on-ramp (which lasts up to five years but can be cut short if an issuer surpasses the revenue threshold or becomes an LAF) the proposed on-ramp provides an unconditional, minimum five-year period of NAF status for every covered new registrant.
• NAFs would receive broad scaled disclosure and Section 404(b) relief. NAFs generally could provide two years of audited financial statements and MD&A, use scaled executive compensation disclosure, omit several current LAF-level disclosure items and avoid the auditor attestation requirement for internal control over financial reporting (ICFR) under Section 404(b).
• The smallest NAFs would receive longer periodic-report deadlines. An SNF, an NAF with total assets of $35 million or less as of the end of each of its two most recent second fiscal quarters, would have 120 days to file Form 10-K and 50 days to file Form 10-Q.
• The proposal would reduce burdens, but market practice may be slow to adjust. Investors, auditors, underwriters, lenders, rating agencies and proxy advisors may continue to expect fuller disclosure, more robust controls work or voluntary risk-factor disclosure from many issuers, particularly frequent issuers and companies with meaningful institutional followings.

The Current Domestic Filer-Status Framework Would Become Binary

Public companies today navigate a layered framework of LAF, accelerated filer, NAF, SRC, and EGC status. Those designations overlap, use different entry and exit thresholds and trigger different consequences for filing deadlines, ICFR auditor attestation, financial statements, executive compensation disclosure, advisory votes and other disclosure items. A company can be, for example, both an accelerated filer and an SRC, making annual status analysis more elaborate than useful. As the SEC acknowledged in the proposing release, this complexity has itself become a compliance burden, adding cost and uncertainty for the companies this framework was designed to accommodate.

The proposal would replace the current system with two primary categories: large accelerated filer and non-accelerated filer. Covered registrants that satisfy the revised LAF definition would continue to provide non-scaled disclosure, meet accelerated periodic-report deadlines and include an auditor attestation of ICFR. All other covered registrants would be NAFs and generally could use the scaled disclosure and other accommodations currently associated with SRCs and EGCs. The SEC would also add the SNF subcategory for the smallest NAFs.

Proposed Filer Statuses at a Glance

Asset-backed issuers would remain outside the LAF/NAF framework because they have a separate Regulation AB reporting regime. Foreign private issuers (FPIs) that elect to use FPI forms would remain outside the new domestic filer-status definitions pending the SEC's broader review of the FPI framework. BDCs and face-amount certificate companies would receive tailored treatment rather than full Article 8 treatment.

LAF Status Would Be Harder to Attain Accidentally and Easier to Predict

The proposed LAF test would resemble the current test in that it would continue to be based principally on public float. The public-float threshold requirement itself would increase from $700 million to $2 billion. The same threshold would apply to both entry and exit, eliminating the current separate, lower exit thresholds that have contributed to the complexity of the existing rules. A registrant would calculate public float using the average closing price over the last 10 trading days of its most recently completed second fiscal quarter, multiplied by the number of voting and non-voting common shares held by non-affiliates as of the last day of that quarter. The registrant would have to be above or below the threshold for two consecutive annual testing periods before entering or exiting LAF status.

The proposal would also extend the LAF seasoning period (the minimum period a company must have been subject to Exchange Act reporting before LAF status can apply) from 12 months to 60 consecutive calendar months. As a result, every covered company that becomes subject to Exchange Act reporting (whether through a traditional IPO, a direct listing, a de-SPAC transaction, a spin-off, a Form 10 registration or another path) would have a minimum five-year period before LAF status could apply. De-SPACs are more complicated, as proposed, the SPAC seasoning period would begin when the SPAC conducts its IPO, not when the business combination is consummated, hence a former SPAC would have less than five full post-combination years before potential LAF status unless the SEC changes course in response to comments.

For large newly public companies that are not EGCs, the five-year seasoning period would be a meaningful new on-ramp. Even for companies that qualify as EGCs, the proposed on-ramp is more protective: the JOBS Act's EGC on-ramp lasts up to five years but can be cut short if a company exceeds the $1.235 billion revenue threshold, issues more than $1 billion in non-convertible debt over three years or becomes an LAF, whereas the proposed 60-month seasoning period cannot be shortened by revenue growth or other disqualifying events. Under the proposal, an EGC that loses its statutory status early would remain an NAF until the full 60 consecutive calendar months have elapsed.

NAFs Would Receive Broad Scaled Disclosure and Other Accommodations

Under the proposal, NAF status would become the default for all covered registrants that are not LAFs, and NAFs generally would receive the scaled disclosure accommodations now divided between SRCs and EGCs. The scaled accommodations would reduce, but not eliminate, disclosure requirements for NAFs.. NAFs would remain reporting companies and would continue to file Forms 10-K, 10-Q and 8-K, provide audited annual financial statements and comply with federal antifraud, certification and controls requirements. The change is that the non-LAF disclosure baseline would be scaled.

Financial Statements, MD&A and Market-Risk Disclosure

NAFs generally could present two years, rather than three years, of audited financial statements and corresponding MD&A in annual reports and registration statements. They generally could use Article 8 of Regulation S-X instead of the more extensive Article 3 form and content requirements, and would not be required to provide selected quarterly financial information under Item 302(a) of Regulation S-K or quantitative and qualitative market-risk disclosure under Item 305 of Regulation S-K.

Internal Controls

Section 404(b) auditor attestation would be required only for LAFs. NAFs would not be required to obtain an auditor's attestation report on management's ICFR assessment. That said, Section 404(a) would still require management to assess and report on ICFR, and CEOs and CFOs would continue to provide Exchange Act certifications addressing disclosure controls and procedures and internal control over financial reporting.

Executive Compensation, Governance and Risk Disclosure

NAFs generally could provide scaled executive compensation disclosure. Among other accommodations, they generally would not be required to provide CD&A, pay-ratio disclosure, pay-versus-performance disclosure, the compensation committee report, compensation committee interlocks and insider participation disclosure, compensation policies and practices related to risk management disclosure, or several detailed compensation tables required of larger companies. NAFs also generally could provide summary compensation table information for fewer named executive officers and fewer fiscal years. NAFs would be exempt from say-on-pay, say-on-frequency and golden parachute advisory vote requirements, and from the related golden parachute compensation disclosure. NAFs also generally would not be required to include a stock performance graph, except in the investment-company context.

As with current SRCs, NAFs generally would not be required to include Item 1A risk factor disclosure in Form 10-K or Form 10-Q. Many companies nevertheless may continue to provide risk factors voluntarily, particularly if they are frequent issuers, have pending or anticipated shelf takedowns, have substantial retail or institutional ownership, face material litigation or regulatory risk, or want to preserve a familiar disclosure architecture. Offering documents would still require material risk disclosure under the Securities Act.

The proposal also would replace the current SRC-specific related-party transaction threshold with a single $120,000 threshold for all filers and would make the Item 404(b) description of related-party transaction policies and procedures applicable only to LAFs.

Material Unresolved SEC Staff Comments

One disclosure obligation would expand. The proposal would require all registrants to disclose in Form 10-K or Form 20-F the substance of material unresolved SEC staff comments on Exchange Act reports if the comments were received at least 180 days before fiscal year end and remain unresolved. Today, that requirement does not apply to SRCs.

EGC Accommodations and Residual EGC Benefits

The proposal would make many EGC-style accommodations available to NAFs, but EGC status would not become irrelevant. EGC status is statutory and would continue to matter for accommodations the SEC is not extending to all NAFs. Most notably, the statutory protection from FOIA production of nonpublic draft registration statements submitted before an EGC's IPO would remain limited to EGCs. Non-EGCs may use the SEC staff's nonpublic draft-review process, but their confidential submissions do not receive the same statutory FOIA protection.

Similarly, the proposal would not extend certain PCAOB-standard accommodations that are available to EGCs, including the EGC exemption from critical audit matter requirements. Companies should therefore avoid treating NAF status as a complete substitute for EGC status when planning an IPO, assessing auditor-reporting requirements or preparing registration-statement cover-page disclosures.

One EGC-style accommodation would be extended to newly public NAFs. For the first five years after initial registration with the SEC, a NAF could elect to defer compliance with certain new or revised FASB accounting standards until those standards apply to private companies. As proposed, the election would be irrevocable and would need to be applied consistently.

Small Non-Accelerated Filers Would Receive Extended Filing Deadlines

The proposal would create a new SNF subcategory for the smallest reporting companies. A registrant would be an SNF if it is a NAF and reports total assets of $35 million or less in its financial statements as of the end of each of its two most recent second fiscal quarters. For an issuer filing an initial registration statement, the total-assets test would be applied to the two annual periods presented in the registration statement until the issuer has the reporting history to perform the second-quarter test.

SNFs would receive the same disclosure accommodations as other NAFs and one additional accommodation: more time to file periodic reports. Form 10-K would be due 120 days after fiscal year end, and Form 10-Q would be due 50 days after quarter end. If the SEC separately adopts optional semiannual reporting,^[2] the SNF timing convention would carry through to the proposed Form 10-S framework.

A company would remain an SNF until it becomes a LAF or reports more than $35 million in total assets at the end of each of its two most recent second fiscal quarters. The SEC also proposes to update its Regulatory Flexibility Act issuer small-entity definitions, generally aligning the issuer asset threshold with the proposed $35 million SNF threshold. The SEC is expressly soliciting comment on whether SNFs should receive additional accommodations beyond extended deadlines.

Special Treatment for FPIs, Asset-Backed Issuers, BDCs and Face-Amount Certificate Companies

The proposal is principally a domestic operating-company reform. FPIs that elect to file on FPI forms would not become LAFs or NAFs under the new definitions. FPIs filing on Form 20-F or Form 40-F would continue to follow the FPI framework, and Form 20-F filers with at least $75 million in public float as of the last business day of the FPI's most recently completed second fiscal quarter generally would continue to provide an ICFR auditor attestation unless they qualify as EGCs. The SEC is deferring broader FPI changes while it separately reviews the FPI eligibility framework.

Asset-backed issuers would remain outside the proposed LAF/NAF categories because Regulation AB provides a separate disclosure framework. BDCs and face-amount certificate companies would be eligible for certain NAF accommodations, but their financial-statement treatment would be tailored. The SEC is not proposing to permit them to rely on Article 8 wholesale, given their investment-company-specific reporting requirements and the importance of schedules of investments and related information.

Transition, Timing and Comment Period

If final rules are adopted, existing registrants would make an initial filer-status assessment after the effective date of the final rules, assessing status as of the end of the fiscal year prior to effectiveness and using public float, and total assets if relevant, for that fiscal year and the immediately prior fiscal year. Registrants could make the assessment at any time after effectiveness, but no later than the day before the last day of the fiscal year in which the final rules become effective.

Key Implications

The filer-status proposal, especially when combined with the Registered Offering Reform proposal and the pending optional semiannual-reporting proposal, could make public-company status materially less costly and more administrable. Private companies currently evaluating a potential IPO or other go-public transaction should reassess the expected regulatory burdens and compliance costs of becoming a public company in light of the proposed five-year on-ramp and scaled disclosure accommodations. Below are examples of how the proposal could affect common company profiles if adopted substantially as proposed.

• IPO companies and other newly public issuers. A newly public company would have at least five years before LAF status could apply, even if its public float is already above $2 billion. That would give large non-EGC IPO candidates access to a more EGC-like reporting runway, including two-year financial statement and MD&A presentation, scaled compensation disclosure and no Section 404(b) auditor attestation. Underwriters, investors and auditors may still expect more robust disclosure or controls work in larger IPOs, but the regulatory baseline would be materially lighter.
• De-SPAC and other business-combination companies. A company that becomes public through a de-SPAC transaction or other business combination would benefit from the proposed 60-month on-ramp in the same way as a traditional IPO company. As proposed, however, the seasoning period would begin when the SPAC completed its IPO, rather than when the post-combination company became public. The SEC has solicited comment on whether the 60-month seasoning period should restart when a SPAC completes a business combination with a private operating company. Interested parties should consider commenting on this point, particularly given that the SEC's recent SPAC rulemaking was intended, in part, to align the treatment of traditional IPOs and de-SPAC transactions. From that perspective, it may be difficult to justify reducing a de-SPAC company's on-ramp by the 12-15 months that often elapse between the SPAC's IPO and the closing of its business combination.
• Current accelerated filers and sub-$2 billion LAFs. Many companies that are accelerated filers today, and some current LAFs, could become NAFs. Those companies should quantify the potential savings from eliminating the ICFR auditor attestation, scaling executive compensation disclosure, moving to NAF filing deadlines and reducing periodic-report content. The analysis should not be purely mechanical: market expectations, future LAF re-entry risk and capital-markets plans may justify voluntary continuation of selected LAF-level practices.
• Frequent issuers. A NAF that also benefits from expanded Form S-3 access under the concurrent offering proposal may incorporate a more scaled periodic-reporting record into shelf registration statements and takedown documents. That is efficient, but underwriters may request supplemental diligence, voluntary risk factors, updated business disclosure, incremental comfort procedures or tailored management representations.
• Companies near the $2 billion threshold. The 10-trading-day average and two-year test should make status changes more foreseeable. Legal, finance and investor-relations teams should build a filer-status dashboard that tracks public float, non-affiliate share counts, 60-month seasoning, likely LAF transition dates and the practical workstreams that would be triggered by entry into or exit from LAF status.
• Small public companies. SNFs would receive a longer reporting runway, which could reduce pressure on lean finance teams and outside advisors. Even so, some SNFs may choose to file earlier than the outer deadline to preserve investor confidence, avoid longer blackout periods or maintain eligibility and timing for financing transactions.
• EGCs and non-EGC IPO candidates. EGC status would become less central for routine scaled disclosure, but it would still have residual value, including statutory FOIA protection for certain nonpublic draft registration statements and certain PCAOB-standard accommodations. IPO planning should therefore continue to analyze EGC status separately from NAF status.
• Contracts, plans and governance documents. Credit agreements, indentures, investor-rights agreements, registration-rights agreements, equity compensation plans, D&O questionnaires, disclosure controls calendars and board committee charters may refer to current filer statuses, reporting deadlines, Section 404(b), Form S-3 eligibility or specified periodic-report content. Those references should be inventoried before final rules are adopted.

Status and Next Steps

The proposed amendments remain subject to the SEC comment process and could change before adoption. Public companies and IPO candidates should nevertheless begin modeling the proposal now. The first-order exercise is numerical: calculate public float using the proposed 10-trading-day average, determine whether the $2 billion threshold was met in two consecutive years, identify the 60-month seasoning date and, for potential SNFs, test total assets against the $35 million threshold.

Companies that would become NAFs should decide which scaled disclosures to omit, which LAF-level practices to retain voluntarily and how to explain those choices to investors, auditors, underwriters, lenders and boards. Audit committees should evaluate whether eliminating the Section 404(b) attestation is consistent with the company's control environment, transaction plans and risk profile.

Companies may also wish to comment on the $2 billion LAF threshold, the 60-month on-ramp, the two-year public-float test, whether the threshold should be indexed, treatment of the largest newly public companies, the scope of NAF accommodations, the residual treatment of EGC benefits, SNF eligibility and whether SNFs should receive accommodations beyond extended filing deadlines.

Comments are due on or before July 20, 2026.^[3]

[1] Statement of Chairman Paul S. Atkins in connection with the proposals is available here.

[2] For more information on the proposed amendments to permit optional semiannual reporting by public companies, see the Venable client alert here.

[3] The Federal Register version of the proposal is available here.