BPI and ABA Supplemental Comments on SEC’s Registered Offering Reform Proposal

Ladies and Gentlemen:

The Bank Policy Institute, the American Bankers Association, and the ABA Securities Association submit this letter to supplement our July 27, 2026 comments on the Securities and Exchange Commission's proposal regarding Registered Offering Reform.^[1] We appreciate the SEC's consideration of our prior comment letter, as well as the opportunity to meet with the SEC on September 8, 2026, to discuss our comments. This letter, like our previous comments, is focused on one aspect of the proposal: the proposed elimination of Form S-3 eligibility for certain "ineligible issuers."^[2]

As described in our July comment letter, the proposed "ineligible issuer" disqualification would represent a significant departure from the SEC's longstanding regulatory approach, under which "ineligible issuer" status has limited certain offering-related accommodations, but has not restricted access to Form S-3 itself or precluded registered shelf offerings. For existing issuers, including public U.S. bank holding companies, banks, and savings and loan holding companies ("Bank Issuers"), the speed, flexibility, and predictability of Form S-3 and shelf access is essential to execute significant, recurring public-market issuance programs.

The proposed disqualification from use of Form S-3 and shelf registration is overly broad and punitive. Loss of Form S-3 would not be calibrated to the specific facts and circumstances of the underlying misconduct. Further, this severe penalty is unnecessary to achieve the SEC's investor-protection objective. It is also contrary to the SEC's capital formation goals. In our July comment letter, we recommended that the SEC address its concerns regarding the conduct that results in "ineligible issuer" status through limitations on automatic shelf registration statement effectiveness, rather than by eliminating access to the shelf registration framework entirely. In this letter, we provide our recommendation for how the SEC can achieve its policy goals without harming existing issuers, including Bank Issuers.

The SEC should amend its proposed framework to permit "ineligible issuers" to be ELIs.

We agree that expanding shelf access to small and newly public companies without a significant Exchange Act reporting history requires investor protection guardrails. Our recommendation would maintain those guardrails while preserving Form S-3 eligibility for Bank Issuers, including those that may become "ineligible issuers," consistent with the SEC's longstanding framework for Form S-3 eligibility.

The SEC's proposal would establish a three-tiered framework for issuers that would benefit from certain of the SEC's enhanced registration and communication benefits: (1) issuers eligible for Form S-3, (2) eligible listed issuers ("ELIs"), and (3) seasoned eligible listed issuers ("SELIs").^[3] SELIs would be eligible for all the accommodations available to well-known seasoned issuers ("WKSIs") today, including automatic shelf registration.^[4] ELIs and issuers eligible to use Form S-3 would be eligible for certain accommodations available to WKSIs today, with ELIs permitted more accommodations than non-ELI issuers eligible to use Form S-3. However, under the proposal, only SELIs would benefit from automatic shelf registration.^[5]

Within this framework, we recommend that the SEC revise the proposal so that an "ineligible issuer" would not be disqualified from Form S-3 and could qualify as an ELI but not a SELI.^[6] Consistent with the recommendation in our previous comment letter, this would mean that an "ineligible issuer" may use Form S-3 and shelf registration if it can satisfy the applicable eligibility requirements but would not be able to use an automatically effective shelf registration statement. However, an "ineligible issuer" would retain all of the WKSI benefits proposed to apply to ELIs and other issuers eligible to use Form S-3 under the proposal.^[7]

Permitting an "ineligible issuer" to qualify as an ELI is consistent with the SEC's purpose in proposing the disqualification. The SEC explains that the disqualification is needed for investor protection because the proposal would expand Form S-3 and shelf registration to a broader set of issuers and that it "do[es] not believe it is appropriate to expand Form S-3 eligibility to certain categories of issuers that may pose greater potential for non-compliance with the Federal securities laws."^[8] Our recommendation would preserve existing Form S-3 access, which is grounded in current and timely reporting, while withholding automatic effectiveness, the accommodation most relevant to the SEC's concern.

As discussed in detail in our previous comment letter, a limitation on automatic shelf registration statement effectiveness, which is a benefit only SELIs would be permitted under the proposal, would achieve the SEC's investor-protection objective. A limitation on automatic shelf registration effectiveness (via loss of SELI status) would preserve the opportunity for the SEC to review the Form S-3 and the filings it incorporates by reference prior to effectiveness. The SEC would also continue to be able to review an issuer's current and periodic reports, as well as any other amendments or supplements to the Form S-3 subsequent to effectiveness, which would include any supplements filed in connection with any securities offering.

In contrast, allowing "ineligible issuers" to use the other accommodations that would be available to ELIs would not diminish the SEC's oversight of the disclosures investors receive or reduce either the quality of those disclosures or the protections surrounding them. In general, these other benefits either make the registered offering process more efficient or facilitate offering-related communications. For example, Rules 456(b) and 457(r) govern the timing and calculation of registration fee payments. Rule 413(b) permits the addition of securities, classes of securities, or securities of a majority-owned subsidiary to an effective registration statement by post-effective amendment. These rules enhance efficiency in the offering process but have no bearing on the disclosure available to investors. In addition, Rules 163 and 163A govern pre-filing communications, while Rules 164 and 433 govern the use of FWPs. Rule 430B(a) permits specified offering information to be omitted when the shelf becomes effective and supplied when the offering occurs; investors still receive the offering-specific information in a prospectus supplement before any sale. These rules affect how and when an issuer may communicate about an offering, not the contents of the communication. Further, certain of these accommodations benefit investors, including retail investors, as well. Significantly, free writing prospectuses are used to convey targeted and relevant information to investors in a user-friendly format, allowing issuers to offer retail investors plain English product explanations through product guides and other disclosures.

In summary, the final rule should permit an "ineligible issuer" to use Form S-3 and to qualify as an ELI, but not as a SELI.^[9] This approach addresses the SEC's stated concern directly by withholding automatic effectiveness, while preserving accommodations that have no bearing on the disclosure investors receive. Whatever approach the SEC adopts, "ineligible issuer" status should not result in the loss of Form S-3 eligibility or access to the shelf registration framework, for the reasons discussed in our July letter.

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The Bank Policy Institute, the American Bankers Association and the ABA Securities Association appreciate your consideration of our supplemental comments. If you have any questions, please contact us at [email protected]; [email protected]; and [email protected].

[1] 91 Fed. Reg. 31022 (May 26, 2026).

[2] We also support the recommendations in the Securities Industry and Financial Markets Association's letter regarding the proposal, dated July 27, 2026, with respect to the "ineligible issuer" issue.

[3] 91 Fed. Reg. at 31056.

[4] Id.

[5] Id. at 31056-58.

[6] An issuer that is an "ineligible issuer" on the effective date of the final rule should qualify as an ELI, but not a SELI, for the remainder of the disqualification period.

[7] For ELIs, these would include Rules 163, 163A, 164, 413, 430B(a), 456(b), and 457(r). For issuers eligible to use Form S-3, these would include Rules 139, 430B(b), and 433. Consistent with this recommendation, the SEC should also exclude ELIs (or Form S-3 eligible issuers) from Rule 164(e)(1)'s independent ineligible issuer disqualification.

[8] 91 Fed. Reg. at 31040.

[9] To implement this recommendation, the SEC should: (i) amend proposed General Instruction I.A.2 of Form S-3 to remove paragraphs (v) and (vi) of the definition of "ineligible issuer" as a basis for disqualifying an issuer from using Form S-3; (ii) provide in the definition of "eligible listed issuer" that an issuer shall not be excluded from ELI status solely because it is an "ineligible issuer," provided it satisfies the other requirements of that definition; (iii) provide in the definition of "seasoned eligible listed issuer" that an "ineligible issuer" may not qualify as a SELI; (iv) amend Rule 164(e)(1), and make conforming changes to Rule 433 and any related cross-references, so that the "ineligible issuer" disqualification does not apply to an ELI or other issuer eligible to use Form S-3; and (v) provide that Rules 163, 163A, 413(b), 430B(a), 456(b), and 457(r) are available to any ELI (including an "ineligible issuer" that qualifies as an ELI) and are not conditioned on SELI status or automatic shelf registration.