SEC Proposes Sweeping Reforms to the Registered Offering Framework

On May 19, 2026, the Securities and Exchange Commission (the "SEC") proposed a comprehensive package of amendments intended to overhaul the registered offering framework under the Securities Act of 1933 (the "Securities Act").[1] The proposal represents the most significant rethinking of Form S-3 eligibility and shelf registration mechanics since the SEC's landmark Securities Offering Reform in 2005. If adopted, the proposed amendments would dramatically expand the number of companies eligible to use Form S-3, extend registration and communication accommodations currently reserved for "well-known seasoned issuers" ("WKSIs") to a far broader set of issuers, modernize Form S-1, and preempt state securities law registration requirements for all registered offerings. The proposal is part of SEC Chairman Paul Atkins' broader initiative to reduce regulatory burdens and incentivize companies to access and remain in the public markets, which Chairman Atkins has described as the foundation of his "Make IPOs Great Again" agenda. On the same date, the SEC separately proposed significant amendments to simplify the Securities Exchange Act of 1934 (the "Exchange Act") filer status framework, which we addressed in a separate client memorandum published on May 22, 2026.[2] This memorandum focuses on the registered offering reform proposal.

Key Proposals

1. Form S-3 eligibility would be significantly expanded. The proposed amendments would eliminate both the 12-month Exchange Act reporting history requirement (the "One-Year Seasoning" requirement) and the $75 million public float threshold (the "Public Float Threshold"), enabling any Exchange Act reporting company that is current and timely in its filings to use Form S-3 for any primary or secondary offering immediately upon becoming a reporting company. Based on SEC data, this could increase the number of issuers eligible to offer unlimited securities on Form S-3 by over 60 percent.
   
   
2. The WKSI framework for domestic issuers would be replaced by two new issuer categories. The proposal would eliminate the WKSI definition for domestic issuers and replace it with two new categories with significantly lower eligibility thresholds: "eligible listed issuers" ("ELIs") and "seasoned eligible listed issuers" ("SELIs"). Certain benefits that are currently available only to WKSIs would become available to ELIs and SELIs, including pay-as-you-go filing fees, the ability to add additional securities or issuers after effectiveness, and pre-filing and post-filing communications flexibility. However, only SELIs would be eligible to file registration statements that become effective automatically upon filing without SEC review. The SEC estimates that approximately 76% of reporting companies would qualify as ELIs and approximately 74% as SELIs, compared to the approximately 36% that currently qualify as WKSIs.
   
   
3. Form S-1 would be modernized. The ability to backward incorporate by reference would no longer require a Form S-1 issuer to have filed a Form 10-K for its most recently completed fiscal year, and forward incorporation by reference, which is currently available only to Form S-1 filers that qualify as smaller reporting companies ("SRCs"), would become available to all S-1 issuers.
   
   
4. State securities law preemption would be extended to all registered offerings. The proposal would define "qualified purchaser" under Section 18(b)(3) of the Securities Act to preempt state registration and qualification requirements for all registered offerings, including offerings of unlisted securities by issuers such as non-traded REITs and non-traded business development companies ("BDCs").
   
   
5. Conforming accommodations for BDCs and closed-end funds. The proposal would also provide parallel expansion of eligibility to use short-form registration statements on Form N-2 to a broader group of BDCs and registered closed-end funds ("CEFs") and extend certain registration and communication benefits currently reserved for WKSIs to the same broader set of BDCs and CEFs.

Background

Form S-3 is a short-form registration statement that eligible issuers can use to register securities under the Securities Act. Form S-3 offers several significant advantages over the long-form registration statement on Form S-1, including the ability to automatically update information in the prospectus through forward incorporation by reference of periodic and current reports filed under the Exchange Act and the ability to conduct shelf offerings as well as at-the-market ("ATM") offerings. Form S-3 allows an issuer to register securities in advance and offer them from time to time as favorable market conditions arise. Issuers that do not satisfy the eligibility requirements for Form S-3 must rely on Form S-1, which is subject to SEC staff review and does not accommodate shelf or delayed primary offerings.

Under current rules, Form S-3 eligibility requires issuers, among other things, to have been subject to Exchange Act reporting requirements for at least 12 calendar months (the One-Year Seasoning requirement) and, for unlimited primary offerings, to meet the Public Float Threshold. Issuers that do not meet the Public Float Threshold may conduct limited primary offerings of exchange-listed securities under the "baby shelf" provision, but these offerings are subject to a cap of one-third of the issuer's public float over any rolling 12-month period. Similarly, the WKSI framework, which provides the most significant offering flexibility, including automatic effectiveness of shelf registration statements, requires issuers to have a minimum $700 million public float or to have completed $1 billion of registered debt offerings.

The SEC has concluded that these eligibility criteria, while originally designed to ensure adequate information dissemination in the marketplace, are no longer necessary given the widespread availability of issuer information through EDGAR and other electronic channels. The proposal reflects a fundamental shift in philosophy: Form S-3 eligibility should depend on whether investors can readily obtain current issuer-specific information via Exchange Act reporting rather than on the size of an issuer's public float or the length of its reporting history.

Overview of Changes

Expanded Form S-3 Eligibility. The proposed amendments would revise Form S-3 eligibility requirements by eliminating the following conditions:

• The One-Year Seasoning requirement (the requirement that an issuer have been subject to Exchange Act reporting requirements for at least 12 calendar months prior to filing);
  
  
• The Public Float Threshold for unlimited primary offerings (and, consequently, the baby shelf limitation on issuers with less than $75 million in public float); and
  
  
• The requirement under General Instruction I.A.4 that neither the registrant nor its subsidiaries shall have failed to make certain dividend or other payments or defaulted under certain other agreements such as an installment payment on indebtedness for borrowed money, or shall have failed to comply with the XBRL/Interactive Data Files and Electronic Filings requirements.

The proposed amendments retain the requirements that issuers be current and timely in their Exchange Act reporting obligations, with a limited cure period: an issuer would remain Form S-3 eligible notwithstanding a single untimely filing during the relevant lookback period, provided the filing was made within seven calendar days of the original due date. Notably, where Rule 12b-25 applies, which requires a company that will be filing a late Form 10-K or 10-Q to file advance notice with the SEC and extends the due date for the filing, the seven-day period would still be calculated from the original due date rather than the extended due date. In other words, if on the due date of a company's Form 10-K it filed a Form 12b-25 to extend the reporting deadline, a Form 10-K filed up to 15 calendar days after the original due date would still be considered timely for Exchange Act reporting compliance, but in order to retain Form S-3 eligibility the company would need to file its Form 10-K by the seventh calendar date after the original Form 10-K due date. The proposed amendments would also add a new prohibition on use of Form S-3 by certain "ineligible issuers," including "BSP issuers." The proposed rule would amend Rule 405 to add a definition of "BSP issuer" that would include blank check companies, shell companies and penny stock issuers. Other "ineligible issuers" would include an issuer or any entity convicted of certain felonies or misdemeanors, issuers subject to anti-fraud decrees, issuers subject pending proceeding under Section 8A of the Securities Act, and issuers that have filed a registration statement that is subject to any pending proceeding under Section 8 of the Securities Act or that is the subject of a stop order.

In a significant change, under the proposed rule, a company that went public via a de-SPAC transaction would not be treated as a BSP issuer solely because it had been a "special purpose acquisition company" during the past three years, and would be eligible to use Form S-3 on the same basis as a traditional IPO company. Importantly, the proposed amendments also incorporate aspects of the existing Rule 405 "ineligible issuer" concept, which currently applies only to WKSI status, into Form S-3 eligibility itself. The SEC notes that the proposed scope of ineligible issuers under the new Form S-3 instruction is narrower than the full scope of current Rule 405; for example, issuers that have been in bankruptcy within the past three years would no longer be ineligible solely on that basis. However, the SEC also acknowledged that certain majority-owned subsidiaries that rely on the current General Instruction I.C.2 of Form S-3 could fall within a category of ineligible issuers and therefore could lose the ability to use Form S-3 under the proposed amendments; General Instruction I.C.2 provides that a majority-owned subsidiary may use Form S-3 if the parent of the registrant-subsidiary meets the Registrant Requirements (in General Instruction I.A. to Form S-3) and meets the conditions of the Transaction Requirements in B.2. (Primary Offerings of Non-Convertible Securities Other than Common Equity). Nevertheless, consistent with the existing waiver mechanism under Rule 405, issuers that fall within a prohibited category may continue to seek a waiver of ineligible issuer status from the SEC.

New ELI and SELI Categories Replace the WKSI Framework for Domestic Issuers. The proposed amendments would eliminate the WKSI definition for domestic issuers and replace it with two new categories:

• Eligible Listed Issuers ("ELIs"): Any issuer that meets the proposed Form S-3 registrant requirements and has at least one class of common equity securities listed on a national securities exchange. ELIs would gain access to pre-filing communications flexibility (Rules 163 and 163A), post-filing free writing prospectuses (Rule 164), the ability to register additional securities via post-effective amendments (Rule 413), the ability to omit certain information from base prospectuses at effectiveness (Rule 430B(a)), and pay-as-you-go SEC registration fees (Rules 456(b) and 457(r)).
  
  
• Seasoned Eligible Listed Issuers ("SELIs"): ELIs that have been subject to Exchange Act reporting for at least 12 complete calendar months. Only SELIs would be eligible for automatic shelf registration.

Consistent with existing practice, Form S-3 eligibility would not be reassessed at the time of each shelf takedown, but only at the time of initial filing and at subsequent updates required by Section 10(a)(3) of the Securities Act, such as an issuer's filing of its Form 10-K.

ELI and SELI status would be determined on an approximately annual basis, consistent with the current WKSI determination framework. The WKSI definition would be retained solely for foreign private issuers ("FPIs"), which are excluded from the new proposed ELI/SELI format pending the SEC's ongoing review of the FPI eligibility framework. We note that the proposed amendments would prohibit all FPIs, including those that currently report on domestic forms (i.e., Form 10-K, Form 10-Q and Form 8-K rather than Form 20-F and Form 6-K), from using Form S-3, requiring any such FPI to transition to Form F-3.

Form S-1 Modernization. The proposed amendments would make two important changes to Form S-1's incorporation by reference regime:

• Backward incorporation: The requirement that an issuer must have filed a Form 10-K for its most recently completed fiscal year to be eligible to use backward incorporation by reference would be eliminated, permitting issuers to use incorporation by reference during their first year as newly public reporting companies.
  
  
• Forward incorporation: The ability to forward incorporate by reference, which for Form S-1 is currently available only to SRCs, would be extended to all Form S-1 issuers that otherwise meet the form's incorporation by reference requirements.

Preemption of State Securities Law Requirements. The proposed amendments would define "qualified purchaser" under Section 18(b)(3) of the Securities Act to include any purchaser of securities offered or sold in a registered offering, thereby preempting state registration and qualification requirements with respect to all registered offerings, whether or not the offered securities are exchange-listed. This significant change would eliminate the costs and complexity of complying with multiple states' registration and qualification requirements for registered offerings of unlisted securities, such as non-traded REITs and certain BDCs.

BDCs and Closed-End Funds. The proposal contains amendments for BDCs and registered CEFs that register their securities on Form N-2 that are largely consistent with the proposed changes for operating companies. The amendments would extend eligibility to use the short-form registration statement on Form N-2 to a broader group of exchange-listed affected funds by removing related seasoning and public float requirements. However, the SEC did not propose to expand the eligibility criteria to use the short-form N-2 to unlisted affected funds. Unlisted affected funds would continue to rely on the existing Rule 486 registration and offering process.

Delaying Amendments. The proposal would revise Rule 473 so that registration statements are deemed delayed unless the issuer affirmatively opts in to Section 8(a) effectiveness by including a specified legend on the cover page of the registration statement. This reverses the current default, under which issuers must include a delaying amendment legend to prevent premature effectiveness, and is intended to eliminate the risk that inadvertent omission of the legend could trigger premature reporting obligations or stop order proceedings.

Age of Financial Statements. The proposed amendments would eliminate the income-based conditions in Rules 3-01(c) and 8-08(b) of Regulation S-X that currently prevent loss-generating issuers from qualifying for extended grace periods before audited annual financial statements must be included in a registration statement or proxy statement. This change would allow issuers that cannot demonstrate profitability, which are often those with the greatest need for capital, to raise funds or complete strategic transactions near fiscal year end without being forced to expedite audited financials ahead of their Form 10-K filing deadline. Importantly, this would enable certain companies looking to conduct an IPO to access the capital markets sooner than they would otherwise be able under the current regime.

Practical Consequences of the Proposal

• Newly Public Companies. A company completing its IPO would be immediately eligible to use Form S-3 to raise additional capital by filing or confidentially submitting a Form S-3 shelf registration statement for a follow-on offering shortly after the IPO closes (subject to applicable contractual lock-up and/or clear market periods). After 12 months of Exchange Act reporting, it would be eligible to file an automatically effective shelf registration statement as a SELI.
  
  
• Exchange-Listed Companies Below Current WKSI Thresholds. An existing listed public company that has been reporting for 12 months but does not currently qualify as a WKSI because it does not meet the $700 million public float threshold would, as a SELI, be able to file an automatically effective shelf registration statement, raise capital immediately, and pay SEC registration fees on a pay-as-you-go basis. This represents a significant expansion of capital-raising flexibility for the large majority of listed companies that currently lack WKSI status.
  
  
• De-SPAC Companies. A company that went public through a de-SPAC transaction would no longer be considered an "ineligible issuer" and would be eligible to use Form S-3 (including ELI and SELI status) on the same basis as a traditional IPO company. This represents a meaningful improvement from the current framework, under which WKSI status is not available to such companies until at least three years after closing of the de-SPAC transaction.
  
  
• Current WKSIs That Do Not Meet ELI/SELI Requirements. Because ELI and SELI status both require at least one class of common equity listed on a national securities exchange, certain issuers that currently qualify as WKSIs through the alternative $1 billion registered debt pathway without having listed equity would lose access to the enhanced registration and communication benefits they currently enjoy. This is particularly relevant for non-traded BDCs and other unlisted issuers that are frequent debt issuers. The SEC has requested comment on whether to provide a transition period for such issuers, but has not proposed to preserve their access to these benefits on a permanent basis.
  
  
• Issuers Conducting Registered Offerings of Unlisted Securities. Non-traded REITs, non-traded BDCs, and other issuers conducting registered offerings of unlisted securities would benefit significantly from the proposed preemption of state securities law registration and qualification requirements, eliminating the costs and delays associated with multi-state blue sky compliance.
  
  
• Reduced Reliance on Exempt Offerings. The elimination of the One-Year Seasoning requirement and the Public Float Threshold for Form S-3 eligibility may reduce issuers' reliance on exempt offerings such as private investments in public equity (known as "PIPEs") and would expand the number of issuers eligible to conduct at-the-market offerings of equity securities in existing trading markets.

Next Steps

The public comment period will remain open until July 27, 2026. Final rules could potentially be adopted before the end of 2026. We will continue to monitor developments and provide updates as the rulemaking progresses. Registrants should consider reviewing the proposal carefully and assessing how the proposed changes, if adopted, could affect their capital-raising strategies, offering timelines, and registration statement practices.

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