Statement on Proposing Registered Offering Reform and Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies

Today, the Commission proposes rules to update its rulebook with respect to conducting shelf offerings and to enhance and simplify the registration and reporting framework for smaller public companies. These proposals reflect a commitment to improve the core features of the SEC's registration and reporting system. They build upon-and improve-the SEC rulebook in a manner that reflects the agency's observations and awareness of contemporary market practices that have developed over the past two decades.

The First Proposal Builds Upon the Successes of the Shelf Registration Framework

With regard to Registered Offering Reform, the proposal would modernize the shelf registration framework. The state of communications and information technologies has evolved significantly since the last time that the Commission made substantial changes to the shelf registration offering process as part of the Securities Act Offering Reform rulemaking in 2005.[1]

Market practices, including how material information is distributed and consumed by investors, have changed dramatically since then. More tools are available to obtain information on financial markets, individual companies, and financial products than ever before. Disclosure is largely available in real time today, far advanced from where it was twenty years ago. For context, in 2005, Chairman Cox noted how technology was impacting financial markets with respect to the distribution of proxy materials:

With the holiday season in full swing … it's difficult not to notice the proliferation of electronic gadgets being advertised as the perfect holiday gift. We can only guess how many Americans will get a USB key as a stocking stuffer, or a cell phone that takes pictures and surfs the Web, or even an iPod that plays not only MP3s, but video.[2]

Chairman Cox's reference to the iPod reminds us that when the Commission last examined shelf registration in a comprehensive manner, the iPhone had not even been rolled out yet.[3] Moreover, the technology available in 2005 substantially differed from the technology available in 1983, the year that the SEC adopted the original shelf registration framework.[4] Instead of carrying around that iPod back then, you might have had a cassette-playing Sony Walkman.

Communication and information technologies have continued to change. Smart phones, cloud computing, social media networks, video streaming, structured data, and third-party messaging services are common features of the investment ecosystem in 2026 and the SEC's rulebook should reflect that environment.

The Registered Offering Reform proposal would facilitate capital formation by expanding access to Form S-3 and streamline the registration and communication benefits for public companies.[5] This would provide meaningful increases in transactional flexibility to a range of smaller entities and improve their access to capital post-IPO. The proposal would also limit unnecessary regulatory duplication by preempting the need to obtain, in certain cases, registration and qualification from dozens of individual state securities regulators, where the investor protection benefits may not be commensurate with the corresponding regulatory hurdles to raising capital.

The Second Proposal Streamlines and Simplifies SEC Reporting

The Commission also proposes the Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies.[6] Among other changes, the proposal would raise the public float threshold for large accelerated filer (LAF) status from the current $700 million to $2 billion, at which threshold the category would represent approximately 19 percent of reporting companies and 93.5 percent of the current total market public float.[7] This would reduce regulatory burdens while ensuring that the vast majority of the public float remains subject to the full set of disclosure requirements. The proposal would also simplify the framework by categorizing all companies that are not LAFs as non-accelerated filers (NAFs).

Additionally, the Commission is proposing to create a subcategory of NAFs constituting the smallest filers, termed small non-accelerated filers (SNFs), with extended periodic reporting deadlines. Scaling regulatory obligations for smaller businesses may incentivize companies to go-and remain-public. It takes the SEC one step closer to making the consequences and burdens of being a public company less onerous-and less off-putting-for small issuers.

Lastly, the proposal would extend nearly all disclosure scaling and accommodations available to smaller reporting companies and emerging growth companies to NAFs, including the internal control over financial reporting (ICFR) auditor attestation exemption. These aspects of the proposal build upon the success of the JOBS Act of 2012.[8] These successes reflect an important point: management and boards of public companies exist to focus on operating and managing their businesses-and not to spend outsized amounts of time and resources on regulatory compliance obligations.

Combined, these proposals advance the Commission's mission of protecting investors and facilitating capital formation and are long overdue.[9] I thank the staff in the Division of Corporation Finance, the Division of Economic and Risk Analysis, the Division of Investment Management, the Division of Trading and Markets, the EDGAR Business Office, the Office of the General Counsel, the Office of the Chief Accountant, the Office of Financial Management, and the many other offices that have contributed to this release. I look forward to hearing the views of market participants on these issues.