The US Securities and Exchange Commission (SEC) has proposed a broad set of rule changes aimed at simplifying how public companies meet ongoing reporting requirements.
The proposals form part of a wider effort to reduce compliance costs while ensuring investor protections.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The planned reforms seek to streamline capital-raising in public markets and tailor disclosure obligations to a company’s size and stage of development.
The SEC said this is part of a broader push to encourage more companies to list and remain public, against a backdrop of declining numbers of public companies over recent decades.
SEC chairman Paul Atkins said: “These proposals build upon the legislative and regulatory concepts that have proven successful in the past and aim to extend that success to more companies – particularly small and mid-sized companies – and incentivise them to go and stay public.”
The registered proposal is described as the “most significant” modernisation of the framework in more than 20 years.
It would allow many more public companies, regardless of public float, to use shelf registrations for quicker access to capital; extend certain communication and registration flexibilities beyond “well-known seasoned issuers”; and enable broker-dealers to publish research on a wider group of companies.
The SEC also proposes to pre-empt state securities registration and qualification requirements for all registered offerings, and maintain parity between certain Form N-2 filers and operating companies.
It also proposes to expand the use of broad-based advertising for certain non-variable annuity insurance products, and simplify the registration process, including greater use of incorporation by reference into Form S-1.
The measures will extend scaled disclosure and related accommodations – currently focused on smaller or emerging issuers – to around 81% of existing public companies.
The SEC noted that the new issuers would retain these benefits for at least five years, and the smallest companies would have more time to file annual and periodic reports.
The threshold for classification as a large, accelerated filer would rise from $700m to $2bn in public float.
No company would be treated as a large, accelerated filer within 60 months of its initial public offering (IPO), regardless of float, creating what the SEC terms an “IPO on-ramp”.
All other issuers would be non-accelerated filers and could rely on nearly all the scaled disclosure measures now available to smaller and emerging companies.
Within this group, a subcategory of small non-accelerated filers would receive an extra 30 days to file Form 10-K and an additional five days for Form 10-Q.
The public comment period will run for 60 days after the proposal is published in the Federal Register.
