SEC Proposes Sweeping Rule Changes for Public Companies

The SEC proposed several rule changes in May that could significantly affect issuers’ reporting requirements and public companies’ access to the capital markets:

• Semiannual reporting. Under the proposed rule, public companies would be permitted to file semiannual reports instead of quarterly reports to satisfy their interim reporting requirements under the federal securities laws. Comments on the semiannual reporting proposal are due July 6, 2026.
• Registered offering reform. Intended to simplify the registered offering framework, the proposed amendments would revise Form S-3 eligibility requirements by eliminating certain reporting obligations and removing the existing $75 million public float threshold for issuers. Comments on the registered offering reform proposal are due July 27, 2026.
• Filer status framework. The proposed amendments would streamline filer status and expand the availability of scaled disclosure requirements and other accommodations currently afforded to smaller reporting companies and emerging growth companies to all non-accelerated filers. The proposal would also increase the threshold for large accelerated filer status from $700 million to $2 billion in public float. Comments on the filer status proposal are due July 20, 2026.

The proposals are intended to reduce the regulatory costs associated with being a public company, improving the attractiveness of the U.S. capital markets and encouraging more companies to go public.

Key provisions follow.

Semiannual Reporting

Current SEC rules require public companies to file quarterly reports on Form 10-Q, with limited exceptions. To meet this obligation, registrants currently file three quarterly reports on Form 10-Q each year, with fourth quarter results included in the annual report on Form 10-K. 

The SEC’s proposal on semiannual reporting would amend the Exchange Act rules to permit companies to optionally elect to report on a semiannual basis, rather than a quarterly basis. Companies that make this election would be required to file one semiannual report each year on a newly created Form 10-S, rather than filing three quarterly reports on Form 10-Q. The election would be made by checking a box on the cover page of the Form 10-K or applicable registration statement. Companies that don’t elect semiannual reporting would continue filing quarterly reports on Form 10-Q.

Importantly, the proposal would not prohibit companies that elect semiannual reporting from continuing to provide quarterly financial information voluntarily. In evaluating the potential impact of the proposal, companies should consider whether investors, analysts, lenders, underwriters, or other stakeholders may continue to expect or require quarterly information.

Form 10-S

The proposed Form 10-S would require the same narrative disclosures and financial information currently included in Form 10-Q, but would cover a six-month reporting period rather than a single fiscal quarter.

Companies electing semiannual reporting would have the same length of time after the second quarter to file the Form 10-S as a Form 10-Q. Accordingly, the Form 10-S would be due 40 or 45 days after the end of the semiannual period, depending on the company’s filer status.

Auditor Review Requirement

Financial statements included in Form 10-S would be prepared in accordance with U.S. GAAP and required to be reviewed by an auditor. This is similar to the current review requirement for financial statements included in quarterly reports.

Age of Financial Statements

The proposed amendments would also revise certain financial statement requirements in Regulation S-X to reflect the new semiannual reporting option, including rules on the age of financial statements.

Under the proposal, registrants would no longer determine whether financial statements included in a registration statement are current by measuring a fixed number of days (i.e. the existing 130- or 135-day requirements). Instead, the determination would be tied to the registrant’s applicable quarterly or semiannual reporting cycle. As proposed, financial statements generally would not become stale until financial statements for the next reporting period have been filed, or are required to be filed, on or before the applicable Form 10-Q or Form 10-S filing deadline.

Registered Offering Reform

The registered offering reform proposal is intended to enhance public companies’ ability to conduct registered offerings and access the public capital markets. The proposed amendments would allow more companies to use Form S-3, expand incorporation-by-reference rules, and provide more companies with benefits currently afforded to well-known-seasoned-issuers (WKSI), among other changes.

Form S-3 Eligibility

Form S-3 eligibility requirements would be revised by removing the requirement that issuers be subject to Exchange Act reporting requirements for one year. As a result, issuers would become eligible to use Form S-3 as soon as they are subject to the Exchange Act reporting requirements.

The proposed amendments would also remove the existing limitation on the amount of securities that may be sold by issuers with a public float of less than $75 million.

Although issuers would still be required to be current and timely in their Exchange Act reporting to remain eligible to use Form S-3, a new limited exception would allow an issuer to maintain Form S-3 eligibility despite a single late filing during the preceding 12 months, provided the filing is submitted within seven days after its original due date.

The SEC estimates that the proposed amendments could increase the number of issuers eligible to offer an unlimited amount of securities on Form S-3 by more than 60%. This change could be especially significant for smaller and mid-sized public companies because Form S-3 shelf registration can allow quicker, more flexible access to the public capital markets.

Incorporation by Reference

Issuers’ ability to incorporate information by reference into Form S-1 would be expanded, including by allowing backward incorporation of information filed before the effective date of the registration statement.

Broader Access to WKSI-Like Benefits

Under current rules, certain registration and communication benefits are reserved for well-known seasoned issuers (WKSIs), which must have at least $700 million in public float or have issued at least $1 billion of debt securities in registered offerings. Under the proposed amendments, issuers wouldn’t need to meet either threshold in order to qualify for the enhanced registration and communication benefits. Instead, issuers generally would qualify for such benefits, other than the ability to use an automatic shelf registration statement, if they’re eligible to use Form S-3 and have at least one class of common equity securities listed on a national securities exchange.

Filer Status Framework

The SEC currently classifies public companies into several filer categories, each with its own reporting requirements and accommodations:

• Large accelerated filers
• Accelerated filers
• Non-accelerated filers
• Smaller reporting companies
• Emerging growth companies

The proposed changes to the filer status framework would simplify filer status rules by eliminating the accelerated filer and smaller reporting company categories, and updating the large accelerated filer thresholds. Under the proposed amendments, any company that is not a large accelerated filer would become a non-accelerated filer.

Large Accelerated Filer Threshold

The proposed amendments would raise the public float threshold for becoming a large accelerated filer from $700 million to $2 billion. Public float would be calculated based on the average stock price over the last 10 trading days of the second fiscal quarter.

The proposal also would require the public float threshold to be met for two consecutive years before a company becomes a large accelerated filer and would require at least 60 consecutive calendar months of reporting before a company could become a large accelerated filer.

Non-Accelerated Filer Accommodations

If the proposed amendments were enacted, all non-accelerated filers would be exempt from the requirement to obtain an auditor’s attestation on a company’s internal control over financial reporting. However, non-accelerated filers would remain subject to the rules under Section 404(a) that require management to establish, maintain and assess the effectiveness of the company’s internal control over financial reporting.

The proposal would also extend the scaled disclosure requirements and accommodations currently available to smaller reporting companies and emerging growth companies to all non-accelerated filers. These accommodations would include:

• Scaled executive compensation disclosures
• No pay versus performance disclosure
• No say-on-pay or say-when-on-pay shareholder advisory votes
• Fewer years of required financial statements and reduced presentation requirements

The SEC estimates that 81% of public companies would be non-accelerated filers if the proposed amendments were in place today.

Small Non-Accelerated Filers

The proposal would also create a new subcategory of small non-accelerated filers for companies with total assets of $35 million or less for the two most recent years. These companies would receive an additional 30 days to file Form 10-K annual reports and an additional five days to file Form 10-Q quarterly reports.