On May 19, 2026, the SEC proposed sweeping reforms to the process by which US public companies raise capital in SEC-registered offerings, and to the requirements for public company reporting under the Exchange Act. These changes would, if adopted, dramatically simplify public securities offerings by post-IPO companies, and greatly reduce the burden of complying with ongoing SEC reporting. As SEC Chairman Paul Atkins put it, the proposals are “the first important steps toward transforming the SEC’s regulatory framework for public companies” to motivate companies “to go and stay public.” 

The proposals would apply to US companies that are already public, introducing dramatic efficiencies across the board. These changes are also intended to make IPOs more attractive for private US companies considering whether to go public. As those companies weigh the benefits and burdens of life as a public company, they will doubtless welcome streamlined access to the public capital markets and reduced public reporting burdens, such as:

• expansion of emerging growth company (EGC) status;
• immediate access to short-form registration on Form S-3;
• expanded availability of an exemption from the costly auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act (SOX), covering:
  • an estimated 81% of existing public companies; and
  • all newly IPO’d companies for at least five years;
• expanded ability to use automatic shelf registration statements, which do not require SEC Staff review and become effective immediately;
• reduced requirements for management’s discussion and analysis of financial condition and results of operations (MD&A); and
• simplified and reduced executive compensation disclosure.

Key points to note about the proposals:

1. Streamlining Public Company Access to Capital Markets

A. Form S-3 and Related Improvements

• Form S-3 unshackled from one-year seasoning and $75 million public float requirements. Newly public companies would be able to use Form S-3 immediately. The requirements to have been public for 12 calendar months and to have at least $75 million in public float would no longer apply. This would unlock the benefits of Form S-3 for newly public companies conducting post-IPO follow-on offerings, as well as for public companies with a smaller public float whose offering sizes are currently limited by the “baby shelf” rules. The changes would also permit primary at-the-market (ATM) offerings immediately post-IPO without the need to wait one year and to satisfy the public float requirement, providing these companies with immediate access to an efficient means of raising equity (subject to post-IPO lockups).
• Well-known seasoned issuer (WKSI) benefits broadened to a new category of companies. Automatic shelf registration will no longer require a $700 million minimum public float (or $1 billion principal amount of non-convertible debt). Many WKSI benefits would extend to all Form S-3 shelf-eligible companies. The proposal replaces the concept of a WKSI with two new categories of companies:
  • ELIs. Eligible listed issuer (ELI), defined as an exchange-listed company that meets Form S-3’s revised registrant requirements. ELIs would be able to use some accommodations currently available only to WKSIs – but not automatic shelf registration. These include pay-as-you-go filing fee payment; the ability to add securities of a new class to a shelf via post-effective amendment; the ability to omit whether a shelf is primary or secondary; and the ability to omit the plan of distribution.
  • SELIs. Seasoned eligible listed issuer (SELI), defined as an ELI that has been subject to Exchange Act reporting for at least 12 calendar months. SELIs would be able to file automatic shelf registration statements, as WKSIs now can. Because there would no longer be a minimum public float or minimum debt issuance requirement for use of automatic shelf registration, many more public companies will be able to take advantage of immediate SEC registration without the need to wait for SEC Staff review.

Only US public companies could qualify as ELIs and SELIs, whereas foreign private issuers (FPIs) would remain subject to the current WKSI rules.

• All shelf-eligible issuers can omit selling securityholder information. All revised Form S-3 shelf-eligible issuers, both ELIs and SELIs, could omit the identities of selling securityholders and the amount of securities that are being registered on their behalf. Currently, only WKSIs can omit this information in full.
• Technical amendments to make Form S-3 more usable. These include:
  • Limited cure period for one untimely filing. While Form S-3 eligibility would still require companies to be current and timely in their Exchange Act reporting, a company with no more than one untimely filing in the last 12 months could retain eligibility if the filing is made within seven calendar days of the original due date (without any extension under Rule 12b-25). The new cure mechanism would help address the harsh result of losing Form S-3 eligibility for a single untimely Exchange Act report filed shortly after its deadline.
  • Absence of defaults requirement eliminated. Companies could use Form S-3 even if they had defaulted on material amounts of debt or leases, or had failed to make payments on preferred stock. Form S-3 is currently not available if a company has (a) failed to pay any dividend or sinking fund installment on preferred stock; or (b) defaulted (i) on any installment on indebtedness for borrowed money, or (ii) on any rental on one or more long term leases, if those defaults are for material amounts, until the company has filed audited annual financial statements that reflect such failure or default.
• New category of ineligible issuers and bad actors, as well as FPIs and foreign governments, cannot use Form S-3. Form S-3 would not be available to:
  • a “BSP issuer,” defined as a company (or predecessor) that is, or during the past three years was:
    • a blank check company;
    • a shell company other than a business combination related shell company, or a special purpose acquisition company (SPAC) (although FPI de-SPAC entities are BSP issuers); or 
    • a penny stock issuer;
  • a company that, within the past three years, was a bad actor, e.g., convicted of certain federal securities law violations, or made the subject of decrees or orders prohibiting certain conduct or activities regarding the antifraud provisions of the federal securities laws; 
  • a company that has filed a registration statement that is the subject of any pending stop order proceeding or has been the subject of any stop order within the past three years;
  • a company that is the subject of any pending administrative cease-and-desist proceeding; or 
  • an FPI or a foreign government.

B. Form S-1 Modifications

• Incorporation by reference expanded for Form S-1. Form S-1 would become easier and more convenient to use.
  • Form S-1 would serve as a short-form registration statement for more issuers by generally permitting both backwards incorporation by reference (i.e., incorporation of existing SEC filings) regardless of the length of time the company has been a reporting issuer, as well as forward incorporation by reference (i.e., incorporation of SEC filings after effectiveness). 
  • Incorporation by reference would not, however, be available to BSP issuers or companies that are not current in their Exchange Act reporting. Currently, Form S-1 restricts backwards incorporation by reference to companies that have filed an annual report on Form 10-K, and limits forward incorporation by reference to smaller reporting companies (SRCs). 
• FPIs no longer able to use Form S-1. FPIs would be required to use Form F-1 instead of Form S-1.

C. Changes to Ease Registered Transactions, Regardless of Which Securities Act Form is Used

• Financial statement staleness extended for loss corporations. Loss corporations – i.e., companies that do not expect to report positive income after taxes for the most recently ended fiscal year and for at least one of the two prior fiscal years – would no longer face accelerated staleness of their annual financial statements for Securities Act registration purposes on the 45^th day after their fiscal year-end (i.e., February 14 for calendar-year filers). Instead, their financial statements would not go stale until the Form 10-K due date, similar to non-loss corporations.
• Blue sky laws preempted for all registered offerings. State securities, or blue sky, laws would be preempted for any offering registered with the SEC. Currently, blue sky laws are preempted in a public offering only if the securities are listed on a US national securities exchange, or rank equal or senior to listed securities (as in the case of debt). This would eliminate frictions that arise in certain types of public securities offerings, such as those by non-traded REITs.

2. Simplifying Public Company Reporting

• Emerging growth company (EGC) status expanded. The IPO on-ramp would extend for a full five years for most public companies by allowing them to retain EGC status far longer than they do today. The proposal would accomplish this change by limiting the large accelerated filer (LAF) category to companies with a $2 billion public float and 60 consecutive months of reporting history, rather than the current $700 million of public float and 12 consecutive months of reporting history. This would eliminate the often abrupt loss of EGC status for successful IPO companies that become LAFs after as little as one year of public reporting.
• LAF threshold raised to $2 billion; seasoning extended to 60 months. The LAF category would now be limited to companies with at least $2 billion in public float, up from the current $700 million. The seasoning period, or minimum time as an SEC reporting company to become an LAF, would extend to 60 consecutive calendar months, up from 12 months. This means most IPO companies would not become LAFs for the full five years after their IPO, regardless of size.

The public float calculation would use the average price of the company’s voting and non-voting common equity held by non-affiliates over the last 10 trading days of its second fiscal quarter, rather than a single trading day. Companies would transition into or out of LAF status only after staying above or below the public float threshold for two consecutive years.

• Expanded availability of exemption from SOX 404(b). SOX 404(b) mandates auditor attestation of management’s assessment of internal control over financial reporting (ICFR). SOX 404(b) is one of the single largest compliance obligations for public companies. NAFs, which already benefit from a SOX 404(b) exemption, would now include all companies that are not LAFs. All members of the newly expanded NAF category would hence enjoy the exemption. The SEC estimates that if the proposals were in place today, only 19% of current public companies would be LAFs (compared to 35% currently) and 81% percent would be NAFs. And all newly IPO’d companies would benefit from the SOX 404(b) exemption for a full five years, regardless of size.
• NAFs benefit from most EGC accommodations. Certain NAFs would not qualify as EGCs – for example, they may have annual revenue in excess of the EGC threshold. Those NAFs would benefit from the following EGC accommodations, even if they do not meet EGC requirements:
  • exemption from SOX 404(b); 
  • exemption from pay versus performance disclosure; 
  • exemption from shareholder advisory votes on executive compensation (say-on-pay);
  • exemption from the frequency of say-on-pay votes;
  • exemption from disclosure relating to golden parachute compensation in connection with mergers and acquisitions; and
  • the ability to elect to use, for five years after initial registration, the longer phase-in periods available to private companies to comply with new or revised GAAP standards.
• NAFs benefit from scaled executive compensation disclosure and other current SRC reporting accommodations. NAFs would benefit from the scaled executive compensation and other reporting accommodations currently available only to SRCs. For example: 
  • NAFs would include two, instead of three, years of MD&A and summary compensation table information;
  • NAFs would include executive compensation disclosure for only three, instead of five, named executive officers (NEOs); 
  • NAFs would omit the burdensome and expensive disclosure mandated in the compensation discussion and analysis (CD&A) narrative; and
  • NAFs could omit a host of currently required disclosures, including:
    • risk factor disclosure in Forms 10-K and 10-Q;
    • performance graph disclosure (except for NAFs that are investment companies);
    • supplementary financial information;
    • quantitative and qualitative disclosures about market risk;
    • compensation policies and practices related to risk management, pay ratio disclosure, and specified executive compensation disclosure tables, including grants of plan-based awards table, pension benefits table, option exercises and stock vested table, and nonqualified deferred compensation table;
    • policies and procedures for the review, approval, or ratification of related party transactions; 
    • Compensation Committee interlocks and insider participation disclosure, and the Compensation Committee report;
    • Audit Committee financial expert disclosure in the first annual report; and
    • resource extraction issuer payments to a government for commercial development of oil, natural gas, or minerals.
• NAF financial statement requirements track current reduced SRC reporting. NAF financial statements would be governed by S-X Article 8, which currently covers only SRC financial statements. That would allow NAFs to:
  • omit separate financial statements of significant equity investees under S-X Rule 3-09; 
  • provide two, rather than three, years of audited financial statements;
  • provide a more condensed format for financial statements of acquired businesses than S-X Rule 3-05 currently requires; and
  • apply more permissive staleness dates.
• Transition provisions. Companies would assess their LAF or NAF status as of the end of their fiscal year before effectiveness of the final rules. A company that qualifies as a NAF after its initial filer status assessment can use the accommodations available to NAFs in its next SEC filing after completing the assessment. Companies could assess their status at any time after effectiveness of the final rules but not later than the day before the last day of their fiscal year in which the final rules become effective. For example, if the final rules become effective on January 15, 2027, then calendar-year companies:
  • would, not later than December 30, 2027, assess their filer status as of December 31, 2026; but
  • could complete that assessment as of any date between January 15 and December 30, 2027. 

Comments on both proposals are due within 60 days after publication in the Federal Register, an uncertain process that can take several weeks.