Key Takeaways:

• On May 19, the Securities and Exchange Commission (SEC) proposed amendments to simplify its filer status framework by: (1) consolidating filer status categories; (2) raising the large accelerated filer public float threshold from $700 million to $2 billion; and (3) through these and related actions, significantly extending disclosure scaling and other accommodations to approximately 81% of all current public companies.
• The proposal would: (1) create a minimum five-year on-ramp by requiring 60 consecutive calendar months of reporting before a newly public company can become a large accelerated filer; (2) extend smaller reporting company (SRC) and emerging growth company (EGC) scaled disclosure accommodations to all non-accelerated filers; and (3) provide additional filing deadline extensions for a new category of filer status for the smallest public companies, small non-accelerated filers with $35 million or less in total assets.
• The public comment period will remain open for 60 days after publication in the Federal Register, and the rule could be adopted as early as the first half of 2027.
• The proposal was announced concurrently with the SEC’s registered offering reform proposal and is part of SEC Chairman Paul Atkins’ broader agenda to reduce regulatory burdens and incentivize companies to go and stay public.

What Is the SEC’s Proposed Filer Status Reform?

Currently, there are five filer statuses:

1. Large accelerated filer
2. Accelerated filer
3. Non-accelerated filer
4. Smaller reporting company
5. Emerging growth company

Under the current framework, filing deadlines and disclosure requirements vary depending on whether a registrant is classified as a large accelerated filer (60-day Form 10-K filing deadline, full disclosure), accelerated filer (75-day Form 10-K filing deadline, full disclosure), or non-accelerated filer (90-day Form 10-K filing deadline), and certain scaled disclosure accommodations are available to registrants that separately qualify as SRCs or EGCs. These five filer statuses can overlap, resulting in a layered compliance framework in which large accelerated filers and accelerated filers are also subject to a mandatory auditor attestation on internal control over financial reporting.

The SEC’s proposal would consolidate the existing filer status categories by eliminating the accelerated filer and SRC designations and creating a streamlined framework consisting of large accelerated filers, non-accelerated filers, a sub-category of small non-accelerated filers and EGCs. Under the proposal, the disclosure scaling and accommodations currently available only to SRCs and EGCs would be extended to all non-accelerated filers, which would encompass approximately 81% of all current public companies. However, large accelerated filers, the companies subject to the most extensive requirements, would still account for approximately 93.5% of total public market float.

The proposal is intended to reduce costs and regulatory burden for smaller public companies while maintaining robust disclosure for the largest companies that dominate public market capitalization.

What Are the Key Changes to Filer Status Categories Under the Proposal?

First, the proposal would revise the large accelerated filer public float threshold and corresponding public float calculation. The public float threshold for large accelerated filer status would be raised from $700 million to $2 billion, and the calculation would be based on the average stock price over the last 10 trading days of the second fiscal quarter (rather than a single-day measurement), multiplied by shares outstanding as of the last day of that quarter. In addition, the proposal would require two consecutive years above or below the threshold before a company transitions into or out of large accelerated filer status, providing greater filer status predictability for companies.

Second, the proposal would extend the seasoning period required before a company can become a large accelerated filer following the time the company has initially become a public reporting company. The minimum seasoning period would be increased from 12 consecutive calendar months to 60 consecutive calendar months, meaning a company must be a reporting company for at least five years before it can become a large accelerated filer, regardless of public float. As such, all new public companies would be classified as non-accelerated filers for a minimum of five years after their initial public offering.

Third, as noted above, the proposal would simplify the filer status framework by eliminating the accelerated filer and SRC designations, so that all registrants that are not large accelerated filers would be classified as non-accelerated filers.

Fourth, the proposal would create a new subcategory of small non-accelerated filers for companies with $35 million or less in total assets. Intended to ease reporting requirements for small public companies, small non-accelerated filers would receive extended filing deadlines: 120 days after fiscal year end for Form 10-K filings (compared to 90 days for other non-accelerated filers) and 50 days after fiscal quarter end for Form 10-Q filings (compared to 45 days for other non-accelerated filers).

It is also worth noting that, due to the accommodations already provided to foreign private issuers (FPIs), FPIs that elect to comply with the rules and forms designated for FPIs (e.g., Form 20-F and Form 40-F) would not be eligible to use the proposed accommodations for non-accelerated filers discussed herein. The proposed amendments also do not revise the way an FPI filing on Form 20-F performs the public float determination for purposes of filer status, so there will be differences between the two public float determinations.

What Disclosure Accommodations Would Be Extended to Non-accelerated Filers?

Under the proposal, all non-accelerated filers would receive the disclosure accommodations currently available to SRCs and EGCs. These include:

1. Exemption from the internal control over financial reporting (ICFR) auditor attestation requirement under Section 404(b) of the Sarbanes-Oxley Act of 2002.
2. The ability to provide two (instead of three) years of audited financial statements, prepared in accordance with Article 8 of Regulation S-X.
3. Significantly reduced executive compensation disclosure.
4. Exemption from say-on-pay and say-on-pay frequency advisory votes.
5. A more limited description of business under Item 101 of Regulation S-K.
6. A scaled requirement to include two years (reduced from three years) of Management’s Discussion and Analysis disclosure in periodic reports.
7. Exemption from the requirement to include risk factor disclosure in Forms 10-K and 10-Q.

Notwithstanding these exemptions, companies may voluntarily elect to continue to provide the disclosures described above, and in various cases we expect companies to do so, particularly in light of investor expectations and existing market practices.

How Does the Proposal Create an On-Ramp for Newly Public Companies?

The 60-month seasoning period is one of the most significant aspects of the proposal, as it means every newly public company would start as a non-accelerated filer regardless of its public float, creating a minimum five-year on-ramp before large accelerated filer requirements could apply. Under the proposal, the on-ramp would be available to all new registrants, not just those meeting the EGC revenue threshold.

The proposal is designed to incentivize more companies to go public by reducing early compliance burdens, particularly the costly ICFR auditor attestation requirement, while giving new registrants time to develop the infrastructure and processes needed to potentially comply in the future with the more extensive large accelerated filer requirements. Under current rules, a company can become an accelerated filer or large accelerated filer after just 12 months of reporting if it meets the applicable public float thresholds, a timeline the SEC has described as insufficient for many newly public companies aiming to develop adequate compliance systems.

What Are the Benefits and Risks of the Filer Status Reform for Public Companies?

The proposal offers several potential benefits for public companies. The SEC estimates that the proposed amendments would significantly reduce annual compliance costs, with the elimination of the ICFR auditor attestation requirement representing one of the most significant cost savings. Additionally, the SEC noted that the streamlined filer status framework would reduce the complexity of filer status analysis, and the two-year lookback period for status transitions would eliminate the single-day volatility risk that exists under the current public float measurement methodology. As such, the potential reduction in compliance costs may contribute to more companies deciding to become and remain public companies.

However, the SEC also noted several potential concerns in the proposal. Specifically, reduced disclosure may affect investors’ ability to make informed investment and voting decisions, and exemption from the ICFR auditor attestation requirement may affect the reliability of financial reporting for newly exempt registrants. Companies currently classified as accelerated filers or large accelerated filers that would become non-accelerated filers would have longer filing deadlines, potentially delaying the availability of material information. The SEC has noted that companies may voluntarily continue to comply with higher disclosure standards if they believe doing so benefits their investors.

How Does the Filer Status Proposal Interact with the SEC’s Other Recent Proposals?

The filer status reform proposal was announced on the same day as the SEC’s Registered Offering Reform Proposal, as discussed in a Securities Law Exchange blog post (SEC Proposes Major Reforms to Registered Offerings: What Public Companies Need to Know), which would expand shelf registration availability and extend certain current well-known seasoned issuer benefits to domestic companies with exchange-listed equity, while eliminating public float and seasoning eligibility requirements for shelf registration.

As discussed in a prior Securities Law Exchange blog post (Flexibility in Reporting Frequency: Understanding the SEC’s Semiannual Reporting Proposal), the filer status proposal also builds on the semiannual reporting proposal issued on May 5, 2026, which would allow all public companies to voluntarily elect to file semiannual reports on a new Form 10-S in lieu of quarterly reports on Form 10-Q. These three proposals represent part of the SEC’s comprehensive effort to reform the public company reporting framework and reduce regulatory burdens for public companies.

Additional proposals in furtherance of this agenda are anticipated. The registered offering reform and filer status reform proposals are designed to work in tandem; as the filer status proposal extends disclosure accommodations to more companies, the registered offering reform would ensure those companies can continue to access the capital markets more efficiently through expanded shelf registration and other offering accommodations.

What Should Public Companies Consider in Evaluating the Filer Status Proposal?

Companies currently classified as accelerated filers or large accelerated filers that would become non-accelerated filers under the proposal should carefully evaluate the potential benefits of scaled disclosure against investor expectations, securities analyst coverage, contractual obligations and voluntary compliance considerations. Companies that have invested in robust ICFR controls may choose to maintain those systems even if the auditor attestation requirement no longer applies.

Companies should also consider whether to continue providing certain disclosures voluntarily, such as full executive compensation tables or risk factors in periodic reports, to maintain credibility with investors and analysts. Additionally, companies should review their contractual obligations, including credit agreements and indentures that may reference specific filer status categories that would be eliminated under the proposal.

When Will the SEC’s Filer Status Reform Take Effect?

The public comment period will remain open for 60 days after publication of the proposal in the Federal Register. The proposing release includes numerous questions requesting public comment on the full range of issues raised by the proposal. If adopted in the first half of 2027 and effective by August 2027, existing calendar-year registrants would assess their filer status under the new framework as of December 31, 2026. Under the proposed transition provisions, companies may assess their status at any time after the rules become effective, but no later than the day before the last day of their fiscal year in which the final rules take effect.

For example, assuming an effective date of August 1, 2027:

1. Calendar-year-end companies would assess filer status as of December 31, 2026.
2. The assessment may be completed any time between August 1, 2027, and December 30, 2027.
3. Companies that qualify as non-accelerated filers could begin using scaled accommodations in their next filing after completing the assessment.

Companies should monitor developments during the comment period, as the ultimate form of any final rule will likely be shaped by feedback received from investors, companies and other market participants. This is the latest in a series of posts covering the SEC’s proposals to reform the public company reporting framework, consistent with its broader focus on reducing regulatory burdens for public companies. We will publish subsequent posts with details as additional proposals are announced by the SEC.

If you have any questions about the proposed rule or need assistance submitting comments, please contact the authors or your relationship partner at Bass, Berry & Sims.