On May 19, 2026, the Securities and Exchange Commission (SEC) released two proposals – a Registered Offering Reform Proposal and a Filer Status Proposal – in furtherance of its stated agenda to incentivize companies to either become or remain public.

Registered Offering Reform Proposal

The Registered Offering Reform Proposal aims to expand eligibility to conduct streamlined registered offerings and reduce the costs associated with conducting registered offerings. Specifically, the proposal would, among other things:

• Expand Form S-3 Eligibility: Form S-3 is a short-form registration statement that permits eligible issuers to streamline their offering process, including by conducting shelf offerings (i.e., offerings made on a delayed basis after the filing and effectiveness of the Form S-3) quickly in response to market conditions and the issuer’s capital requirements without waiting for further SEC review or action. The proposed amendments would eliminate current requirements that (i) in order to be eligible to use Form S-3, issuers must be subject to Securities Exchange Act of 1934, as amended (Exchange Act), reporting requirements for at least 12 months, and (ii) in order to register an unlimited amount of securities on Form S-3, the issuer’s public float^[1] must be at least $75 million (i.e., this proposal would eliminate the current “baby shelf” requirements). Notably, eligibility to use the form would still be conditioned on the issuer being current and timely with respect to its Exchange Act reports and materials. In its proposing release, the SEC noted that public securities offerings provide investors with protections not available in the private markets, such as more robust disclosures; therefore, in the SEC’s view, expanding the population of issuers eligible to use Form S-3 and encouraging such issuers to use Form S-3 in lieu of raising capital in the private markets would benefit both issuers and investors.

 

• Revise Form S-1 to Expand Incorporation by Reference Accommodations: Form S-1 is a long-form registration statement often used for initial public offerings of securities or by issuers ineligible to use Form S-3. The proposed amendments would eliminate the requirement that in order to use backward incorporation by reference in Form S-1, an issuer must have filed an Annual Report on Form 10-K for its most recently completed fiscal year. This change is designed to reduce compliance and disclosure costs associated with preparing a Form S-1 by eliminating the need to repeat disclosures that have already been publicly filed (such as in a Form 10 for an issuer that has not yet filed a Form 10-K for its most recently completed fiscal year). The proposed amendments would also provide that any issuer that is permitted to backward incorporate by reference in Form S-1 would be permitted to forward incorporate by reference in Form S-1 – an accommodation currently available only for smaller reporting companies. This change is designed to reduce issuer costs by eliminating the need to file duplicative Form S-1 updates through post-effective amendments or prospectus supplements, while maintaining investor access to the relevant substantive disclosure, because such forward-incorporated filings would be easily accessible through the SEC’s EDGAR system.

 

• Preempt State Securities Registration and Qualification for Any Registered Offering: Section 18(a) of the Securities Act of 1933, as amended (Securities Act), provides that states may not require registration or qualification of “covered securities,” and Section 18(b)(3) of the Securities Act provides that covered securities include those securities offered and sold to “qualified purchasers.” The SEC is proposing to add a new definition of “qualified purchasers” to preempt state securities law registration and qualification requirements for any registered offering. Currently, preemption only applies to registered offerings of securities that are listed on a national securities exchange – it does not apply to registered offerings of unlisted securities. Notably, many real estate investment trusts (REITs) conduct registered offerings of unlisted securities on Form S-11. These non-traded REITs are currently subject to state securities law requirements and the Statement of Policy Regarding Real Estate Investment Trusts (REIT Guidelines) developed by the North American Securities Administrators Association (NASAA). Recent amendments to the NASAA REIT Guidelines impose certain limitations on non-traded REITs, including (i) limiting a non-accredited investor’s aggregate investments in non-traded REITs to 10% of such investor’s liquid net worth, and (ii) requiring minimum annual gross income or net worth standards of non-traded REIT investors. The SEC’s proposal would preempt and therefore render ineffective these and any other state registration or qualification requirements for registered offerings of non-listed securities. The SEC’s proposal aims to enhance efficiency, reduce compliance costs, and promote capital formation by reducing redundant regulatory oversight and, therefore, simplify the process for conducting registered offerings of unlisted securities. In the SEC’s view, this proposal is consistent with the public interest and protection of investors as investors will have the benefit of the federal securities laws requirements applicable to registered offerings of unlisted securities, including registration statement disclosures (e.g., risk factors, audited financial statements, and management’s discussion and analysis of financial condition and results of operations), SEC review of registration statements, and post-registration periodic reporting requirements.

Issuers should continue to operate in accordance with current Form S-3, Form S-1, and state registration and qualification requirements because the proposed rule and form changes are not yet effective and may not be in their final form. The SEC is soliciting comments on the proposed amendments until July 27, 2026.

Filer Status Proposal

The Filer Status Proposal would streamline the existing public company filer status framework in an effort to provide simplified compliance and reduced costs for a majority of existing registrants and encourage other companies to go public by reducing the current regulatory impediment. Currently, a public company is categorized as one or potentially more than one of the following filer statuses: (i) large accelerated filer, (ii) accelerated filer, (iii) non-accelerated filer, (iv) smaller reporting company, or (v) emerging growth company. Periodic reporting deadlines vary depending on the filer status of the public company. For example, a large accelerated filer must file its Annual Report on Form 10-K within 60 days after its fiscal year end and its Quarterly Reports on Form 10-Q within 40 days after its fiscal quarter end. In contrast, a non-accelerated filer must file its Annual Report on Form 10-K within 90 days after its fiscal year end and its Quarterly Reports on Form 10-Q within 45 days after its fiscal quarter end. Disclosure requirements and accommodations also vary depending on the filer status of the public company. For example, smaller reporting companies and emerging growth companies are only required to provide two years (instead of three years) of audited financial statements in Forms 10-K, and emerging growth companies are not required to provide pay versus performance disclosure in proxy statements or to solicit shareholder say-on-pay or say-on-pay frequency advisory votes.

The SEC’s proposal would do the following:

• Raise the public float threshold for becoming a large accelerated filer from $700 million to $2 billion.
• Require the determination of public float to be based on the average stock price over the last 10 trading days of the second fiscal quarter. Currently, the determination of public float is based on the stock price on the last trading day of the second fiscal quarter. This proposed change is designed to protect against a single day of stock price volatility resulting in a change in filer status.
• Establish that a registrant will only transition into or out of a filer status after the registrant has been above or below the public float threshold for two consecutive years.
• Require that a registrant cannot become a large accelerated filer until such registrant has been subject to the Exchange Act reporting requirements for 60 consecutive calendar months. Currently, a registrant must be subject to Exchange Act reporting requirements for just 12 months before it can be classified as a large accelerated filer.
• Eliminate the accelerated filer and smaller reporting company filer statuses so any registrant that is not a large accelerated filer would become a non-accelerated filer.
• Apply to non-accelerated filers the current disclosure accommodations applicable to smaller reporting companies and emerging growth companies.
• Create a new category of small non-accelerated filers for companies with total assets of $35 million or less for the two most recent fiscal years. These companies would have until 120 days after their fiscal year end to file Forms 10-K and until 50 days after their fiscal quarter end to file Forms 10-Q.

The SEC estimates that these proposed changes would decrease the percentage of large accelerated filers from 35.4% to 19.2% and increase the percentage of registrants permitted to provide scaled-back disclosures for smaller reporting companies from approximately 44% to approximately 81%.

If this proposal is ultimately adopted in its current form, registrants that fit the new definition of non-accelerated filer would benefit from significantly scaled back disclosure requirements, particularly as they relate to executive compensation. In addition to those accommodations discussed in the lead-in paragraph, these registrants would no longer be required to provide CEO pay ratio disclosure, would be required to provide only two years (instead of three years) of summary compensation table information, and would be required to provide executive compensation disclosure for only three (instead of five) named executive officers, among other accommodations. The SEC acknowledges that this proposal would result in reduced disclosure for investors; however, it notes that investors may benefit from more companies choosing to become or remain public as a result of the proposal, thereby providing more public market investment opportunities for investors and greater transparency as compared to private markets.

Registrants should continue to operate in accordance with their current filer status requirements because the proposed rule is not yet effective and may not be in its final form. The SEC is soliciting comments on the proposal until July 20, 2026.

^[1] The SEC defines “public float” as the aggregate value of the issuer’s voting and non-voting common equity held by non-affiliates.