Proposal would raise large accelerated filer threshold, create five-year IPO on-ramp, and expand scaled disclosures.

This is the second of two companion alerts. See also: SEC Proposes Major Reforms to Shelf Registration Eligibility.

COMMENT DEADLINE: JULY 20, 2026

Comments on Release No. 33-11419 are due by July 20, 2026 (60 days after Federal Register publication).

What Happened

In May 2026 the Securities and Exchange Commission (SEC) proposed Release No. 33-11419 (Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies), which would simplify the SEC’s filer-status framework by eliminating the accelerated filer and smaller reporting company categories, leaving registrants generally classified as either large accelerated filers or non-accelerated filers for reporting and disclosure purposes. The proposal would also create a five-year IPO on-ramp by requiring 60 consecutive months of Exchange Act reporting history before a company can become a large accelerated filer, ensuring that no newly public company faces full large accelerated filer compliance obligations for at least five years. EGC status, which is a statutory category under the JOBS Act, would remain, but the practical need to rely on it would be reduced. Additionally, the proposal would extend many scaled disclosure accommodations currently available to EGCs and SRCs to non-accelerated filers generally. According to the SEC, approximately 81% of reporting companies would qualify as non-accelerated filers under the proposal, though these companies represent only 6.5% of total market public float.

Why This Matters

The proposal reflects a broader SEC effort – framed by Chairman Atkins as part of his “Make IPOs Great Again” agenda – to reduce compliance burdens for smaller and mid-sized reporting companies while maintaining investor protections for the largest issuers. The release emphasizes the five-year IPO on-ramp as a central feature, signaling the Commission’s intent to encourage companies to go and stay public. If adopted, the reforms could significantly alter disclosure obligations, internal control compliance costs, and filing timelines for a large majority of public companies. These reforms are designed to work in tandem with a companion offering reform proposal (Release No. 33-11418), which would expand access to Form S-3 shelf offerings and extend WKSI-like benefits to a broader class of exchange-listed issuers. 

Key Changes

Large accelerated filer: higher threshold, longer runway

The proposal makes several changes to the large accelerated filer criteria, effectively narrowing the category so that only the largest registrants are subject to the most comprehensive disclosure obligations:

	Current	Proposed
Public Float Threshold	$700 million	$2 billion
Float Measurement Period	Closing price on last business day of Q2	Average stock price over last 10 trading days of Q2
Seasoning (Exchange Act Reporting)	12 calendar months	60 consecutive calendar months (5-year on-ramp)
Two-Year Lookback	Not required (single-year test)	Must be above public float threshold for 2 consecutive fiscal years
Exit / Transition Mechanics	Separate lower large accelerated filer-to-accelerated filer threshold and related transition rules for accelerated filers and SRCs	Must be below public float threshold for 2 consecutive years

A company must satisfy both the 60-month seasoning requirement and the increased two-consecutive-year public float threshold of $2 billion before it can become a large accelerated filer.

The two-year lookback for both entry into and exit from large accelerated filer status is designed to reduce the likelihood that a single period of abnormal stock price activity will trigger a filer status change, providing greater stability and predictability.

Scaled disclosures for non-accelerated filers

Under the proposed framework, any reporting company that does not qualify as a large accelerated filer would be classified as a non-accelerated filer. Subject to specified exceptions, non-accelerated filers would receive many of the scaled disclosure accommodations currently available to SRCs and EGCs including:

• Two years (not three) of audited financial statements.
  Scaled executive compensation disclosure (three NEOs, no CD&A).
• Exemption from say-on-pay, say-on-frequency, and golden parachute advisory votes, as well as pay-versus-performance disclosure.
• Exemption from ICFR auditor attestation under Section 404(b) of the Sarbanes-Oxley Act (management’s own ICFR assessment under Section 404(a) would still be required, and financial statement auditors would continue to obtain an understanding of ICFR and perform control-related procedures where required by applicable auditing standards).
• Exemption from disclosure in Item 404(b) of Regulation S-K describing policies and procedures for the review, approval, or ratification of related party transactions, but all filers would be required to report related party transactions exceeding $120,000 under Item 404(a), which would replace the current SRC-specific threshold of the lesser of $120,000 and 1% of average total assets.

As part of the SEC’s proposed “on-ramp” for public companies, non-accelerated filers could also elect to defer compliance with new or revised financial accounting standards issued by the Financial Accounting Standards Board (“FASB”) for the first five years after their IPO. Under the current proposal, that election would be irrevocable, meaning that it would be unavailable to a non-accelerated filer that did not initially elect to rely on the accommodation.

In addition, non-accelerated filers would be required to disclose material unresolved SEC staff comments in their annual reports, a requirement that currently applies only to large accelerated filers and accelerated filers. This would impose a new disclosure obligation on companies transitioning from accelerated filer to non-accelerated filer status. The SEC links this change to its companion offering reform proposal, noting that expanded access to shelf offerings that incorporate Exchange Act reports by reference heightens the importance of this disclosure to investors.

Continuing EGC relevance

EGC status, which is statutory under the JOBS Act, would remain, though the practical need to rely on most EGC-specific accommodations would be substantially reduced. Certain accommodations would remain exclusive to EGCs and would not extend to non-EGC non-accelerated filers, including statutory FOIA protection for confidentially submitted draft registration statements, the exemption from PCAOB requirements to communicate critical audit matters in the auditor’s report, and other PCAOB standard accommodations. Companies should continue to track EGC status and its expiration independently of filer status determinations, particularly where confidential submission or PCAOB accommodations remain strategically relevant.
 
Extended deadlines for smallest filers

A new subcategory of “smallest non-accelerated filers,” defined as non-accelerated filers with total assets of $35 million or less, would receive extended filing deadlines: 120 days for Form 10-K and 50 days for Form 10-Q. The extended deadlines would apply only after the asset threshold is met for two consecutive second-quarter measurement periods. For issuers filing an initial registration statement, eligibility for the extended deadlines would be assessed using total assets as of the end of the two annual periods presented in that registration statement.
 
Asset-backed issuers and FPIs

The proposed large accelerated filer and non-accelerated filer definitions would not apply to asset-backed issuers or to FPIs that elect to use FPI forms, unless such FPI qualifies as an EGC.
 
Transition

Existing reporting companies would assess filer status annually as of fiscal year-end under the final rules. When an issuer qualifies for a new filer status, the requirements and accommodations of that status would apply beginning with the Form 10-K for the fiscal year in which the filer status was determined, subject to any transition provisions adopted in the final rules.

What to do now

1. Assess preliminary impact. Review whether the proposed $2 billion threshold and 60-month seasoning requirement would change your company’s filer status, and identify which scaled disclosure accommodations would become available. This is a preliminary exercise—the thresholds may change before adoption.
2. Flag for your audit committee. The proposed Sarbanes-Oxley Act Section 404(b) exemption is likely the highest-impact change for affected companies and is worth flagging as an emerging development, even at the proposing-release stage. However, companies should carefully weigh whether to voluntarily maintain ICFR auditor attestation even if no longer required, as proxy advisory firms, institutional investors, and lenders may continue to expect it.
3. Consider commenting. Comments are due July 20, 2026. Companies with views on the proposed thresholds, transition mechanics, or scope of accommodations should consider participating in the comment process individually or through industry organizations.
4. Evaluate interaction with offering reform. The filer status proposal is expressly designed to work with the companion offering reform proposal. Companies that would transition to non-accelerated filer status should assess whether they would simultaneously gain expanded access to Form S-3 shelf registration and at-the-market offerings under the offering reform proposal and plan their capital markets strategy accordingly.
5. Consider market perception and disclosure strategy. Companies that would become non-accelerated filers should evaluate which disclosures they currently provide, such as risk factors, full executive compensation tables, and pay-versus-performance disclosure, and determine whether to continue providing any of them voluntarily. Several commentators have noted that eliminating disclosures investors have come to expect could create negative market signaling effects, particularly with institutional holders, proxy advisory firms, and rating agencies. Similarly, companies that have recently undergone an IPO as non-EGCs should consider how the five-year on-ramp may alter their near-term reporting calendars and Section 404 compliance planning.

Link to SEC release

For questions about this proposal or its implications for your company, please contact your Reed Smith relationship partner or any member of the Capital Markets and Public Company Advisory practice.
 
These proposals are subject to public comment and may be revised materially before adoption. The SEC has not proposed a fixed compliance date, and implementation timing could vary depending on the final rules as adopted. This alert is for informational purposes only and does not constitute legal advice.

Client Alert 2026-120