SEC Proposes Simpler Reporting Rules for Most Public Companies

The SEC has announced a proposed rule that would change how public companies are categorized for reporting purposes and increase the threshold at which companies are designated as large accelerated filers. These changes would significantly simplify the reporting obligations of more than 80% of public companies. This post summarizes the proposed rules.

Background: The Current Public Company Reporting Structure

Public companies are currently divided into five categories:

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

Some of these categories overlap, so some companies may meet the requirements of more than one category. For example, a company that meets the threshold to be an accelerated filer might also be an emerging growth company if fewer than five years have elapsed since its IPO.

A company’s designation affects both the timing of when its public reports must be filed with the SEC and what information must be included in those reports. Large accelerated filers’ public reports are due earlier than those of accelerated or non-accelerated filers. Smaller reporting companies and emerging growth companies are not required to include as much information in their reports as other public companies.

The Proposed New Filer Categories

The SEC has proposed to simplify how filers are categorized into three designations (note that I’m just hitting highlights of the requirements; see the SEC fact sheet and full 318-page proposal for more detailed information).

Large Accelerated Filers

This category would comprise the largest companies that have been public for at least five years: those with a public float of $2 billion or more (a notable increase from the $700 million threshold established in 2005).

Non-Accelerated Filers

This category would include all other public companies: those that have been public for fewer than five years (regardless of size) and those that have been public longer but have a public float of less than $2 billion.

Small Non-Accelerated Filers

Non-accelerated filers with assets of $35 million or less.

New Filer Categories: The Stats

According to the SEC, just over 80% of current public companies would be non-accelerated filers (18% would be small non-accelerated filers). Just under 20% of public companies would be large accelerated filers, but SEC Chair Paul Atkins notes that these companies represent almost 94% of total public market float.

How the Proposal Changes Public Company Reporting Obligations

For the roughly 20% of companies that would still be large accelerated filers, the proposal doesn’t really change anything: they would still be subject to the same deadlines and reporting obligations as they are now. (Stay tuned, though: the SEC is working on a separate proposal to overhaul Reg S-K that has the potential to materially update the form and substance of required public disclosures).

The proposal could change considerably more for other companies. As noted in the SEC’s fact sheet it would:

Extend to all non-accelerated filers the same disclosure scaling and other accommodations currently available to smaller reporting companies and emerging growth companies.

This proposal would also likely have little effect, if any, on emerging growth companies. To varying degrees, however, it would materially reduce the disclosures required of accelerated filers, non-accelerated filers, and smaller reporting companies.

For non-accelerated filers, the proposal would:

• Eliminate the requirement to hold Say-on-Pay votes (and related Say-on-Pay- Frequency and Say-on-Parachute-Payment votes).
• Eliminate the CD&A requirement for the company’s proxy statement.
• Reduce the number of officers for which compensation disclosure is required to the CEO and two other highest-paid officers (and up to two former officers).
• Limit the Summary Compensation Table to two years of data
• Eliminate many tabular disclosures relating to executive compensation, including (but not limited to) the Grants of Plan-Based Awards Table, Option Exercises and Stock Vested Table, and Pay Versus Performance Table.
• Eliminate the CEO Pay Ratio Disclosure.

Small non-accelerated filers would be subject to the same disclosures as other non-accelerated filers, but with extended filing deadlines: an additional 30 days to submit their 10-K and an extra five days for 10-Q filings.

Elimination of Internal Controls Audit Requirement

In addition to reduced disclosures, non-accelerated filers would no longer have to obtain an auditor attestation for their financial reporting internal controls.

And There’s More: SEC Proposal on Registered Offerings

The SEC has also proposed significant changes to the rules and forms governing registered offerings, notably those made on Form S-3. This topic falls well outside the scope of equity compensation (S-3 registration statements are typically used for secondary offerings, not shares offered through equity plans), which also puts it outside the scope of the NASPP Blog. TheCorporateCounsel.net has a great summary of the proposal.

More Information

Numerous law and consulting firms have issued memos discussing the SEC’s proposals. Here are a few to check out: Compensia, Cooley, WTW, and Venable.

Submit a Comment on the Proposal

The SEC is accepting comments on the proposal through July 20, 2026.