Key Takeaways:
- Expanded Form S-3 eligibility and shelf access
- Greater flexibility in offering communications
- Streamlined Form S-1 disclosures
- Federal preemption of state blue sky laws
- Simplified filer categories with broader scaled disclosure benefits
On May 19, 2026, the Securities and Exchange Commission (the “SEC”) proposed significant amendments to its rules governing public securities offerings and public company reporting, with the goal of encouraging more initial public offerings and facilitating capital formation. If adopted, these amendments would represent the most significant rule changes to public securities offering and public company reporting requirements since the 1990s.
Public Securities Offering Reform
The first proposal, entitled “Registered Offering Reform,” represents a comprehensive modernization of the registered public securities offering framework. The proposal seeks to expand issuer eligibility for Form S‑3 and shelf registration, broaden access to communication and offering flexibilities, modernize Form S‑1 disclosure practices, and reduce state-level regulation.
Summary of Key Changes
I. Expansion of Form S-3 Eligibility
Under the current framework, larger public companies are eligible to raise an unlimited amount of capital, sometimes without SEC review, by using a streamlined registration statement on Form S-3 as opposed to using the more cumbersome Form S-1 registration process.
The proposed rules, if adopted, would:
- Eliminate the seasoning requirement requiring a company to be subject to public reporting for 12 months to utilize Form S-3.
- Eliminate all transaction requirements to use Form S-3, including “baby shelf” rules. If adopted, any company eligible to use Form S-3 would be able to raise an unlimited amount of capital using Form S-3.
As a result of these proposed rules, a much broader group of companies, including smaller and newly public companies, would be able to access shelf registration and streamlined offering processes.
II. Expansion of Communication Flexibility
Under the current framework, Well-Known Seasoned Issuers (“WKSIs”), which are public companies with a public float of $700 million or more, benefit from automatic registration of Form S-3 without SEC review and communication flexibilities in public offerings, including use of free writing prospectuses without certain delivery requirements and pre-filing communications.
The proposed rules, if adopted, would:
- Eliminate the WKSI concept and replace with two new categories of companies: Eligible Listed Issuers (“ELIs”) and Seasoned Eligible Listed Issuers (“SELIs”).
- ELIs are Form S-3 eligible companies with a class of securities registered on a national securities exchange, such as the NYSE or NASDAQ, and they would benefit from expanded communication flexibility, broader use of free writing prospectuses, and streamlined registration tools.
- SELIs would be a subset of ELIs that also have at least 12 months of Exchange Act reporting history and would be eligible for additional benefits, including automatic shelf registration and pay-as-you-go fee provisions.
III. Modernization of Form S-1
Form S‑1 is the default long-form registration statement used by issuers that do not qualify for Form S‑3, including IPO issuers. Although Form S‑1 permits backward incorporation by reference for certain issuers that have filed an annual report on Form 10‑K for their most recently completed fiscal year, forward incorporation by reference is currently available only to smaller reporting companies.
The proposed amendments would permit forward incorporation by reference into Form S‑1 for all eligible issuers, not just smaller reporting companies. In addition, the amendments would eliminate the requirement that an issuer must have filed a Form 10‑K for its most recently completed fiscal year to use backward incorporation by reference.
IV. Federal Preemption of State Blue Sky Laws
Under the current framework, securities listed on a national exchange are considered “covered securities” and are therefore exempt from state blue sky registration requirements. However, registered offerings of securities that are not listed on a national securities exchange, such as those listed on the OTC Markets, are not treated as covered securities and remain subject to overlapping federal and state regulation, including state-by-state registration requirements.
The proposed amendments would expand federal preemption to include all purchasers in registered securities offerings. As a result, securities offered and sold in registered offerings would qualify as covered securities, effectively centralizing regulatory oversight at the federal level and eliminating state registration requirements.
Additional details are included in the 511-page proposed rule and the SEC’s accompanying Fact Sheet.
Filer Status and Emerging Growth Company Accommodations Reform
The second proposal, entitled “Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies” seeks to extend disclosure scaling and other accommodations currently utilized by smaller or emerging growth companies to approximately 81% of all current public companies.
Background
The current framework places Exchange Act reporting companies into five filer categories: large accelerated filer (LAF), accelerated filer (AF), non-accelerated filer (NAF), smaller reporting company (SRC), and emerging growth company (EGC). Please see our LEGALcurrents “SEC Amends Definitions of Accelerated and Large Accelerated Filers” and “SEC Amends Definition of Smaller Reporting Company and Expands Scaled Disclosure Eligibility” for additional discussion on filer status. Each category has certain eligibility thresholds and disclosure requirements.
Summary of Key Changes
The proposal would consolidate the five existing categories into two: LAFs and NAFs, while revising eligibility thresholds and expanding access to accommodations.
I. LAF Status
Under the current framework, an issuer qualifies as a LAF if it has a public float of at least $700 million, has been subject to Exchange Act reporting for at least 12 months, and has filed at least one annual report. LAFs are subject to the most stringent reporting requirements, including accelerated filing deadlines and auditor attestation requirements under Section 404(b) of the Sarbanes‑Oxley Act.
The proposed rules, if adopted, would:
- Raise the LAF public float threshold from $700 million to $2 billion.
- Require that threshold to be met for two consecutive years rather than annually.
- Require at least 60 months of reporting history before initial qualification.
- Change public float calculation requirement to use an average stock price over the last 10 trading days of the second fiscal quarter, rather than a single point-in-time measurement.
LAFs would remain subject to strict reporting and internal control requirements, including the auditor attestation requirements.
II. NAF Status
Under the proposed amendment, all issuers who are not LAFs would fall under NAF status. All NAFs would be permitted to:
- rely on the disclosure accommodations currently reserved for SRCs and EGCs, including reduced executive compensation disclosure, simplified financial statement requirements, and other scaled Regulation S‑K and Regulation S‑X obligations.
- NAFs would not be subject to the auditor attestation requirements under Section 404(b) of the Sarbanes Oxley Act.
III. Small Non-Accelerated Filer Sub-Category
The proposal would introduce a new subcategory of NAFs—Small Non‑Accelerated Filers (“SNFs”)—for smaller issuers. An issuer would qualify as an SNF if it is a NAF and has total assets of $35 million or less as of the end of each of its two most recent second fiscal quarters.
SNFs would receive extended filing deadlines, with 120 days (instead of 90 days) to file Form 10‑K and 50 days (instead of 45 days) to file Form 10‑Q. Newly public companies would generally be eligible to rely on NAF (and SNF, if applicable) accommodations for a period of five years.
Additional details are included in the proposed rule and the SEC’s accompanying Fact Sheet.
How to Submit a Public Comment
The public comment period for both proposals will remain open for 60 days following publication of the proposed rules in the Federal Register. If you are interested in submitting a comment letter, please contact a member of Harter Secrest & Emery LLP’s Securities and Capital Markets group or you can submit an electronic comment by using this Form or by sending an email to rule-comment@sec.gov. Please include File Number S7-2026-18 on the subject line. Paper comments may be sent to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090, and all submissions must include the File Number S7-2026-18.
We will monitor this proposal and provide updates as appropriate. In the interim, if you have any questions about this proposal, please contact a member of Harter Secrest & Emery LLP’s Securities and Capital Markets group.