The SEC's filer status proposal: A path forward to simplify and reduce burdens

Over the coming months, the SEC's proposal to simplify filer statuses (available here), if adopted, could become a cornerstone of the SEC’s latest agenda to simplify its requirements and seek to encourage more companies to go and stay public. The proposed rules, if adopted, would reduce the SEC’s regulatory burdens for all newly public domestic public companies (for their first five years) and for all domestic public companies with a public float of less than $2 billion.

Although some public comments on the proposal to date have focused on investor protection concerns, it is notable that there are no new novel exemptions being proposed by the SEC in its filer status proposal, as further described below.¹ Rather, the filer status proposal would simplify the complicated web of filer statuses from five to only two simple groupings (large accelerated filers ("LAFs") and non-accelerated filers ("NAFs")) and offer the ability (but not the requirement) for an expanded number of public companies to use existing SEC exemptions.

Namely, these existing SEC exemptions include: reduced executive compensation disclosure requirements for domestic companies (currently available to only emerging growth companies ("EGCs"), and, in part, to smaller reporting companies ("SRCs")); and the exemption from the auditor's attestation of internal control over financial reporting ("ICFR") under Section 404(b) of the Sarbanes-Oxley Act of 2002 ("SOX") (currently available to non-accelerated filers and EGCs). Notably, however, the SEC's filer status proposal, if adopted, would not impact the SEC's bedrock requirements applicable to all public companies to establish and maintain SOX controls (internal control over financial reporting and disclosure controls and procedures), to conduct management assessments and certifications on the effectiveness of such controls,² and to obtain a financial statement audit of an independent registered public accounting firm. Foreign private issuers ("FPIs") filing on Forms 20-F or 40-F would remain largely unaffected by the proposed rules, as noted below.

I. Overview of proposal

Key aspects of the SEC's filer status proposal include the following:

• Only Two Categories of Filers, Instead of Five: The "accelerated filer" or "smaller reporting company" categories would be eliminated, and reliance on "emerging growth company" status would become unnecessary in most circumstances.
• New Public Float Threshold of $2 billion for Large Accelerated Filers: The public float threshold (1) for becoming a large accelerated filer ("LAF") would increase from $700 million to $2 billion; and (2) for becoming a non-accelerated filer ("NAF") would be less than $2 billion.³
• Public Float Methodology: Public float would be determined using the average price over the last 10 trading days of the second fiscal quarter of a public company's fiscal year, rather than a single day.
• 5 Year IPO On-Ramp. When going public, new public companies would have to be public for 60 consecutive calendar months (as opposed to the current 12 months) to become an LAF.
• 2-Year Transition Periods for Moving In and Out of LAF/NAF Status: In addition to meeting the 60-calendar-months requirement, public companies would have to meet the $2 billion public float threshold for two consecutive years to qualify as an LAF. Once a company qualifies as an LAF, it would need a public float of less than $2 billion for two consecutive years to qualify as an NAF.² For the proposed amended definitions in Rule 12b-2 and other select proposed rule changes, see Annex A.
• Filing Deadlines. The filing deadlines would remain the same for 10-Ks (90 days post fiscal year end for NAFs and 60 days post fiscal year end for LAFs) and for 10-Qs (45 days post quarter end for NAFs and 40 days post quarter end for LAFs).
• Transition Mechanics. If the proposal is adopted, existing registrants would perform an initial assessment after the final rules become effective, assessing public float for that fiscal year and the immediately prior fiscal year.
• Application to FPIs. The LAF/NAF definitions would not apply to FPIs filing on Forms 20-F and 40-F. The SEC is proposing to retain the current approach of requiring ICFR auditor attestation for issuers with a public float of $75 million or more (unless they are EGCs), rather than aligning to the new $2 billion LAF threshold, and to revise Form 20-F formally to reflect this. This would mean more stringent treatment for small- to mid-cap FPIs than for small- to mid-cap domestic companies.³ The SEC notes its ongoing, broader review of the FPI framework as the reason for not extending the proposed changes to FPIs at this time. FPIs filing on domestic forms would be treated like domestic filers for the purposes of the proposed amended framework.

Disclosure Exemptions. The exemptions proposed for NAFs would include the SEC's existing exemptions that are currently already available for non-accelerated filers, emerging growth companies and/or smaller reporting companies, which are, with respect to key disclosure items, as follows:

In addition, other disclosure requirements would be simplified and aligned across issuers, as follows:

• Related party disclosure requirements. The proposed amendments would:
  • Align disclosure requirements for all issuers by removing the additional requirements that apply to SRCs in Item 404(d), including the higher dollar threshold applicable to SRCs (the lesser of $120,000 or one percent of total assets) and the requirement for SRCs to disclose information on their parent companies under Item 404(d)(3).
  • Eliminate for NAFs the requirement to describe policies and procedures for the review, approval, or ratification of related party transactions, in line with the exemption already available for SRCs.
• Unresolved staff comment disclosure expanded to all issuers. The proposed amendments would expand and align disclosure requirements on material unresolved staff comments for all issuers. Currently, only accelerated filers, large accelerated filers and well-known seasoned issuers are required to disclose the substance of any material unresolved comments on Form 10-K. Under the proposed rule, all issuers (including NAFs) would be required to provide this disclosure, as the SEC noted that it would "serve as an important investor protection function."
• Deferred compliance with new or revised accounting standards. The proposed amendments would extend to all NAFs, not only statutory EGCs, the ability to elect deferred adoption of certain new or revised accounting standards until the date that non-issuer (i.e., private) companies are required to comply with the standard. This accommodation would be available only for the first five years following a registrant's initial public offering and a registrant's election not to use this accommodation would be irrevocable, meaning a registrant that elects not to use this accommodation could not later use it in future filings.

A New Category of Small Non-Accelerated Filers. The proposed amendments would also create a sub-category of small non-accelerated filers that would benefit from extended deadlines for periodic reports. NAFs with total assets of $35 million or less as of the end of each of the issuer’s two most recent second fiscal quarters would be eligible for extended periodic report deadlines of 120 days for Form 10-K (instead of 90 for NAFs) and 50 days for Form 10-Q (instead of 45 for NAFs). Small non-accelerated filer status would persist unless the registrant becomes an LAF or exceeds the $35 million assets threshold for two consecutive years.⁴ 

What happens to EGCs? EGC status, which is statutorily codified, would still exist under the proposed amendments, but reliance on this status would be unnecessary for most accommodations. EGCs would still benefit from certain accommodations that are not proposed as being extended to all NAFs, such as protection from Freedom of Information Act requests for draft registration statements confidentially submitted to the SEC prior to the EGC's initial public offering,⁵ and certain Public Company Accounting Oversight Board standard accommodations, such as the ECG exemption from the auditing standard requiring the communication of critical audit matters.

What About Asset-Backed Securities Issuers and Other Types of Issuers? The SEC proposes excluding asset-backed securities (“ABS”) issuers from the LAF and NAF determination framework, as ABS reporting largely does not rely on Regulation S-K, making SRC and EGC scaling largely inapplicable. The SEC also proposes a new Form 10-K checkbox to identify ABS issuers and would retain the existing 90-day annual report deadline for ABS issuers.⁶ 

II. Request for comment and comments to date

The proposing release includes 48 numbered questions covering a broad range of topics addressed by the proposal. The comment period closes July 20, 2026, and the proposal has already attracted significant attention. The comment record to date has been generally supportive, with many comments praising the SEC for the proposed changes. In addition, the comments so far reflect two principal themes:

• Section 404(b). Multiple commenters addressed the proposed changes to the 404(b) auditor attestation. Key arguments include that existing safeguards already render the attestation’s marginal value insufficient to justify its costs, that compliance burdens stem from audit firm methodology rather than company size alone, and that alternatives such as an internal audit function-led ICFR assurance within a company should be considered in lieu of outright removal.⁷
• Investor protection concerns. Several commenters cautioned that the proposal weakens investor protections, particularly objecting to the removal of say-on-pay for companies below the $2 billion public float threshold and arguing that the proposed 60-month on-ramp is unnecessary for certain companies.⁸

III. Key Considerations and Practical Steps for Public Companies

• Assess and model filer status. Companies may wish to consider how the proposed changes could affect their current classification and disclosure obligations. If final rules went effective in 2027, current LAFs near the $2 billion threshold could be required to track their average share price and public floats during the final 10 days of their second fiscal quarters in 2026 and 2025. Companies that would transition to NAF status should quantify the potential financial and operational benefits, including potential elimination of the Section 404(b) auditor attestation requirement (often a significant portion of annual audit fees), scaled executive compensation and MD&A disclosures, and eliminated say-on-pay obligations.
• Evaluate whether to continue voluntary full disclosures and/or ICFR attestation. Companies that would become NAFs would no longer be required to comply with LAF-level requirements, but may choose to do so to address proxy advisory firm and investor expectations, existing contractual obligations, litigation considerations or in anticipation of requalifying as an LAF in the future.
• Plan for revised audit and reporting calendars. Registrants that would newly qualify as NAFs or smaller non-accelerated filers may wish to take advantage of extended deadlines for periodic reports (for 10-Ks, the 90 day deadline for NAFs instead of a 60 day deadline for LAFs) and should assess the downstream impact on internal audit processes.
• Consider shareholder engagement on compensation. Because NAFs would not be required to conduct say-on-pay votes, companies should anticipate (if the proposed rules were adopted) that shareholders may seek alternative channels to express views on executive compensation, including through increased opposition or “against” votes in director elections (particularly for compensation committee members) and shareholder proposals.
• Consider the five-year accounting standard deferral. Newly public companies should consider evaluating whether electing deferred adoption of new accounting standards is consistent with their financial reporting strategy and capital markets plans, bearing in mind that the election is irrevocable and expires five years after registration.
• For FPIs, absent further rulemaking from the SEC, consider implications of filing on domestic forms. As drafted, the proposed amendments would apply to FPIs that file on domestic forms, but not to FPIs that file on FPI forms. In practice, the norm is for FPI to file on FPI forms. The exclusion of FPIs from the proposed rules could disadvantage some FPIs relative to similarly sized domestic-form filers that would receive NAF-level relief. To the extent the rules are adopted and the SEC does not separately adopt similar accommodations for FPIs, this asymmetry may factor into form-choice decisions for FPIs going forward, with FPIs considering filing on domestic forms to obtain the benefit of NAF status, including the application of SOX 404(b) requirements at a much higher threshold than the $75 million that would otherwise apply. However, this would subject FPIs to certain additional aspects of domestic form filing, including, for example, disclosures of any Section 16(a) filing delinquencies and Rule 10b5-1 plans by directors and officers and shorter disclosure deadlines.⁹ 
• Engage in the comment process. The SEC is seeking comment on a broad range of features of the proposed amendments. Public and private and pre-IPO companies, auditors, underwriters, and investors should assess which aspects of the proposal are most relevant to their circumstances, including by addressing any quantitative cost benefits for companies, and consider submitting targeted comment letters to help shape the final rules.

The following White & Case attorneys authored this alert: Maia Gez, Scott Levi, Danielle Herrick and Michelle Rutta.

_{1 As proposed, the new threshold for NAF filer status encompasses approximately 81 percent of public companies that represent 6.5 percent of total market public float.
2 Notably, the proposal is generally consistent with prior recommendations to the Staff, e.g., Society for Corporate Governance Submits Recommendations to SEC on Scaled Disclosure and Filer Category Reforms for Small- and Mid-Cap Companies. 
3 While the new NAF definition (and related accommodations) would not apply to FPIs, the SEC is proposing a limited accommodation that would exempt registrants who would otherwise qualify as an NAF from providing quantitative and qualitative disclosure about market risk (the same accommodation that is currently provided to SRCs).
4 In addition, Securities Act Rule 157(a) and Exchange Act Rule 0-10(a) would be amended to raise the asset threshold from $5 million to $35 million and harmonize the definitions, aligning the Regulatory Flexibility Act small-entity threshold with the proposed small non-accelerated filer asset threshold.
5 Non-EGC registrants would continue to be able to use the Commission’s confidential treatment procedures regarding FOIA requests pursuant to 17 CFR 200.83, when submitting draft registration statements for nonpublic review.
6 Further, the proposal would not permit investment companies that are NAFs to rely on Regulation S-X Article 8 financial statement accommodations. Business development companies and face-amount certificate companies would, however, receive scaled accommodations through proposed Regulation S-X Rule 3-19.
7 See comment letters from: (i) Andy Whittle, CPA, Internal Audit & Financial Advisory Professional (May 29, 2026), available here, and (ii) Anne DeTraglia, Chief Audit Executive, Institute of Internal Auditors (May 27, 2026), available here. 
8 See, for example, comment letters from: (i) Hannah Pasco (May 21, 2026), available here, (ii) Marc I. Steinberg, Radford Chair and Professor of Law at Southern Methodist University (June 1, 2026), available here, and (iii) Anonymous (June 2, 2026), available here. 
9 According to the SEC Staff Financial Reporting Manual Topic 6120.10b, foreign private issuers that file on Form 20-F and foreign private issuers who voluntarily file on Form 10-K are not subject to domestic filer executive compensation disclosures required by Regulation S-K 402, and may, instead, follow Form 20-F executive compensation disclosures.}

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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