On May 19, 2026, the Securities and Exchange Commission (SEC) proposed a rule aimed at simplifying and expanding the benefits of the current SEC disclosure scaling framework.
SEC Chair Paul Atkins noted that “the proposed amendments extend disclosure scaling and other accommodations, which are currently available only to newly public companies and smaller companies, to seasoned companies and mid-sized public companies. These amendments are part of my renewed focus on rightsizing the SEC’s disclosure requirements through the lenses of materiality.”
Current Requirements
Filing deadlines for periodic reports depend on whether a registered company is classified as a large accelerated filer, accelerated filer, or non-accelerated filer. Large accelerated filers—which have the most stringent requirements—and accelerated filers are both required to have a registered public accounting firm attest to and report on management’s assessment of the effectiveness of internal control over financial reporting (ICFR) under Sarbanes–Oxley Section 404(b). This attestation requirement represents one of the most significant compliance costs for public companies. Both large accelerated filers and accelerated filers are also bound to shorter filing deadlines.
Smaller reporting companies (SRCs) and emerging growth companies (EGCs) currently face fewer disclosure requirements for financial statements and executive compensation. Today, only 52% of companies enjoy these benefits.
What Would Change
The proposal attempts to simplify filer status by (1) sorting companies into just two main categories, large accelerated filers and non-accelerated filers; and (2) increasing the threshold and seasoning requirements for companies to reach large accelerated filer status.
Specifically, the proposal would raise the public float threshold for large accelerated filer status from $700 million to $2 billion and increase the seasoning requirement from 12 to 60 consecutive calendar months (five years) of Exchange Act reporting. This proposal would extend current SRC and EGC benefits to approximately 81% of publicly traded companies to entice more companies to go and stay public. The remaining 19% of companies considered large accelerated filers would continue to be subject to the most extensive disclosure requirements.
To minimize volatility in filer status, a company would need to be above or below the $2 billion public float threshold for two consecutive years before transitioning into or out of large accelerated filer status.
The proposal would also eliminate the current “accelerated filer” and “smaller reporting company” categories entirely, consolidating the framework into just two filer categories. The proposal also creates a new subcategory of non-accelerated filers called “small non-accelerated filers” (SNFs) for the smallest companies—those with total assets of $35 million or less.
Foreign private issuers filing on Form 20-F or Form 40-F are excluded from the proposed large accelerated filer and non-accelerated filer definitions and would continue following existing requirements.
Key Accommodations for Non-accelerated Filers
Under the proposal, non-accelerated filers would benefit from the following key accommodations:
- Exemption from ICFR Auditor Attestation. Non-accelerated filers would be exempt from the Section 404(b) requirement for a registered public accounting firm’s attestation on management’s assessment of ICFR. Management would still be required to provide its own assessment under Section 404(a), and auditors would still consider internal controls as part of their financial statement audit. The SEC estimates this exemption would newly apply to approximately 1,600 registrants that are currently subject to the attestation requirement.
- Extended Filing Deadlines. Non-accelerated filers would have 90 days after fiscal year-end to file Form 10-K and 45 days after fiscal quarter-end to file Form 10-Q. SNFs would receive additional time: 120 days for Form 10-K and 50 days for Form 10-Q.
- Scaled Disclosure Requirements. Non-accelerated filers would have access to scaled disclosure requirements currently available to SRCs and EGCs, including:
- Reduced executive compensation disclosure; no pay-for-performance disclosure.
- The ability to provide two rather than three years of audited financial statements.
- Exemptions from certain governance-related disclosures such as say-on-pay votes.
- Fewer years of audited financial statements.
Practical Considerations and Next Steps
Public companies and companies considering an IPO should consider the following:
- Whether the company would qualify as a large accelerated filer, non-accelerated filer, or small non-accelerated filer under the proposed thresholds, and how the two-year transition period would affect timing of any status change.
- The potential cost savings from exemption from the ICFR auditor attestation requirement, balanced against the value that investors and lenders may place on auditor attestation of internal controls.
- The extent to which reduced disclosure requirements will lead investors to rely more heavily on third-party data or alternative information sources.
- How reduced disclosure requirements may impact investor perception.
- The extent to which reduced disclosure requirements may increase investor burden as shareholders incur the costs of gathering or accessing this information.
- Whether a company may choose to continue to voluntarily provide additional disclosure if the proposal is ultimately adopted.
The proposal is subject to a 60-day public comment period following publication in the Federal Register and may be revised before adoption. Companies should consider submitting a comment letter to the SEC.
Alston & Bird advises public companies on all aspects of SEC disclosure and reporting compliance. Please reach out to a member of the Alston & Bird Capital Markets & Securities Group to answer questions about the proposed rules or assist with the legal considerations behind this decision.
If you have any questions, or would like additional information, please contact one of the attorneys on our Capital Markets & Securities team.
You can subscribe to future advisories and other Alston & Bird publications by completing our publications subscription form.