SEC proposal could provide reporting relief for many public companies

Under the proposal, a company would not be classified as a large accelerated filer until it reaches $2 billion in public float, up from the current $700 million threshold. Companies below the $2 billion level would generally be treated as nonaccelerated filers and would qualify for scaled reporting accommodations.

This change would shift a meaningful number of mid-cap public companies out of the accelerated filer status, reducing filing pressure and compliance demands that may no longer reflect their risk profile or market footprint. It would also extend reporting timelines (for example, from 60 to 75 or 90 days for annual reports, depending on filer status, and from 40 to 45 days for quarterly reports).

One of the most consequential aspects of the proposal is expanded relief from the requirement for an independent auditor attestation on internal control over financial reporting (ICFR). Under the proposal, nonaccelerated filers would not be subject to this requirement.

While management would remain responsible for maintaining effective internal controls, the absence of a required auditor attestation could change how companies think about control design, documentation and oversight.

The proposal also introduces a five-year transition period following an initial public offering. Regardless of public float, a newly public company could not become a large accelerated filer during its first 60 months as a public registrant.

This provision is designed to give companies time to stabilize operations, reporting processes and governance after going public. For businesses considering an IPO, the on ramp offers greater certainty around reporting expectations during the early years of issuer status.

Companies that do not meet the revised large accelerated filer definition would be classified as non-accelerated filers and would generally be eligible for scaled disclosures currently associated with smaller reporting companies or emerging growth companies. These accommodations affect both the volume of disclosures and the content.

The proposal reflects the SEC’s view that disclosure requirements should be better aligned with company size and maturity, rather than relying on thresholds that may no longer reflect today’s capital markets.

The proposal would also establish a subcategory of small nonaccelerated filers, defined based on total assets less than $35 million. These companies would receive additional time to file annual and quarterly reports, further reducing reporting pressure for the smallest public companies.