SEC Proposes Sweeping Reforms To Capital Markets Framework

On May 19, 2026, the Securities and Exchange Commission (SEC) announced two comprehensive proposals aimed at significantly modernizing and simplifying the framework governing public securities offerings and reporting obligations:

The Registered Offering Reform proposal, which would expand issuer eligibility, and attempts to streamline registration processes to enhance market access for public companies; and

The Public Company Reporting Framework proposal, which would simplify the public company filer classification system and extend scaled disclosure benefits to a broader group of companies. 

These proposals represent the most substantial overhaul of the offering and reporting framework in nearly two decades and serve as a foundation to incentivize more small and mid-sized companies to consider going public. 

Registered Offering Reform

The Registered Offering Reform proposal comprehensively overhauls the rules governing how public companies access the capital markets through registered security offerings. 

• Expanded Form S-3 Eligibility: Currently, Form S-3 (the SEC’s short form registration often used for shelf offerings) is only available to companies that have been reporting under the Exchange Act for at least 12 months and have a public float of at least $75 million. The proposed rule would eliminate both of these requirements, opening the shelf registration process to a much wider universe of issuers. Under the proposal, newly public companies would be eligible to use Form S-3 immediately after completing the Initial Public Offering (IPO) process. The SEC estimates that these changes could increase the number of eligible issuers by more than 60%.
• New Framework - Eligible Listed and Seasoned Eligible Listed Issuers: The proposal replaces the existing Well-Known Seasoned Issuer (WKSI) category with two new classifications. The first is the Eligible Listed Issuer (ELI), which includes any Form S-3 eligible issuer with at least one class of common equity listed on a national securities exchange. The second is the Seasoned Eligible Listed Issuer (SELI), which is an ELI that has been subject to Exchange Act reporting for at least 12 months. These new categories are designed to provide additional registration and communication benefits. Both ELIs and SELIs would be able to omit certain information from base prospectuses, broaden their ability to add securities and subsidiaries by way of post-effective amendments, and enjoy more flexibility in filing offering communications. In addition, SELIs would be eligible for automatic shelf registration and certain “pay-as-you-go” filing fee provisions. 
• Modernization of Form S-1: The proposal includes a modernization of Form S-1 (the SEC’s long-form registration used primarily for IPOs) by permitting both backward and forward incorporation by reference. Currently, backward incorporation into a Form S-1 is only permitted if an issuer has filed a Form 10-K for its most recently completed fiscal year. The proposal would remove this filing requirement. Similarly, forward incorporation by reference into Form S-1 would be extended to all eligible issuers rather than just being limited to smaller reporting companies (SRCs). 
• Federal Preemption of State Securities Laws: Currently, securities listed on a national exchange are considered “covered securities” and are exempt from state registration requirements, but offerings of unlisted securities remain subject to state registration. The proposed rule would preempt state securities (blue sky) law registration requirements for offerings conducted under the expanded Form S-3 framework, reducing costs and compliance burdens that currently drive some issuers toward private markets. 
• Benefits for Business Development Companies and Closed-End Funds: Other amendments within the proposal seek to extend registration and communication benefits to a wider range of exchange-listed business development companies and closed-end funds, including the elimination of related seasoning and public float requirements. 

Public Company Reporting and Filing Framework

The second proposed rule would dramatically simplify the SEC’s existing public company filer classification system (currently composed of five overlapping categories) and extend scaled disclosure accommodations to a much larger population of public companies.

• Simplification of Filer Categories: The existing five-tier filing system—Large Accelerated Filer (LAF), Accelerated Filer (AF), Non-Accelerated Filer (NAF), SRC, and Emerging Growth Company (EGC)—would be replaced with just two primary categories: LAF and NAF. The public float threshold for LAF status would increase from $700 million to $2 billion, and the seasoning threshold would increase from 12 to 60 consecutive calendar months. Any company not categorized as an LAF would be classified as an NAF.
• Reduced Disclosure Requirements for NAFs: All NAFs would be eligible for scaled disclosure accommodations currently available only to SRCs and EGCs. This would include reduced financial and executive compensation disclosure requirements, streamlined periodic reporting requirements, and exemption from the auditor attestation requirement on a company’s internal control over financial reporting. 
• Small Non-Accelerated Filer Subcategory: A new subcategory of NAFs, called Small Non-Accelerated Filers (SNFs), would be created for companies with total assets of $35 million or less as of the end of each of its two most recent second fiscal quarters. Companies meeting this definition would benefit from extended filing deadlines, with 120 days for Form 10-K filings instead of 90, and 50 days for Form 10-Q filings instead of 45. 

The SEC’s proposed reforms aim to modernize and simplify public securities offerings and reporting obligations, while reducing financial and administrative burdens for issuers. The impact of these proposals will vary depending on the company’s current size and filer status. Companies that have recently gone public and smaller issuers would have immediate access to shelf registration, lower capital-raising costs, and significant reductions in disclosure and compliance burdens. Mid-sized companies (public floats below $2 billion) would move from AF or SRC status to NAF status, unlocking scaled disclosure accommodations. Companies considering going public would see a significant improvement in the post-IPO capital-raising and reporting compliance landscape, given the elimination of seasoning requirements and expanded communication flexibilities.

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