On May 19, 2026, the U.S. Securities and Exchange Commission (the "SEC") proposed two companion rulemakings that, if adopted, would make it substantially easier for companies to conduct registered offerings of securities and would extend scaled disclosure and reporting accommodations — currently available only to a subset of smaller issuers — to the vast majority of public companies. These proposals are part of the SEC's broader initiative to reinvigorate the public capital markets and encourage more companies to go — and stay — public. Below is an overview of what these proposals would change.

Easier Access to Shelf Registration and Capital Markets

Under current rules, many smaller public companies cannot use Form S-3 — the streamlined registration form that enables "shelf" offerings of securities to investors — because they do not satisfy the form’s cumulative eligibility requirements. To use Form S-3, a company must meet all of the form’s registrant requirements (including 12 months of SEC reporting history) and at least one transaction requirement (such as having $75 million in public float). "Public float" refers to the aggregate market value of a company's voting and non-voting common equity held by persons other than the company's affiliates. Companies with a public float below $75 million may still utilize Form S-3 for primary offerings, but only under the so-called "baby shelf" rule, which caps the dollar amount of securities that such companies can sell at one-third of their public float in any 12-month period.

The SEC's proposal would eliminate both the one-year seasoning requirement and the $75 million public float test, along with all of Form S-3's other transaction-specific conditions, opening Form S-3 to any company that is current and timely in its reporting under the Securities Exchange Act of 1934 (the "Exchange Act"). Companies that are "ineligible issuers" — including shell companies, blank check companies, and penny stock issuers — would not be permitted to use Form S-3 for shelf offerings. Foreign private issuers, asset-backed issuers, and investment companies (including Business Development Companies) would also be ineligible. Notably, the proposal would amend Rule 415(a)(4) to enable the SEC to designate additional “trading markets” for at-the-market (“ATM”) offerings. The SEC notes that this would likely continue to include securities that qualify for the OTCQX Best Market tier or OTCQB Venture Market tier of the OTC Link ATS, and could include others at the SEC’s discretion.

The proposal also includes a limited late-filing safe harbor: an issuer that files a single required Exchange Act report up to seven calendar days after the original due date (calculated without regard to any Rule 12b-25 extension) would not lose Form S-3 eligibility on account of that late filing, so long as it is the only untimely filing during the lookback period.

What this means in practice:

• Shelf and ATM offerings for more companies. Form S-3 eligibility for primary offerings is necessary in order for issuers to conduct shelf offerings, which provide flexibility for issuers to access public markets over time and respond to market conditions. A broader S-3 eligible population also means more companies would have the ability to conduct ATM offerings, a popular tool for raising capital incrementally without a traditional underwritten deal, and at larger facility amounts.
• No more baby shelf limitation. Smaller companies that were previously constrained by the baby shelf cap could conduct primary shelf offerings on Form S-3 without any dollar or percentage-of-float ceiling, giving them the same capital-raising flexibility that issuers with a public float of greater than $75 million enjoy today.
• New "WKSI-like" benefits for national securities exchange-listed companies. Companies listed on a national securities exchange (such as the NYSE or Nasdaq) that meet the new Form S-3 requirements would qualify as "Eligible Listed Issuers" (“ELIs”) and gain significant communications flexibility — including freer use of marketing materials, the ability to pay registration fees on a rolling basis, and streamlined prospectus requirements — benefits historically reserved for the largest public companies (i.e., "well-known seasoned issuers” (“WKSIs”), which are companies with at least $700 million in public float or that have issued at least $1 billion of debt securities in registered offerings within a three year period). ELIs that have been subject to the Exchange Act's or, in the case of a registered closed-end investment company, the Investment Company Act’s, reporting requirements for 12 months would qualify as “Seasoned Eligible Listed Issuers” (“SELIs”) and gain a significant WKSI benefit: the ability to use an automatic shelf registration statement.
• Simpler Form S-1 filings. Companies that continue to use Form S-1 for the registration of securities would benefit from expanded "incorporation by reference," a technique that lets a company point to its existing SEC filings in order to satisfy disclosure obligations rather than repeating the same information — thereby reducing preparation time, paperwork, and the need for costly amendments. Specifically, under the proposed amendments, issuers would be able to backward incorporate regardless of whether they had filed an annual report for their most recently completed fiscal year and forward incorporate regardless of whether they are a Smaller Reporting Company (“SRC”).

A Simpler Filer Status Framework and Broader Accommodations

Today, public companies navigate a confusing patchwork of overlapping categories — Large Accelerated Filer, Accelerated Filer, SRC, and Emerging Growth Company (“EGC”) — each with different thresholds, deadlines, and disclosure rules. The SEC proposes to collapse these into just two categories — Large Accelerated Filer (“LAF”) and Non-Accelerated Filer (“NAF”) — and to eliminate the Accelerated Filer and SRC designations entirely.

Key changes:

• Higher bar for "large company" obligations. The LAF threshold would rise from $700 million to $2 billion in public float, and a company would need to exceed that threshold for two consecutive years before being reclassified as an LAF. Public float for these purposes would be calculated based on the average stock price over the last ten trading days of the company’s second quarter. All other issuers that are not classified as an LAF would be classified as an NAF. As a result, many mid-cap companies that are currently subject to full-scale reporting and disclosure obligations as LAFs would shift to the lighter NAF regime.
• Five-year on-ramp for every newly-public company. Every company would start as an NAF and remain one for at least 60 months (five years) regardless of public float — ensuring that the transition to full reporting obligations is gradual, regardless of growth trajectory.
• SRC and EGC benefits become standard for all NAFs. NAFs would be permitted to use scaled disclosure currently reserved for SRCs — such as two years of financial statements (and related MD&A) instead of three, simplified executive compensation tables, and fewer narrative disclosures. EGC-specific accommodations would also be extended to NAFs, including exemptions from the costly independent auditor attestation of internal controls (SOX 404(b)), pay-versus-performance disclosure, and mandatory say-on-pay and say-when-on-pay advisory votes.
• Extended filing deadlines for the smallest companies. A new "Small Non-Accelerated Filer" subcategory (total assets of $35 million or less) would enjoy even longer deadlines for annual and quarterly reports: 120 days after fiscal year-end to file a Form 10-K (instead of the standard 90 days for NAFs) and 50 days after fiscal quarter-end to file a Form 10-Q (instead of 45 days). The SEC noted in its release that if it were to adopt its recent proposal to permit semiannual interim reporting on Form 10-S, Small Non-Accelerated Filers would be provided the same 50 days after the end of the applicable semiannual period to file their Form 10-S.
• EGC status still exists, but matters less. Because NAF accommodations would subsume most EGC benefits, separate reliance on EGC status would rarely be necessary — though EGCs would retain two unique advantages. First, only EGCs would remain eligible for statutory Freedom of Information Act confidentiality protection for draft registration statements. Second, EGCs would retain the ability to defer compliance with new or revised financial accounting standards applicable to private companies for the full duration of EGC status. NAFs would receive a similar but more limited version of the accounting standards deferral, available only for the first five years after initial registration.

The Bottom Line

Taken together, these proposals represent the most significant rethinking of the SEC's registered offering and capital-formation framework in over a decade. If adopted, smaller and newly-public companies in particular would encounter fewer obstacles to raising capital through registered offerings than exist under current rules. Additionally, a significantly broader segment of the public company population would enjoy a simpler, more accommodating periodic reporting regime in which they could access many of the benefits and accommodations that are currently limited to SRCs and EGCs.

Both proposals are subject to a 60-day public comment period. Companies that currently hold SRC or EGC status — and those considering going public — should monitor these developments closely and consider whether to submit comments.

If you have any questions or would like additional information about the SEC’s proposed rulemaking, please reach out to the authors of this Legal Update, or to the Pryor Cashman professionals with whom you work.