SEC Proposes Significant Relief for Small and Mid-Size Companies

In response to NAM advocacy, the Securities and Exchange Commission is proposing to significantly simplify the disclosure burdens that apply to small and mid-size public companies.

The details: The proposed changes, if approved, would spare these companies from costly SEC requirements, including “say on pay” votes, “pay versus performance” disclosure and the auditor attestation mandate of the Sarbanes-Oxley Act.

How it works: The SEC is proposing to reduce the categories of corporate filers from five overlapping categories down to two: large accelerated filers and nonaccelerated filers.

• Companies would be classified as nonaccelerated filers if they have a public float below $2 billion (an increase from the $700 million standard under current rules).
• Additionally, newly public companies would maintain nonaccelerated status, regardless of size, for their first five years on the public market.
• As a result of the expansion of the nonaccelerated filer category, more small and mid-size companies would be eligible for scaled compliance burdens—including an exemption from the Sarbanes-Oxley Section 404(b) requirement for external auditor attestation of a company’s internal financial controls.

NAM in action: The NAM requested this type of relief for smaller companies in letters to the SEC in April 2026 and September 2025 and shared members’ concerns about Sarbanes-Oxley compliance costs with Congress in June 2025.

Promoting registered offerings: The SEC has proposed a separate rulemaking that would make it easier for companies to conduct registered offerings.

• The SEC seeks to revise the criteria for Form S-3 offerings, extend registration and offering communication options now only available to “well-known seasoned issuers” to a broader set of companies.
• It will also preempt state securities law registration and qualification requirements for all registered offerings.

The SEC says: “Today, the Commission proposed two rulemakings that serve as the foundation for my agenda to Make IPOs Great Again,” SEC Chairman Paul S. Atkins said in a statement.

• “These proposals build upon the legislative and regulatory concepts that have proven successful in the past and aim to extend that success to more companies—particularly small and mid-size companies—and incentivize them to go and stay public.”

The NAM says: “Today’s proposals from the SEC are directly responsive to the NAM’s priorities: reducing regulatory burdens and making it easier for small and mid-size companies to access capital on the public market,” said NAM Managing Vice President of Policy Charles Crain.

Get involved: The NAM plans to submit comment letters in response to these two rulemakings. If you have any feedback on these proposed changes, please email NAM Senior Director of Corporate Finance Policy Ted Allen by June 22.