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Your business is moving fast. You need to assess new developments quickly, determine if they apply to your business, and act accordingly. The Ticker is designed to focus your attention on key developments in the areas of SEC compliance, capital markets, corporate governance, executive compensation and other matters important to public companies and their officers and directors. Below are summaries of recent developments in these areas.
On Monday, the SEC proposed changes to the definition of “smaller reporting company” that would allow more public companies to use the scaled-back disclosure applicable to these companies. The proposed rules would allow a company with a public float of less than $250 million to provide scaled disclosure as a smaller reporting company, up from the $75 million public float threshold under the current definition. If a company does not have a public float, it would be permitted to provide scaled disclosure as a smaller reporting company if its annual revenues are less than $100 million, compared to the current $50 million threshold. Similar to current rules, a lower threshold would apply once a company exceeds either threshold, such that a company could qualify again as a smaller public company only if its public float is less than $200 million or, if it has no public float, its annual revenues are less than $80 million. The SEC did not propose to increase the $75 million threshold in the “accelerated filer” definition. As a result, companies with $75 million or more of public float that would qualify as smaller reporting companies would be subject to the requirements that apply currently to accelerated filers, including the timing of the filing of periodic reports and the requirement that accelerated filers provide the auditor’s attestation of management’s assessment of internal controls over reporting required by the Sarbanes-Oxley Act. Read the SEC press release.