SEC Adopts Amendments to “Accelerated Filer” and “Large Accelerated Filer” Definitions

March 12, 2020

On March 12, the SEC adopted amendments to the “accelerated filer” and “large accelerated filer” definitions in Exchange Act Rule 12b-2 that will have the primary effect of exempting smaller reporting companies with less than $100 million in revenues from the requirement to obtain an attestation of their internal control over financial reporting (ICFR) from an independent outside auditor.  The amendments were proposed on May 9, 2019, and were adopted substantially as proposed.

According to the SEC’s press release, the amendments “will more appropriately tailor the types of issuers that are included in the definitions, thereby reducing unnecessary burdens and compliance costs for certain smaller issuers while maintaining investor protections.”

In his statement in support of the amendments, Chairman Jay Clayton notes that “smaller issuers that will benefit from today’s amendments will still be required to have their principal executive and financial officers certify that, among other things, they are responsible for establishing and maintaining ICFR and have evaluated and reported on the effectiveness of the company’s disclosure controls and procedures, will continue to be subject to a financial statement audit by an independent auditor who is required to consider ICFR in the performance of that audit and will still be subject to the independent audit committee and other requirements of Sarbanes-Oxley.”

The amendments will become effective 30 days after publication in the Federal Register and will apply to annual reports due on or after the effective date.

For a more detailed discussion of the amendments as originally proposed, see this previous update.

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