SEC Proposes Amendments to “Accelerated Filer” and “Large Accelerated Filer” Definitions
On May 9, the SEC proposed amendments to Exchange Act Rule 12b-2 that would revise the “accelerated filer” and “large accelerated filer” definitions in order to reduce costs for certain lower-revenue companies. As previously reported by The Ticker, on June 28, 2018, the SEC adopted amendments to the “smaller reporting company” (SRC) definition to expand the number of companies that qualify for certain scaled disclosure accommodations, but failed to simultaneously amend the “accelerated filer” and “large accelerated filer” definitions, thereby causing some companies to be categorized as both SRCs and accelerated or large accelerated filers. These SRCs have remained subject to the requirements that apply to accelerated filers, most notably the requirement to provide an auditor’s attestation of management’s assessment of internal control over financial reporting (ICFR).
According to the SEC’s press release, “smaller reporting companies with less than $100 million in revenues would not be required to obtain an attestation of their internal control over financial reporting (ICFR) from an independent outside auditor. The proposed amendments would not change … the requirement that companies continue to establish, maintain, and assess the effectiveness of their ICFR.”
The proposed amendments would also:
- Increase the transition thresholds for accelerated and large accelerated filers becoming a non-accelerated filer from $50 million to $60 million and for exiting large accelerated filer status from $500 million to $560 million; and
- Add a revenue test to the transition thresholds for exiting both accelerated and large accelerated filer status.
The proposal is subject to a 60-day public comment period.