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The Securities and Exchange Commission proposed two sets of rule changes on Monday designed to make it easier and less expensive for companies to go public and remain listed, the agency said.
The registered offering reform proposal, if adopted, would be the most significant update to the registered offering framework in more than 20 years, the SEC said. A broader set of public companies would gain access to shelf offerings, which allow firms to pre-register securities and sell them when market conditions are favorable. Current eligibility for shelf offerings requires a minimum $75 million public float and a full year of SEC reporting history — two conditions the new proposal would do away with, according to Reuters.
More companies would also be able to use registration and communication flexibilities currently reserved for "well-known seasoned issuers," a designation tied to large public floats. The proposal would additionally preempt state securities law registration requirements for all registered offerings, reducing the cost and complexity of multi-state listings, the SEC said.
The second proposal would raise the threshold at which a company becomes a "large accelerated filer" — a designation that triggers stricter reporting requirements and mandatory auditor attestation on internal financial controls — from $700 million to $2 billion in publicly traded shares. No company would reach that classification for at least 60 months following its IPO regardless of its public float, the SEC said.
