Acting SEC Chair Mark T. Uyeda outlined potential regulatory changes to make IPOs more attractive and to scale public company disclosures at the Florida Bar’s 41st Annual Federal Securities Institute and M&A Conference. At the conference, Uyeda provided insights into the following potential regulatory changes at the SEC: 

EGC Definition: In his remarks, Uyeda stated he has asked the SEC staff to review the definition of “emerging growth company” and recommend potential changes, including how a company qualifies and the duration for which it retains the status. Uyeda believes that appropriately tailoring disclosure requirements for newly public companies may incentivize more companies to go public and in turn provide attractive exit opportunities for venture funds.  

Filer Categories: Uyeda stated that the SEC should consider: 

• Updating Financial Thresholds to Qualify as a Large Accelerated Filer (LAF) or Accelerated Filer (AF): He noted that the SEC has not updated these thresholds since 2005, resulting in the number of LAFs doubling from 18% to 36% today.  
• Scaling Disclosure Requirements for Filer Categories: He pointed out that only one requirement differentiates LAFs and AFs—the deadline for filing a Form 10-K.  
• Aligning the Definition of Smaller Reporting Companies and AFs: Uyeda noted that a smaller reporting company could be either an AF or a non-AF. According to Uyeda, these overlapping definitions increase complexity and compliance costs. For example, smaller reporting companies that qualify as an AF must provide costly auditor attestation of the company’s evaluation of internal controls.  

Overall, Uyeda suggests that the SEC’s filer categories should be updated to reflect “the size and make-up of public companies today.”  

This article is part of a Fenwick "Securities Law Update" authored by David A. Bell, Ran Ben-Tzur, Amanda Rose, Wendy Grasso, and Merritt Steele.