On May 19, 2026, the Securities and Exchange Commission (SEC) proposed sweeping amendments to its rules and forms governing registered offerings. The proposed amendments represent a significant modernization of the registered offering framework. If adopted, these reforms could reshape which companies can access the most efficient forms of public capital raising and how quickly they can do so.
Key Aspects of the Proposed Amendments
Expansion of Form S-3 Eligibility
One of the most impactful elements of the proposal for small- and mid-cap companies is the expansion of Form S-3 eligibility. Currently, an issuer must have either $75 million in public float or satisfy one of several alternative transaction-specific requirements to use Form S-3 for primary offerings without a limit on the amount offered. The proposed amendments would eliminate all Form S-3 transaction requirements, including the $75 million public float threshold, as well as the requirement that issuers be reporting companies under the Securities Exchange Act of 1934 (Exchange Act) for at least 12 months. Form S-3 would continue to require that issuers be current and timely in their Exchange Act reporting and would prohibit blank check companies, shell companies, penny stock issuers, and other “ineligible issuers” as defined in Rule 405 from using Form S-3.
To illustrate the practical consequences, a recently listed company with a $30 million market cap that is current in its Exchange Act filings would have the same shelf registration access as a company with a multi-billion-dollar float. The ability to register securities on a shelf registration statement and take them down in response to favorable market windows, without pre-effective SEC staff review and without preparing a full standalone prospectus each time, would meaningfully reduce both cost and execution risk for capital raising.
New Issuer Categories — Enhanced Registration and Communication Benefits
The proposal would retire the familiar “well-known seasoned issuer” (WKSI) concept for domestic issuers and replace it with two new categories that decouple offering flexibility from issuer size. Currently, WKSI status requires either $700 million in public float or $1 billion in registered non-convertible debt issuances, thresholds that the SEC acknowledges have become misaligned with modern market conditions and that arbitrarily exclude well-followed companies from the most efficient capital raising tools. The proposal introduces a tiered framework that would extend enhanced registration and communication benefits to three groups: all Form S-3 eligible issuers, Eligible Listed Issuers, and Seasoned Eligible Listed Issuers.
The two new issuer categories are:
- Eligible Listed Issuer (ELI): An issuer that meets the proposed Form S-3 registrant requirements and has at least one class of common equity listed on a national securities exchange.
- Seasoned Eligible Listed Issuer (SELI): An ELI that has been subject to Exchange Act reporting requirements for at least 12 calendar months.
The proposal would extend enhanced registration and communication benefits to these categories in a tiered structure:
- Benefits Available to All Form S-3 Eligible Issuers. Broker-dealers participating in a distribution would be able to rely on Rule 139 to publish issuer-specific research reports about any Form S-3 eligible issuer without such reports being deemed an offer. Form S-3 eligible issuers also would be able to omit the identities of selling security holders from resale registration statements (Rule 430B(b)) and use free writing prospectuses (FWPs) without Section 10 prospectus delivery requirements (Rule 433).
- Additional Benefits for ELIs. ELIs would gain access to nearly all current WKSI benefits under the Securities Act, including:
- The ability to make certain offers before filing a registration statement without violating Section 5(c) of the Securities Act (Rule 163)
- The ability to make pre-filing communications more than 30 days before filing a registration statement in connection with Form S-8 offerings (Rule 163A)
- The ability to use free writing prospectuses after filing in connection with Form S-8 offerings (Rule 164)
- The ability to register additional classes of securities or securities of majority-owned subsidiaries via automatic post-effective amendments (Rule 413)
- The ability to omit, among other things, a plan of distribution and securities description from a base prospectus (Rule 430B(a))
- And “pay-as-you-go” registration fees (Rules 456(b)/457(r))
As a practical matter, ELI status would allow a newly listed company to immediately begin marketing a shelf offering through FWPs and roadshows without gun-jumping concerns, a meaningful advantage that today requires $700 million in public float.
- Additional Benefits for SELIs. Only SELIs would qualify for automatic shelf registration, the ability to file a shelf registration statement that becomes immediately effective without SEC staff review (Rule 462).
Modernization of Form S-1
For issuers that continue to use Form S-1, whether by choice or because they do not yet meet Form S-3 eligibility, the proposed amendments would significantly reduce the burden of maintaining an effective registration statement by expanding incorporation by reference:
- Backward Incorporation. Currently, an issuer can only incorporate by reference its previously filed Exchange Act reports into a Form S-1 if it has filed an annual report on Form 10-K for its most recently completed fiscal year. The proposal would remove this requirement, which is particularly relevant for companies in registration during their first fiscal year. For example, an issuer conducting an IPO that has not yet filed an annual report on Form 10-K would be able to incorporate “Form 10 Information” from its previously filed registration statement.
- Forward Incorporation. Currently, only smaller reporting companies (SRCs) can forward incorporate on Form S-1, meaning that non-SRC issuers must file post-effective amendments to update their registration statements with new periodic reports. The proposal would extend forward incorporation to all issuers meeting the incorporation by reference requirements, effectively giving Form S-1 some of the “evergreen” characteristics traditionally associated with Form S-3, reducing the need for costly and time-consuming post-effective amendments.
At-the-Market (ATM) Offerings
Because ATM offerings currently require Form S-3 eligibility, the proposed expansion of Form S-3 access would open ATM programs to a much broader group of issuers. However, the proposal would codify limits on the markets in which ATM offerings may be conducted.
The proposed amendments would define “trading market” for purposes of Rule 415(a)(4) to mean securities listed on a national securities exchange or traded in a market designated by the SEC based on specified criteria. Currently, the SEC believes the OTCQX Best Market and OTCQB Venture Market tiers of OTC Link alternative trading system would qualify as trading markets for ATM purposes. The proposed framework would give the SEC flexibility to recognize additional markets or withdraw recognition if market eligibility criteria change.
Preemption of State Blue Sky Requirements for All Registered Offerings
The proposal would fully preempt state securities law registration and qualification requirements for all registered offerings. Currently, preemption under Section 18 of the Securities Act applies only to listed securities; offerings of unlisted securities remain subject to state registration and, in some states, merit review.
By defining “qualified purchaser” to include any person to whom securities are offered in a registered offering, the SEC would eliminate state-level registration and qualification requirements for unlisted securities offerings. This particularly benefits non-traded business development companies (BDCs), real estate investment trusts (REITs), and interval funds conducting continuous offerings.
However, states would retain authority under Section 18(c) of the Securities Act to require notice filings and collect filing fees for offerings of unlisted securities and may suspend the offer or sale of such securities for failure to submit the required notice and fees. This authority to require notice filings does not extend to securities listed on a national securities exchange or securities of the same issuer that are equal or senior in seniority to such listed securities. States would also retain anti-fraud enforcement jurisdiction.
Business Development Companies (BDCs) and Closed-End Funds
The proposal extends parallel benefits to BDCs and registered closed-end funds on Form N-2, removing seasoning and public float requirements for short-form shelf registration. Exchange-listed BDCs and closed-end funds qualifying as ELIs or SELIs would gain the same enhanced registration and communication benefits as operating companies. Non-traded BDCs would also benefit from blue sky preemption.
Insurance Product Advertising
The proposal would amend Rule 482 to permit insurance companies to use the advertising safe harbor for registered index-linked annuities (RILAs) and market value adjustment annuities, addressing a gap in the framework. RILA advertisements would not be permitted to include performance data.
Modernization of Delaying Amendments
The proposal would flip the default for registration statement effectiveness under Rule 473 of the Securities Act. Currently, a registration statement becomes effective 20 days after filing unless the issuer includes a “delaying amendment” legend. Under the proposal, effectiveness would be automatically delayed unless the issuer affirmatively elects immediate effectiveness.
Practical Considerations for Companies and Their Advisors
These proposals have different implications depending on a company’s current status and capital markets strategy. Below, we highlight key considerations that companies and their counsel should be evaluating now, even before final rules are adopted.
- Revisiting Capital Markets Strategy. Companies with public floats below $75 million or less than 12 months of Exchange Act reporting should begin discussions with their investment bankers and legal counsel about how expanded Form S-3 eligibility could change their approach to equity financing. Companies with existing at-the-market (ATM) programs capped at one-third of their public float in any 12-month period under the current “baby shelf” rules should evaluate whether to expand those programs if the cap is eliminated.
- ATM Programs and OTC-Traded Issuers. ATM offerings would only be permitted for securities listed on a national securities exchange or traded on markets that meet the proposed “trading market” criteria, such as the OTCQX and OTCQB. Companies traded on lower OTC tiers would gain shelf registration access but would not be able to conduct ATM offerings, a distinction that could influence listing decisions.
- Interaction with Semiannual Reporting. Companies should evaluate these proposals in tandem with the SEC’s recently proposed semiannual reporting option. A company that both elects semiannual reporting and uses forward incorporation on a shelf registration statement would have less frequent updates to the information available to investors in its prospectus. While this could reduce costs, it may also cause underwriters to demand more extensive “bring-down” diligence in connection with shelf takedowns and could lead to wider offering discounts if investors perceive heightened information asymmetry. Companies contemplating both proposals should consider whether the cost savings from less frequent reporting are offset by potentially higher capital-raising costs.
- Risk for Unlisted WKSIs. Existing domestic WKSIs that are not exchange-listed could lose the enhanced registration and communication benefits they currently enjoy because the new ELI/SELI framework requires an exchange listing. These issuers, which include certain large privately held companies that have issued significant registered debt, should evaluate whether the proposal includes any transition relief and consider submitting comments requesting appropriate grandfathering provisions.
- Due Diligence Implications. The expansion of shelf registration to a larger universe of smaller issuers will require market participants, particularly underwriters, to consider whether their due diligence practices are adequate for accelerated offerings by companies with potentially thinner analyst coverage, lower institutional ownership, and shorter public reporting histories. While the SEC notes that existing Securities Act Sections 11 and 12(a)(2) liability frameworks remain intact, the compressed timelines of shelf offerings may require underwriters to develop more robust continuous diligence programs for newly eligible issuers.
- State Blue Sky Compliance. For issuers of unlisted securities, the proposed preemption would eliminate multi-state registration and qualification requirements. However, states would retain authority to require notice filings and collect fees for offerings of unlisted securities.
Comment Period and Next Steps
The public comment period on the proposing release will remain open until July 27, 2026. Interested parties may submit comments through the SEC’s public comment portal.
These proposals should be understood as part of a broader regulatory package being proposed by the SEC, alongside the contemporaneously proposed filer status simplification and the recently proposed semiannual reporting option, that collectively seek to reduce the cost of being a public company. Companies should not evaluate any one of these proposals in isolation; rather, the aggregate effect of expanded shelf access, reduced reporting frequency, and simplified filer categories could meaningfully alter the IPO calculus for companies currently weighing the decision to go public. Conversely, the combined reduction in disclosure frequency and expansion of offering flexibility may prompt investor advocacy groups and institutional investors to push back during the comment period on investor protection grounds.
We will continue to monitor developments related to this rulemaking and will provide updates as appropriate.
