The Society submitted this comment letter on the SEC’s proposal to simplify filer status and extend scaled disclosure accommodations to a broader group of reporting companies. The Society supports replacing the current overlapping filer classifications with two principal categories—large accelerated filers (“LAFs”) and non-accelerated filers (“NAFs”)—and generally supports the proposed $2 billion public-float threshold for LAF status.
The Society also recommends extending existing smaller reporting company and emerging growth company accommodations, including voluntary relief from the SOX Section 404(b) auditor-attestation requirement, to all NAFs, with an NAF’s ability to include all or a portion of item-by-item LAF disclosure, without opting into LAF status.
The letter further recommends a longer seasoning period for newly public companies, a two-year stabilization period before companies enter or exit LAF status, and use of a multi-day average to reduce status changes caused by short-term market volatility. It also urges the SEC to pursue broader disclosure modernization, provide additional accommodations to NAFs, and grant targeted transitional relief so that companies do not incur substantial compliance costs under the existing framework while the rulemaking remains pending.
This post first appeared in the weekly Society Alert!