July 9, 2025
Filer Status & Scaled Disclosure: The Society for Corporate Governance Weighs In
Earlier this year, Commissioner Mark Uyeda indicated that a review of filer classifications and scaled disclosure requirements would be on the SEC’s agenda. Last month, the Society for Corporate Governance submitted this 8-page letter to SEC Chairman Paul Atkins with suggestions on modifying and scaling disclosures for small- and mid-cap public companies.
If you represent smaller companies, you’ll probably find a lot to like in the Society’s letter. This excerpt lays out suggested changes to 10-K & 10-Q disclosure requirements for SRCs:
Form 10-K/10-Q-Related Simplifications: We respectfully request that the Commission:
– remove the requirement that SRCs’ audit reports include disclosure regarding critical accounting matters that an auditor identifies during the course of the audit, consistent with the treatment for EGCs.
– remove the requirement for all SRCs to provide an auditor attestation of internal control over financial reporting under Sarbanes-Oxley Act Section 404(b), which results from categorizing all SRCs as non-accelerated filers.
– revise Item 408(a) of Regulation S-K to exempt EGCs and SRCs from the requirement to provide quarterly disclosure regarding director and officer entrance into or termination of a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.
– revise the Rule 12b-25 deadlines and provide that, in the event of a filed Form 12b-25, an EGC or SRC may file their late Form 10-K or Form 10-Q within 30 days or 15 days, respectively, of the original due date (as opposed to 15 and five days, respectively).
The Society letter also suggests updating SRC thresholds and aligning filer statuses using a combination of public float and annual revenue based on the EGC annual revenue threshold. This would result in the two categories of filers:
– Registrants with a public float of less than $2 billion or annual revenues below $1.235 billion would qualify as both an SRC and non-accelerated filer (thereby aligning the two categories).
– Registrants with a public float of $2 billion or more and annual revenues of $1.235 billion or more would be large accelerated filers (and, therefore, will lose SRC status).
Other topics addressed in the Society’s letter include simplification of proxy and executive comp disclosures and Section 16 and Form 144 reporting. An appendix to the Society’s letter includes a chart detailing each of its proposals.
– John Jenkins
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