Last week, Dave blogged about Corp Fin’s new CDI on filer status. This interpretation has been flying under the radar – but it’s actually a pretty big deal for companies that lose their eligibility as smaller reporting companies under the SRC revenue test – (paragraph (2) or 3(iii)(B) of the SRC definition in Exchange Act Rule 12b-2) – and need to transition to being accelerated filers.

Moving into the accelerated filer category means that a Section 404(b) auditor attestation is required – which adds time & expense to the filing process. According to the CDI – which is No. 130.05 in the “Exchange Act Rules” category – companies have a year after the loss of SRC status to continue as non-accelerated filers (without the expensive auditor attestation). This clarifies Rule 12b-2 in a way that’s different from how some people had been interpreting it – which will be welcome news to SRCs, but keep in mind that the accommodation applies only if the SRC loses eligibility due to the revenue test, not the public float test.

If that’s all clear as mud, take a look at this Filer Status Guide from Cooley. It has flowcharts that show when to evaluate filer status and the questions to ask.

– Liz Dunshee