Article

Nearly 1,000 Companies to Receive Smaller Reporting Company Status

July 30, 2018

With unanimous approval, the Securities and Exchange Commission (“SEC”) voted last month to issue a final rule that will give 966 companies smaller reporting company status. The rule, Release No. 33-10513, Amendments to Smaller Reporting Company Definition, raises the public float threshold (i.e., the value of a company’s publicly traded stock) for a smaller reporting company from $75 million to $250 million.

Additionally, companies with no public float or have a public float under $700 million can qualify as a smaller reporting company if annual revenues were less than $100 million in their most recently concluded fiscal year. The SEC previously allowed companies without a public float and under $50 million in annual revenues to give scaled disclosures.

SEC chairman Jay Clayton says amending the current compliance structure will help align it more with the size and scope of smaller companies while continuing the agency’s approach of protecting investors in public capital markets. The change does not increase the public float thresholds for the accelerated filer status, which will remain at $75 million.

The amendments under Release No. 33-10513 are effective 60 days after publication in the Federal Register.