SEC Proposes Significant Registered Offering Reform

On May 19, 2026, the Securities and Exchange Commission (the “SEC”) issued a proposal (the “Proposal”) that would dramatically expand the ease with which companies can access the public markets and conduct registered offerings of securities with the SEC.

Framed as part SEC Chair Paul Atkins’s “Make IPOs Great Again” agenda, the Proposal represents the most significant overhaul of how companies register and sell securities to the public in more than 20 years.

The proposed amendments would:

• Make shelf registration on Form S‑3 available for a significantly larger number of public companies;
• Enhance the ability of companies that are not “well known seasoned issuers” (“WKSIs”) to take advantage of registration and offering communications accommodations that are currently exclusively available to WKSIs;
• Expand the pool of issuers eligible to incorporate information by reference (both backward and forward‑looking) in a registration statement on Form S‑1;
• Preempt state securities law registration and qualification requirements for all registered offerings;
• Maintain parity between certain Form N‑2 filers and operating companies across registration, offering, and communication provisions; and
• Expand access to broad‑based advertising for certain insurance products.

These are each discussed further below. 

Expanding Access to Form S‑3 Shelf Registration

How does Form S‑3 work?

Form S‑3 currently provides a streamlined method of registration that lets eligible companies pre‑register securities and then sell them quickly when market conditions are favorable. It also enables “at‑the‑market” (“ATM”) offerings, which allow companies to sell shares gradually at current market prices.

To use Form S‑3, a company must, among other things, have been timely filing reports with the SEC for at least 12 months, be current on all required filings, have no material defaults on debt or lease payments, and have a public float of at least $75 million. Companies below that threshold, including companies with no public float, such as non‑listed real estate investment trusts (“REITs”), currently can use Form S‑3 only in limited circumstances.

What would the Proposal change?

The SEC proposes significantly expanding the availability of Form S‑3 to less seasoned issuers. The Proposal would eliminate the 12‑month reporting history requirement, the restriction on companies with certain financial defaults, and the $75 million public float threshold.

As a practical effect, newly public and smaller companies would be able to access shelf registration and raise capital on a streamlined basis much earlier than they can today; almost immediately, in fact. Companies without a public float, such as non‑listed REITs, would be able to bypass the more burdensome disclosure requirements of Form S‑11; however, the SEC has requested comments with respect to whether REITs should be required to include certain of the disclosure requirements from Form S‑11 in a registration statement on Form S‑3. 

The Proposal would retain the requirement that an issuer be current and timely in its Exchange Act of 1934, as amended (the “Exchange Act”), reporting obligations at the time of filing the Form S‑3. The Proposal would, however, create a limited grace period for eligibility as an issuer would remain Form S‑3 eligible despite an untimely filing if (i) the filing was made within seven calendar days of its original due date and (ii) the issuer had only one untimely filing during the relevant look‑back period.

In addition, the SEC would prohibit certain “ineligible issuers” from using Form S‑3 altogether. These include issuers that, during the prior three years, were:

• A blank check company;
• A shell company, other than a business combination‑related shell company (with a carve‑out under which an issuer, other than a foreign private issuer (“FPI”), would not be deemed a shell company solely because it or a predecessor was a special purpose acquisition company during that period); or
• An issuer in an offering of penny stock.

An issuer would also be ineligible under certain “bad actor” provisions. Foreign governments, FPIs, asset‑backed issuers, investment companies, and business development companies (“BDCs”) would also be ineligible to use Form S‑3, though FPIs would continue to have access to Form F‑3.

The Proposal also would permit majority‑owned subsidiaries to use Form S‑3 to register offerings of nonconvertible debt guaranteed by the parent (or guarantees of the parent’s debt) provided the parent qualifies to use the Form and the subsidiary satisfies the other applicable conditions of use of the Form.

Extending WKSI Accommodations

How does it currently work?

The federal securities rules feature a number of accommodations to facilitate capital raising, including but not limited to, automatic shelf registration, the ability to add new classes of securities and additional registrants after effectiveness, pay‑as‑you‑go filing fees, and broader pre‑filing communications safe harbors. These, however, are currently only available for WKSIs, which are issuers with a public float of at least $700 million or $1 billion in non‑convertible debt registered in the past three years, which limits these benefits to the largest public companies.

What would the Proposal change?

The SEC would largely eliminate the WKSI category for domestic issuers and replace it with a three‑tier framework that significantly expands access to these benefits, particularly for mid‑cap and smaller public companies. The new tiers proposed are:

• Form S‑3 Eligible Issuers. All companies eligible for Form S‑3, whether or not they are exchange‑listed, would gain access to certain benefits, including the ability for broker‑dealers to publish research reports without those reports being treated as an “offer,” the ability to omit certain selling shareholder details from registration statements, and the ability to use a “free writing prospectus” without an accompanying formal prospectus. As noted above, significantly more public companies would be S‑3 eligible under the SEC’s Proposal.
• Eligible Listed Issuers (“ELIs”). Any issuer with common stock listed on a national securities exchange that meets the Form S‑3 eligibility requirements would qualify as an ELI. ELIs would gain access to many benefits currently reserved for WKSIs, including greater pre‑filing and post‑filing communications flexibility, the ability to register additional securities or classes of securities (including securities of majority‑owned subsidiaries) by post‑effective amendment, the ability to omit information from the base prospectus (e.g., whether an offering is a primary or secondary offering, the plan of distribution, and a description of the securities being offered), and the ability to pay filing fees on a pay‑as‑you‑go basis at the time of takedown. ELIs would also have all the benefits available to Form S‑3 Eligible Issuers.
• Seasoned Eligible Listed Issuers (“SELIs”). A SELI would be an ELI with at least 12 months of timely filed Exchange Act reporting history. SELIs would be the only issuers eligible for automatic shelf registration and would have all the benefits available to ELIs and Form S‑3 Eligible Issuers.

The SEC estimates that the number of issuers eligible for the full set of enhanced registration and communication benefits would more than triple under the Proposal.

The WKSI category would be retained solely for FPIs, which would continue to qualify under the current criteria and would not gain access to any of the new domestic‑issuer benefits described above.

Expanding the Utility of Incorporation by Reference on Form S‑1

How does it currently work?

Currently, the ability to incorporate Exchange Act filings by reference into a registration statement on Form S‑1 is limited. Backward incorporation by reference (incorporating previously filed Exchange Act reports) is conditioned on the issuer having filed an Annual Report on Form 10‑K (“Annual Report”) for its most recently completed fiscal year. Eligibility for forward incorporation by reference (automatically incorporating future Exchange Act filings) is limited to smaller reporting companies (“SRCs”), pursuant to the FAST Act, adopted in 2016.

What would the Proposal change?

The SEC would remove both of these conditions, greatly expanding the number of issuers that are eligible to incorporate Exchange Act filings by reference in a registration statement on Form S‑1. Any issuer could incorporate previously filed Exchange Act reports and other filings by reference into a registration statement on Form S‑1 regardless of whether it has filed an Annual Report, and the ability to automatically incorporate future Exchange Act filings would be extended to all issuers, not just SRCs.

According to the SEC, this would cut down on repetitive disclosures in Form S‑1 filings, reduce preparation costs, lower the risk of inconsistencies between filings, and reduce the need for repeated updates to keep registration statements current, a particular benefit for issuers that are not yet eligible to use Form S‑3. However, companies wanting to conduct ATM or delayed shelf offerings would still need to qualify to use Form S‑3.

Changes for BDCs and Closed‑End Funds

How does it currently work?

BDCs and registered closed‑end funds (together with BDCs, “affected funds”) register their offerings on Form N‑2 rather than Form S‑3. Access to streamlined shelf registration on Form N‑2 (through a “Short‑Form N‑2”) currently depends on meeting the Form S‑3 eligibility requirements, including the $75 million public float minimum threshold. Affected funds that qualify as WKSIs, which generally requires at least $700 million in public float, may file automatic shelf registration statements on Form N‑2 that become effective immediately upon filing, register unspecified amounts and classes of securities, and pay filing fees on a pay‑as‑you‑go basis. Certain affected funds, including most interval funds and many BDCs, do not list their securities on an exchange and thus do not have public float. As a result, these affected funds generally cannot satisfy the transaction requirements necessary to be considered a seasoned affected fund or a WKSI and thus cannot make shelf offerings under Rule 415(a)(1)(x). These affected funds instead rely on the tailored Rule 486 framework, which provides for automatically effective post‑effective amendments and new registration statements. Additionally, affected funds are currently eligible to use Form S‑1.

What would the Proposal change?

The SEC would bring affected funds into the same ELI/SELI framework described above, leveling the playing field between exchange‑listed BDCs/closed‑end funds and operating companies and giving a wider range of funds access to shelf registration and streamlined offerings without needing to meet the current $700 million WKSI public float threshold. An exchange‑listed affected fund could qualify as an ELI by meeting Form N‑2’s eligibility requirements, being exchange‑listed, being current on all required SEC filings, and not being an ineligible issuer. Those with at least 12 months of timely filed reporting history would qualify as SELIs.

Affected funds that qualify as ELIs would gain access to benefits currently limited to WKSI funds, including greater pre‑filing communications flexibility, the ability to add securities through post‑effective amendments, the option to omit certain prospectus details, and pay‑as‑you‑go filing fees. In addition to these expanded benefits, affected funds that qualify as SELIs would qualify for automatic shelf registration.

All Short‑Form N‑2 eligible funds (whether or not exchange‑listed) would also benefit from the research report safe harbor, the ability to omit selling securityholder information, and the ability to use a free writing prospectus. However, the SEC is not proposing to extend Short‑Form N‑2 eligibility to unlisted affected funds, meaning unlisted affected funds would see no change, and affected funds would no longer be able to use Form S‑1. All offerings would need to be registered on Form N‑2, consolidating affected fund offerings on a single form to ensure that Investment Company Act‑specific disclosure rules are consistently applied.

Broader Advertising Options for Certain Insurance Products

How does it currently work?

Under Rule 482, investment companies are allowed to use advertisements that include performance data and other product details when marketing their offerings. However, issuers of registered non‑variable annuity contracts cannot rely on Rule 482 because they are not investment companies. This limits how they can advertise.

What would the Proposal change?

The SEC would extend similar advertising flexibility to issuers of registered non‑variable annuity contracts, letting insurance companies use broad‑based advertisements that include performance data and product information, as long as the ads are not misleading. This would improve investors’ access to product information and help create a more level playing field between insurance products and investment company products.

Eliminating State‑by‑State Registration for All SEC‑Registered Offerings

How does it currently work?

When securities are listed on a national stock exchange, federal law generally preempts state‑level registration requirements. But for unlisted securities that are part of a registered offering, issuers must also comply with separate “blue sky” registration rules and regulations in each state where they want to sell, adding cost and complexity and significantly increasing the time it takes to access the public markets.

What would the Proposal change?

The SEC proposes to define “qualified purchaser” under Section 18(b)(3) of the Securities Act of 1933, as amended, to include any purchaser of securities offered or sold in an SEC registered offering, which would effectively preempt state registration and qualification requirements for any registered offering, not only those involving exchange‑listed securities. This would be transformative for non‑listed REITs and BDCs, significantly reducing initial and ongoing costs of registration and compliance.

Simplifying the “Delaying Amendment” Process

How does it currently work?

Under current rules, a registration statement automatically becomes effective 20 days after filing. To prevent premature effectiveness, companies typically include a “delaying amendment” legend on the cover page of their registration statement. If a company forgets to include this legend, it can face unintended consequences.

What would the Proposal change?

The SEC would eliminate the default mechanism. Instead, effectiveness of a registration statement would automatically be delayed unless the company affirmatively includes a legend stating it wants the registration statement to become effective under the standard 20‑day timeline. This would reduce the risk of companies accidentally triggering ongoing reporting obligations or facing SEC proceedings because they forgot to include the delaying legend.

Increased Grace Period for Audited Financial Statements

How does it currently work?

Companies are not required to include audited financial statements for their most recently completed fiscal year if their registration statement or proxy statement is filed within the first 45 days after fiscal year‑end. Depending on a company’s size and filing status, this grace period can be extended by an additional 14 to 45 days, but only if the company meets certain income‑related conditions.

What would the Proposal change?

The SEC would eliminate the income‑related conditions. As a result, SRCs that are current on their filings (or are non‑reporting companies) would get a flat 90‑day grace period after fiscal year‑end to include audited financial statements, regardless of when the registration or proxy statement is filed. Exchange Act reporting companies that do not qualify as SRCs and are current on their filings would be required to include audited financial statements no later than their Annual Report due date. These changes are intended to reduce costs and make more companies eligible for the extended grace periods when conducting offerings or proxy solicitations near fiscal year‑end.

Next Steps

Read the SEC’s release. The Proposal was published in the Federal Register and comments are open until July 25, 2026. The SEC will consider whether to adopt final rules, with potential modifications in response to comments received. Due to the sweeping and novel nature of the proposed reform, however, it remains possible that some of the proposed amendments could be subject to litigation aimed at halting or modifying the proposed rules. In addition, the final rules could vary significantly from the Proposal. Companies interested in these reforms should stay informed as the regulatory process unfolds.