On May 19, 2026, the Securities and Exchange Commission proposed a set of amendments that would fundamentally restructure the registered offering framework under the Securities Act of 1933. The proposal reflects a broad policy shift away from size‑based eligibility thresholds and toward a disclosure‑driven model that prioritizes reporting status, market access, and the availability of current information to investors.

If adopted, the reforms would significantly expand access to short‑form registration and shelf offerings, recalibrate the allocation of offering flexibility across issuers, and streamline several procedural and disclosure requirements that have historically constrained capital raising.

Expanded Form S-3 Eligibility and Shelf Access

The proposed expansion of Form S‑3 eligibility is the centerpiece of the SEC’s reform package and would significantly broaden issuers’ ability to access the public capital markets. At a high level, the SEC is proposing to move away from the existing mix of seasoning and size‑based requirements and instead tie Form S-3 eligibility more directly to an issuer’s reporting status and the availability of current disclosure.

Under the current framework, Form S‑3 eligibility is subject to both registrant and transaction‑based requirements. These include a minimum 12 month reporting history, current and timely Securities Exchange Act of 1934 reporting, and, for primary offerings, a $75 million public float threshold. Issuers that do not meet that threshold are subject to the “baby shelf” limitations, which cap the amount of securities that may be sold over a rolling 12‑month period.

The SEC’s proposal would eliminate both the one‑year ‘seasoning’ reporting history requirement and the transaction‑based limitations, including the public float threshold and corresponding volume caps. In their place, eligibility would turn largely on whether the issuer is subject to Exchange Act reporting and is current in its filings. As a practical matter, this would allow issuers to become Form S‑3 eligible and conduct shelf take-downs to access capital more quickly and cost-effectively much earlier in their public company lifecycle, including shortly after an initial public offering.

Issuers meeting the revised standard would also be able to establish shelf registration statements without delay and conduct offerings without regard to size‑based limits. In turn, a broader group of issuers would be positioned to take advantage of at‑the‑market programs and other flexible capital‑raising structures. The proposal would also streamline the existing framework by eliminating certain disqualifying conditions and placing greater weight on the availability of current disclosure.

New Eligible Listed Issuers/Seasoned Eligible Listed Issuers (ELI/SELI) Framework Replacing the Well Known Seasoned Issuer (WKSI) Regime

In parallel with the expansion of Form S-3 eligibility, the SEC has proposed to eliminate the existing WKSI framework and replace it with a new tiered issuer classification system that reallocates offering flexibility across a broader group of issuers.

Under this system, issuers would be classified as Form S-3 Eligible Issuers, ELIs, and SELIs. Form S-3 Eligible Issuers would include all issuers that meet the revised eligibility criteria. ELIs would consist of Form S-3 eligible issuers with stock exchange-listed equity securities. SELIs would be ELIs that have been subject to Exchange Act reporting (or ‘seasoning’) for at least 12 months.

Unlike the current WKSI definition, the proposed classifications would not rely on public float thresholds or debt issuance tests. Instead, eligibility would depend on disclosure status, exchange listing and reporting history.

The proposal would allocate the benefits currently associated with WKSI status across these categories. All Form S-3 Eligible Issuers would gain access to certain procedural flexibilities, including greater ability to rely on Exchange Act reporting to update disclosure and to utilize offering communications.

ELIs would receive additional accommodations that enhance offering flexibility, including expanded communications capabilities, the ability to update registration statements through post-effective amendments, and the ability to defer payment of SEC filing fees until securities are sold from their Form S-3 registration statement.

SELIs would have access to automatically effective Form S-3 shelf registration statements, known as Form S-3ASRs, which would be the most significant accommodation under the current framework. A Form S-3ASR becomes effective automatically upon filing and permits issuers to execute offerings without prior SEC review, allowing for rapid access to capital raising.

Form S-1 Modernization: Expanded Incorporation by Reference

The proposal would expand the eligibility of issuers to use both backward and forward incorporation by reference when filing a Form S-1, allowing a broader group of issuers to avoid duplicative disclosure and reduce compliance costs for issuers. This expansion to permit incorporation by reference for a registration statement on Form S-1 gives a ‘short form’ registration statement pathway to more issuers in lieu of using Form S-3.

The proposal would eliminate the current requirement for an issuer to have filed a form 10-K for its most recently completed fiscal year in order to use backward incorporation by reference on Form S-1. As a result, issuers that are not eligible to use Form S-3 will be allowed to use backward incorporation by reference prior to filing a Form 10-K for their most recently completed fiscal year. Issuers will also be allowed to use backward incorporation by reference during their first year as an Exchange Act reporting company even when they have not yet been required to file their annual report on Form 10-K.

Second, the proposal would eliminate the current limitation that permits only smaller reporting companies (SRCs) to use forward incorporation by reference on Form S-1 and does not extend that ability to larger issuers. As a result, issuers that are eligible to use backward incorporation by reference would also be able to use forward incorporation by reference. By adopting this proposed amendment, registration statements would be automatically updated through subsequent Exchange Act reports, which will reduce the need to file post-effective amendments and prospectus supplement updates for offerings conducted using Form S-1. The proposed amendment, however, would not extend the forward incorporation on Form S-1 in context of delayed shelf offerings or primary at-the-market (ATM) offerings, which would continue to only be available using Form S-3.

Business Development Companies (BDCs) and Closed-End Funds (CEFs)

In addition to amending the registration and offering process for issuers that register securities on Form S-1 and Form S-3, the proposed amendment would extend similar modifications to the registration and offering process for BDCs and registered CEFs that register securities on Form N-2. These proposed amendments are described in our separate May 28, 2026, client alert titled “If Adopted, Proposed SEC Rules Should Make it Easier for More Closed-End Funds and BDCs to Register and Offer their Securities.”

Preemption of State Securities Law Registration and Qualification

Section 18(a) of the Securities Act currently provides that states may not require registration or qualification of “covered securities,” which includes securities with respect to the offer or sale to qualified purchasers. Currently, generally only registered offerings of securities that are listed or approved for listing on a national securities exchange are not subject to state securities laws registration and qualification requirements, while offerings of unlisted securities must comply with such requirements.

The proposed amendments will add a new definition of “qualified purchaser” under section 18(b)(3) of the Securities Act to preempt state securities law registration and qualification requirements with respect to any registered offering under the Securities Act (including securities that are not listed or proposed to be listed on a national securities exchange).

This proposed amendment would benefit issuers with shares quoted on the over-the-counter (OTC) market that are not listed on a national securities exchange. Federal preemption of state securities law registration for SEC registered offerings by OTC companies would reduce regulatory oversight and compliance costs for these issuers and simplify the process for conducting registered securities of unlisted securities.

Other Proposed Rule Amendments

Delaying Amendments

The SEC proposes to amend Rule 473 under the Securities Act in such way that provides that a registration statement will be deemed delayed, unless the issuer includes on the facing page of the registration statement a legend stating that it should become effective in accordance with the provisions of Section 8(a) of the Securities Act. As a result, issuers will no longer need to include the delaying amendment for purposes of delaying a registration statement’s effectiveness. Issuers desiring that a registration statement become available on the 20th day after its filing would need to include an applicable legend on the facing page of the registration statement.

Grace Period for Untimely Filing and Form S-3 Eligibility

The SEC proposes to amend Form S-3 such that an issuer that makes a late filing which would otherwise render it ineligible to use Form S-3, it would not lose its ability to use Form S-3 if certain conditions are met. First, the late filing would need to have been made within seven calendar days of the original due date (without giving any effect to any applicable filing extension period under Rule 12b-25 under the Exchange Act). Second, the issuer could have made only one untimely filing during the issuer’s relevant lookback period (i.e., the 12 calendar months and any portion of a month immediately preceding the filing of the Form S-3). This grace period to cure an untimely filing would ensure that issuers are not faced with a harsh consequence for a single untimely filing and could instead retain access to use Form S-3 and its faster path to capital and lower compliance burdens than Form S-1. 

Elimination of Certain Conditions Relating to Age of Financials

The Proposed amendments would simplify the rules under Regulation S-X regarding how recent financial statements required for a registration statement or a proxy statement must be.

Under the proposed amendments, an SRC that is either an Exchange Act reporting company that has filed all periodic reports due, or is a non-reporting company, would have 90 days after its fiscal year end to provide audited annual financial statements for its most recently completed fiscal year, regardless of the timing of a registration statement or a proxy statement, unless such financial statements become available earlier. Additionally, a non-SRC Exchange Act reporting company that has filed all required periodic reports would be required to provide annual audited financial statements in a registration statement no later than its Form 10-K due date, which is based on its filer status. For additional information about proposed changes to filer status categories, see our separate June 1, 2026, client alert titled “SEC Proposes Significant Changes to Public Company Reporting Rules, Including New Filer Categories and Expanded Disclosure Relief.”

Such proposed amendments are intended to reduce costs of conducting registered offerings and certain proxy solicitation, especially for those loss generating issuers who may otherwise face unnecessary delays in raising capital via registered offering or completing strategic transactions through proxy solicitation, by expanding the population of issuers eligible for extended financial statement updating periods.

Implications for Foreign Private Issuers (FPIs)

At this time, the SEC’s proposed amendments do not extend to FPIs. The proposed amendments prohibit FPIs from using both Forms S-1 and S-3 entirely, even if the FPIs report on domestic Exchange Act forms. FPIs would continue to be able to use Form F-1, as well as Form F-3, which has similar eligibility requirements and benefits as Form S-3, and is available to FPIs. The SEC stated that given its ongoing comprehensive review of the FPIs framework, which was announced in June 2025, it would not extend to FPIs the benefits of the proposed amendments at this time. The SEC also stated that it expects minimal impact from this aspect of the proposed amendment based on its understanding that few FPIs file on domestic forms.

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If you would like further information regarding the proposed amendments to filer status and reporting requirements under the Exchange Act, or any other rule changes or guidance described above, please contact the lawyer at Sullivan & Worcester LLP with whom you regularly consult, or any of the lawyers listed above.