SEC Disclosure Requirements - YouTube

I am attorney Laura Anthony founding partner of Legal & Compliance, a full service corporate,

securities, and business transactions law firm.

Today is the continuation in a LawCast series discussing SEC disclosure requirements and

in particular, the 341-page Regulation S-K concept release and request for public comment

issued by the SEC on April 15, 2016.

The SEC disclosure requirements are scaled based on company size.

The categories of reporting companies include: an emerging growth company, a smaller reporting

company, a non-accelerated filer, an accelerated filer, and a large accelerated filer.

The Jobs Act created the emerging growth company category for which certain scaled down disclosure

requirements apply for up to five years after an initial IPO.

An emerging growth company is one that has total annual gross revenues of less than one-billion

during its most recently completed fiscal year.

A smaller reporting company is defined as one that, among other things, has a public

float of less than 75-million in common equity, or if unable to calculate the public float,

has less than 50-million in annual revenues.

Similarly, a non-accelerated filer has a public float of less than 75-million, but does not

yet have to file accelerated reports.

An accelerated filer has a public float in excess of 75-million, but less than 700-million,

has been public for at least 12 months and has filed at least one annual report as a

public company.

A large accelerated filer has to public float in excess of 700 million.

In addition to scaled disclosure requirements in terms of the amount of disclosure the scale

disclosure requirements, also pertain to the time of filing.

A large accelerated filer must file its annual Form 10-K within 60 days of its fiscal year,

and its Form 10-Q within 40 days of a quarter and an accelerated filer must file its annual

Form 10-K within 75 days of fiscal year end., and its Form 10-Q within 40 days of a quarter

end.

All other categories must file their annual Form 10-K within 90 days of a fiscal year

end, and a quarterly Form 10-Q within 45-days of quarter end.

Sometimes a company fits within both, the emerging growth company category and smaller

reporting company category.

A company that has been in public for more than five years would never be an emerging

growth company, but could remain a smaller reporting company for an indefinite period

of time.

However, the scaled down disclosure requirements are not completely the same for each.

And the SEC is considering whether they should be adjusted to further align those requirements.

The SEC Advisory Committee on small and emerging growth companies suggested that the SEC should

revise the definition of smaller reporting company to include companies with a public

float of up to 250-million.

This will increase the class of companies benefitting from a broad range of disclosure

benefits for smaller reporting companies, including the exemption from the pay ratio

rule, the exemption from the auditor attestation requirements, and an exemption from providing

a compensation discussion and analysis.

In addition, the committee suggested that the

SEC

should revise the definition of accelerated filer to include companies with a public float

of 250-million or more, but less than 700-million.

As a result, the auditor attestation report under Section 404-B of the Sarbanes-Oxley

Act would no longer apply to companies with a public float between 75-million and 250-million.

Although the SEC seeks public comment as to changes in the eligibility standards for each

category, it does not make any particular recommendations in its SK concept release,

but rather indicates that it is currently evaluating the criteria.

I am securities attorney Laura Anthony, founding partner of Legal & Compliance, and producer

of LawCast.

Should you have any questions about today’s topic, please visit SecuritiesLawBlog.com

and LawCast.com, or contact me directly.

Inquiries of a technical nature are always encouraged.