The Securities and Exchange Commission (SEC) has adopted amendments to the definitions of accelerated filer and large accelerated filer to exclude companies that had annual revenues of less than $100 million in their most recent fiscal year and are eligible to be a smaller reporting company (SRC) under SEC rules. The amendments also revise the transition thresholds to make it slightly easier for companies to exit accelerated filer and large accelerated filer status based on their public float. The result will be an increase in the number of companies that are non-accelerated filers, which are not required (1) to have the company’s independent auditor attest to and report on management’s assessment of the effectiveness of the company’s internal control over financial reporting (ICFR) or (2) to file periodic SEC reports within the accelerated deadlines that apply to accelerated filers. The SEC adopted its May 2019 proposals as proposed, with two additions. One clarifies the limitations on the eligibility of a foreign private issuer (FPI) to report under SRC rules. The second addition adds a checkbox on the cover of Form 10-K to indicate whether the company has filed a report on and attestation to management’s assessment of the company’s ICFR with the Form 10-K. The amendments will be effective 30 days after publication in the Federal Register.

Impact of the Amendments -

The amendments will result in many more companies that currently qualify as SRCs and are accelerated filers qualifying as non-accelerated filers. As a result, these companies will no longer be required...