Registered Offering Reform

SECURITIES AND EXCHANGE
COMMISSION
17 CFR Parts 210, 229, 230, 232, 239, 240, and 249 [Release Nos. 33–11418; 34–105513; IC– 36160; File No. S7–2026–17] RIN 3235–AN41 Registered Offering Reform AGENCY: Securities and Exchange Commission. ACTION: Proposed rule. SUMMARY: The Securities and Exchange Commission (‘‘Commission’’) is proposing amendments that are intended to facilitate capital formation in the public securities markets. Specifically, the proposed amendments would make Form S–3 and the ability to conduct shelf offerings available to significantly more issuers, extend certain benefits currently reserved for ‘‘well-known seasoned issuers’’ to a broader set of issuers, and modernize Form S–1 by expanding the ability to incorporate information by reference into that form. The proposed amendments also would make conforming changes to the registration, communication, and offering process for certain business development companies and registered closed-end investment companies that register securities on Form N–2. We also are proposing to amend the communication rules to permit broad-based advertising for certain insurance products. In addition, we are proposing certain other amendments that are intended to modernize certain rules. Finally, to mitigate the costs and complexity of conducting a registered offering, the proposed amendments would preempt State securities law registration and qualification requirements for all registered offerings. DATES: Comments should be received on or before July 27, 2026. ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments

• Use the Commission’s internet
  comment form (https://www.sec.gov/ comments/s7-2026-17/registered￾offering-reform).
• Send an email to rule-comments@
  sec.gov. Please include File Number S7– 2026–17 on the subject line. Paper Comments
• Send paper comments to Vanessa
  A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number S7–2026–17. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method of submission. The Commission will post all submitted comments on the Commission’s website (https://www.sec.gov/rules-regulations/ public-comments/s7-2026-17). Do not include personally identifiable information in submissions; you should submit only information that you wish to make available publicly. The Commission may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. Studies, memoranda, or other substantive items may be added by the Commission or staff to the comment file during this rulemaking. A notification of the inclusion in the comment file of any such materials will be made available on the Commission’s website. To ensure direct electronic receipt of such notifications, sign up through the ‘‘Stay Connected’’ option at www.sec.gov to receive notifications by email. A summary of the proposal of not more than 100 words is posted on the Commission’s website (https:// www.sec.gov/rules-regulations/2026/05/ S7-2026-17). FOR FURTHER INFORMATION CONTACT:
  Mark W. Green, Senior Special Counsel, or Isabel Rivera, Special Counsel, Office of Rulemaking, Division of Corporation Finance, at (202) 551–3430, Matt McNair, Senior Adviser to the Chief Counsel, Office of Chief Counsel, Division of Corporation Finance, at (202) 551–3500, Pamela Ellis, Senior Counsel; Blair Burnett, Bradley Gude, Branch Chiefs; or Brian McLaughlin Johnson, Assistant Director, at (202) 551–6792, Investment Company Regulation Office, Division of Investment Management; U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549. SUPPLEMENTARY INFORMATION: We are proposing to amend the following rules and forms:

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1 15 U.S.C. 77a et seq.
2 15 U.S.C. 78a et seq.
3 15 U.S.C. 80a et seq.
4For purposes of this release, we use the terms ‘‘registered’’ or ‘‘public’’ offerings or markets interchangeably, the terms ‘‘exempt’’ or ‘‘private’’ offerings or markets interchangeably, and the terms ‘‘public companies,’’ ‘‘companies,’’ ‘‘registrants,’’ and ‘‘issuers’’ interchangeably. Unless explained in the text, the use of different terms in different places is not meant to connote a significant difference. 5See, e.g., Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets, Release No. 33–10884 (Nov. 2, 2020) [86 FR 3496, 3551 (Jan. 14, 2021)] (‘‘Harmonization Adopting Release’’) (‘‘[T]he amendments simplify, harmonize, and improve certain aspects of the exempt offering framework to promote capital formation.’’); Exemptions to Facilitate Intrastate and Regional Securities Offerings, Release No. 33–10238 (Oct. 26, 2016) [81 FR 83494, 83494 (Nov. 21, 2016)] (‘‘The amendments . . . are designed to facilitate capital formation.’’); Revisions to the Eligibility Requirements for Primary Securities Offerings on Forms S–3 and F–3, Release No. 33–8878 (‘‘Baby Shelf Adopting Release’’) (Dec. 19, 2007) [72 FR 73534, 73548 (Dec. 27, 2007)] (‘‘We therefore believe that extending shelf registration benefits to more companies in the manner that we have chosen will facilitate the capital-raising efforts of smaller public companies who currently have fewer financing options than their larger counterparts.’’); Securities Offering Reform, Release No. 33–8591 (July 19, 2005) [70 FR 44721, 44796 (Aug. 3, 2005)] (‘‘Securities Offering Reform Adopting Release’’) (stating the Commission’s belief that the rules will ‘‘make the capital formation process more efficient’’). 6See, e.g., Securities Offering Reform for Closed￾End Investment Companies, Release No. 33–10771 (Apr. 8, 2020) [85 FR 33290, 33321 (June 1, 2020)] (‘‘CEF Offering Reform Adopting Release’’) (‘‘The rule is designed to reduce regulatory impediments to capital formation and provide more flexibility to these funds to conduct registered securities offerings.’’); Baby Shelf Adopting Release at 73534 (‘‘The amendments are intended to allow more companies to benefit from the greater flexibility and efficiency in accessing the public securities markets afforded by Form S–3 and Form F–3 without compromising investor protection.’’); Securities Offering Reform Adopting Release at 44794 (‘‘Providing flexibility for registered offerings may encourage issuers to raise capital through the registration process instead of through private placements.’’); Asset-Backed Securities, Release No. 33–8518 (Dec. 22, 2004) [70 FR 1506, 1591 (Jan. 7, 2005)] (‘‘[W]e anticipate that these rules will enhance capital formation by simplifying the process of registering an offering of asset-backed securities.’’). 7See, e.g., Solicitations of Interest Prior to a Registered Public Offering, Release No. 33–10699 (Sept. 25, 2019) [84 FR 53011, 53028 (Oct. 4, 2019)]
(‘‘[I]f the final rule encourages additional issuers to conduct a registered securities offering, issuers may benefit from greater secondary market liquidity associated with registered securities, compared to exempt securities, to the extent that greater liquidity makes the issuers’ securities potentially more attractive to prospective investors. Any additional issuers that elect to conduct a registered offering in part as a result of the final rule also may benefit from the greater ease of raising follow-on financing through future registered offerings.’’); Baby Shelf Adopting Release at 73548 (‘‘Consequently, we anticipate that the amendments will result in smaller issuers raising more capital through the public markets rather than through
Table of Contents
I. Introduction
A. Overview of the Proposed Amendments B. Eliminating Public Float Requirements and Other Indicia of Market Following
II. Discussion of Proposed Amendments
A. Form S–3
1. Background
2. Proposed Amendments
B. The Enhanced Registration and Communication Benefits
1. Background
2. Proposed Amendments
C. Form S–1
1. Background
2. Proposed Amendments
D. Business Development Companies and Closed-End Funds
1. Background
2. Proposed Amendments
E. Registered Non-Variable Annuity Advertising
1. Background
2. Proposed Amendments
F. Preemption of State Securities Law Registration and Qualification
1. Background
2. Proposed Amendments
G. Other Rule Amendments
1. Delaying Amendments
2. Elimination of Certain Conditions
Relating to Age of Financial Statements
3. Conforming and Technical
Amendments
III. Other Matters
IV. Economic Analysis
A. Overview
B. Baseline
1. Form S–1 and Form S–3 Issuers
2. Form N–2 and Insurance Company
Issuers
C. Benefits and Costs
1. Benefits and Costs of Proposed
Amendments to Form S–3
Eligibility
2. Benefits and Costs of Amendments
to Eligibility for the Enhanced Registration and Communication Benefits
3. Benefits and Costs of Amendments
to Incorporation by Reference in Form S–1
4. Benefits and Costs of Amendments
to Preempt State Regulation and Qualification
5. Business Development Companies,
Closed-End Funds, and Registered Non-Variable Annuity Advertising
6. Benefits and Costs of Proposed
Amendments to Rule 473 and Regulation S–X
7. Other Commission Proposals
8. Aggregate Monetized Benefits and
Costs
D. Effects on Efficiency, Capital Formation, and Competition
1. Effects on Efficiency
2. Effects on Capital Formation
3. Effects on Competition
E. Reasonable Alternatives
1. Retain and Modify the Public Float￾Based Conditions for Form S–3
Eligibility and WKSI Status
2. Retain WKSI Definition and Use an
Alternative Measure of Whether an Issuer is ‘‘Well-Known’’ F. Request for Comment
V. Paperwork Reduction Act
A. Summary of the Collections of Information B. Summary of the Proposed Amendments’ Estimated Effects on the Collections of Information
C. Incremental and Aggregate Burden
and Cost Estimates
D. Request for Comment
VI. Congressional Review Act
VII. Initial Regulatory Flexibility Act
Analysis and Regulatory Flexibility Act Certification A. Initial Regulatory Flexibility Act Analysis
1. Reasons for, and Objectives of, the
Proposed Action
2. Legal Basis
3. Small Entities Subject to the
Proposed Amendments
4. Projected Reporting,
Recordkeeping, and Other
Compliance Requirements
5. Duplicate, Overlapping, or
Conflicting Federal Rules
6. Significant Alternatives
B. Request for Comment
C. Certification Relating to Issuers of
Registered Non-Variable Annuities Statutory Authority
I. Introduction
We are proposing amendments that are intended to facilitate capital formation in the public securities markets. To achieve that goal, the proposed amendments would amend certain of our Securities Act rules and forms to provide issuers with greater flexibility to determine the timing and structure of their registered offerings and reduce the costs of conducting a registered offering by, among other things, simplifying and modernizing the applicable rules and forms.4 The Commission’s longstanding, three-part mission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. Over the years, the Commission has engaged in various rulemakings with the express goal of facilitating capital formation.5 Some of those rulemakings focused specifically on facilitating capital formation with respect to registered offerings.6 As the Commission has recognized, the public capital markets offer several benefits to issuers and investors alike.7 For

exempt offerings conducted in the domestic and offshore markets. Investors in these companies will benefit by such companies’ improved access to capital on more favorable terms.’’); Securities Offering Reform Adopting Release at 44794 (‘‘Typically, registered securities enjoy more liquid markets than unregistered securities. Therefore, registered securities are less likely to be subject to a liquidity discount. In addition, registered securities offerings provide a potentially larger investor base than that available to those who participate in private placements.’’). 8See, e.g., Baby Shelf Adopting Release at 73548 (‘‘We believe that extending shelf registration benefits to more companies, in the manner we have chosen, will facilitate the capital-raising efforts of smaller public companies who currently have fewer financing options than their larger counterparts. . . . By selling into the public markets, these companies may be able to avoid the substantial pricing discounts that private investors often demand to compensate them for the relative illiquidity of the restricted shares they are purchasing.’’); Securities Offering Reform Adopting Release at 44794 (‘‘[R]egistered securities offerings provide a potentially larger investor base than that available to those who participate in private placements. Accordingly, issuers may incur lower transaction costs when raising capital because they will have access to a much deeper market for their securities and may have to expend fewer resources to locate investors.’’). 9Baby Shelf Adopting Release at 73548. 10 Id. 11Harmonization Adopting Release at 3562 (noting certain ‘‘investor protections associated with registered offerings’’ that are not associated with exempt offerings, such as ‘‘gun jumping provisions of the Securities Act . . . staff review,
Section 11 liability, disclosure requirements in the
registration statement, and Exchange Act reporting requirements’’). 12See, e.g., Accelerated Filer and Large Accelerated Filer Definitions, Release No. 34–88365 (Mar. 12, 2020) [85 FR 17178, 17215 (Mar. 26, 2020)] (‘‘2020 Accelerated Filer Adopting Release’’) (‘‘[A]t the issuer level, more reliable disclosures are generally expected, based on economic theory, to lead investors to demand a lower expected return to hold an issuer’s securities (i.e., a lower cost of capital).’’). 13See, e.g., Harmonization Adopting Release at 3498 (‘‘We are amending the exempt offering framework to close gaps and reduce complexities that may impede access to capital for issuers and thereby limit investment opportunities, while preserving or enhancing important investor protections.’’); Baby Shelf Adopting Release at 73534 (‘‘These amendments are intended to allow a larger number of public companies to benefit from the greater flexibility and efficiency in accessing the public securities markets afforded by Form S–3 and Form F–3 in a manner that is consistent with investor protection.’’); Securities Offering Reform Adopting Release at 44761 (‘‘The amendments we are adopting today are designed to ensure that appropriate investor protections are maintained.’’); Shelf Registration, Release No. 33–6499 (Nov. 17,
1983) [48 FR 52889, 52890 (Nov. 23, 1983)] (‘‘Shelf
Registration Adopting Release’’) (‘‘The Commission believes that limiting the Rule to primary offerings of securities qualified to be registered on Form S– 3 or F–3 and to traditional shelf offerings strikes the appropriate balance.’’). 14When an issuer conducts a delayed offering under a shelf registration statement, it is commonly described as taking securities ‘‘off the shelf.’’ These delayed offerings are referred to as ‘‘takedowns.’’ 15Throughout this release, ‘‘public float’’ refers to the aggregate market value of the voting and non￾voting common equity held by non-affiliates. 16See Table 2 and the accompanying discussion in section IV.B.1.a below for the methodology used in developing (and the assumptions underlying) this estimate. 17Among other things, the Enhanced Registration and Communication Benefits include the ability to file shelf registration statements on Form S–3 that are automatically effective upon filing with the Commission, to exercise greater flexibility with respect to pre-filing and post-filing communications, and to pay filing fees at the time of the takedown, rather than at the time of filing a Form S–3. See infra sections II.B.1 and II.B.2.a for a more comprehensive discussion of the Enhanced Registration and Communication Benefits, the types of issuers that currently qualify for each of the benefits, and the types of issuers that would qualify for each of the benefits under the proposed amendments. example, the Commission has noted that issuers can raise capital through the public markets on more favorable terms as compared to the private markets.8 This is due, in large part, to the ‘‘substantial pricing discounts that private investors often demand to compensate them for the relative illiquidity of the restricted shares they are purchasing’’ in exempt offerings.9 Both issuers and their investors benefit from this characteristic of the public markets because investors ‘‘may be less subject to the risk of dilution in the value of their shares if the companies in which they invest are able to meet more of their capital needs in the public markets.’’ 10 Investors in registered offerings also enjoy additional benefits and protections. As compared to exempt offerings, issuers conducting registered offerings are required to provide their investors with more robust disclosures, and those disclosures are subject to enhanced liability standards.11 Although these requirements may increase compliance costs and litigation risks for issuers, those issuers ultimately may benefit from a lower cost of capital due, in part, to investors’ reduced risk perception with respect to registered offerings.12 When pursuing the goal of facilitating capital formation, the Commission also has sought to ensure investors remain appropriately protected.13 To the extent there is a trade-off between efforts to facilitate capital formation and protect investors, the Commission has calibrated its rules with an eye towards balancing those two goals.
This proposal is intended to achieve the benefits associated with increased capital formation in the public securities markets. At the same time, we are committed to ensuring that investors remain appropriately protected. We recognize, however, that several aspects of our current Securities Act rules and forms, while intended to help protect investors at the time they were adopted, may now have the unintended effect of unduly inhibiting capital formation in today’s markets. We believe, therefore, that it is appropriate to recalibrate certain of our rules and forms to ensure that they do not unduly restrict issuers’ abilities to raise capital in a timely, efficient manner via a registered offering. A. Overview of the Proposed Amendments As discussed in more detail in section II below, the proposed amendments can be separated into several categories. First, we are proposing to revise Form S–3’s eligibility requirements to allow a broader range of issuers to conduct offerings using the form, including delayed primary offerings (which, for purposes of this release, we refer to as ‘‘shelf offerings’’) 14 and at the market (‘‘ATM’’) primary offerings. Notably, the proposed amendments would eliminate the following eligibility requirements in Form S–3:

• The issuer must have filed all the
  material required to be filed pursuant to
  section 13, 14, or 15(d) of the Exchange
  Act for a period of at least 12 calendar months immediately preceding the filing of the registration statement (which we refer to as the ‘‘One-Year Seasoning’’ requirement); and
• The aggregate value of the issuer’s
  voting and non-voting common equity held by non-affiliates (i.e., ‘‘public float’’) must be $75 million or more to offer an unlimited amount of securities on Form S–3.15 These proposed changes would significantly expand the population of issuers eligible to offer an unlimited amount of securities on Form S–3. Specifically, we estimate that there could be an increase of over 60 percent in the number of issuers eligible to offer an unlimited amount of securities on Form S–3.16 As discussed in section II.A below, these newly eligible issuers would benefit from the cost savings and capital raising efficiencies and flexibilities associated with the ability to use Form S–3 and conduct shelf offerings. Second, we are proposing to extend certain benefits currently reserved for ‘‘well-known seasoned issuers’’ (‘‘WKSIs’’) and other seasoned issuers (which we refer to as the ‘‘Enhanced Registration and Communication Benefits’’) to a larger set of issuers.17 Those benefits, which are discussed in
  section II.B below, are intended to
  further the Commission’s longstanding goal of ‘‘facilitat[ing] capital formation, and possibly lower[ing] the cost of

18Securities Offering Reform Adopting Release at 44793. 19A ‘‘national securities exchange’’ is a securities exchange that has registered with the Commission under section 6 of the Exchange Act. 15 U.S.C. 78f. In this release, we refer to issuers that have at least one class of common equity securities listed on a national securities exchange as ‘‘exchange-listed.’’ To qualify for the ability to file automatic shelf registration statements, issuers also would be required to have been subject to the Exchange Act’s reporting requirements for a period of at least 12 calendar months. 20See Table 7 and the accompanying discussion in section IV.B.1.a below for the methodology used in developing (and the assumptions underlying) this estimate. 21To be able to forward incorporate by reference, an issuer must be an SRC that meets the eligibility requirements for incorporation by reference in General Instruction VII of Form S–1, which includes being subject to the reporting requirements pursuant to section 13 or 15(d) of the Exchange Act, having filed all reports and other materials required to be filed by sections 13(a), 14, or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports and materials), having filed an annual report required under section 13(a) or 15(d) of the Exchange Act for the most recently completed fiscal year, and not being a BSP issuer, as defined infra note 180. See infra section II.C for a discussion of the requirements to incorporate by reference on Form S–1. 22We calculated this estimated increase by comparing the number of Exchange Act reporting issuers that are SRCs to the number of such issuers that are non-SRCs, according to the economic analysis we conducted in another proposing release. See Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies, Release No. 33–11419 (May 19, 2026) (‘‘Filer Status Proposal’’) (noting in EA Table 2 that, as of 2024, there were 2,904 SRCs and 3,067 Exchange Act reporting companies that were non-SRCs). 23 15 U.S.C. 77r(b)(3). 24We also are proposing certain conforming and technical amendments to some of our rules and forms that are intended to simplify them and avoid redundancy. These amendments generally are not intended to have a substantive effect and are discussed in more detail in section II.G.3 below. 25See infra section II.A.1.b and c. capital, by improving access to the public capital markets.’’ 18 Currently, in order to be a WKSI (and, in turn, qualify for all of the Enhanced Registration and Communication Benefits), an issuer must, among other things, either have a public float of $700 million or more or have issued at least $1 billion aggregate principal amount of non-convertible securities, other than common equity, in primary offerings for cash, not exchange, registered under the Securities Act. Under the proposed amendments, issuers would not
be required to meet either of these metrics in order to qualify for the Enhanced Registration and Communication Benefits. Instead, under the proposed amendments, issuers generally would qualify for those benefits if they are eligible to use Form S–3 and have at least one class of common equity securities listed on a national securities exchange.19 Thus, as a result of the proposed amendments, we estimate that there could be an increase of over 200 percent in the number of issuers eligible for all of the Enhanced Registration and Communication Benefits.20 Third, we are proposing to revise Form S–1 to expand issuers’ abilities to incorporate by reference information filed before (i.e., backward incorporation by reference) and after (i.e., forward incorporation by reference) the effective date of the registration statement. As discussed in section II.C below, the ability to backward incorporate currently is limited to issuers that, among other things, have filed an annual report for their most recently completed fiscal year. The ability to forward incorporate currently is limited to issuers that, among other things, are smaller reporting companies (‘‘SRCs’’).21 Under the proposed amendments, issuers that meet Form S– 1’s requirements to incorporate by reference would be able to backward incorporate regardless of whether they had filed an annual report for their most recently completed fiscal year and forward incorporate regardless of whether they are an SRC. This would allow a greater number of issuers to enjoy the cost savings associated with incorporation by reference, with an estimated increase of up to 106 percent in the number of issuers eligible to forward incorporate on Form S–1.22 Fourth, in addition to the proposed amendments to the registration process for issuers that register securities on Form S–1 and Form S–3, we are also proposing to modify the registration, communication, and offering process for certain business development companies (‘‘BDCs’’) and registered closed-end investment companies (‘‘registered CEFs’’, collectively with BDCs, ‘‘affected funds’’) that register securities on Form N–2, broadening their access to shelf offerings and the Enhanced Registration and Communication Benefits. These amendments would allow a greater number of affected funds to raise capital more efficiently and would provide more affected funds flexibility to manage the timing of their offerings in response to market opportunities. Fifth, we are proposing to amend Rule 482 and other related rules to permit broad-based advertising relating to certain insurance products as discussed in more detail in section II.E below. Sixth, under section 18(b)(3) of the Securities Act,23 we are proposing to define ‘‘qualified purchaser’’ such that State securities law registration and qualification requirements would be preempted with respect to any registered offering. As discussed in
section II.F below, such preemption
currently applies to registered offerings in which the securities being offered and sold are listed or approved for listing on a national securities exchange. Preemption currently does not, however, apply to registered offerings of unlisted securities. The proposed amendment, therefore, would eliminate the costs associated with complying with numerous states’ registration and qualification requirements for registered offerings of unlisted securities. Finally, we are proposing certain other amendments that are intended to modernize our rules. We discuss those proposed amendments in section II.G below.24 We invite and encourage interested parties to submit comments on any aspect of the proposed amendments. When commenting, please include the reasoning in support of your position or recommendation and provide any supporting documentation or data. B. Eliminating Public Float Requirements and Other Indicia of Market Following As noted in section I.A above, the proposed amendments would overhaul the criteria used to determine whether an issuer can use Form S–3 or the Enhanced Registration and Communication Benefits. For example, the proposed amendments would eliminate the requirements that issuers exceed a specified public float or amount of registered debt issued threshold to be eligible to offer an unlimited amount of securities on Form S–3 or to qualify for all of the Enhanced Registration and Communication Benefits. The proposed amendments also would eliminate the One-Year Seasoning requirement for Form S–3 eligibility. These proposed amendments are intended to expand the population of issuers eligible to use Form S–3 and the Enhanced Registration and Communication Benefits. As discussed in section II.A.1 below, this goal is consistent with several prior Commission rulemakings. We recognize, however, that the proposed amendments also would, in many ways, represent a departure from the Commission’s historical approach. An issuer’s eligibility to use Form S–3 has, since the form’s inception, depended on whether the issuer satisfies the Exchange Act seasoning and minimum public float requirements.25 Similarly, since the Commission adopted the Enhanced Registration and

26See infra section II.B.1.
27See supra note 13.
28Reproposal of Comprehensive Revision to System for Registration of Securities Offerings, Release No. 33–6331 (Aug. 6, 1981) [46 FR 41902, 41913 (Aug. 18, 1981)] (‘‘1981 Reproposal’’). 29See id. (explaining that short-form eligibility is premised ‘‘generally on dissemination of information in the marketplace, as represented by the length and nature of compliance by the company with the reporting requirements of the Exchange Act, and, with respect to proposed Form S–3, on the registrant’s float’’). 30See Securities Offering Reform Adopting Release at 44791 (‘‘For issuers with publicly traded equity, we believe that market capitalization provides a sufficient proxy for determining whether or not an issuer is well followed. For issuers of fixed income securities, we believe that the amount of fixed income securities sold in registered offerings for cash in the past three years provides a sufficient proxy.’’). 31See Release No. 34–8345 (June 28, 1968) [not published in the Federal Register]. 32To review Commission filings, investors had to either physically visit one of the Commission’s public reference rooms or subscribe to commercial data vendors for a considerable fee. See Yen-Cheng Chang, Alexander Ljungqvist, and Kevin Tseng, Do Corporate Disclosures Constrain Strategic Analyst Behavior?, 36 Rev. of Fin. Stud. 3614, 3169 (2023) (citing letter to Chairman Richard C. Breeden and Representative Edward J. Markey from Patricia Glass Schuman, American Library Association et al. dated January 13, 1992, available at http:// www.bio.net/bionet/mm/ag-forst/1992-January/ 000187.html) (noting that pre-EDGAR one vendor charged ‘‘a fee of $125 per month, plus a connect charge of $39 an hour, plus a charge of 2.5 cents per line of data plus search charges which range from $6 to $51 per search’’ while another charged ‘‘$84 per hour plus $1 per page’’ and noting as an example that ‘‘obtaining Ford’s 1994 10–K from [the vendor] would have cost $145 in page charges alone’’). 33Short Form for the Registration of Securities, Release No. 33–5923 (Apr. 11, 1978) [43 FR 16672, 16673 (Apr. 19, 1978)] (‘‘1978 Amendments to Short-Form Registration’’). 34 In 1993, the Commission began mandating electronic filings on EDGAR on a phased-in basis. See Rulemaking for EDGAR System, Release No. 33–6977 (Feb. 23, 1993) [58 FR 14628 (Mar. 18, 1993)] (‘‘1993 EDGAR Adopting Release’’). This phase-in culminated in all corporate issuers becoming subject to electronic filing requirements in 1996. See Rulemaking for EDGAR System, Release No. 33–7122 (Dec. 19, 1994) [59 FR 67752 (Dec. 30, 1994)]. 35EDGAR was first introduced as a concept more than 15 years after the Commission adopted short￾form registration and more than a year after Form S–3’s adoption. See Electronic Filing, Processing and Information Dissemination System, Release No. 33–6519 (Mar. 22, 1984) [49 FR 12707 (Mar. 30, 1984)]. Even though EDGAR was introduced in the mid-1980s, issuers were not required to make their
filings electronically on EDGAR until the mid￾1990s, which was after the Commission last revisited the ‘‘One-Year Seasoning’’ requirement. The Commission, therefore, has not reassessed that requirement since EDGAR was in its infancy. Communication Benefits, an issuer’s ability to use those benefits has been conditioned, in part, on whether the issuer exceeds either a minimum public float or amount of registered debt issued threshold.26 In adopting rules and forms permitting short-form and shelf registration and the Enhanced Registration and Communication Benefits, and in periodically reconsidering the requirements issuers must meet to qualify for some of those benefits, the Commission has sought to reduce issuers’ costs of raising capital while maintaining investor protection.27 The proposed amendments are intended to reflect the Commission’s experience since it adopted or last amended the rules, including a reassessment of how best to protect investors in a manner that does not unduly limit issuers’ access to short-form and shelf registration and the Enhanced Registration and Communication Benefits. As the Commission has previously recognized, public securities offerings provide investors with benefits and protections not available in the private markets. The existing eligibility requirements, including the One-Year Seasoning and public float requirements, are intended to protect investors. Those eligibility requirements, however, also limit the number of issuers that may utilize Form S–3 and the Enhanced Registration and Communication Benefits, thus prompting some issuers to raise capital through other means, such as an exempt offering or private financing, in lieu of conducting a registered offering. Because registered offerings often ultimately benefit issuers and investors alike, we believe it is appropriate to expand significantly the population of issuers eligible to use Form S–3, conduct shelf and ATM offerings, and qualify for the Enhanced Registration and Communication Benefits so as to encourage more registered offerings, provided that appropriate investor protections are maintained. The proposed changes to these eligibility requirements also are intended to reflect technological advancements and developments in the financial markets since the Commission adopted short-form registration, shelf registration, and the Enhanced Registration and Communication Benefits. The Commission has stated that the eligibility criteria in Form S–3 ‘‘are based on the Commission’s belief that information about companies using the form already is known or is so readily available that it need not be repeated in a prospectus.’’ 28 The Commission historically relied on that criteria—in particular, the Exchange Act reporting history and minimum public float requirements—as indicia of whether an issuer was widely followed and, in turn, whether information about the issuer had been sufficiently disseminated into the marketplace such that short-form registration
was appropriate.29 The Commission relied on a similar rationale in conditioning the ability to use the Enhanced Registration and Communication Benefits on an issuer’s ability to meet the specified public float or registered debt thresholds.30 When short-form registration was first introduced in 1967, Commission filings were submitted and available only in paper copy. The Commission attempted to facilitate broader distribution of this information by contracting with an outside company to create and distribute microfiche copies to designated Commission public reference rooms,31 but obtaining copies of these documents was cumbersome and expensive. Notably, an individual had to either make paper copies in the Commission’s public reference rooms or order copies from service bureaus which, in turn, had to make and sell paper copies as requested.32 Thus, because it was difficult for investors to obtain information about an issuer, the Commission sought to ensure that, for companies using short-form registration, there was ‘‘wide dissemination of information about such companies in the market place’’ and that ‘‘securities analysts [would] follow companies of this size.’’ 33 In the intervening years, technological developments have transformed how information is disseminated into the marketplace and facilitated widespread access to issuer information. For example, issuers today must make their Commission filings electronically through the Commission’s Electronic Data Gathering, Analysis, and Retrieval system (‘‘EDGAR’’),34 which makes these filings immediately available to the investing public without charge.35 In addition, corporate news is disseminated in an electronic world, and issuers today make their Commission filings and other company information available through recognized electronic channels of distribution, including their websites and other digital technologies. Today’s investors can access and follow publicly filed information about an issuer for low or no cost in real time and on demand. Further, although Commission filings have been available to the investing public electronically, free of charge, through EDGAR since the mid-1990s and were available to investors in 2005 when the Commission adopted the Enhanced Registration and Communication Benefits and in 2007 when the Commission last considered eliminating the public float requirement

36See Baby Shelf Adopting Release at 73536 (noting that ‘‘the technological advances that have revolutionized communications between companies and the market should allow us to ease the Form S–3 eligibility standards without undermining investor protection or the integrity of the markets’’ but ‘‘retaining public float as a factor in determining the extent of short-form eligibility’’ because ‘‘[t]echnology can facilitate and enhance market following, but it does not ensure it’’). 37 John B. Horrigan & Aaron Smith, Home Broadband Adoption 2007, Pew Research Center (July 3, 2007), available at https:// www.pewresearch.org/internet/2007/07/03/home￾broadband-adoption-2007/. 38 Internet, Broadband Fact Sheet, Pew Research Center (Nov. 13, 2024), available at https:// www.pewresearch.org/internet/fact-sheet/internet￾broadband/. 39 Mobile Fact Sheet, Pew Research Center (Nov. 13, 2024), available at https:// www.pewresearch.org/internet/fact-sheet/mobile/. 40See 17 CFR 230.411(d); FAST Act Modernization and Simplification of Regulation S– K, Release No. 33–10618 (Mar. 20, 2019) [84 FR 12674 (Apr. 2, 2019)] as corrected by FAST Act Modernization and Simplification of Regulation S– K, Correction, Release No. 33–10618A (Aug. 6,
2019) [84 FR 13796 (Aug. 13, 2019)] (‘‘FAST Act
Adopting Release’’). The Commission also has made it easier for the public to access EDGAR data by, for example, offering robust search features for EDGAR filings and making available Application Programing Interfaces (‘‘APIs’’) and Really Simple Syndication (‘‘RSS’’) feed options that can help investors stay current with filings made on EDGAR. See U.S. Securities and Exchange Commission, EDGAR Application Programming Interfaces (Last Reviewed or Updated April 8, 2025), available at https://www.sec.gov/search-filings/edgar￾application-programming-interfaces; U.S. Securities and Exchange Commission, Structured Disclosure RSS Feeds (Last Reviewed or Updated Jan. 21, 2026), available at https://www.sec.gov/data￾research/structured-data/structured-disclosure-rss￾feeds. Further, investors may use other websites to receive alerts when, for example, a company issues a press release or a media outlet publishes a news
article about the company.
41Sabrina Chi & Devin M. Shanthikumar, Do Retail Investors Use SEC Filings? Evidence from EDGAR Search (Oct. 25, 2018), available at https:// ssrn.com/abstract=3281234 (finding that retail investor trading is significantly related to EDGAR searches for Form 10–K and Form 10–Q filings). 42Cf. supra note 33 and accompanying text. 43Adoption of Amendments to Registration Forms and Guide and Rescission of Registration Form, Release No. 33–5791 (Dec. 20, 1976) [41 FR 56301, 56302 (Dec. 28, 1976)] (‘‘1976 Amendments to Forms S–7 and S–16’’). 44Rule 415(a) provides that ‘‘[s]ecurities may be registered for an offering to be made on a continuous or delayed basis in the future, Provided, That: (1) the registration statement pertains only to:
. . . (x) Securities registered (or qualified to be registered) on Form S–3 or Form F–3 which are to be offered and sold on an immediate, continuous or delayed basis by or on behalf of the registrant, a majority owned subsidiary of the registrant or a person of which the registrant is a majority-owned in Form S–3,36 we believe such information has become even more widely accessible in the intervening years. Whereas only 71 percent of U.S. adults used the internet in 2007 and only 47 percent had a broadband connection at home,37 today 96 percent use the internet and 79 percent have a broadband connection at home.38 In addition, today approximately 91 percent of Americans own a smartphone compared to just 35 percent in 2011.39 Thus, a greater number of investors can retrieve investment information from nearly anywhere and nearly anytime. Moreover, the Commission improved investor access to this information in 2019 by requiring active hyperlinks to information incorporated by reference into registration statements and prospectuses.40 As a result, today’s investors can now more easily and rapidly access Commission filings on EDGAR and via issuer websites, as well as other issuer-related information that is available through other electronic channels, at significantly lower cost than in the past.41 Because of the ease with which investors may obtain Exchange Act disclosure documents and other information about an issuer, we believe that eligibility to use Form S–3 and the Enhanced Registration and Communication Benefits should not depend on the extent of an issuer’s market following, including analyst coverage (e.g., by reference to its public float or initial Exchange Act seasoning).42 Instead, we believe a more appropriate criterion is whether investors can readily obtain issuer￾specific information that is incorporated by reference into a prospectus and the related registration statement to make an informed investment decision. If an issuer is current and timely with respect to its Exchange Act reporting obligations, then an investor’s ability to obtain such issuer-specific information will not depend on the length of the issuer’s Exchange Act reporting history or the amount of the issuer’s public float. In the pre-EDGAR era, it may have been important to include eligibility requirements for short-form registration that ‘‘assure[d] that sufficient information about registrants using the form [was] available to the investing public through the Exchange Act reporting system.’’ 43 Today, however, the public availability of all issuers’ Exchange Act reports in EDGAR effectively addresses the concerns that animated those requirements. We believe, therefore, that eligibility for Form S–3 and the Enhanced Registration and Communication Benefits no longer should be conditioned on an issuer’s Exchange Act reporting history, public float, or amount of registered debt issued. That said, consistent with the Commission’s investor protection mandate, we are not
proposing to expand eligibility to use Form S–3 or the Enhanced Registration and Communication Benefits to all issuers. For example, under the proposed amendments, issuers would be eligible to use most of the Enhanced Registration and Communication Benefits only if they are eligible to use Form S–3 and are exchange-listed. Further, although use of Form S–3 would not be conditioned on an issuer having satisfied the One-Year Seasoning requirement under the proposed amendments, use of the form would be conditioned on an issuer being current and timely with respect to all the material required to be filed pursuant to sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act during the preceding 12 calendar months, or such shorter period that the issuer was required to file such reports and materials. The proposed amendments also would prohibit issuers from using Form S–3 (and, therefore, the Enhanced Registration and Communication Benefits) if they are within a category of issuers we believe pose greater investor protection concerns, including those issuers that potentially present the highest risk of non-compliance with Securities Act and Exchange Act disclosure requirements. We discuss each of these aspects of the proposed amendments in more detail below.
II. Discussion of Proposed Amendments
A. Form S–3
We are proposing to amend Form S– 3 to revise its eligibility requirements. In addition, we are proposing certain other amendments to Form S–3 that would simplify and modernize the form. Taken together, these proposed amendments are intended to allow a greater number of issuers the flexibility to access the public securities markets quickly by using Form S–3 while also ensuring that investors remain appropriately protected. Form S–3, as it would read under the proposed amendments, is attached to this release as Appendix B.

1. Background
   a. Eligibility To Use Form S–3 and Conduct Shelf Offerings Form S–3 is a short-form registration statement that eligible issuers can use to register offerings under the Securities Act. The ability to use Form S–3 can confer significant advantages on eligible companies seeking to raise capital through the public markets. Notably, an issuer that is Form S–3 eligible for primary offerings is permitted to conduct shelf offerings—that is, offerings made on a delayed basis— under Rule 415.44 Rule 415 provides

subsidiary.’’ 17 CFR 230.415(a). Offerings under 17 CFR 230.415(a)(1)(x) (‘‘Rule 415(a)(1)(x)’’) are referred to as ‘‘shelf offerings’’ because securities can be offered (or ‘‘taken down’’ from the shelf registration statement) over time and from time to time. As noted above, for purposes of this release, the term ‘‘shelf offering’’ is intended to refer to an offering made on a delayed basis. 45See 17 CFR 230.430B(a). 46See 17 CFR 229.512(a)(1)(B). 47See 17 CFR 229.512(a)(1). 48See General Instruction I of Form S–1 (‘‘This Form shall be used for the registration under the [Securities Act]. . . of securities of all registrants for which no other form is authorized or prescribed, except that this Form shall not be used for securities of foreign governments or political subdivisions thereof or asset-backed securities, as defined in 17 CFR 229.1101(c).’’). Form S–3 has more extensive registrant and transaction requirements, as discussed infra notes 50–64 and accompanying text. 49As discussed in more detail in section II.C below, the proposed amendments would permit other issuers using Form S–1 (i.e., not just SRCs) to forward incorporate. 50See Form S–3, General Instruction I.A. 51See Form S–3, General Instruction I.B. 52See Form S–3, General Instruction I.A.1. 53See Form S–3, General Instruction I.A.2. 54See Form S–3, General Instruction I.A.3(a). 55See id. General Instruction I.A.3(b) of Form S– 3 specifies that an issuer must be timely in its Exchange Act reports ‘‘during the twelve calendar months and any portion of a month immediately preceding the filing of the registration statement.’’ As an illustration of how that measurement period functions, an issuer intending to file a Form S–3 on July 19, 2026 would have to have been current and timely with respect to its Exchange Act filings, other than specified reports on Form 8–K, from July 1, 2025 through July 19, 2026. 56See Form S–3, General Instruction I.A.3(b). 57See Form S–3, General Instruction I.A.4. 58See Form S–3, General Instruction I.A.7(a). issuers with considerable flexibility to access the public securities markets from time to time in response to changes in the market and the issuer’s capital needs. Issuers that are eligible to conduct shelf offerings under Rule 415 are permitted to register securities offerings prior to planning any specific offering and, once the registration statement is effective, issue securities in one or more offerings without waiting for further Commission or staff action. By having more control over the timing of their offerings, eligible issuers can take advantage of desirable market conditions, thus allowing them to raise capital on more favorable terms (such as a higher equity price or lower debt interest rate). As a result, the ability to sell securities ‘‘off the shelf’’ as needed gives issuers a financing alternative that may be more advantageous for them than other available methods, such as private placements with securities priced at discounted
values based in
part on their relative illiquidity.
One of the primary advantages of Form S–3 is the ability to omit from the prospectus included in a registration statement at the time of effectiveness (the ‘‘base prospectus’’) certain information, including, for WKSIs, information as to whether an offering is a primary or secondary offering, the plan of distribution for the securities, a description of the securities to be offered other than an identification of the name or class of such securities, and the identification of other issuers.45 An issuer can instead provide this information at the time that it is actually conducting an offering, after its terms have been determined. The ability to omit information from the base prospectus at the time of effectiveness, therefore, enables issuers to conduct shelf offerings. In addition, Form S–3 permits the required information to be backward and forward incorporated by reference to a company’s disclosure in its Exchange Act filings. The ability to forward incorporate allows for automatic updating of the registration statement.46 By contrast, a company without the ability to forward incorporate must file a prospectus supplement to update information or, in certain cases, file a post-effective amendment to its registration statement to prevent information in the registration statement from becoming outdated and to update for fundamental changes to the information set forth in the registration statement.47 Issuers that are ineligible to file on Form S–3 often register their offerings on Form S–1, which has far fewer eligibility requirements than Form S–
3.48 Issuers filing registration statements
on Form S–1 are not permitted to register shelf offerings under Rule 415 and therefore cannot register securities in advance of an actual offering. Thus, as compared to conducting a shelf offering on Form S–3, it is more challenging (and, in some instances, likely not feasible) for Form S–1 registrants to take advantage of favorable market opportunities, as they must prepare and file a registration statement at the time of an expected offering and await Commission or staff action before offering or selling securities. Further, Form S–1 permits certain issuers to backward incorporate. Form S–1 currently does not, however, permit issuers other than SRCs to forward incorporate, which therefore requires a company to update the registration statement through prospectus supplements and post-effective amendments.49 To use Form S–3, an issuer must meet the form’s registrant requirements,50 which generally pertain to the issuer’s reporting history under the Exchange Act, as well as at least one of the form’s transaction requirements.51 Form S–3’s registrant requirements (which are enumerated in General Instruction I.A of Form S–3) specify that to use the form, an issuer must satisfy each of the following:

• U.S. Issuer. The issuer must be
  organized under the laws of the United States or any State or territory or the District of Columbia and have its principal business operations in the United States or its territories.52
• Exchange Act Reporting. The issuer
  must have a class of securities registered pursuant to section 12(b) or 12(g) of the Exchange Act or be required to file reports pursuant to section 15(d) of the Exchange Act.53
• One-Year Seasoning. The issuer
  must have been subject to the requirements of section 12 or 15(d) of the Exchange Act for a period of at least 12 calendar months immediately preceding the filing of the registration statement.54
• Current in Exchange Act Reporting.
  The issuer must have filed all the material required to be filed pursuant to
  section 13, 14, or 15(d) of the Exchange
  Act for a period of at least 12 calendar months immediately preceding the filing of the registration statement.55
• Timely in Exchange Act Reporting.
  The issuer must have filed in a timely manner all reports required to be filed during the 12 calendar months and any portion of a month immediately preceding the filing of the registration statement, other than specified reports on Form 8–K.56
• Certain Failures to Make Payments
  and Defaults. The issuer must have not, since the end of the last fiscal year for which certified financial statements of the issuer and its consolidated subsidiaries were included in a report filed pursuant to section 13(a) or 15(d) of the Exchange Act: (a) failed to pay any dividend or sinking fund installment on preferred stock; or (b) defaulted (i) on any installment or installments on indebtedness for borrowed money, or (ii) on any rental on one or more long-term leases, which defaults in the aggregate are material to the financial position of the issuer and its consolidated and unconsolidated subsidiaries, taken as a whole.57
• Electronic Filings. The issuer must
  have filed with the Commission all required electronic filings.58
• Interactive Data Files. The issuer
  must have submitted electronically to the Commission all Interactive Data

59 17 CFR 232.11 defines Interactive Data File as ‘‘the machine-readable computer code that presents information in eXtensible Business Reporting Language (XBRL) electronic format pursuant to § 232.405 and as specified by the EDGAR Filer Manual.’’ 60See Form S–3, General Instruction I.A.7(b). 61See Form S–3, General Instruction I.A.5. 62See Form S–3, General Instruction I.A.6. Specifically, successor issuers may use Form S–3 if:
(a) the issuer’s predecessor and the successor issuer, taken together, meet the registrant requirements, and the succession was primarily for the purpose of changing the state of incorporation of the predecessor or forming a holding company and the assets and liabilities of the successor at the time of succession were substantially the same as those of the predecessor; or (b) if all predecessors met the conditions at the time of succession and the successor issuer has continued to do so since the succession. See id. 63Although General Instruction I.B.1 is titled ‘‘Primary Offerings by Certain Registrants,’’ the instruction, in addition to permitting primary offerings, permits registration of ‘‘outstanding securities to be offered for cash for the account of any person other than the registrant’’ if the issuer’s public float is $75 million or more. 64The reference in General Instruction I.B.3 to securities being ‘‘quoted on the automated quotation system of a national securities association’’ is a reference to The Nasdaq Stock Market LLC (‘‘Nasdaq’’) before Nasdaq became a national securities exchange. Because Nasdaq is now a national securities exchange, this language has no effect. Accordingly, a class of securities to be offered in reliance on General Instruction I.B.3 must be listed on a national securities exchange. 65The definition of WKSI under 17 CFR 230.405 (‘‘Rule 405’’) also allows majority-owned subsidiaries of WKSIs to be treated as WKSIs for purposes of certain offerings. We discuss the WKSI status of these issuers and our related proposed amendments in section II.B below. 66See Form S–3, General Instruction I.C.1. 67See Form S–3, General Instruction I.C.2. 68See Form S–3, General Instruction I.C.3. 69See Form S–3, General Instruction I.C.4. 70See Form S–3, General Instruction I.C.5. Files 59 required to be submitted pursuant to 17 CFR 232.405 during the 12 calendar months and any portion of a month immediately preceding the filing of the registration statement on Form S–3 (or for such shorter period of time that the issuer was required to submit such files).60 Foreign issuers, other than foreign governments, also can use Form S–3 if they satisfy all the registrant requirements, other than the ‘‘U.S. Issuer’’ eligibility requirement, and file the same Exchange Act reports as a domestic issuer.61 In addition, successor issuers are permitted to use Form S–3 if they meet certain conditions.62 Form S–3’s transaction requirements (which are enumerated in General Instruction I.B of Form S–3) specify that the form can be used for primary offerings only under the following circumstances:

• General Instruction I.B.1—Primary
  Offerings by Certain Registrants. An issuer may register any primary offering of its securities on the form if, among other requirements, the issuer’s public float is $75 million or more.
• If an issuer does not have a public
  float of at least $75 million, it may nevertheless register the following primary offerings on Form S–3:
  Æ General Instruction I.B.2—Primary Offerings of Non-Convertible Securities Other than Common Equity. An issuer may register a primary offering of non￾convertible securities other than common equity, provided the issuer: (1) has issued at least $1 billion in non￾convertible securities, other than common equity, in primary offerings for cash registered under the Securities Act over the prior three years; (2) has outstanding at least $750 million of non￾convertible securities, other than common equity, issued in primary offerings for cash registered under the Securities Act; (3) is a wholly-owned subsidiary of a WKSI; or (4) is a majority-owned operating partnership of a real estate investment trust (‘‘REIT’’) that qualifies as a WKSI. Æ General Instruction I.B.4—Rights Offerings, Dividend or Interest Reinvestment Plans, and Conversions or Warrants and Options. An issuer may register securities to be offered upon exercise of outstanding rights, under a dividend or interest reinvestment plan, or upon the conversion of outstanding convertible securities or the exercise of outstanding warrants or options, if certain conditions are met. Æ General Instruction I.B.6—Limited Primary Offerings by Certain Other Registrants. An issuer that is not a shell company may register any primary offering if it is exchange-listed and the aggregate market value of securities sold by or on behalf of the issuer under the instruction during the 12 months immediately prior to, and including, the sale is no more than one-third of the issuer’s public float. Form S–3’s transaction requirements specify that the form can be used for resale offerings only under the following circumstances:
• General Instruction I.B.1—Primary
  Offerings by Certain Registrants.63 An issuer may register resales of outstanding securities if the issuer has a public float of at least $75 million.
• General Instruction I.B.3—
  Transactions Involving Secondary Offerings. If an issuer does not have a public float of at least $75 million, resales of outstanding securities can be registered on Form S–3 if the securities are listed on a national securities exchange or quoted on the automated quotation system of a national securities association.64 In addition, General Instruction I.B.5 provides that Form S–3 may not be used to register offerings of asset-backed securities, as defined in 17 CFR 229.1101(c). Finally, Form S–3 has instructions that specify circumstances under which certain subsidiaries are eligible to use the form.65 In addition to the permissible offerings by subsidiaries identified in General Instruction I.B.2 (with respect to wholly-owned subsidiaries of WKSIs and majority￾owned operating partnerships of REITs that qualify as WKSIs), General Instruction I.C provides that majority￾owned subsidiaries may register certain offerings on Form S–3 if:
• the issuer-subsidiary itself meets
  the registrant requirements and the applicable transaction requirement; 66
• the parent of the issuer-subsidiary
  meets the registrant requirements and the conditions of General Instruction I.B.2 are met; 67
• the parent of the issuer-subsidiary
  meets the registrant requirements and the applicable transaction requirement, and provides a full and unconditional guarantee, as defined in 17 CFR 210.3– 10 (‘‘Rule 3–10 of Regulation S–X’’), of the payment obligations on the securities being registered, and the securities being registered are non￾convertible securities, other than common equity; 68
• the parent of the issuer-subsidiary
  meets the registrant requirements and the applicable transaction requirement, and the securities of the issuer￾subsidiary being registered are full and unconditional guarantees, as defined in Rule 3–10 of Regulation S–X, of the payment obligations on the parent’s non-convertible securities, other than common equity, being registered; 69 or
• the parent of the issuer-subsidiary
  meets the registrant requirements and the applicable transaction requirement, and the securities of the issuer￾subsidiary being registered are guarantees of the payment obligations on the non-convertible securities, other than common equity, being registered by another majority-owned subsidiary of the parent where the parent provides a full and unconditional guarantee, as defined in Rule 3–10 of Regulation S– X, of such non-convertible securities.70 For convenience, throughout the remainder of this release, we refer to the offerings involving parent or subsidiary guarantees permitted under General Instructions I.C.3, I.C.4, and I.C.5 as ‘‘Guarantee-Related Offerings.’’ b. History of Short-Form Registration The Commission first introduced short-form registration ‘‘in the nature of

71Adoption of Short Form for Registration of Securities of Certain Issuers and Amendment of Rule 174, Release No. 33–4886 (Nov. 29, 1967) [32 FR 17933 (Dec. 15, 1967)] (‘‘Form S–7 Release’’). The Commission had previously adopted a registration statement designated Form S–7 in 1947 to be used by the International Bank of Reconstruction and Development. See Adoption of Form S–7, Release No. 33–3238 (July 8, 1947) [12 FR 4531 (July 10, 1947)]. This form was rescinded in 1950. See Bretton Woods Agreement, Release No. 33–3364 (Jan. 9, 1950) [15 FR 280 (Jan. 17, 1950)]. 72Form S–7 was available to listed issuers with a class of common equity securities registered under section 12(b) and unlisted domestic issuers that had a class of equity securities registered under
section 12(g). See Form S–7 Release. 73The registrant was required to have been
engaged in business of substantially the same general character since the beginning of the last five fiscal years. 74The issuer’s board of directors had to have been directors of the registrant during each of the last three fiscal years. 75The issuer and its subsidiaries could not have, during the prior 10 years, defaulted in the payment of any dividend or sinking fund installment on preferred stock, or in the payment of any principal, interest, or sinking fund installment on any indebtedness for borrowed money, or in the payment of rentals under long term leases. 76The issuer and its consolidated subsidiaries had to have had sales or gross revenues of at least $50 million for the prior fiscal year and a net income, after taxes but before extraordinary items net of tax effect, of at least $2.5 million for the prior fiscal year, and of at least $1 million for each of the preceding four fiscal years. 77 If the securities to be registered were common stock or securities convertible into common stock, the issuer had to have earned in each of the prior five fiscal years any dividends paid in each such year on all classes of securities. In addition, if the issuer paid a stock dividend in any of such fiscal years, the aggregate amount transferred from surplus to capital in respect of each such dividend had to have been charged only to the earned surplus account and been equal to the aggregate fair market value of the stock issued as such dividend. 78See Form S–7 Release (noting that ‘‘[t]he form represents a closer integration of the requirements of the [Securities Act] and the [Exchange Act]’’ and that ‘‘prospectuses and registration statements on this form will be substantially shorter than heretofore and will, therefore, be substantially easier both for the issuer to prepare and for the Commission to process’’). 79Francis M. Wheat, Disclosure to Investors—A Reappraisal of Administrative Policies Under the ’33 and ’34 Securities Acts, at 67–68 (1969), available at https://www.sechistorical.org/museum/ galleries/tbi/gogo_d.php. 80See Adoption of Amendments to Form S–7, Release No. 33–5100 (Nov. 12, 1970) [35 FR 228 (Nov. 24, 1970)]. Specifically, the Commission eliminated the business continuity requirement and eased the board stability requirement (by specifying that a majority of the existing board must have been directors of the issuer or a predecessor for each of the last three, rather than five, fiscal years) and the financial performance requirement (eliminating the requirement to have had gross revenues of at least $50 million for the prior fiscal year and replacing the requirement to have had net income of at least $2.5 million in the last fiscal year and $1 million for each of the last five fiscal years with a requirement to have had net income of $500,000 in each of the last five fiscal years). 81See Adoption of Form S–16 for Registration of Securities to be Offered in Specified Transactions and Amendment of Rules 427 and 429, Release No.
33–5117 (Dec. 23, 1970) [36 FR 777 (Jan. 16, 1971)]. 82See id. 83See id. 84See 1976 Amendments to Forms S–7 and S–16. 85See supra notes 73–77 and accompanying text for a description of the qualitative issuer requirements of Form S–7. The amendments also made Form S–7 available for certain exchange offers. See 1976 Amendments to Forms S–7 and S– 16. 86 Id. 87 1978 Amendments to Short-Form Registration. 88 Id. at 16673. 89 Id. (internal quotation marks omitted) (quoting The Report of the Advisory Committee on Corporate Disclosure to the Securities and Exchange Commission (Nov. 3, 1977), Committee Print 95–29, House Committee on Interstate and Foreign Commerce, 95th Cong., 1st Sess.). With respect to the $50 million public float requirement in particular, the Commission stated that ‘‘this requirement will provide some assurance that, in addition to wide dissemination of information about such companies in the market place, Continued an experiment’’ with Form S–7 in
1967.71 Unlike other forms, Form S–7
permitted eligible issuers to omit certain information about the issuer, such as property descriptions, pending legal proceedings, and director and executive compensation. To use the form, issuers had to have a class of equity securities registered under section 12(b) or (g) of the Exchange Act and had to be current and timely in their Exchange Act reporting for at least five years.72 Issuers also had to satisfy other qualitative criteria related to business continuity,73 board stability,74 solvency,75 financial performance,76 and dividend coverage.77 The rationale for this short￾form registration statement was that the omitted information was already available through the issuer’s Exchange Act reports, making its inclusion in the registration statement unnecessary.78 Over time, the Commission has periodically amended its rules and forms to broaden the availability of short-form registration and shelf offerings. In the Commission’s 1969 Disclosure Policy Study led by Commissioner Francis Wheat (often referred to as the ‘‘Wheat Report’’), the Commission recommended a ‘‘substantial expansion’’ of short-form registration.79 In response, the Commission broadened short-form eligibility by decreasing Form S–7’s five-year Exchange Act reporting requirement to three years and eliminating or easing certain qualitative criteria.80 That same year, the Commission further expanded short-form registration by adopting Form S–16, which increased the scope of offerings available to issuers eligible to use Form S–7.81 Specifically, Form S–16 allowed these issuers to register secondary offerings of securities listed on a national securities exchange, conversions of convertible securities, and warrant exercises.82 Unlike Form S– 7, Form S–16 allowed incorporation by reference of an issuer’s Exchange Act reports, including forward incorporation, and required fewer disclosures.83 In 1976, the Commission again amended Form S–7 to extend its availability—and, by extension, that of Form S–16—to a larger number of issuers.84 The amendments made Form S–7 available to issuers with a class of debt securities registered under section 12(b) as well as issuers with a section 15(d) reporting obligation. They also permitted use by successor issuers and certain majority-owned subsidiaries of Form S–7 eligible parents, while broadening eligibility by reducing the Exchange Act reporting timeliness requirement from three years to one year. In addition, the amendments eliminated the board stability and dividend coverage requirements and eased the financial performance requirement.85 The Commission also retained certain safeguards—including the requirement that issuers have filed all Exchange Act reports for 36 months—‘‘to assure that sufficient information about registrants using the form is available to the investing public through the Exchange Act reporting system.’’ 86 In 1978, the Commission further expanded the scope of short-form registration by amending Form S–16 to permit
primary cash underwritten offerings by any Form S–7 eligible issuer with a public float of at least $50 million.87 The amendments also allowed offerings by majority-owned subsidiaries whose securities were fully and unconditionally guaranteed by a parent meeting the $50 million public float threshold. The Commission characterized these amendments as ‘‘extremely important,’’ noting that they were expected to ‘‘reduce registration costs and thus the costs of raising capital, facilitate timely access to the capital markets, make more meaningful the periodic reporting requirements of the Exchange Act and eliminate needless duplication of disclosure which results in increased costs to investors.’’ 88 At the same time, the Commission explained that the $50 million public float requirement was intended to limit eligibility to ‘‘a small top tier of companies . . . which usually provide high quality corporate communication documents, including [Exchange] Act reports, and whose corporate information is widely disseminated because members of this class of registrants are widely followed by debt and equity analysts.’’ 89

securities analysts will follow companies of this size.’’ Id. Although the Commission recognized that ‘‘[t]he lack of interest of securities professionals in a company does not mean necessarily that information about that company is not readily available or that the public information is of inferior quality,’’ it further noted that ‘‘professional interest should help assure market reaction to material information about a company and thereby alleviate the need to provide the information directly to offerees when securities are registered on Form S– 16 for a primary offering.’’ Id. 90Adoption of Integrated Disclosure System, Release No. 33–6383 (Mar. 3, 1982) [47 FR 11380 (Mar. 16, 1982)] (‘‘Integrated Disclosure Adopting Release’’) (implementing an integrated disclosure system by, among other things, ‘‘expan[ding] and reorganiz[ing] . . . Regulation S–K as the repository for the uniform disclosure requirements of documents filed with the Commission under the Securities Act and the [Exchange Act]’’). 91The Commission initially sought public comment on whether to add a market criterion, such as public float, as a condition of Form S–2 eligibility. See Proposed Comprehensive Revision to System for Registration of Securities Offerings, Release No. 33–6235 (Sept. 2, 1980) [45 FR 63693 (Sept. 25, 1980)] (‘‘1980 Proposed Revisions’’). The Commission determined not to move forward with such a requirement, stating that although it ‘‘believes such criteria, which ensure adequate information dissemination, are necessary where, as in the case of an offering on Form S–3, much of the underlying disclosure is not delivered . . . , with Form S–2 there is delivery of the basic disclosure documents and therefore the Commission believes that requirement can be deleted.’’ 1981 Reproposal at 41912. 92The Commission rescinded Form S–2 in 2005 because requiring physical delivery of Exchange Act reports had ‘‘become outdated in view of the introduction of EDGAR, other technological developments, and the rapid dissemination of information in the market.’’ Securities Offering Reform Adopting Release at 44782. The Commission also stated that Form S–2 had become ‘‘superfluous’’ in light of concurrent amendments to Form S–1 that allowed certain Exchange Act reporting issuers to incorporate by reference into Form S–1 information from previously filed Exchange Act reports and documents. Id. 93See Integrated Disclosure Adopting Release. 94 Id. 95 Id. at 11382. 96 Id. at 11384. 97 Id. 98See id. at 11394. 99This staff practice was set forth in a release commonly referred to as ‘‘Guide 4,’’ which was published in 1968. See Guides for Preparation and Filing of Registration Statements, Release No. 33– 4936 (Dec. 9, 1968) [33 FR 18617 (Dec. 17, 1968)]. Guide 4 set forth the Division of Corporation Finance’s view that the last sentence of section 6(a) of the Securities Act, 15 U.S.C. 77f(a) (‘‘A registration statement shall be deemed effective only as to the securities specified
therein as proposed to be offered.’’), prohibited ‘‘securities [to] be registered if there is no intention to offer them within the proximate future.’’ Id. Guide 4 also set forth the Division’s view that ‘‘[t]here are, however, certain types of deferred or extended offerings for which registration is permitted or required’’ (e.g., when the issuer proposed to engage in a continuing acquisition program or in the case of securities underlying exercisable options, warrants, or rights). Id. 100Shelf Registration Adopting Release at 52890 (‘‘The cost savings are attributable to a number of factors, including flexibility to respond to rapidly changing markets, reduced legal, accounting, printing and other expenses and increased competition among underwriters.’’). 101 Id. at 52890. With respect to adequacy of disclosure, commenters ‘‘question[ed] the amount and quality of information available, as well as whether investors receive it in time to make investment decisions’’ and ‘‘express[ed] concern that [Rule 415] contributes to deficiencies in the disclosure provided to investors caused, in great
part, by short form registration statements.’’ Id. at
52892. With respect to due diligence, commenters
‘‘attribute[d] concerns . . . largely to fast time schedules’’ associated with shelf offerings under Rule 415. Id. at 52892–93. 102 Id. at 52890. Commenters also expressed concerns about the ‘‘institutionalization of the securities markets, impact on retail distribution, increased concentration in the securities industry, [and] effects on the secondary markets.’’ Id. at
52893. The Commission noted, however, that these
concerns ‘‘relate to economic factors, such as volatile interest rates and other market forces, which exist apart from Rule 415 and thus are not appropriate bases on which to take action on the Rule.’’ Id. 103 Id. With respect to registrants not eligible to use short-form registration, ‘‘[t]he Commission also note[d] that shelf registration may not be as advantageous for such registrants because they cannot rely on subsequently filed Exchange Act reports for certain updating of the information in the shelf registration statement.’’ Id. at 52893–94. 104 Id. In 1982, the Commission replaced Forms S–7 and S–16 with Forms S–2 and S–3 as part of adopting the ‘‘integrated disclosure system.’’ 90 Form S–2 allowed any issuer that had been an Exchange Act reporting company for at least 36 months (and had timely filed its reports during the prior 12 calendar months) to register any transaction, other than an exchange offer, on a short￾form basis.91 Similar to Form S–7, instead of providing all required disclosures directly in the prospectus, issuers that qualified to use the form could choose to either (i) deliver a copy of the annual report to security holders with the prospectus or (ii) present issuer-oriented information comparable to that required to be included in such annual report in the prospectus. In either case, the more complete issuer information required by the form was incorporated by reference into the prospectus from the issuer’s most recent annual report on Form 10–K. Form S– 2 did not permit forward incorporation; accordingly, updating amendments (which required Commission or staff action to become effective) had to be filed for ongoing offerings.92 As initially adopted, Form S–3 permitted registration of any primary or secondary offering if the issuer had, among other requirements: (1) been subject to Exchange Act reporting for at least 36 months; (2) timely filed its Exchange Act reports for the 12 months prior to filing the registration statement; and (3) at least $150 million in public float, or, alternatively, at least $100 million in public float if the annual trading volume of such stock was at least three million shares.93 An issuer also could register certain specific transactions on Form S–3 without regard to public float, including primary offerings of investment grade non￾convertible debt or preferred stock, secondary offerings of a class of securities listed on a national securities exchange or quoted on the Nasdaq interdealer quotation system, rights offerings to shareholders, offerings of securities issuable upon exercise of warrants or upon conversion of other outstanding securities, and offerings pursuant to dividend and interest reinvestment plans.94 The Commission adopted Form S–3 ‘‘in reliance on the efficient market theory,’’ 95 with registrant and transaction requirements designed to ‘‘relat[e] short-form registration to the existence of widespread following in the marketplace.’’ 96 Based on commenter input, the
Commission explained that ‘‘a test based on the registrant’s [public] float . . . is an appropriate measure of marketplace following’’ and determined that ‘‘a [public] float of $150 million is the appropriate level at which short￾form registration should be allowed.’’ 97
c. History of Shelf Registration
At the same time it adopted Forms S– 2 and S–3 in 1982, the Commission also adopted Rule 415 as a ‘‘temporary rule.’’ 98 Rule 415 conditionally permitted shelf registration and codified Commission staff practice that had informally permitted shelf registration prior to that time.99 The Commission permanently adopted Rule 415 in 1983 after it concluded that the rule ‘‘has operated efficiently and has provided registrants with important benefits in their financings, most notably cost savings.’’ 100 In doing so, the Commission acknowledged commenters’ concerns regarding the ‘‘adequacy of disclosure and due diligence’’ 101 and addressed those concerns by ‘‘limiting the Rule to primary offerings of securities qualified to be registered on Form S–3 or F–3 and to traditional shelf offerings.’’ 102 The Commission noted that ‘‘[t]he integrated disclosure system addresses concerns about the quality and timeliness of disclosure by ensuring that the marketplace is provided with a continuous stream of high quality corporate information about registrants widely followed in the marketplace.’’ 103 The Commission further stated that ‘‘[f]or registrants not eligible to use short form registration, . . . concerns about disclosure and due diligence outweigh the benefits of Rule 415.’’ 104

105Simplification of Registration Procedures for Primary Securities Offerings, Release No. 33–6964 (Oct. 22, 1992) [57 FR 48970 (Oct. 29, 1992)] (‘‘1992 Adopting Release’’). 106The Commission also eliminated the alternative test of $100 million public float with annual trading volume of three million shares because this test became unnecessary due to the lower $75 million public float threshold. 107Simplification of Registration Procedures for Primary Securities Offerings, Release No. 33–6943 (July 16, 1992) [57 FR 32461, 32463 (July 22, 1992)] (‘‘1992 Proposing Release’’). 108 1992 Adopting Release at 48971. 109 In an unallocated shelf offering, an issuer is permitted to disclose the various types and categories of securities (both debt and equity) covered by the registration statement without assigning a specific dollar amount to each category to be offered. In such offering, the registration statement lists the types of securities covered and the prospectus supplement filed in connection with a ‘‘takedown’’ offering from the shelf registration statement specifies the amount of the particular security being offered. 110 1992 Proposing Release at 32466. ‘‘Overhang’’ generally refers to potential downward pressure on an issuer’s stock price that may occur when an issuer signals a willingness to sell securities in the future by filing a shelf registration statement and investors fear future dilution stemming from future issuances. See, e.g., Mary C. Neary, SEC Rule 415:
Resolving the Dilemma of Shelf Registrations Creates Problems of Its Own, 3 Pace L. Rev. 275, 300 (1983) (‘‘[N]ot knowing when a large block of stock will be sold from the shelf, or the date, underwriter, or timing of future offerings, creates what is known as an ‘overhang’ problem, and intensifies the downward pressure, effectively placing a lid on the stock price.’’). 111See Securities Offering Reform Adopting Release. 112See 17 CFR 230.462(e); 17 CFR 239.13(d). The term ‘‘WKSI’’ and the benefits currently reserved for these issuers are discussed in greater detail in
section II.B below.
113See 17 CFR 230.456(b).
114See Securities Offering Reform Adopting Release at 44774–75. 115See 17 CFR 230.413(b). In general, securities cannot be added to an effective registration statement. See 17 CFR 230.413(a). 116Specifically, the Commission eliminated a requirement that ATM offerings involve an underwriter and a requirement that an ATM offering not exceed 10% of the issuer’s public float if the offering related to voting stock. 117See Baby Shelf Adopting Release. 118 Id. at 73535. 119 Id. 120 Id. 121 Id. at 73536. In 1992, the Commission amended Form S–3 to make it and, by extension, shelf registration, available to a broader group of issuers and classes of transactions.105 It increased the pool of eligible issuers by shortening the requisite Exchange Act reporting history from 36 to 12 months for most issuers and reducing the public float requirement from $150 million to $75 million.106 In proposing these amendments, the Commission cited the success of Form S–3 and the integrated disclosure system over the previous 10 years, which had ‘‘achieved their intended effects of providing issuers efficient access to the public securities markets without compromising investor protection’’ and ‘‘improvement in the quality of ongoing Exchange Act reporting.’’ 107 Among other things, the Commission noted that the amendments ‘‘would provide significant cost savings, efficiency and flexibility for many issuers’’ and, with respect to the expanded access to shelf registration, ‘‘allow[ ] significantly greater numbers of issuers the flexibility to access the public securities markets on demand without having to obtain additional clearance from the Commission’s staff,’’ which would ‘‘remove unnecessary regulatory obstacles to capital raising.’’ 108 The 1992 amendments also permitted shelf registration of debt, equity, and other securities on an unallocated basis and provided for immediate effectiveness of Form S–3 registration statements for dividend and interest reinvestment plans.109 The Commission suggested that unallocated offerings may promote greater use of shelf offerings, especially for common stock offerings. In this regard, the Commission noted ‘‘[t]he limited use of shelf registration for common stock,’’ which it attributed to ‘‘concerns by registrants about the market effects from the overhang created by such registration, as well [as] concerns that the market would view even a registration statement for possible future sales of common stock as signaling management’s view that the price of the stock has reached a peak.’’ 110 The Commission addressed these concerns by allowing issuers to identify the types of securities covered by the registration statement without having to identify the specific amount (either number of shares or dollar amount) of each category to be offered (these registration statements are commonly referred to as ‘‘universal shelf registration statements’’). The Commission further liberalized the shelf registration process in several ways in a 2005
rulemaking titled ‘‘Securities Offering Reform.’’ 111 First, the Commission permitted a new category of issuers, referred to as WKSIs, greater flexibility in registering their securities offerings by allowing them to file shelf registration statements on Form S–3 that are automatically effective upon filing with the Commission.112 Second, the Commission adopted rules allowing WKSIs using automatic shelf registration statements to pay filing fees at any time (i.e., either in advance of a takedown or on a ‘‘pay-as-you-go’’ basis at the time of each takedown).113 The ‘‘pay-as-you-go’’ model enabled WKSIs to file shelf registration statements without specifying a total dollar amount of securities to be offered. Third, the Commission eliminated a provision in Rule 415 that limited the amount of securities that could be registered for certain primary offerings on Form S–3 to an amount reasonably expected to be offered and sold within two years.114 Fourth, WKSIs were permitted to add new classes of securities or securities of an eligible subsidiary to an already effective automatic shelf registration statement by post-effective amendment.115 Finally, the amendments eliminated certain limitations imposed on ATM offerings by seasoned issuers.116 To further enhance issuers’ access to the public markets, the Commission in 2007 again amended the eligibility requirements of Form S–3.117 These amendments allowed an even greater number of issuers to conduct primary securities offerings on the form, and, in turn, to conduct shelf offerings. Significantly, under these amendments, an issuer could use Form S–3 to conduct primary shelf offerings without regard to the size of its public float or the rating of its debt to be offered if it satisfied the form’s registrant requirements, was not a shell company, was exchange-listed, and did not sell more than the equivalent of one-third of its public float in primary offerings over any period of 12 calendar months. In further extending Form S–3 eligibility to a broader group of issuers and allowing the use of Form S–3 without regard to an issuer’s public float, the Commission stated its ‘‘belie[f] that extending Form S–3 short-form registration to additional issuers should enhance their ability to access the public securities markets.’’ 118 The Commission also noted ‘‘that such a measure would greatly enhance smaller public companies’ access to capital in the securities markets, with far less burden and cost.’’ 119 In adopting these amendments, the Commission emphasized ‘‘the great advances in the electronic dissemination and accessibility of company disclosure transmitted over the internet in the last several years.’’ 120 The Commission, therefore, was ‘‘persuaded that the technological advances that have revolutionized communications between companies and the market should allow us to ease the Form S–3 eligibility standards without undermining investor protection or the integrity of the markets.’’ 121 Nonetheless, the
Commission stated that it was not prepared at that time ‘‘to allow unlimited use of this form for

122 Id. at 73535.
123 Id. at 73536. In addition, although the Commission cited certain technological advances as a reason for expanding Form S–3 eligibility, it also explained that ‘‘[w]hile current technology provides investors with access to information about publicly reporting companies at an unprecedented level of ease and speed, it does not guarantee that the market has fully absorbed and synthesized all of the available information of a given company’’ and that ‘‘[t]echnology can facilitate and enhance market following, but it does not ensure it.’’ Id. 124 Id. at 73534. 125 Id. 126Recommendation IV.P.3. of the Final Report of the Advisory Committee on Smaller Public Companies (Apr. 23, 2006), at 68–72 (‘‘[W]e recommend that the efficiencies associated with the use of Form S–3 be made available to all companies that have been reporting under the Exchange Act for at least one year, and are current in their Exchange Act reporting at the time of filing. Additionally, we recommend elimination of the current condition to the use of Form S–3 that the issuer has timely filed all required reports in the last year.’’), available at http://www.sec.gov/info/smallbus/acspc/acspc￾finalreport.pdf. 127See letter in response to Security Ratings, Release No. 33–9186 (Feb. 9, 2011) [76 FR 8946 (Feb. 16, 2011)] (‘‘Security Ratings Proposing Release’’) from Securities Industry and Financial Markets Association (Mar. 18, 2011). 128 31st Annual Government-Business Forum on Small Business Capital Formation, Final Report (Nov. 15, 2012), at 26, 28, available at https:// www.sec.gov/info/smallbus/gbfor31.pdf. 129 Legislative Proposals to Enhance Capital Formation and Reduce Regulatory Burdens, Part II:
Hearing Before the Subcomm. on Capital Markets and Government Sponsored Enterprises, 114th Cong. (2015) (Statement of David Weild) (‘‘We would also support the expansion of Form S–3 and other shelf registration approaches to improve access to capital for smaller public companies that are current with their SEC filings.’’), available at https://financialservices.house.gov/uploadedfiles/ hhrg-114-ba16-wstate-dweild-20150513.pdf. 130See Transcript of Small Cap Policy Roundtable: Reassessing the Framework for Small Public Companies at 26–27, 34–35 (June 18, 2025), available at https://www.sec.gov/files/small-cap￾policy-roundtable-transcript.pdf. 131See letter from New York City Bar Ass’n to The Hon. Paul S. Atkins dated May 27, 2025 (‘‘We recommend that the Commission eliminate or increase the one-third public float limit in General Instruction I.B.6 of Form S–3 or exempt issuers after some period of time (e.g., one year after the company becomes eligible to file on Form S–3).’’), available at https://www.nycbar.org/reports/letter￾to-sec-chairman-atkins-with-recommendations-for￾rulemaking-and-guidance/. 132See Transcript of the 45th Annual Small Business Forum at 161–62 (Mar. 9, 2026), available at https://www.sec.gov/files/transcript-45th-sb￾forum.pdf. 133See, e.g., 44th Annual Small Business Forum, Final Report (Apr. 10, 2025) (recommending that the Commission ‘‘[s]treamline the SEC registration process for smaller businesses’’); Transcript of the 44th Annual Small Business Forum (Apr. 10, 2025), comments of Dave Lynn (encouraging the Commission to review smaller company access to shelf registration), available at https://www.sec.gov/ files/2025-SBF-508-Transcript.pdf; 37th Annual Government-Business Forum on Small Business Capital Formation, Final Report (Dec. 12, 2018) (forum participants recommending ‘‘[i]ncreasing the companies that can take advantage of Form S–3— whether listed on a national exchange or not’’), available at https://www.sec.gov/info/smallbus/ gbfor37.pdf; Legislative Proposals to Enhance Capital Formation for Small and Emerging Growth Companies, 113th Cong. (2014) (Statement of Brian Hahn) (recommending ‘‘[e]xpanded eligibility for Form S–3 to encompass a greater pool of small companies’’), available at https:// financialservices.house.gov/uploadedfiles/hhrg￾113-ba16-wstate-bhahn-20140409.pdf. 134Accelerating Access to Capital Act of 2017, H.R. 4529, 115th Cong. (2017); Accelerating Access to Capital Act of 2016, H.R. 2357, 114th Cong. (2015); Small Business Freedom to Grow Act of 2014, H.R. 4568, 113th Cong. (2014). 135H.R. Rep. No. 115–576, at 9 (2017) (noting that ‘‘[c]urrent restrictions for companies using Form S– 3, which are based on size and whether they are primary offerings by companies who do not have at least $75 million in public float.’’ 122 In that regard, the Commission noted certain concerns related to allowing smaller public companies to use shelf registration. Those concerns included ‘‘that the securities of
smaller public companies are comparatively more vulnerable to price manipulation than the securities of larger public companies, and may also be more prone to financial reporting error and abuses’’ and ‘‘that the disclosure obligations and liability imposed by the federal securities laws on smaller public companies are comparable, but not identical, to the largest reporting companies.’’ 123 In part due to those concerns, the Commission stated that only a ‘‘modest expansion of Form S–3 . . . eligibility’’ was warranted at that time.124 The Commission further explained, however, that it ‘‘may revisit the appropriateness of the form restrictions at a later time if our experience with this revised requirement suggests issuer eligibility for primary offerings on Form S–3 . . . should be further revised.’’ 125 The Commission has not further expanded shelf offerings or Form S–3 eligibility since 2007. d. Public Views on Expanding Form S– 3 Eligibility Over the years, some market participants have advocated for expanding Form S–3 eligibility to reduce compliance costs in connection with registered offerings and to promote capital formation. Those commentators have proposed different methods for accomplishing this objective. For example, in 2006, the Commission’s Advisory Committee on Smaller Public Companies recommended allowing all Exchange Act reporting companies that had been reporting for at least one year and were listed on a national securities exchange or quoted in the over-the-counter market to use Form S–3.126 In response to a 2011 Commission proposing release, one commenter recommended eliminating Form S–3’s transaction requirements and permitting its use by issuers that had reliably filed Exchange Act reports for at least one year.127 Participants at the Commission’s 2012 Government-Business Forum on Small Business Capital Formation recommended permitting ‘‘all public companies (regardless of public float or exchange-traded status) to utilize Form S–3 for primary and secondary offerings’’ or eliminating the one-third limit under General Instruction I.B.6 for exchange-listed issuers.128 In 2015, another commentator supported making Form S–3 available to any issuer current in its Exchange Act reporting obligations, regardless of public float.129 At the ‘‘Small Cap Policy Roundtable:
Reassessing the Framework for Small Public Companies’’ hosted by the Commission’s Office of the Advocate for Small Business Capital Formation, some participants recommended reconsideration of: (1) the One-Year Seasoning requirement and the requirement to have a Form 10–K on file to use Form S–3; (2) the $75 million public float requirement in General Instruction I.B.1 and raising the related one-third limit in General Instruction I.B.6; (3) whether failing to file a Form 8–K should result in a 12-month ineligibility to use Form S–3; and (4) whether it makes sense to lose Form S– 3 eligibility over a limited omission of XBRL tags.130 Also in 2025, the New York City Bar Association recommended that all exchange-listed issuers be permitted to register offerings in any amount on Form S–3.131 More recently, a participant at the Commission’s annual Small Business Forum recommended that the Commission consider shortening the One-Year Seasoning requirement, eliminating or reducing the $75 million public float requirement in General Instruction I.B.1, and eliminating or reducing the 12-month ineligibility that results from a late Form 8–K filing.132 Various others commentators have recommended modernizing the registration process or shelf eligibility without specifying the manner for doing so.133 There also have been legislative attempts to expand access to Form S–3 by allowing all exchange-listed issuers to register any offering on the form, regardless of public float, and to allow non-exchange-listed issuers to register on Form S–3 primary offerings of up to one-third of their public float.134 Opponents of these proposals, however, cautioned that such changes could ‘‘allow companies to avoid SEC staff review and risk increased fraud and market manipulation, particularly for non-exchange traded companies.’’ 135

traded on an exchange, ensure that they have timely information available to the public, ample liquidity, and strong corporate governance standards,’’ and expressing the view that the proposed legislation ‘‘would dangerously expand the type of companies that are eligible to use . . . Form S–3 to register their securities before selling them to the public’’), available at https://www.govinfo.gov/content/pkg/ CRPT-115hrpt576/pdf/CRPT-115hrpt576.pdf; see also Legislative Proposals to Enhance Capital Formation for Small and Emerging Growth Companies, 113th Cong. (2014) (Statement of Professor John C. Coffee, Jr.) (expressing concern about allowing smaller issuers, including those in the over-the-counter market and Pink Sheets, to use Form S–3 for unlimited capital raising activities, but also questioning whether the market would accept such offerings or whether reputable underwriters would feel comfortable underwriting such offerings), available at https:// financialservices.house.gov/uploadedfiles/hhrg￾113-ba16-wstate-jcoffee-20140409.pdf. 136Certain transaction-based requirements would continue to apply to subsidiaries that rely on a parent’s Form S–3 eligibility to conduct offerings on Form S–3. See section II.A.2.c below for a discussion regarding Form S–3 eligibility for subsidiaries. 137We also recognize that our proposed expansion of Form S–3 eligibility would provide more issuers that register debt securities subject to the Trust Indenture Act of 1939 (‘‘Trust Indenture Act’’) [15 U.S.C. 77aaa et seq.] (‘‘subject debt securities’’) with greater flexibility to comply with the Trust Indenture Act’s trustee qualification requirements. The Trust Indenture Act requires an issuer that registers subject debt securities on Form S–1 to file in the initial filing or a pre-effective amendment a trust indenture to be qualified and related trustee statement of eligibility and qualification. Section 305(b)(2) of the Trust Indenture Act [15 U.S.C. 77eee(b)(2)], however, permits the issuer to designate the trustee on a delayed basis for a shelf offering and, as a result, the issuer may file the trustee statement of eligibility and qualification after the related registration statement, such as a Form S–3, goes effective. 138See supra notes 52–60 and accompanying text. 139As is currently the case, Form S–3 would not be available for exchange offers or business combination transactions under the proposed amendments. 140We are proposing various amendments to simplify and modernize Form S–3. First, we are proposing to amend Item 9 and eliminate Item 12(a)(3) of Form S–3. Item 9 requires an issuer to ‘‘[f]urnish the information required by Item 202 of Regulation S–K (§ 229.202 of this chapter), unless capital stock is to be registered and securities of the same class are registered pursuant to Section 12 of the Exchange Act,’’ in which case an issuer must (in accordance with Item 12(a)(3)) incorporate by reference ‘‘the description of such class of securities
which is contained in a registration statement filed under the Exchange Act, including any amendment or reports filed for the purpose of updating such description.’’ We are proposing to eliminate Item 12(a)(3) and amend Item 9 to specify that 17 CFR
229.202 (‘‘Item 202 of Regulation S–K’’) disclosure
should be provided in response to that item regardless of whether capital stock that is registered under section 12 of the Exchange Act is to be registered on the form. We note that issuers could elect to incorporate by reference the information required by Item 9 pursuant to Item 12(d). Item 12(d) currently permits an issuer to satisfy the disclosure requirements of Items 3 through 11 to be incorporated by reference from documents filed pursuant to Section 13(a), 14, or 15(d) of the Exchange Act. Second, we propose to amend Item 12(d) to also permit incorporation by reference from any Securities Act or Exchange Act filing in order to give issuers greater flexibility to incorporate by reference on Form S–3. Third, we also are proposing revisions to simplify Item 11(b) of Form S–3 by removing references to specific filings that are required to be incorporated by reference for the purpose of including certain financial statements required by that item. We do not believe it is necessary to specify the forms that need to be incorporated by reference. Instead, we believe issuers should have the flexibility to incorporate the requisite financial statements from any filing that is made with the Commission. 141Thus, under the proposed amendments, an issuer could become an Exchange Act reporting company—for example, by registering a class of equity securities on Form 10 under section 12(g) of the Exchange Act—and then immediately conduct its first registered offering on Form S–3. 142At least one observer has previously recommended that the Commission eliminate the timeliness requirement altogether. See 2006 Report of the Advisory Committee on Smaller Public Companies, supra note 126. 143The proposed amendments would codify the staff’s longstanding interpretation that for purposes of determining whether a registrant has timely filed all reports required to be filed during the past twelve calendar months only reports under section 13(a) or 15(d) of the Exchange Act and materials under sections 14(a) and 14(c) of the Exchange Act, other than specified reports on Form 8–K, would be considered. As is the case currently, the timeliness requirement would not apply to reports that are required solely pursuant to Item 1.01, 1.02, 1.04, 1.05, 2.03, 2.04, 2.05, 2.06, 4.02(a), or 5.02(e) of Form 8–K. We note that the Commission recently issued a proposal that would allow registrants to elect to report on a semiannual basis on a new Form 10–S in lieu of reporting quarterly on Form 10–Q. See Semiannual Reporting, Release No. 33–11414 Continued
2. Proposed Amendments
We are proposing to amend Form S– 3’s registrant requirements and to eliminate the form’s transaction requirements 136 to simplify and expand eligibility, thereby allowing significantly more issuers to avail themselves of the form’s flexibility to access the public securities markets on demand.137 With respect to the registrant requirements, the proposed amendments would eliminate the ‘‘One￾Year Seasoning,’’ ‘‘Certain Failures to Make Payments and Defaults,’’ ‘‘Electronic Filings,’’ and ‘‘Interactive Data Files’’ eligibility requirements described above.138 The proposed amendments would retain the ‘‘Current in Exchange Act Reporting’’ and ‘‘Timely in Exchange Act Reporting’’ requirements and would add two new registrant requirements prohibiting a subset of ‘‘ineligible issuers,’’ as that term is defined in Rule 405, and certain other types of issuers (as discussed in
section II.A.2.a.v below) from using
Form S–3.
With respect to the transaction requirements, the proposed amendments would eliminate those requirements, including the requirement in General Instruction I.B.1 that the issuer have a public float of $75 million or more to offer an unlimited amount of securities for cash on Form S–3. As such, any issuer that meets the proposed registrant requirements would be eligible to use Form S–3 for any primary or secondary offering of the issuer’s securities.139 Each of the proposed amendments is discussed, in turn, below.140 a. Form S–3 Registrant Requirements
i. Exchange Act Reporting (One-Year
Seasoning, Current, and Timely Requirements) We propose to eliminate the One-Year Seasoning requirement (which currently is in General Instruction I.A.3(a)) that requires an issuer to have been an Exchange Act reporting company for at least 12 calendar months prior to filing a Form S–3 because, as discussed in
section I.B above, we believe an
investor’s ability to obtain issuer￾specific information in Exchange Act reports does not depend on the length of an issuer’s reporting history. Rather, the ability to obtain such information depends on whether an issuer is current and timely with respect to its reporting obligations. Under the proposed amendments, an issuer would immediately become eligible to use Form S–3 upon having a class of securities registered pursuant to section 12(b) or 12(g), or becoming subject to
section 15(d), of the Exchange Act.141
Although we are proposing to eliminate the One-Year Seasoning requirement, we are proposing to retain the Current and Timely in Exchange Act Reporting requirements.142 Specifically, proposed General Instruction I.A.1.a would set forth the requirement that an issuer be subject to the Exchange Act’s reporting requirements, and proposed General Instructions I.A.1.b and c, respectively, would set forth the Current and Timely in Exchange Act Reporting requirements. Accordingly, under the proposed amendments, Form S–3 eligibility would be contingent on (among other things) an issuer being subject to the Exchange Act’s reporting requirements and having timely filed all reports and other materials required to be filed under sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act, other than specified reports on Form 8– K, during the preceding 12 calendar months and any portion of a month immediately preceding the filing of a Form S–3, or, if an issuer had been subject to such requirements for less than 12 calendar months, during the time the issuer had been required to file such reports and materials.143

(May 5, 2026) [91 FR 24968 (May 7, 2026)] (‘‘Semiannual Reporting Proposal’’). If that proposal is adopted, an issuer that elects to file semiannually would be required to comply with the timeliness requirement with respect to its Form 10–S filings rather than with respect to Form 10–Q filings. The staff position discussed in this footnote and any other staff guidance, statements, or positions referenced in this release, represent the views of Commission staff and are not a rule, regulation, or statement of the Commission. The Commission has neither approved nor disapproved the views reflected in these staff positions or the content of these staff statements and, like all staff positions or statements, they have no legal force or effect, do not alter or amend applicable law, and create no new or additional obligations for any person. 144See 1981 Reproposal at 41913 (stating that ‘‘Form S–3 eligibility criteria are based on the Commission’s belief that information about companies using the form already is known or is so readily available that it need not be repeated in a prospectus’’). 145See 15 U.S.C. 77j. We recognize that not all Exchange Act reports required to be filed during the 12 calendar months preceding the filing of a Form S–3 are incorporated by reference into the Form S– 3 and therefore are not part of the prospectus. Item 12 of Form S–3 requires incorporation by reference of reports filed since the end of the latest fiscal year for which a Form 10–K was required to be filed, which could be less than a 12-calendar month period. For example, assume a calendar-year-end issuer files its Form 10–K for fiscal year end 2025 on Mar. 3, 2026. If the issuer files a Form S–3 on Aug. 27, 2026, it would be required to incorporate by reference all reports required to have been filed since Dec. 31, 2025, which would be less than a 12- calendar month period. Nonetheless, we believe the 12-calendar month lookback period is appropriate because it helps ensure that all information required to be incorporated by reference into the Form S–3 is timely filed and therefore available to investors. 146That is, if an issuer attempts to rely on Rule 12b–25 but is unable to comply with the requirements of that rule, the seven calendar days would be calculated from the filing’s original due date and not from the end of the period prescribed under Rule 12b–25. If, on the other hand, an issuer complies with Rule 12b–25 with respect to a report, such report is deemed to be filed on the prescribed due date and, therefore, the issuer would not need to rely on the seven-calendar-day grace period described in this section. 147 If the seventh calendar day falls on a Saturday, Sunday, or holiday, the report or other material would need to have been filed no later than the first business day immediately following the Saturday, Sunday, or holiday. Under General Instruction G.(3) of Form 10–K, a reporting issuer subject to the proxy rules may omit Part III information from
the Form 10–K if that information is included in the issuer’s proxy statement filed with the Commission within 120 calendar days after the fiscal year end. This instruction treats the omitted Part III information as timely filed on the Form 10–K due date. If the issuer fails to file this information with its proxy statement or fails to amend its Form 10– K within 120 calendar days, the Form 10–K is considered untimely. The proposed seven-day period would apply only to the original Form 10– K due date and not to the additional 120-day period provided by General Instruction G.(3). 148To the extent issuers are engaged in a registered offering while contemplating a subsequent registered offering, they should consider whether they have present disclosure obligations with respect to such subsequent offering. For example, such issuers should consider the adequacy of their discussion of liquidity and capital resources under 17 CFR 229.303(b)(1)(i) and (ii) of Regulation S–K, the disclosure regarding their intended use of proceeds under 17 CFR 229.504 of Regulation S–K, and any other material effects that the subsequent registered offering may have on the investors of the issuers. 149We do not believe that satisfaction of an initial Exchange Act compliance period is premised on the notion that an issuer’s historical compliance with its Exchange Act reporting obligations is indicative We continue to believe issuers must be current and timely with respect to their Exchange Act reports at the time of filing a registration statement on Form S–3 because short-form and shelf registration are premised on the availability of information about an issuer.144 If an issuer is not current in its Exchange Act reporting obligations, then the issuer-specific information that may be needed to make an investment decision would not be available. Moreover, where Exchange Act reports that are required to be incorporated by reference into a Form S–3 have not been filed, the issuer likely would not be in compliance with section 10 of the Securities Act.145 Further, we believe that conditioning Form S–3 eligibility on the timely filing of Exchange Act reports establishes a compelling incentive for issuers to timely file their Exchange Act reports, thereby helping ensure continuous availability of issuer￾specific information even after the shelf registration statement has become effective and in the period during which an issuer conducts its offerings and at other times. Consistent with the Commission staff’s current practice of not objecting to use of Form S–3 when an untimely filing has been made under certain limited circumstances, we also propose to amend the form’s instructions to provide that an issuer would remain Form S–3 eligible notwithstanding an untimely filing having been made during the relevant lookback period so long as: (a) the filing was made within seven calendar days of the original due date (where 17 CFR 240.12b–25 (‘‘Rule 12b–25’’) applies, the seven
calendar days would be calculated from the filing’s original due date and not from the end of the time period prescribed under Rule 12b–25 146) and (b) the issuer made only one untimely filing during the relevant lookback period.147 We want to encourage issuers to make their Exchange Act filings on a timely basis. At the same time, however, we believe loss of Form S–3 eligibility can be a disproportionately harsh consequence for a single untimely filing during a 12-month period. Accordingly, we propose to permit issuers to remain Form S–3 eligible when the conditions described herein are satisfied. We believe a seven-day period provides a reasonable amount of time to file the missed report or other material while helping ensure investors receive necessary information within a reasonable timeframe. The One-Year Seasoning requirement may make registered offerings less attractive or feasible for new Exchange Act reporting companies. Currently, such issuers must file a new Securities Act registration statement on Form S–1 for any registered offerings conducted during their first year of being an Exchange Act reporting company despite having already filed a Securities Act or Exchange Act registration statement through which the issuer became an Exchange Act reporting company that contained much of the same information that would be in the new Form S–1. Further, these newly public companies cannot conduct shelf offerings, making it difficult for them to take advantage of favorable market conditions to efficiently raise capital from the public markets or to meet unexpected capital needs during this one-year period. Eliminating the One￾Year Seasoning requirement would allow issuers to use Form S–3 and conduct shelf offerings immediately after becoming an Exchange Act reporting company.148 We recognize that eliminating the One-Year Seasoning requirement may raise concerns about extending Form S– 3 eligibility to issuers without a demonstrated ability to comply with their Exchange Act reporting obligations. Specifically, there may be a view that issuers are more likely to become delinquent in their Exchange Act reporting obligations during their first year as a reporting company and, therefore, they should not be able to use Form S–3 until they have demonstrated an ability to comply with the Exchange Act. Despite these concerns, we do not believe an initial seasoning period is necessary. Consistent with the Commission’s longstanding approach, the essential aspect of Form S–3 and shelf eligibility is whether requisite information about an issuer is available to investors at the time they make an investment decision. Although there is a risk that an issuer without a demonstrated ability to comply with its Exchange Act reporting obligations will become delinquent in its reporting obligations while it has an effective registration statement on Form S–3, we do not believe this possibility alone should preclude an issuer from filing a Form S–3 at a time when it
is otherwise eligible to do so as there are other investor protection measures in place.149 To the extent an issuer were to

of, or provides a degree of certainty regarding, future compliance. 150Although we do not believe the risk of future non-compliance with Exchange Act reporting requirements warrants retaining the One-Year Seasoning requirement for the reasons discussed above, we nevertheless considered whether Form S–3 eligibility should be reassessed at the time of a takedown in addition to assessing at the time of initial filing and related updates under section 10(a)(3) of the Securities Act to ensure issuers remain current and timely (among the other Form S–3 eligibility requirements) at the time of a takedown. See 15 U.S.C. 77j(a)(3) (providing that ‘‘when a prospectus is used more than nine months after the effective date of the registration statement, the information contained therein shall be as of a date not more than sixteen months prior to such use, so far as such information is known to the user of such prospectus or can be furnished by such user without unreasonable effort or expense’’). We do not believe such reassessment is necessary or appropriate. We believe the liability provisions of the Federal securities laws sufficiently incentivize issuers to conduct takedowns only when in compliance with the form’s eligibility requirements and other requirements under the Federal securities laws. In addition, we believe that adding a reassessment requirement at the time of each takedown would impose an unnecessary burden on issuers and introduce unwarranted regulatory uncertainty. Accordingly, we are not proposing to require reassessment at the time of a takedown, but we seek comment on this issue. But see infra note 206 and accompanying text (noting that certain types of issuers would be prohibited from using Form S–3 at any time they become such type of issuer). 151 Issuers are (and would continue to be) required to include in a prospectus all information required by section 10(a) of the Securities Act and to ensure that such information is current in accordance with section 10(a)(3) of the Securities Act. We propose to amend Item 12(b) of Form S– 3, however, to eliminate the requirement for forward incorporation by reference of proxy or information statements, or other material, filed under section 14 of the Exchange Act, as we believe it is unnecessary to incorporate such information beyond the extent to which Part III information of Form 10–K is incorporated by reference from the proxy or information statement. Because this Part III information is already incorporated by reference—either directly or indirectly—through the Form 10–K, a separate requirement to incorporate all proxy materials under section 14 is unnecessary. Notwithstanding 17 CFR 230.411(e) (‘‘Rule 411(e)’’), when an issuer incorporates by reference a Form 10–K that itself incorporates by reference Part III information from a proxy or information statement within the timeframe specified in General Instruction G.(3) of Form 10– K, we view the Part III information as incorporated by
reference into Form S–3. We also propose to remove the reference to section 13(c) in Item 12(b) for the reasons discussed in section II.C.2 below. Further, we propose to amend Item12(b) to require issuers to explicitly state that all Exchange Act reports filed under sections13(a) and 15(d) after the initial registration statement is filed and before the termination of the offering are incorporated by reference into the prospectus. This amendment would eliminate ambiguity and reduce the need for issuers to file pre-effective amendments solely to incorporate Exchange Act reports filed during the waiting period. 152Under the proposed amendments, Item 12(a)(1) of Form S–3 would state that the term ‘‘Form 10 information’’ means the information that is required by Form 10 to register under the Exchange Act each class of securities to be registered on Form S–3. Item 12(a)(1) also would provide that a filing contains Form 10 information even if it omits the information required by Item 202 of Regulation S–K with respect to a class of securities to be registered on the form. We recognize that the filing that would otherwise serve as an issuer’s Form 10 information may, in some cases, not include the information required by Item 202 of Regulation S–K—which is a disclosure requirement of Form 10—with respect to each class of securities to be registered on Form S–3. For example, an issuer might register common stock in an IPO on Form S–1 and later register the offer and sale of a different class of securities, such as debt, on Form S–3. The Form S–1 would not include the disclosure required by Item 202 of Regulation S–K for the debt securities and, therefore, the Form 10 information would be incomplete with respect to those securities. As such, we are proposing to carve out the information required by Item 202 of Regulation S–K from Item 12(a)(1) of Form S–3 to address any potential confusion as to whether the Form S–1 (or other Securities Act or Exchange Act filing) in those circumstances would satisfy the requirement to provide Form 10 information because it excludes the relevant information required by Item 202 of Regulation S–K. Although the information required by Item 202 of Regulation S–K would not need to be included in the Securities Act or Exchange Act filing that serves as the Form 10 information for purposes of Item 12(a)(1), this information would have to be incorporated by reference from another filing or included directly in the prospectus in order to satisfy the disclosure requirements of Item 9 of Form S–3. 153 17 CFR 230.408. 154Under Rule 430B, for a prospectus supplement required to be filed in connection with a takedown of securities pursuant to 17 CFR 230.424(b)(2) (‘‘Rule 424(b)(2)’’), 17 CFR 230.424(b)(5) (‘‘Rule 424(b)(5)’’), or 17 CFR 230.424(b)(7) (‘‘Rule 424(b)(7)’’), all information in that prospectus supplement will be deemed part of and included in Continued become delinquent before conducting a takedown from a shelf
registration statement, it would still have to assess whether the registration statement contained all of the required information and whether the prospectus contained all information required under the Securities Act.150 Further, as discussed below, failure to provide the material information required to be included in the registration statement would raise liability concerns under the Federal securities laws. Our proposed prohibition of certain ineligible issuers from using Form S–3, as discussed in
section II.A.2.a.iv below, also may help
address concerns about the types of issuers that may pose a higher risk of non-compliance with their Exchange Act reporting obligations. Under the proposed amendments, some issuers using Form S–3 may have shorter Exchange Act reporting histories than Form S–3 eligible issuers do today. Nonetheless, we do not believe that such potential differences in issuers’ Exchange Act reporting histories would pose heightened investor protection risks. As an initial matter, all Form S– 3 issuers would be required to incorporate by reference (or otherwise disclose) the same issuer-related information and remain subject to the same liability standards as today.151 For example, currently Item 12(a)(1) of Form S–3 requires an issuer to incorporate by reference its latest annual report on Form 10–K that contains audited financial statements for the registrant’s latest fiscal year for which a Form 10– K was required to be filed and any Exchange Act reports filed since the end of such fiscal year. Under the proposed amendments, an issuer that had not been required to file a Form 10–K since becoming subject to section 13(a) or 15(d) of the Exchange Act would instead incorporate by reference a Securities Act or Exchange Act filing that contains ‘‘Form 10 information’’ 152 with all financial statements required by Regulation S–X. In addition, issuers would be required to provide ‘‘such further material information, if any, as may be necessary to make the required statements, in the light of the circumstances under which they are made, not misleading.’’ 153 Under Item 11(a) of Form S–3 (as revised by the proposed amendments), issuers also would be required to describe any and all material changes in the issuer’s affairs which have occurred since the end of the most recent fiscal year covered by the audited annual financial statements required to be included in the registration statement pursuant to Item 12(a)(1) that have not been described in a filing incorporated by reference into the registration statement. Further, to the extent an issuer had not yet been required to file a Form 10–K, Commission staff would have had the opportunity to review the information disclosed in the Securities Act or Exchange Act registration statement through which the issuer became an Exchange Act reporting company and which would be incorporated by reference into the prospectus. Finally, other requirements under the Federal securities laws are designed to ensure investors are adequately protected and receive the information necessary to make an informed investment decision in connection with a registered securities offering. For example, under the Securities Act, anyone who acquires an issuer’s securities in a registered offering has a private right of action under section 11 and a purchaser has a private right of action under section 12(a)(2). Section 11 liability exists for untrue statements of material fact or omissions of material facts required to be included in a registration
statement or necessary to make the statements in the registration statement not misleading at the time the registration statement became effective.154 Importantly, underwriters,

the registration statement as of the earlier of the date it is first used or the date and time of the first contract of sale of securities in the offering to which the prospectus supplement relates. 155For outside directors, liability is proportional to fault, but for all other parties, liability is generally joint and several. See 15 U.S.C. 77k(f). 156These parties may assert a ‘‘due diligence’’ defense, provided the defendant ‘‘had, after reasonable investigation, reasonable ground to believe and did believe, at the time such part of the registration statement became effective, that the statements therein were true and that there was no omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading.’’ 15 U.S.C. 77(k)(b)(3). Some courts have held that section 11 defendants asserting the due diligence defense of reasonable investigation must carry the burden of proof that they acted with the requisite diligence and the bar for asserting the due diligence defense may be high and highly fact-specific. See, e.g., In re WorldCom, Inc. Sec. Litig., 346 F. Supp. 2d 628, 662 (S.D.N.Y.
2004) (‘‘Underwriters must exercise a high degree
of care in investigation and independent verification of the company’s representations. Overall, no greater reliance in our self-regulatory system is placed on any single participant in the issuance of securities than upon the underwriter. Underwriters function as ‘the first line of defense’ with respect to material misrepresentations and omissions in registration statements. As a consequence, courts must be particularly scrupulous in examining their conduct.’’ (internal quotation marks omitted)). experts such as accountants, an issuer’s directors, and other signatories can be held strictly liable for material misstatements or omissions; 155 thus, these parties are incentivized to ensure an issuer’s disclosures are free of material misstatements or omissions, thereby helping to protect investors.156 Under section 12(a)(2), sellers have liability to purchasers for offers or sales by means of a prospectus or oral communication that includes an untrue statement of material fact or omits to state a material fact necessary to make the statements made, based on the circumstances under which they were made, not misleading. Moreover, section 17(a) of the Securities Act provides, among other things, that it shall be unlawful for any person in the offer or sale of a security to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading. Thus, to the extent that there may be a higher risk of delinquency by issuers with shorter Exchange Act reporting histories, and less historical information for investors to review when an issuer has been subject to the Exchange Act’s reporting requirements for a shorter period of time, the Federal securities laws generally require that issuers provide investors with information about an issuer that is necessary to make an informed investment decision and provide remedies to investors when these disclosure standards are not satisfied. We believe that investors will continue to be protected by these liability provisions of the Federal securities laws and receive material information even in the absence of an initial Exchange Act seasoning requirement. For these reasons, we propose to eliminate the One-Year Seasoning requirement. Request for Comment

1. We are proposing to eliminate the
   One-Year Seasoning requirement in General Instruction I.A.3(a) that requires an issuer to have been an Exchange Act reporting company for at least 12 calendar months before becoming eligible to use Form S–3. Should we adopt the amendment as proposed? If not, please explain why the One-Year Seasoning requirement is necessary.
2. Instead of eliminating the One-Year
   Seasoning requirement altogether, should we shorten the required seasoning period? If yes, what would be an appropriate seasoning period and why?
3. Notwithstanding the proposal to
   eliminate the One-Year Seasoning requirement, we are proposing to require issuers to be subject to the Exchange Act’s reporting requirements and current and timely in their Exchange Act reporting obligations during the 12 calendar months (or such shorter period that the issuer has been subject to the Exchange Act’s reporting requirements) and any portion of a month immediately preceding the filing of a Form S–3. Should we retain these requirements as proposed?
4. As discussed in section II.A.2.a.i
   and footnote 148 above, the proposed amendments would allow issuers to use Form S–3 and conduct shelf offerings immediately after becoming an Exchange Act reporting company. Would this aspect of the proposed amendments alter market practice with respect to initial public offerings (‘‘IPOs’’)? For example, would the proposed amendments affect the need for, or use of, an overallotment option (i.e., ‘‘greenshoe’’), given the proposed ability to use Form S–3 for follow-on primary offerings after the completion of the IPO? If so, are there any investor protection concerns resulting from such a change in market practice? Would the proposed amendments affect how issuers choose to go public? For example, would the proposed ability to use Form S–3 for shelf offerings immediately after becoming a reporting company affect the extent to which direct listings would be used by companies as a means of going public?
5. As discussed in footnote 55, Form
   S–3 currently requires (and under the proposed amendments, would continue to require) an issuer to have been timely in its Exchange Act reports ‘‘during the twelve calendar months and any portion of a month immediately preceding the filing of the registration statement.’’ Should we revise this standard to instead require only a 12-month (or one￾year) lookback? Under this alternative approach, an issuer intending to file a Form S–3 on July 19, 2026, for example, would need to have been current and timely in its Exchange Act filings—other than specified Form 8–K reports—from July 19, 2025 through July 19, 2026 (rather than from July 1, 2025 through July 19, 2026). Why or why not?
6. We are proposing to amend Form
   S–3’s instructions to provide that an issuer would remain eligible to use the form notwithstanding an untimely filing having been made during the relevant lookback period so long as: (a) the filing was made within seven calendar days of the original due date and (b) the issuer had only one untimely filing during the relevant lookback period. Should we adopt the amendment as proposed? Would a shorter or longer period than seven calendar days be appropriate? For example, should the period be 10 business days rather than seven calendar days? Are there other conditions that we should include in this proposed instruction?
7. Under the proposed amendments,
   an issuer would be required to be subject to the Exchange Act’s reporting requirements. Should issuers that voluntarily comply with the reporting requirements of section 13(a) or 15(d) be eligible to use Form S–3 if they have filed all reports and materials that would otherwise be required of an issuer subject to the Exchange Act’s reporting requirements?
8. Should we amend our rules to
   require reassessing of Form S–3 eligibility each time an issuer conducts a shelf takedown to help ensure issuers remain current and timely and investors have available all required information at the time they make an investment decision?
9. Under the proposed amendments to
   Item 12(a)(1) of Form S–3, an issuer that was not yet required to file a Form 10– K since becoming subject to section 13(a) or 15(d) of the Exchange Act would instead have to incorporate by reference a Securities Act or Exchange Act filing that contains Form 10 information with respect to each class of securities to be registered on Form S–3. The term ‘‘Form 10 information’’ would

157See supra section II.A.1.b.
158See Integrated Disclosure Adopting Release. 159See 1981 Reproposal. 160 1981 Reproposal at 41912. The Commission also stated its intention to ‘‘markedly reduce[ ] or eliminate[ ] those criteria relating to the ‘quality’ of the registrant, and premise[ ] eligibility generally on dissemination of information in the market place, as represented by the length and nature of compliance by the company with the reporting requirements of the Exchange Act, and, with respect to proposed Form S–3, on the registrant’s float.’’ Id. at 41904; see also id. at 41905 (‘‘[T]he Commission has made a concerted effort to revise the eligibility requirements in a manner that is simple and rational and is consistent with its intention to classify registrants on the basis of the degree of information disseminated and analyzed in the marketplace.’’). 161See 17 CFR 210.3–01; 17 CFR 210.3–02; 17 CFR 210.3–04; 17 CFR 210.8–02. 162 17 CFR 229.303(a). 163See Form 8–K, Item 2.04. 164 17 CFR 210.4–08. 165See 1993 EDGAR Adopting Release. 166See Interactive Data to Improve Financial Reporting, Release No. 33–9002 (Jan. 30, 2009) [74 FR 6776 (Feb. 10, 2009)] (‘‘Interactive Data Adopting Release’’). be defined as the information required by Form 10 to register under the Exchange Act each class of securities to be registered on the Form S–3. The proposed amendments also would provide that a filing contains Form 10 information even if it omits the information required by Item 202 of Regulation S–K with respect to a class of securities registered on this Form. Should we adopt the amendments as proposed? Is it necessary to specify that the Form 10 information need not include the information required by Item 202 of Regulation S–K? Should similar treatment be permitted for other Form 10 disclosure requirements? Why or why not?
10. We propose to amend Item 12(b)
of Form S–3 to eliminate the requirement for forward incorporation by reference of proxy or information statements, or other material, filed under section 14(a) or 14(c) of the Exchange Act. We also propose to eliminate Item 12(b)’s reference to
section 13(c) of the Exchange Act.
Should we adopt the amendments as proposed?
11. We propose to amend Item 12(b)
of Form S–3, consistent with prior staff guidance, to clarify that all Exchange Act reports filed pursuant to sections 13(a) and 15(d) ‘‘after the date of filing the initial registration statement and prior to the termination of the offering’’ would be deemed to be incorporated by reference into the prospectus. Should we adopt the amendment as proposed?
12. We propose to amend Item 12(d)
of Form S–3, which currently permits the information required in response to Items 3 through 11 of the form to be incorporated by reference from filings made pursuant to section 13(a), 14, or 15(d) of the Exchange Act, to permit such information to be incorporated from any Securities Act or Exchange Act filing. Should we adopt the amendment as proposed?
ii. Certain Failures To Make Payments
and Defaults
We propose to eliminate the ‘‘Certain Failures to Make Payments and Defaults’’ requirement for Form S–3 eligibility. As explained in section II.A.1 above, the Commission initially conditioned short-form registration on satisfaction of certain factors addressing the ‘‘quality’’ of the issuer, among other requirements. Over time, however, the Commission reduced or eliminated certain of those requirements.157 In 1982, when the Commission adopted Form S–3, it kept the Certain Failures to Make Payments and Defaults requirement from Form S–7 without explanation.158 The Commission had previously expressed the view that qualitative requirements are not appropriate criteria for short-form eligibility.159 Specifically, in 1981, after seeking comment on whether to prohibit issuers that were ‘‘financially troubled’’ from using Form S–2, the Commission explained that ‘‘the use of tests measuring the ‘quality of a registrant’ . . . is inconsistent with the basic precept of registrant classification under Forms S–3, S–2, and S–1, namely, the extent information about a registrant has been disseminated in the marketplace and the accuracy of such information.’’ 160 We believe that eliminating this criterion is consistent with the Commission’s prior statement. We agree with the Commission’s 1981 statement and, therefore, are proposing that Form S–3 eligibility no longer be conditioned on an issuer satisfying the Certain Failures to Make Payments and Defaults requirement. We view that requirement as the type of qualitative measure the Commission previously deemed inappropriate. In our view, such criteria are inconsistent with the principle of short-form registration, and Form S–3 eligibility should instead focus on an issuer’s status as a current and timely Exchange Act reporting company. We also believe a specific eligibility requirement in Form S–3 related to defaults on financial obligations is unnecessary because the Commission’s disclosure requirements should provide investors with the information necessary to evaluate an issuer’s financial health. For example, issuers are required to provide financial statements covering a minimum of two fiscal years 161 and to accompany such financial statements with management’s discussion and analysis that ‘‘provide[s] material information relevant to an assessment of the financial condition and results of operations of the registrant including an evaluation of the amounts and certainty of cash flows from operations and from outside sources.’’ 162 Issuers also are required to file a Form 8–K within four business days of certain types of defaults, including specified defaults in connection with various off-balance sheet arrangements.163 In addition, issuers must disclose information about dividends paid on preferred stock (and other equity securities) as well as certain default-related matters, including defaults in principal, interest, sinking fund provisions, or redemption provisions with respect to any issue of securities
or credit agreements, or any breach of covenant of a related indenture or agreement.164 Accordingly, investors should have the information necessary about an issuer’s financial condition, including defaults, to make an informed investment decision with respect to offerings conducted by that issuer pursuant to Form S–3, making the Certain Failures to Make Payments and Defaults requirement superfluous. Request for Comment
13. Should the Commission eliminate
the Certain Failures to Make Payments and Defaults requirement, as proposed? If not, please explain why.
iii. Electronic Filings and Interactive
Data Files
We propose to eliminate the Electronic Filings and Interactive Data Files requirements. General Instruction I.A.7(a) conditions Form S–3 eligibility on an issuer having ‘‘[f]iled with the Commission all required electronic filings.’’ This provision was added to Form S–3 in connection with EDGAR’s implementation in 1993, which required issuers to file their registration statements and reports electronically on EDGAR.165 General Instruction I.A.7(b) requires an issuer to have ‘‘[s]ubmitted electronically to the Commission all Interactive Data Files required to be submitted pursuant to [17 CFR 232.405] . . . during the twelve calendar months and any portion of a month immediately preceding the filing of the registration statement on this Form.’’ This provision was added to Form S–3 in connection with the Commission’s initial adoption of the Interactive Data File requirements in 2009.166 Each of these provisions

167The term ‘‘structured data’’ generally refers to data that is tagged to make it machine-readable, facilitating its use by investors and other market participants, such as data aggregators (i.e., entities that, in general, collect, package, and resell data). 168See 17 CFR 232.100 mandating electronic filing and 17 CFR 232.201 and 202 relating to temporary and continuing hardship exemptions. 169As indicated above, we are retaining the requirement that an issuer must have timely filed all the material required to be filed pursuant to sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act during the preceding 12 calendar months (or such shorter period that the issuer was required to file such reports and materials), other than specified reports on Form 8–K. 170At this time, however, we are not proposing a corollary amendment to General Instruction A.3(a) of Form S–8, which contains the same electronic filing provision as General Instruction 1.A.7(a) of Form S–3. 171See Interactive Data Adopting Release. 172See Inline XBRL Filing of Tagged Data, Release No. 33–10514 (Aug. 16, 2018) [83 FR 40846 (Aug. 16, 2018)]. Whereas previously filers generated an HTML document of their financial statement information or risk/return summary information and then tagged a copy of the data to create a separate XBRL exhibit, Inline XBRL allows filers to prepare a single document that is both human-readable and machine-readable. 173See, e.g., Holding Foreign Companies Accountable Act Disclosure, Release No. 34–93701 (Dec. 2, 2021) [86 FR 70027 (Dec. 9, 2021)]; Filing Fee Disclosure and Payment Methods Modernization, Release No. 33–10997 (Oct. 13,
2021) [86 FR 70166 (Dec. 9, 2021)]; FAST Act
Adopting Release. More recently, the Commission has adopted additional disclosures requirements subject to XBRL and Inline XBRL. See, e.g., Insider Trading Arrangements and Related Disclosures, Release No. 33–11138 (Dec. 14, 2022) [87 FR 80362 (Dec. 29, 2022)]; Pay Versus Performance, Release 34–95607 (Aug. 25, 2022) [87 FR 55134 (Sept. 8, 2022)]. 174At this time, we are not proposing corollary amendments to 17 CFR 230.144(c)(1)(ii) and General Instruction A.3(b) of Form S–8, which require an issuer to have submitted every Interactive Data File required to be submitted pursuant to 17 CFR 232.405. 175See proposed General Instruction I.A.2 to Form S–3. Under paragraph (2) of the definition of ‘‘ineligible issuer’’ in Rule 405, the Commission may grant waivers of ineligible issuer status ‘‘upon a showing of good cause, that it is not necessary under the circumstances that the issuer be considered an ineligible issuer.’’ 17 CFR 230.405; see also Revised Statement on Well-Known Seasoned Issuer Waivers, Division of Corporation Finance, U.S. Sec. & Exch. Comm’n (Apr. 24, 2014), available at https://www.sec.gov/about/divisions￾offices/division-corporation-finance/revised￾statement-well-known-seasoned-issuer-waivers￾april-24-2014 (elaborating on application of good cause standard). The Commission has delegated the authority to act on such applications to the Director of the Division of Corporation Finance. See 17 CFR 200.30–1(a)(10). Issuers that obtain such waivers would be able to use Form S–3 assuming they meet all other requirements of the form. We recognize that the number of waiver requests could increase due to the proposed amendments. We seek comment on whether issuers should be permitted to request such waivers for purposes of establishing Form S–3 eligibility. 176See 17 CFR 230.419(a)(2) (defining ‘‘blank check company’’ as a company that (i) is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person and (ii) is issuing penny stock). 177See 17 CFR 230.405 (defining ‘‘shell company’’ as a registrant, other than an asset￾backed issuer, that has (1) no or nominal operations and (2) either (i) no or nominal assets, (ii) assets consisting solely of cash and cash equivalents, or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets, and defining ‘‘business combination related shell company’’ as a shell company that is (1) formed by an entity that is not a shell company solely for the purpose of changing the corporate domicile of that entity solely within the United States or (2) formed by an entity that is not a shell company solely for the purpose of completing a business combination transaction among one or more entities other than the shell company, none of which is a shell company). 178 In light of the Commission’s 2025 concept release, which
solicits public comment on whether the current FPI definition appropriately balances the protection of investors with the promotion of appears to have been added to the registrant requirements of Form S–3 to incentivize compliance with newly adopted Commission rules; specifically, the transition from paper to electronic filings and the requirement to provide structured data in an Interactive Data File for the first time.167 We are proposing to eliminate these registrant requirements because we believe they are no longer necessary. While the electronic filing provision may have helped encourage issuers who had been accustomed to making their filings in paper to instead make their filings electronically when EDGAR was first introduced more than 30 years ago, we believe issuers are now fully accustomed to the electronic filing process, and we are not aware of issuers commonly attempting to submit mandated electronic filings in paper. Today, all companies must make their Commission filings electronically through EDGAR, and mandated electronic filings are not accepted in paper form, absent a hardship exemption.168 In addition, a mandated electronic Exchange Act report that was submitted in paper would not be considered to have been filed with the Commission unless a hardship exemption applied; if resubmitted electronically after the requisite deadline, such material would be untimely, and the issuer may be ineligible to use Form S–3.169 For these reasons, we believe the electronic filing provision in General Instruction I.A.7(a) is no longer necessary as a condition to Form S–3 eligibility.170 We also believe that the Interactive Data File provision is no longer necessary to induce compliance with the Commission’s Interactive Data File requirements. Since 2009, the Commission’s rules have required companies to provide the information from the financial statements in their registration statements and periodic and current reports in structured format using eXtensible Business Reporting Language (‘‘XBRL’’).171 In 2018, the Commission began requiring the use of Inline XBRL for financial statement information.172 Subsequently, the Commission has required additional disclosures to be made using XBRL and Inline XBRL.173 We believe issuers are now sufficiently accustomed to complying with the Commission’s Interactive Data File requirements such that conditioning Form S–3 eligibility on compliance with these requirements is no longer necessary. Accordingly, we propose to eliminate this Form S–3 eligibility requirement.174 Request for Comment
14. We are proposing to eliminate the
registrant requirements in General Instruction I.A.7 of Form S–3 that require an issuer to have filed with the Commission all electronic filings and Interactive Data Files. Should we adopt the amendments as proposed? If not, please explain why.
iv. Prohibition on Use of Form S–3 by
Certain Ineligible Issuers Although the proposed amendments would extend the benefits of Form S–3 and shelf registration to a broader group of issuers, we seek to do so only to the extent the amendments are consistent with investor protection. We do not believe it is appropriate to expand Form S–3 eligibility to certain categories of issuers that may pose greater potential for non-compliance with the Federal securities laws. Accordingly, in addition to conditioning Form S–3 eligibility on an issuer being an Exchange Act reporting issuer that is current and timely with respect to its Exchange Act filings, the proposed amendments also would prohibit certain ‘‘ineligible issuers,’’ as defined in Rule 405, from using the form.175 Under proposed new General Instruction I.A.2 (which would be titled ‘‘Prohibition on Use of Form S– 3 by Certain Ineligible Issuers’’), an issuer would not be eligible to use Form S–3 if:

• The issuer is a ‘‘BSP issuer,’’ which
  the proposed amendments would define in Rule 405 as an issuer that is, or during the past three years the issuer or any of its predecessors was: (1) a blank check company as defined in 17 CFR 230.419(a)(2) (‘‘Rule 419(a)(2)’’); 176 (2) a shell company, other than a business combination related shell company, each as defined in Rule 405,177 provided, however, that an issuer, other than a foreign private issuer, as defined in Rule 405,178 would not be deemed to be a

capital formation, we are not proposing to amend the three-year lookback on shell company status for foreign private issuers. As a result, an FPI that was a SPAC during the past three years would not be eligible to be a WKSI. See Concept Release on Foreign Private Issuer Eligibility, Release No. 33– 11376 (June 4, 2025) [90 FR 24232 (June 9, 2025)] (‘‘FPI Concept Release’’). 179See 17 CFR 229.1601(b) (defining a ‘‘special purpose acquisition company (SPAC)’’ as a company that has: (1) indicated that its business plan is to: (i) conduct a primary offering of securities that is not subject to the requirements of 17 CFR 230.419 (‘‘Rule 419’’); (ii) complete a business combination, such as a merger, consolidation, exchange of securities, acquisition of assets, reorganization, or similar transaction, with one or more target companies within a specified time frame; and (iii) return proceeds from the offering and any concurrent offering (if such offering or concurrent offering intends to raise proceeds) to its security holders if the company does not complete a business combination, such as a merger, consolidation, exchange of securities, acquisition of assets, reorganization, or similar transaction, with one or more target companies within the specified time frame; or (2) represented that it pursues or will pursue a special purpose acquisition company strategy). 180See 17 CFR 240.3a51–1 (setting forth a detailed definition of the term ‘‘penny stock’’). The acronym ‘‘BSP’’ in this context is intended to refer to ‘‘blank check companies,’’ ‘‘shell companies,’’ and ‘‘penny stock issuers.’’ The proposed definition of ‘‘BSP issuer’’ generally conforms to the requirement in paragraph (1)(ii) of the definition of ‘‘ineligible issuer’’ in Rule 405, except that it excludes issuers that previously were (or whose predecessors were) ‘‘special purpose acquisition companies (SPACs),’’ as defined in Item 1601 of Regulation S–K. We discuss our basis for excluding SPACs from the proposed definition of ‘‘BSP issuer’’ below. See infra text accompanying notes 194–196. We are proposing to define the term ‘‘BSP issuer’’ in part because several of our current rules (and proposed amendments) refer to the three categories of issuers encompassed in the defined term. We believe there is an administrative benefit to using a defined term rather than reiterating those categories of issuers in every instance. 181See 17 CFR 230.405 (‘‘A subsidiary of a specified person is an affiliate controlled by such person directly, or indirectly through one or more intermediaries.’’). 182See 17 CFR 230.405, paragraph (1)(v) of the definition of ‘‘ineligible issuer.’’ Section 15(b)(4)(B) of the Exchange Act lists felonies or misdemeanors (i) involving the purchase or sale of any security, the taking of a false oath, the making of a false report, bribery, perjury, burglary, substantially equivalent activities, or conspiracies to commit any such offenses, (ii) arising out of the conduct of the
business of certain securities market participants, such as brokers or dealers, (iii) involving the larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulent conversion, or misappropriation of funds, or securities, or substantially equivalent activities, and (iv) involving the violation of section 152 (Concealment of assets; false oaths and claims; bribery), 1341 (Frauds and swindles), 1342 (Fictitious name or address), or 1343 (Fraud by wire, radio, or television) or chapter 25 (Counterfeiting and forgery) or 47 (Fraud and false statements) of title 18, United States Code, or a violation of a substantially equivalent foreign statute. 183See 17 CFR 230.405, paragraph (1)(vi) of the definition of ‘‘ineligible issuer.’’ 184See 17 CFR 230.405, paragraph (1)(vii) of the definition of ‘‘ineligible issuer.’’ 185See 17 CFR 230.405, paragraph (1)(viii) of the definition of ‘‘ineligible issuer.’’ 186See, e.g., Baby Shelf Adopting Release (excluding shell companies from amendments allowing certain issuers to conduct primary securities offerings on short-form registration statements without regard to public float or debt rating); Use of Form S–8, Form 8–K, and Form 20– F by Shell Companies, Release No. 33–8587 (July 15, 2005) [70 FR 42234 (July 21, 2005)] (prohibiting the use of Form S–8 by a shell company). 187See, e.g., Revisions to Rules 144 and 145, Release No. 33–8869 (Dec. 6, 2007) [72 FR 71546, 71550 (Dec. 17, 2007)] (making 17 CFR 230.144 unavailable for resales of securities of shell companies and applying presumptive underwriter provision under 17 CFR 230.145 to transactions involving shell companies to protect against potential abuses with respect to shell companies); Securities Offering Reform Adopting Release at 44798 (‘‘The reforms are not available to offerings by a blank check company, offerings by a shell company, and offerings of penny stock by an issuer. . . . We have excluded these offerings from the reforms because they pose the greatest risk of abuse of the reforms.’’); Delayed Pricing for Certain Registrants, Release No. 33–7393 (Feb. 20, 1997) [62 FR 9276 (Feb. 28, 1997)] (‘‘Proposed Rule 430A Amendments’’) (proposing to not allow blank check and penny stock issuers to use delayed pricing because of ‘‘prior substantial abuses’’); Penny Stock Definition for Purposes of Blank Check Rule, Release No. 33–7024 (Oct. 25, 1993) [58 FR 58099 (Oct. 29, 1993)] (stating that Congress found blank check companies to be common vehicles for fraud and manipulation in the penny stock market). 188See, e.g., Securities Enforcement Remedies and Penny Stock Reform Act, Public Law 101–429, 104 Stat. 931 (1990) (giving the Commission the authority and tools to protect investors and deter fraud and abuse by penny stock issuers); Securities Act section 27A [15 U.S.C. 77z–2(b)] (excluding from safe harbor for forward-looking statements issuers of blank check and penny stock securities, as well as issuers
previously convicted of certain felonies and misdemeanors and issuers subject to a decree or order involving a violation of the antifraud provisions of the Federal securities laws); Exchange Act section 21E [15 U.S.C. 78u–5(b)] (same). 189See Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, sec. 926, 124 Stat. 1376, 1851 (July 21, 2010) (codified at 15 U.S.C. 77d note) (directing the Commission to adopt rules disqualifying securities offerings involving certain ‘‘felons and other bad actors’’ from reliance on Rule 506 of Regulation D); Jumpstart Our Business Startups Act, Public Law 112–106, sec. 302(d), 126 Stat. 306, 320 (Apr. 5,
2012) (requiring the Commission to adopt bad actor
disqualification provisions for offerings under Regulation Crowdfunding and Tier II Regulation A offerings). shell company solely because during the past three years either the issuer or any of its predecessors was a ‘‘special purpose acquisition company (SPAC),’’ as defined in 17 CFR 229.1601(b) (‘‘Item 1601 of Regulation S–K’’); 179 or (3) an issuer in an offering of penny stock as defined in 17 CFR 240.3a51–1; 180

• Within the past three years, the
  issuer or any entity that at the time was a subsidiary 181 of the issuer was convicted of any felony or misdemeanor described in paragraphs (i) through (iv) of section 15(b)(4)(B) of the Exchange Act; 182
• Within the past three years, the
  issuer or any entity that at the time was a subsidiary of the issuer was made the subject of any judicial or administrative decree or order arising out of a governmental action that: (1) prohibits certain conduct or activities regarding, including future violations of, the antifraud provisions of the Federal securities laws; (2) requires that the person cease and desist from violating the antifraud provisions of the Federal securities laws; or (3) determines that the person violated the antifraud provisions of the Federal securities laws; provided, however, that an issuer only would be ineligible to use Form S– 3 under this provision if the prohibition, requirement, or determination is based on an untrue, false, or misleading statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, in each case in violation of the applicable antifraud provision and arising from a registration statement filed under the Securities Act, the Investment Company Act, or section 12 of the Exchange Act, any offering materials provided to purchasers in connection with an offering exempt from the registration requirements of the Securities Act, or a filing required by
  section 13(a), 14(a), 14(c), or 15(d) of the
  Exchange Act or the Commission’s rules thereunder; 183
• The issuer has filed a registration
  statement that is the subject of any pending proceeding or examination under section 8 of the Securities Act or has been the subject of any refusal order or stop order under section 8 of the Securities Act within the past three years; 184 or
• The issuer is the subject of any
  pending proceeding under section 8A of the Securities Act in connection with an offering.185 These categories of issuers have been viewed historically as unsuited for certain types of short-form registration and other offering-related accommodations or ineligible for certain disclosure-related relief.186 For instance, the Commission has stated that penny stock and blank check offerings, as well as shell companies, may give rise to certain disclosure and offering-related abuses.187 In addition, Congress has expressed concerns with these issuers and imposed limits on their ability to utilize certain disclosure and offering￾related benefits.188 Congress and the Commission also have imposed restrictions on certain felons and other bad actors in connection with certain types of securities offerings when deemed necessary and appropriate.189 For example, the offering exemptions

190See 17 CFR 230.501 through 230.508. 191See 17 CFR 230.251 through 230.263. 192See 17 CFR 227.100 through 230.504. 193See 17 CFR 230.262 (Regulation A disqualification provision); 17 CFR 227.503 (Regulation Crowdfunding disqualification provision); 17 CFR 230.506(d) (Regulation D disqualification provision). 194See supra note 180 and accompanying text. 195See Special Purpose Acquisition Companies, Shell Companies, and Projections, Release No. 33– 11265 (Jan. 24, 2024) [89 FR 14158, 14163 (Feb. 26, 2024)] (noting that the rules are intended to align regulatory treatment between de-SPAC transactions and traditional IPOs). 196As discussed in section II.B.2 below, however, such an issuer would not be permitted to take into account the Exchange Act reporting history of the former SPAC for purposes of determining whether it is eligible to file automatic shelf registration statements under the proposed amendments. 197See supra note 183 and accompanying text. 198The proposed amendment also would apply for purposes of assessing Short-Form N–2 eligibility. See infra section II.D.2.a. 199The proposed scope of issuers that would be ineligible to use Form S–3 under this proposed instruction would be narrower than the full scope of the term ‘‘ineligible issuer’’ as defined in Rule
405. For example, although paragraph (iv) of the
definition of ‘‘ineligible issuer’’ covers certain issuers that have been in bankruptcy within the past three years, under our proposed amendments, an issuer’s Form S–3 eligibility would not be affected by its bankruptcy status. As discussed in
section II.A.2.a.ii above, we believe such criteria
would be inappropriate to include for Form S–3 eligibility purposes because it goes to the ‘‘quality’’ of the issuer. In addition, paragraph (iii) of the definition of ‘‘ineligible issuer’’ covers limited partnerships offering and selling securities other than through a firm commitment underwritten offering. Under our proposed amendments, these issuers would not be precluded from using Form S– 3 because, as discussed infra note 305, we believe concerns related to these entities have been adequately addressed by other Commission rules. Paragraph (1)(i) of the definition of ‘‘ineligible issuer’’ covers issuers that have not filed all Exchange Act reports required to be filed during the preceding 12 months (or such shorter period that the issuer was required to file such reports). Proposed General Instruction I.A.1.b to Form S–3 would require an issuer to have filed all reports and other materials required to be filed under sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act. While the scope of filings required to be filed under proposed General Instruction I.A.1.b is narrower than what is required under paragraph (1)(i) of the definition of ‘‘ineligible issuer,’’ we believe an issuer that has provided the filings specified in proposed General Instruction I.A.1.b would have provided the type of information necessary to qualify for Form S–3 eligibility. 200See, e.g., letter in response to Securities Offering Reform, 33–8501 (Nov. 3, 2004) [69 FR 67391 (Nov. 17, 2004)] (‘‘Securities Offering Reform Proposing Release’’) from the American Bar Association (Feb. 11, 2005) (‘‘We agree with the Commission that the definition of ineligible issuer should include blank check companies, shell companies and penny stock issuers. We also agree that the definition should encompass issuers that are in bankruptcy proceedings and issuers that have been the subject of a refusal or stop order under the Securities Act.’’). The comment letters submitted in response to the Securities Offering Reform Proposing Release are available at https:// www.sec.gov/files/rules/proposed/s73804.shtml. under Regulation D,190 Regulation A,191 and Regulation Crowdfunding 192 are unavailable for an offering by an issuer if, among other things, an issuer, any of its predecessors, or any affiliated issuer is subject to certain administrative orders, industry bars, injunctions involving certain securities law violations, or specified criminal convictions.193 As noted above,194 a ‘‘BSP issuer,’’ as we propose to define that term in Rule 405, would be prohibited from using Form S–3. Under the proposed amendments, however, an issuer that otherwise would be barred from using Form S–3 solely because it or its predecessor was a ‘‘special purpose acquisition company (SPAC),’’ as defined in Item 1601(a) of Regulation S– K, during the prior three years would be excepted from the three-year lookback for shell companies and, therefore, able to use Form S–3 if it was not a shell company at the
time the issuer filed the form. In our view, former SPACs (which initially were formed specifically for the purpose of identifying a private target and that have successfully completed a de-SPAC transaction by combining with such a target) should be eligible to use Form S–3 to the same extent as a newly public company that conducted a traditional IPO. This is consistent with the Commission’s stated goal when it adopted rules for SPACs in 2024.195 Accordingly, issuers that otherwise would be barred from using Form S–3 solely because of their former SPAC status would be eligible to use the form, assuming they satisfied the form’s other eligibility requirements.196 In addition, as noted above,197 an issuer would be prohibited from using Form S–3 if, within the past three years, either the issuer or one of its subsidiaries was the subject of certain judicial or administrative decrees or orders arising out of governmental actions. Under the proposed amendments, however, for purposes of Form S–3 eligibility, an issuer would be an ‘‘ineligible issuer’’ under paragraph (vi) of the definition in Rule 405 only if the relevant prohibition, requirement, or determination is based on an untrue, false, or misleading statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, in each case in violation of the applicable antifraud provision and arising from a registration statement filed under the Securities Act, the Investment Company Act, or section 12 of the Exchange Act, any offering materials provided to purchasers in connection with an offering exempt from the registration requirements of the Securities Act, or a filing required by
section 13(a), 14(a), 14(c), or 15(d) of the
Exchange Act or the Commission’s rules thereunder. This proposed amendment reflects our belief that Form S–3 eligibility should depend on whether investors can readily obtain issuer￾specific information to make an informed investment decision. As such, the proposed amendment is intended to limit application of paragraph (vi) of the definition of ‘‘ineligible issuer,’’ for purposes of Form S–3 eligibility, to the types of antifraud violations that are most likely to suggest that the issuer may pose a greater risk of non￾compliance with Exchange Act reporting requirements (i.e., disclosure￾based violations arising out of a registration statement, offering materials provided to purchasers in connection with an exempt offering, or certain Exchange Act filings).198 Although Form S–3 has not previously included a disqualifying provision similar to proposed new General Instruction I.A.2 (with the exception of shell companies being unable to rely on General Instruction I.B.6), we believe it would be appropriate for the protection of investors to prohibit the specified categories of issuers from using Form S–
3.199 This is due to the additional
accommodations that would be afforded by our proposed amendments and our view that these categories of issuers may pose a greater risk of non-compliance with Exchange Act reporting requirements and, therefore, present greater potential for abuse. We believe these types of issuers, therefore, should not be eligible to conduct offerings that are not subject to staff review (i.e., shelf offerings). Instead, we believe the staff should have the opportunity to review those issuers’ offerings (by requiring, for example, those issuers to use Form S– 1 rather than Form S–3), as staff review may mitigate risks of non-compliance and potential abuse. In proposing these restrictions on the use of Form S–3, we note that some commenters have previously stated that excluding certain categories of issuers from specific registration and other offering-related benefits is appropriate.200 Although we recognize that the proposed amendment would not eliminate all potential risks that may arise from the proposed expansion of Form S–3, we believe this restriction would address a significant area of risk. The Commission has adopted a number of measures over the years to address concerns related to certain types of ‘‘BSP issuers.’’ Examples include Rule 419, which imposes certain

201See 17 CFR 239.16b(a).
202See 17 CFR 230.144(i).
203See 17 CFR 230.145(c).
204See Item 5.06 of Form 8–K.
205We also are proposing certain other amendments to the definition of ‘‘ineligible issuer’’ in Rule 405. Specifically, we are proposing to add new paragraph (3)(iii), which would set forth the date of determination of whether an issuer is an ineligible issuer for purposes of determining whether it satisfies proposed General Instruction I.A.2 of Form S–3. The proposed determination date under this paragraph would align with the dates on which an issuer must determine whether it has satisfied Form S–3’s eligibility requirements (which also are consistent with the current date of determination for purposes of WKSI eligibility under paragraph (3)(i) of the definition of ‘‘ineligible issuer’’). See supra note 150. requirements on offerings by blank check companies issuing penny stock, prohibitions on the use of Form S–8 by shell companies,201 restrictions on the ability to rely on 17 CFR 230.144 to resell restricted securities,202 deemed underwriter status for certain parties involved in business combination transactions involving a shell company,203 and the imposition of specific disclosure requirements for an issuer that completes a transaction that causes it to cease being a shell company.204 We believe, however, that those types of provisions do not address the higher risk of non-compliance with Exchange Act reporting requirements that these issuers present. For that reason, we are proposing to prohibit the use of Form S–3 by BSP issuers. We seek comment on the appropriateness of the proposed amendments, including whether each category of issuer we have identified should be prohibited from using Form S–3 and whether the three￾year lookback period that applies to certain types of issuers is necessary.205 Request for Comment
15. We are proposing to prohibit use
of Form S–3 by certain ‘‘ineligible issuers,’’ including BSP issuers, issuers previously convicted of certain felonies and misdemeanors, issuers subject to a decree or order involving a violation of the antifraud provisions of the Federal securities laws, issuers that have been subject to any refusal order or stop order under section 8 of the Securities Act within the past three years, and issuers that are subject to pending proceedings or examinations under section 8 or 8A of the Securities Act. Should we adopt the amendments as proposed? If not, please explain why and suggest alternative methods for protecting investors the Commission could consider.
16. Alternatively, should these issuers
be permitted to use Form S–3 if they meet the other conditions of the Form, but not be permitted to avail themselves of the Enhanced Registration and Communication Benefits that we propose to extend to Form S–3 eligible issuers, as discussed in section II.B.2 below?
17. Are there any categories of issuers
we are proposing to prohibit from using Form S–3 that should not be prohibited solely on the basis of issuer type? Are there any categories of issuers we are not proposing to prohibit from using Form S–3 that should be excluded?
18. Under the proposed amendments,
certain ineligible issuers would not be eligible to use Form S–3 until three years after the issuer had ceased being a ‘‘BSP issuer,’’ or since the date of the issuer’s conviction of the enumerated felonies and/or misdemeanors, or since the date the issuer had entered into a decree or order involving a violation of the antifraud provisions of the Federal securities laws, or since the date of any refusal or stop order under section 8 of the Securities Act. We note that under current Instruction I.B.6 of Form S–3, there is only a one-year lookback period regarding shell company status. Is the proposed three-year prohibition appropriate? Would a shorter or longer ineligibility period be more appropriate?
19. If we adopt the proposed
prohibition on the use of Form S–3 by certain ineligible issuers, should issuers be ineligible to use Form S–3 based on actions that occurred before the date on which the requirement becomes effective? Or, similar to certain disqualification provisions for Regulation A in 17 CFR 230.262, should an issuer only be ineligible based on actions that occurred on or after the date on which the requirement becomes effective? If we did limit the prohibition to actions that occurred on or after the date on which the requirement becomes effective, how would that affect an issuer’s eligibility for the Enhanced Registration and Communication Benefits, given the fact that in order to be eligible for all of those benefits today as a WKSI, an issuer must not be an ‘‘ineligible issuer’’?
20. Should other types of issuers,
other than those we have identified, be ineligible to use Form S–3? For example, should issuers that are the subject of a going concern audit opinion or those in bankruptcy be ineligible to use the form? Would such requirements be consistent with the Commission’s previously expressed views that factors related to the quality of an issuer are not appropriate considerations for Form S– 3 eligibility, as discussed in section II.A.2.a.ii above?
21. If the proposed amendments were
adopted, should issuers that were Form S–3 eligible prior to adopting the amendments remain eligible to use the form with respect to any existing effective Form S–3 registration statement even if they fall within one of the categories of ineligible issuer at the time the new rules become effective? Alternatively, should there be a transition period during which such issuers would retain their Form S–3 eligibility but after which their eligibility would be assessed anew? If so, what is the appropriate duration of such transition period?
22. Under the proposed amendments,
an issuer that was formerly a SPAC would be excepted from the three-year lookback for shell companies and, therefore, eligible to use Form S–3 if the issuer was not a SPAC at the time of filing the registration statement, had not otherwise previously been a shell company, and otherwise met the form’s requirements. Should we adopt the amendment as proposed? Should SPACs be eligible to use Form S–3 prior to identifying a target and completing a de￾SPAC transaction notwithstanding their shell company status?
23. Form S–8 prohibits issuers from
using the form if they are a shell company or if they were a shell company during the previous 60 calendar days. Should we carve out former SPACs from this 60-calendar day lookback period in Form S–8, similar to the carveout for former SPACs in the proposed definition of BSP issuer?
24. Under the proposed new Form S–
3 eligibility criteria, an issuer would be ineligible to use Form S–3 if, within the past three years, the issuer or any entity that at the time was a subsidiary of the issuer was convicted of certain felonies or misdemeanors or was made the subject of judicial or administrative decrees or orders arising out of certain governmental actions. Should this criterion apply to both the issuer and its subsidiaries, as proposed, or should it apply only to the issuer itself? Alternatively, should it apply to certain, but not all, subsidiaries? If so, how should we differentiate between subsidiaries?
25. Under the proposed amendments,
for purposes of Form S–3 and Short￾Form N–2 eligibility, an issuer would be an ‘‘ineligible issuer’’ under paragraph (vi) of the definition in Rule 405 only if the relevant prohibition, requirement, or determination is based on an untrue, false, or misleading statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, in each case in violation of the applicable antifraud provision and arising from a registration

206That is, unlike the other proposed eligibility requirements in Form S–3, an issuer would not continue to be able to conduct takedowns (or any other offerings) on Form S–3 if it was not one of these types of issuers at the time it filed the form or at the time of the update under section 10(a)(3) of the Securities Act but subsequently became one of these types of issuers. See supra note 150. We believe it is appropriate to ensure these types of issuers do not use Form S–3 at any time because, as discussed below, the Commission has prescribed other forms that are more appropriate given the nature of these issuers. 207See Form S–3, General Instruction I.A.1. 208A ‘‘foreign private issuer’’ is a foreign issuer other than a foreign government, except for an issuer that as of the last business day of its most recently completed second fiscal quarter has more than 50% of its outstanding voting securities directly or indirectly held of record by U.S. residents and meets any of the following: a majority of its executive officers or directors are citizens or residents of the United States, more than 50% of its assets are located in the United States, or its business is principally administered in the United States. See 17 CFR 230.405. 209Under the proposed amendments, all FPIs would be prohibited from using Form S–3. This prohibition would include, for example, FPIs that report on FPI-specific Exchange Act forms (e.g., Form 20–F and Form 6–K), FPIs that report on domestic Exchange Act forms (e.g., Form 10–K, Form 10–Q, and Form 8–K), and FPIs that use a variable interest entity structure. We recognize that an FPI could take measures (e.g., reorganizing its corporate structure) to avoid the proposed prohibition on FPIs. We will continue to monitor developments in the FPI market, including with respect to any changes in market practice as a result of the proposed prohibition, if adopted. We believe, however, the likely associated costs and the continued availability of Form F–3 (as discussed in this section) would deter issuers from taking such measures. 210See FPI Concept Release at 24237, n.73 (identifying only nine foreign issuers that file on domestic forms). 211See Form F–3, General Instruction I (limiting Form F–3 eligibility to FPIs). Under the proposed amendments, foreign issuers (other than foreign governments and FPIs) would remain eligible to use Form S–3 if they satisfy the form’s eligibility requirements. This approach reflects, in part, that these issuers are not permitted to use Form F–3. Thus, eliminating their ability to use Form S–3 could have a more significant impact than removing Form S–3 eligibility for FPIs. 212See Form F–3, General Instruction I.A (setting forth Form F–3’s registrant requirements, including one-year seasoning, timely in Exchange Act reporting, and current in Exchange Act reporting requirements). But cf. FPI Concept Release at 24236 (noting that Forms F–1, F–3, and F–4 ‘‘differ in structure and disclosure
requirements from the corresponding Forms S–1, S–3, and S–4 used by domestic issuers’’). 213See Form F–3, General Instruction I.B (setting forth Form F–3’s transaction requirements, including a $75 million public float requirement, similar to General Instruction I.B.1 of Form S–3, and a ‘‘baby shelf’’ requirement applicable to exchange-listed issuers with less than $75 million public float, similar to General Instruction I.B.6 of Form S–3). 214See Form F–3, Part I (requiring an issuer to incorporate by reference from its Exchange Act reports most of the issuer-specific information required by the form); 17 CFR 230.415(a)(1)(x) statement filed under the Securities Act, the Investment Company Act, or section 12 of the Exchange Act, any offering materials provided to purchasers in connection with an offering exempt from the registration requirements of the Securities Act, or a filing required by
section 13(a), 14(a), 14(c), or 15(d) of the
Exchange Act or the Commission’s rules thereunder. Should we adopt this amendment as proposed? Would the proposed amendments limit application of paragraph (vi) of the definition of ‘‘ineligible issuer,’’ for purposes of Form S–3 and Short-Form N–2 eligibility, to the types of antifraud violations that are most likely to suggest that the issuer may pose a greater risk of non￾compliance with Exchange Act reporting requirements (i.e., disclosure￾based violations arising out of a registration statement, offering materials provided to purchasers in connection with an exempt offering, or certain Exchange Act filings), as intended? In addition to the registration statements and Exchange Act filings enumerated in the proposed amendment, for purposes of Form S–3 and Short-Form N–2 eligibility, should paragraph (vi) of the definition of ‘‘ineligible issuer’’ also cover prospectuses that do not form part of a registration statement (e.g., free writing prospectuses)? Finally, for purposes of Form S–3 and Short-Form N–2 eligibility, paragraph (vi) of the definition of ‘‘ineligible issuer’’ would apply to antifraud violations arising out of disclosures in reports that are both ‘‘furnished’’ and ‘‘filed’’ with the Commission. Should we instead limit the applicability of paragraph (vi) of the definition of ‘‘ineligible issuer,’’ for purposes of Form S–3 and Short-Form N–2 eligibility, to only antifraud violations arising out of reports that are ‘‘filed’’?
26. Under Rule 405, an issuer may
seek a waiver of ineligible issuer status ‘‘upon a showing of good cause that it is not necessary under the circumstances that the issuer be considered an ineligible issuer.’’ Currently, issuers may seek such waivers for purposes of qualifying as a WKSI. As discussed in footnote 175, under the proposed amendments, issuers would be able to seek such waivers for purposes of Form S–3 eligibility. Should issuers be permitted to request such a waiver for purposes of Form S–3 eligibility, as proposed? Is there an alternative approach we should take that would avoid the need for such waivers? For example, should issuers remain eligible to use Form S–3 despite being classified as an ineligible issuer, provided they have not held that status during a specified prior period? If so, what would be an appropriate lookback period? Are there other alternatives we should consider?
v. Prohibition on Use of Form S–3 by
Certain Other Issuers
We are proposing new General Instruction I.A.3, which would be titled ‘‘Prohibition on Use of Form S–3 by Certain Other Issuers.’’ The proposed instruction would prohibit the following types of issuers from using Form S–3:
(1) a foreign government (or a political subdivision thereof) or a foreign private issuer (‘‘FPI’’) as those terms are defined in Rule 405; (2) an asset-backed issuer, as defined in 17 CFR 229.1101(b); (3) an investment company, as defined in 15 U.S.C. 80a–3(a)(1); and (4) a BDC, as defined in 15 U.S.C. 80a–2(a)(48). Under the proposed instruction, these types of issuers would be prohibited from using Form S–3 at any time, including at the time of any offering registered on the form.206 As to FPIs, current General Instruction I.A.5 of Form S–3 allows foreign issuers, other than foreign governments, to use Form S–3 if they satisfy all the registrant requirements, other than the ‘‘U.S. Issuer’’ requirement,207 provided they file the same reports with the Commission under section 13(a) or 15(d) of the Exchange Act as a domestic registrant. Foreign issuers that qualify as FPIs are permitted to use Form S–3 if they satisfy this instruction.208 We are proposing to prohibit FPIs from using Form S–3 through proposed new General Instruction I.A.3 in light of the FPI Concept Release.209 Given our ongoing evaluation in this area, we believe it is prudent not to extend the benefits of the proposed amendments to FPIs at this time, prior to completion of our more comprehensive review of the FPI framework. We seek comment on whether to adopt the instruction as proposed. We believe, however, there would be minimal impact from the proposed amendment. For example, we note that very few FPIs currently are eligible to use Form S–3.210 Further, under our proposed amendments, FPIs would continue to be able to use Form F–3, which is available only to FPIs.211 This includes both FPIs that report on FPI-specific Exchange Act forms (e.g., Form 20–F and Form 6–K) and FPIs that report on domestic Exchange Act forms (e.g., Form 10–K, Form 10–Q, and Form 8–K). Form F–3 has eligibility requirements similar to current Form S–3, including registrant requirements 212 and transaction requirements.213 And, notably, Form F– 3 provides eligible issuers with benefits similar to Form S–3, including short￾form and shelf registration.214 Thus, we

(permitting shelf offerings for securities registered on Form F–3). 215See 17 CFR 239.45 (codifying a description of Form SF–3). 216See, e.g., Asset-Backed Securities Disclosure and Registration, Release No. 33–9638 (Sept. 4,
2014) [79 FR 57184, 57265 (Sept. 24, 2014)] (‘‘We
are adopting new Forms SF–1 and SF–3 for ABS offerings, which are largely based on existing Forms S-l and S–3. ABS offerings that qualify for shelf registration will be registered on Form SF–3, and all other ABS offerings will be registered on Form SF–1.’’). 217See, e.g., Form N–2, General Instruction A.1 (stating that Form N–2 is to be used by all closed￾end management investment companies to file registration statements, and any amendments to registration statements, under the Securities Act and section 8(b) of the Investment Company Act). 218Although the term ‘‘successor registrant’’ is not defined, the term ‘‘successor’’ is defined in Rule 405. 219The term ‘‘predecessor’’ is defined in Rule 405. 220With respect to use of automatic shelf registration statements on Form S–3 by successor issuers within the successor issuer’s first year as an Exchange Act reporting company, see the discussion in section II.B.2 below regarding a proposed new category of issuer, the ‘‘seasoned eligible listed issuer,’’ and the ability of successor issuers to rely on the Exchange Act reporting history of the successor’s predecessor(s). 221But see supra note 196. 222See 17 CFR 240.12g–3. 223We recognize that an issuer may take measures to more quickly regain Form S–3 eligibility, but we believe the likely associated costs and potential reputational impacts would deter issuers from taking such measures. believe the continued availability of Form F–3 would further mitigate any impact from the proposed amendment prohibiting FPIs from using Form S–3. As to asset-backed issuers, the proposed amendment is intended to preserve the prohibition on the use of Form S–3 for offerings of asset-backed securities that appears in current General Instruction I.B.5. In adopting Form SF–3,215 the Commission intended that such issuers would use that form (rather than Form S–3) as a short-form registration statement and to conduct shelf offerings.216 Finally, as to investment companies and BDCs, Form S–3 currently does not expressly prohibit such issuers from using the form. These issuers, however, must use other forms adopted by the Commission for investment companies and BDCs.217 Request for Comment
27. Should we adopt General
Instruction I.A.3 as proposed?
28. As discussed in footnote 206,
under the proposed amendments, an issuer would not be able to conduct takedowns on Form S–3 if it was not a type of ineligible issuer specified in General Instruction I.A.3 at the time it filed a Form S–3 or at the time of the update under section 10(a)(3) of the Securities Act, but subsequently became one of those issuers. Should the prohibition in General Instruction I.A.3 apply at any time, as proposed, rather than being assessed only at the time of the filing of a Form S–3 and at the time of the update under section 10(a)(3) of the Securities Act?
29. We are proposing to amend Form
S–3 to no longer allow FPIs to use the form. Should we adopt the amendment as proposed? If not, please explain why.
30. We note that very few FPIs appear
to be eligible to use Form S–3 currently. Would there be significant disruptions to those FPIs who are currently eligible if we were to amend Form S–3 to no longer allow them to use the form, as proposed? Should FPIs that are currently eligible to use Form S–3 instead continue to be eligible to use the form for at least some period of time? If so, what is the appropriate time period?
31. As discussed in footnote 211, the
proposed amendments would allow foreign issuers (other than foreign governments and FPIs) to remain eligible to use Form S–3 as long as they satisfy the form’s eligibility requirements, in part, because those issuers are not able to use Form F–3. Should Form S–3 remain available for foreign issuers, other than foreign governments and FPIs?
vi. Successor Registrants
We are proposing to eliminate current General Instruction I.A.6 of Form S–3, which provides that successor registrants may use the form if certain conditions are met.218 This instruction allows a successor registrant to take into account a predecessor’s Exchange Act reporting history in determining whether the successor registrant satisfies the requirements of current General Instruction I.A.3; specifically, whether the successor registrant could be treated as having been current and timely in its Exchange Act reporting obligations for a period of 12 calendar months immediately preceding the filing of a Form S–3 when the successor registrant itself has not been subject to the Exchange Act’s reporting requirements for the requisite amount of time.219 We are proposing to eliminate this instruction because we believe it would no longer be necessary under the proposed amendments, as issuers would no longer need to have been subject to the Exchange Act’s reporting requirements for a minimum amount of time before becoming eligible to use Form S–3. Nevertheless, we seek comment on whether it is appropriate to eliminate this successor registrant provision.220 We recognize that an issuer could become a successor registrant to a predecessor that was delinquent in its Exchange Act reporting obligations prior to or at the time of the succession. Under the proposed amendments, the successor registrant would nevertheless be eligible to use Form S–3 because the successor registrant would not be required to consider the predecessor’s reporting history for purposes of determining Form S–3 eligibility.221 Although a successor registrant would succeed to the predecessor’s Exchange Act reporting obligations,222 the successor registrant would be treated as a new Exchange Act reporting company for purposes of determining Form S–3 eligibility and, accordingly, would only need to consider its own Exchange Act reporting history.223 Request for Comment
32. We are proposing to eliminate the
successor registrant provision currently in General Instruction I.A.6 of Form S–
3. Should we adopt the amendment as
proposed? If not, please explain why.
33. Under the proposed amendments,
a successor registrant would not be required to take into account a predecessor’s reporting history for purposes of determining Form S–3 eligibility. Accordingly, an issuer that becomes a successor registrant to a predecessor that was delinquent in its Exchange Act reporting obligations would nevertheless be eligible to use Form S–3 as long as the successor registrant was current and timely in making its Exchange Act filings. Should we instead require a successor registrant to take into account a predecessor’s reporting history when determining Form S–3 eligibility? Does the proposed approach (i.e., not requiring a successor registrant to take into account a predecessor’s reporting history) create the potential for abuse by an issuer seeking to regain Form S–3 eligibility more quickly? Would either the proposed approach or the alternative approach (i.e., requiring a successor registrant to take into account a predecessor’s reporting history) result in unnecessary complexity and subsequent requests for interpretive guidance? b. Form S–3 Transaction Requirements In addition to the proposed amendments to the registrant requirements described in section II.A.2.a above, we are proposing to eliminate Form S–3’s transaction requirements that currently appear in General Instruction I.B such that any issuer that meets the proposed registrant

224Under the proposed amendments, current General Instruction I.B.5, which specifies that Form S–3 cannot be used to register offerings of asset￾backed securities, would be preserved as an eligibility requirement in proposed General Instruction I.A.3 to Form S–3. See supra section II.A.2.a.v. 225See Form S–3, General Instruction I.B.1. 226See section II.A.2.a above for a discussion of our proposed amendments with respect to the Form S–3 registrant requirements, including both the requirements we are proposing to eliminate and those we are proposing to either retain or add. 227We recognize that eliminating the public float requirement would allow issuers without a public float—such as non-traded REITs, which currently register offerings on Form S–11—to use Form S–3 (to the extent they satisfy the form’s eligibility requirements). We also acknowledge that non￾traded REITs and other issuers required to use Form S–11 are subject to certain disclosure requirements not required by Form S–3, such as the disclosures required by Items 13 through 16 of Form S–11. Under current staff interpretation, issuers otherwise required to use Form S–11 are permitted to file on Form S–3 if they meet Form S–3’s eligibility requirements and provide the disclosures specified in Items 13 through 16 of Form S–11. We request comment on whether Form S–3 should be amended to require the disclosures that would otherwise apply to these issuers in a registered offering or, alternatively, whether we should prohibit issuers that are required to use Form S–11 from using Form S–3. 228For example, some issuers that have an immediate need for capital but are not eligible under the current requirements of Form S–3 may issue ‘‘extreme convertibles.’’ These convertible securities often are issued by distressed issuers and have features designed to reduce or eliminate investment risk by allowing the investor to convert the security at a steep discount to the market price. Upon conversion, a large percentage of the float typically is issued to the investor at below-market prices and results in significant dilution to existing investors. Because these issuers are not eligible to use Form S–3 (or conduct ATM offerings), and preparing a Form S–1 may not meet the issuer’s timing considerations, the convertible securities generally are sold pursuant to an exemption on terms that are less favorable to the issuer. By permitting more issuers to be eligible to use Form S–3, there may be less need for issuers to raise capital via extreme convertibles and similar types of transactions. 229See Table 2 and the accompanying discussion in section IV.B.1.a below for the methodology used in developing (and the assumptions underlying) this estimate. 230We continue to believe that public float is relevant for determining an issuer’s filer status and deadlines for filing Exchange Act reports. See Filer Status Proposal. As we have previously stated, public float can serve as a reasonable measure of a company’s
size and market interest and, in turn, where investor interest in accelerated filing is likely to be highest. See Acceleration of Periodic Reporting Filing Dates and Disclosure Concerning website Access to Reports, Release No. 33–8128 (Sept. 5, 2002) [67 FR 58480 (Sept. 16, 2002)]. While the accelerated filer criteria were initially based primarily on the eligibility requirements of Form S–3 such that investors in issuers that were Form S–3 eligible would receive information about these issuers sooner, see id., the Commission also recognized that the rationale for an issuer’s filer status is independent of form eligibility. See id. (noting that the initial accelerated filer status rules ‘‘ensure that investors receive consistent financial information regardless of the particular registration form a company uses’’). We also note that the Commission later adopted amendments to the filer status provisions that departed from Form S–3 eligibility criteria. See 2020 Accelerated Filer Adopting Release (adopting amendments that excluded from the accelerated and large accelerated filer definitions an issuer that is eligible to be an SRC based on its annual revenues). 231Specifically, in the 2007 Baby Shelf Adopting Release, the Commission adopted current General Instruction I.B.6 to Form S–3, which permits an issuer with less than $75 million in public float that is exchange-listed and is not a shell company to register any primary offering if the aggregate market value of securities sold by or on behalf of the issuer under the instruction during the 12 months immediately prior to, and including, the sale is no more than one-third of the issuer’s public float. requirements would be eligible to use Form S–3.224 Currently, issuers are eligible to register offerings on Form S–3 if they satisfy the registrant requirements and at least one of the transaction requirements. One of the transaction requirements is that an issuer’s public float is $75 million or more.225 Issuers that satisfy the registrant requirements and the $75 million public float requirement can register any primary or secondary offering for cash on Form S–
3. Issuers that do not satisfy the $75
million public float requirement may nevertheless register certain transactions on Form S–3, as discussed in section II.A.1.a above, if they satisfy one of the other transaction requirements. In light of our proposal to eliminate the $75 million public float requirement, we also are proposing to eliminate the other transaction requirements of Form S–3 because those requirements would become unnecessary, as they are relevant only for issuers that do not meet the current $75 million public float requirement. We first address our proposed elimination of the public float requirement, and then we address our proposed elimination of the other transaction requirements.
i. $75 Million Public Float
We are proposing to eliminate the $75 million public float requirement in current General Instruction I.B.1. As discussed in section II.A.1.b above, the Commission historically relied on a minimum public float requirement as a proxy for whether an issuer was widely followed and, in turn, whether information about the issuer disclosed in Exchange Act reports rather than in the prospectus had been sufficiently disseminated into the marketplace such that short-form registration was appropriate. We now believe, however, that Form S–3 eligibility should be based on the ability to readily obtain issuer-specific information in Exchange Act reports and not, in part, on the amount of an issuer’s public float. For the same reasons as discussed in section II.A.2.a above, we believe the ability to obtain such information depends on whether an issuer is current and timely with respect to its reporting obligations. Thus, under the proposed amendments, an issuer that satisfies the registrant requirements—including the Current and Timely in Exchange Act Reporting requirements—would be eligible to use Form S–3 for any primary or secondary offering of the issuer’s securities, without regard to the amount of its public float.226 The proposed amendment is intended to facilitate capital formation in the public markets which, as noted above, may benefit issuers and investors alike.227 The $75 million public float requirement limits certain issuers’ abilities to take advantage of the efficiencies associated with the use of Form S–3 and, as a result, may limit their ability to raise capital in a timely, efficient manner via a registered offering. Issuers that do not meet the form’s eligibility requirements may look instead to other financing alternatives such as exempt offerings or registered offerings that could have less favorable terms that could create significant dilution to the shareholder base or possibly cause them to forgo certain securities offerings altogether.228 As noted in section I.A above, we estimate that eliminating the $75 million public float requirement could result in an increase of over 60 percent in the number of issuers eligible to offer an unlimited amount of securities on Form S–3.229 At the same time, when taking into account the Form S–3 registrant requirements we are proposing to retain and add, we believe that the proposed amendment would be consistent with investor protection. As noted above, we no longer believe it is necessary to rely on public float as a proxy for investors’ access to an issuer’s Exchange Act information for purposes of determining Form S–3 eligibility.230 Instead, we believe that maintaining the Current and Timely in Exchange Act Reporting requirements, as well as prohibiting certain types of issuers (as described in
section II.A.2.a.v above) from using
Form S–3, would help protect against potential abuses associated with the proposal to eliminate the minimum public float requirement. As compared to the existing Form S–3 eligibility requirements, we believe the proposed amendments would better balance the goals of protecting investors without unduly inhibiting capital formation. We recognize that when the Commission amended Form S–3 in 2007 to permit limited primary offerings by certain issuers whose public float was less than $75 million,231 the

232See Baby Shelf Adopting Release at 73535–36 (‘‘We are not prepared at this time to abandon our longstanding prerequisite contained in the instructions to Form S–3 and allow unlimited use of this form for primary offerings by companies who do not have at least $75 million in public float.’’). 233See Baby Shelf Adopting Release at 73536 (‘‘Concerns have been raised in the past when the Commission considered easing the restrictions of shelf registration eligibility to allow smaller public companies to use a modified form of shelf registration . . . . It has been observed that the securities of smaller public companies are comparatively more vulnerable to price manipulation than the securities of larger public companies, and may also be more prone to financial reporting error and abuses.’’). 234See supra section II.A.2.a.v. The study cited by the Commission in support of the view that greater potential for price manipulation exists in smaller public companies’ securities compared to larger companies indicated that ‘‘over 50% of the stocks manipulated are ‘penny stocks’ with very low average trading volume and market capitalization.’’ See Rajesh Aggarwal and Guojon Wu, Stock Market Manipulations, 79 J. of Bus., No. 4 (2006), at 1936. 235 17 CFR 242.100 through 105. 236 17 CFR 242.200 through 205. 237See Baby Shelf Adopting Release at 73536–37 (‘‘We also note that the disclosure obligations and liability imposed by the federal securities laws on smaller public companies are comparable, but not identical, to the largest reporting companies.’’). 238See id. (‘‘We are comfortable that the scaled disclosure standards for smaller public companies are sufficiently comparable to those governing larger issuers such that the limited expansion of Form S–3 primary offering eligibility, as we are adopting it, will not adversely impact investors. However, the level of disclosure required of smaller public companies under the federal securities laws is yet another factor that we believe weighs against expanding Form S–3 eligibility further than we have in this release.’’). 239See Filer Status Proposal at section II (‘‘We are proposing amendments with the goal of streamlining the overlapping Exchange Act filer statuses and further scaling disclosures and other accommodations while ensuring that investors continue to receive timely and material information. . . . The proposed amendments would provide for simplified compliance and reduced costs for a majority of registrants.’’). 240Public Law 107–204, 116 Stat. 745 (2002). See Baby Shelf Adopting Release at n.31 (‘‘[W]e acknowledge that the companies implicated in this rulemaking are not yet fully subject to Section 404 of Sarbanes-Oxley. . . . We may revisit the limitation on our expansion of Form S–3 after full compliance with Section 404 is complete.’’). 241 17 CFR 229.308(b). 242 17 CFR 229.308(a). All issuers must provide a report of management on the registrant’s internal control over financial reporting that
contains a statement of management’s responsibility for establishing and maintaining adequate internal control over financial reporting, management’s assessment of its effectiveness of internal control over financial reporting effectiveness as of year end, and disclosure of any identified material weaknesses. This requirement would not change under the amendments proposed in the Filer Status Proposal. 243Although an issuer must have less than $75 million in public float to be a non-accelerated filer, it is possible for a non-accelerated filer to use Form S–3 for primary offerings under General Instruction I.B.1 if its public float increases above $75 million prior to the issuer’s next determination date for accelerated filer status. Non-accelerated filers also can use Form S–3 for primary equity offerings under General Instruction I.B.6 if they have a class of equity securities listed on a national securities exchange and are not (and have not been in the last 12 calendar months) a shell company. Commission considered whether to eliminate the $75 million public float requirement altogether and decided to retain it.232 The Commission highlighted certain investor protection concerns associated with eliminating altogether the $75 million minimum public float requirement and determined that the requirement reflected an appropriate balance between capital formation with investor protection. As discussed above, the proposed amendments are intended to reflect the Commission’s experience since it last adopted or amended the rules, including a reassessment of how best to achieve investor protection in a manner that does not unduly limit issuers’ access to short-form and shelf registration. Nonetheless, we acknowledge and address the concerns that the Commission expressed in 2007 about modifying the $75 million public float requirement and expanding access to Form S–3 beyond what the Commission did in that rulemaking. One concern that the Commission expressed in 2007 related to the potential for price manipulation and financial reporting errors and abuse posed by smaller issuers.233 While the proposed amendments would not completely eliminate these concerns with respect to securities of issuers that would become newly eligible to use Form S–3, we believe they would help address them in a meaningful way. Specifically, certain issuers that pose greater market manipulation and disclosure risks would, under the proposed amendments, be prohibited from using Form S–3, including BSP issuers, as we propose to define that term in Rule 405, and certain ‘‘bad actors.’’ 234 As discussed in section II.A.2.a.iv, we believe Commission staff should have the opportunity to review those issuers’ offerings (by requiring, for example, those issuers to use Form S– 1 rather than Form S–3), as staff review may mitigate risks of non-compliance and other potential abuses. In addition, we believe the antifraud and antimanipulation rules under the Exchange Act, including 17 CFR
240.10b–5 (‘‘Rule 10b–5’’), Regulation M,235 and Regulation SHO,236 address concerns about price manipulation in a more appropriate and targeted manner than conditioning Form S–3 eligibility on a minimum public float requirement. We also acknowledge, as the Commission did in 2007, concerns regarding the expansion of Form S–3 eligibility to smaller issuers given the different disclosure requirements and liability standards between smaller and larger issuers.237 While we recognize the distinction in disclosure standards, we agree with the Commission’s 2007 view that the disclosure requirements applicable to smaller issuers are sufficiently comparable to those governing larger issuers such that expansion of Form S–3 eligibility would not adversely affect investors.238 Although the Commission in 2007 expressed a potential concern with expanding Form S–3 further than it did given the disclosure differences, our proposed amendments are informed by approximately 18 years of experience with Form S–3 registration statements filed by SRCs and 14 years of experience with emerging growth companies that are eligible to provide certain scaled disclosures in their Securities Act and Exchange Act filings. The Commission’s scaled disclosure requirements are intended to promote capital formation by reducing compliance costs for certain issuers while maintaining investor protection. Despite the differences between the two regimes, the Commission’s disclosure requirements are intended to ensure that all issuers provide material information to investors necessary to make an informed investment decision, while accounting for the costs and burdens of producing such disclosures.239 Accordingly, we do not believe that differences in the applicable disclosure requirements should limit the Securities Act registration forms available to a particular issuer. Further, while the Commission’s previous concerns regarding distinctions in liability were focused on the fact that issuers implicated in that rulemaking were not yet fully subject to
section 404 of the Sarbanes-Oxley Act of
2002 (‘‘Sarbanes-Oxley’’), we believe it is time to reassess those concerns.240 Today, while non-accelerated filers, as defined in 17 CFR 240.12b–2, and emerging growth companies are not required to provide an auditor’s attestation report in compliance with
section 404(b) of Sarbanes-Oxley,241 all
issuers that have filed or are required to file an annual report are required to provide management’s attestation report in compliance with section 404(a) of Sarbanes-Oxley.242 We also note that Form S–3 is not currently limited to issuers that are subject to the auditor attestation requirements. For example, emerging growth companies and non￾accelerated filers are currently permitted to use Form S–3.243 In addition, we are unaware of any indication from Congress that it

244Baby Shelf Adopting Release at 73537. 245See id. (‘‘[S]ecurities transactions exceeding one-third of the value of an issuer’s public float are generally of such significance to the issuer that the opportunity for specific staff review of the transaction and a greater window for underwriter due diligence are advisable.’’). 246The staff generally does not review these Rule 424 prospectuses because by the time those prospectuses have been filed and made available for staff review, offers and sales pursuant to those prospectuses (and investors’ related investment decisions) likely already were made. 247See Sarbanes-Oxley Act, Public Law 107–204, sec. 408, 116 Stat. 745, 790–91 (2002). 248See 15 U.S.C. 77k; 15 U.S.C. 77l(a)(2); 15 U.S.C. 77q(a); see also 15 U.S.C. 78j(b); 17 CFR 240.10b–5. 249See Baby Shelf Adopting Release at 73537 (noting that ‘‘the short time horizon of shelf offerings may also reduce the time that participating underwriters have to apply their independent scrutiny and judgment to an issuer’s prospectus disclosure’’); Proposed Rule 430A Amendments (acknowledging, in connection with the Commission’s proposal to permit a ‘‘modified form of shelf registration’’ for certain smaller issuers, that such ‘‘expedited access to the markets . . . could make it difficult for gatekeepers, particularly underwriters, to perform adequate due diligence for the smaller companies that would be eligible’’ to use the new procedure). Commentators also have suggested that shelf takedowns present challenges for underwriters in performing due diligence investigations and making reliance-based decisions because of the time constraints of such offerings. See, e.g., Joseph K. Leahy, What Due Diligence Dilemma? Re-Envisioning Underwriters’ Continuous Due Diligence After WorldCom, 30 Cardozo L. Rev. 2001 (2009) (contending that underwriters are forced ‘‘to choose between their clients’ desire to issue securities quickly in [a] shelf-registered offering and the obligation to exercise reasonable care in due diligence’’); Eric Seitz, Comment, Underwriter Due Diligence: It’s [Not] a Whole New Ballgame, 61 SMU L. Rev. 1633, 1648 (2008) (positing that ‘‘issuers generally are anxious to pull an offering ‘off the shelf’ quickly, leaving the chosen underwriter little time to perform due diligence without raising the ire of its client’’); Christian A. Young, Looking Back on WorldCom:
Addressing Underwriters’ Due Diligence in Shelf Registration Offerings and the Need for Reform, 40 Suffolk U. L. Rev. 521, 547–48 (2007) (suggesting that shelf registration ‘‘effectively reduce[s] the time available for underwriters to conduct the requisite due diligence’’). 250Shelf Registration Adopting Release at 52892 (‘‘Registrants and the other parties involved in their public offerings—attorneys, accountants, and underwriters—are developing procedures which allow due diligence obligations under Section 11(b) to be met in the most effective and efficient manner possible.’’). 251There are two affirmative defenses under
section 11: a ‘‘reasonable investigation’’ defense for
non-expertized disclosures and a ‘‘reasonable reliance’’ defense for expertized disclosures. See 15 U.S.C. 77k(b)(3). There is also a ‘‘reasonable care’’ defense under section 12(a)(2), provided a defendant can establish that it ‘‘did not know, and in the exercise of reasonable care, could not have known, of [the] untruth or omission.’’ See 15 U.S.C. 77l(a)(2). 252The due diligence defense under the Securities Act technically does not apply to claims under section 10(b) and Rule 10b–5 of the Exchange Act, but satisfaction of the due diligence standard may be relevant to the analysis of whether an underwriter engaged in intentional or reckless conduct required to prove a Rule 10b–5 violation. 253Baby Shelf Adopting Release at 73536. 254See supra notes 36–41 and accompanying text. intended for section 404(b) of Sarbanes￾Oxley to serve as a condition to an issuer’s ability to use Form S–3. Accordingly, we do not believe it is necessary to limit expansion of Form S– 3 eligibility based on whether an issuer is subject to section 404(b) of Sarbanes￾Oxley. We also note that the Commission in 2007 expressed concern about ‘‘the unique set of investment risks posed by smaller public companies in the context of shelf registration, which provides speed and flexibility to issuers, but at the same time may limit Commission and underwriter involvement in the registration process.’’ 244 We recognize the investor protection benefits associated with Commission staff and underwriter involvement in the registration process, especially with respect to relatively large offerings.245 We also acknowledge that fewer registered offerings may be subject to Commission staff review under the proposed amendments. Although Commission staff would retain the ability to review registration statements before they became effective, Rule 424 prospectuses filed for individual takedowns from shelf offerings generally are not reviewed by the staff.246 Under current rules, issuers using Form S–1 are only permitted to register continuous offerings that commence promptly upon effectiveness of the registration statement. A separate registration statement would be required for a new offering to be made in the future. Each Form S–1 may be subject to selective staff review before going effective. If these issuers could instead conduct shelf offerings on Form S–3, they could conduct takedowns without staff review of the specific offering terms disclosed in Rule 424 prospectuses. Under our proposal, however, the staff would retain the ability to review certain filings. For example, our proposal would not affect the staff’s ability to conduct a selective review of Form S–3 registration statements that are not automatic shelf registration statements if it chooses to do so. While the specific deal terms of a particular takedown are not typically disclosed in a base prospectus, and therefore an offering may be conducted without the staff having previously reviewed offering specifics associated with
shelf takedowns that are disclosed in a Rule 424 prospectus, the staff may still review the Exchange Act reports that are incorporated by reference into the Form S–3 prior to acceleration of the effective date. In addition, pursuant to section 408 of Sarbanes-Oxley, ‘‘the Commission shall review disclosures made by issuers . . . includ[ing] their financial statements . . . no less frequently than once every three years.’’ 247 These reviews afford the staff an opportunity to evaluate and comment on the adequacy of an issuer’s filings that are incorporated by reference into an issuer’s short-form registration statements. Moreover, we believe that the liability provisions under the Federal securities laws that apply to shelf registration statements help protect against material misstatements and omissions from prospectuses used in connection with shelf takedowns.248 In addition, we acknowledge that shelf registration can present some challenges for underwriters in performing their due diligence activities.249 Despite these challenges and concerns, we note that underwriters have been conducting due diligence under compressed timelines in the context of shelf offerings for many years.250 We also note that underwriters can be held strictly liable under sections 11 and 12(a)(2) of the Securities Act for any material misstatements or omissions made in connection with a registered offering, except to the extent they can demonstrate that they conducted adequate due diligence or exercised reasonable care, respectively. They also can be held liable under section 10(b) of the Exchange Act and Rule 10b–5 promulgated thereunder. As a result, underwriters will continue to be incentivized to conduct thorough due diligence for purposes of establishing an affirmative defense to disclosure liabilities under sections 11 and 12(a)(2) of the Securities Act,251 and to negate an inference of fraud under Rule 10b–5.252 To that end, we expect underwriters and issuers will develop market practices that would allow underwriters to conduct the necessary due diligence while still allowing issuers to benefit from the greater flexibility that our proposed amendments will provide with respect to registered offerings. Finally, we note that although the Commission in 2007 ‘‘ease[d] the Form S–3 eligibility standards’’ in part based on ‘‘the technological advances that have revolutionized communications between companies and the market,’’ it ultimately decided to ‘‘retain[ ] public float as a factor in determining the extent of short-form eligibility’’ in part because of the limitations of technology.253 As previously discussed, information has become only more widely accessible and used, and absorbed into the market even more rapidly, since 2007.254 More

255Baby Shelf Adopting Release at 73536. 256 General Instruction I.B.2 requires that the issuer: (1) has issued at least $1 billion in non￾convertible securities, other than common equity, in primary offerings for cash registered under the Securities Act over the prior three years; (2) has outstanding at least $750 million of non-convertible securities, other than common equity, issued in primary offerings for cash registered under the Securities Act; (3) is a wholly-owned subsidiary of a WKSI; or (4) is a majority-owned operating partnership of a REIT that qualifies as a WKSI. 257But see supra note 224 (noting that, under the proposed amendments, current General Instruction I.B.5, which specifies that Form S–3 cannot be used to register offerings of asset-backed securities, would be preserved as an eligibility requirement). 258See 17 CFR 229.801(e). 259Non-traded REIT offerings are typically blind pool offerings, which are offerings where a material portion of the offering proceeds have not been allocated to an identified use. Item 20.D. of Industry Guide 5 requires non-traded REITs conducting blind pool offerings to update their prospectuses regularly regarding the acquisition of properties through sticker supplements, post-effective amendments, and Form 8–K filings. It requires blind pool non-traded REITs to consolidate all supplements into a post-effective amendment filed every three months. significantly, however, the Commission’s reticence in 2007 to eliminate public float appeared to be due, in part, to its continued reliance on public float ‘‘as an approximate measure of a stock’s market following and, consequently, the degree of efficiency with which the market absorbs information and reflects it in the price of a security.’’ 255 As noted above, our proposed amendments reflect a shift away from this historical approach, as we believe that Form S–3 eligibility should depend on whether investors can readily obtain issuer-specific information to make an informed investment decision and not on the degree of an issuer’s public following or the extent to which information has been absorbed into the market. For these reasons, we propose to eliminate the $75 million minimum public float requirement.
ii. Other Transaction Requirements
As discussed in section II.A.1.a above, Form S–3 has several other transaction requirements in addition to the $75 million public float requirement in General Instruction I.B.1. Issuers only would need to rely on these other transaction requirements to the extent they do not meet the $75 million public float requirement in General Instruction I.B.1. For example, an issuer with less than $75 million in public float may rely on General Instruction I.B.2 to register a specific type of offering (i.e., primary offering of non-convertible securities other than common equity) if the issuer meets the requirements of that instruction (as well as the Form S–3 registrant requirements).256 Similarly, an issuer with less than $75 million in public float may register any primary offering under General Instruction I.B.6 if the issuer is exchange-listed and is not a shell company and if the aggregate market value of securities sold by or on behalf of the issuer under the instruction during the 12 months immediately prior to, and including, the sale is no more than one-third of the issuer’s public float. Because issuers only need to rely on these other transaction requirements if they do not satisfy the $75 million public float requirement in General Instruction I.B.1, and because we are proposing to eliminate that minimum public float requirement, we also propose to eliminate the other transaction requirements in General Instructions I.B.2 through 6.257 We also are proposing to make certain conforming changes to other parts of Form S–3 (e.g., in the form’s ‘‘Calculation of Filing Fee Tables’’) and certain other rules and forms that currently reference one or more of the transaction requirements. Those conforming changes are discussed in
section II.G.3 below.
Request for Comment
34. We are proposing to eliminate
Form S–3’s transaction requirements that currently appear in General Instruction I.B, including the requirement that an issuer have a $75 million public float to conduct unlimited primary offerings, such that any issuer that meets the proposed registrant requirements would be eligible to use Form S–3. Should we adopt the amendments as proposed? If not, please explain.
35. Should we retain a minimum
public float requirement? If so, what are the benefits of retaining such a requirement? Is the extent to which an issuer is widely followed or the degree to which information about an issuer has been absorbed into the marketplace a relevant factor for assessing whether an issuer should be able to use Form S– 3 and/or conduct shelf offerings?
36. If we retain the minimum public
float requirement, is $75 million the appropriate threshold for such a requirement, or should we adopt a minimum public float requirement with a different dollar threshold?
37. Rather than eliminating the $75
million minimum public float requirement in General Instruction I.B.1, should we instead amend General Instruction I.B.6 or any other instructions in General Instruction I.B? For example, should we remove the ‘‘exchange-listing’’ requirement from General Instruction I.B.6? Alternatively, should we raise the ‘‘one-third of public float’’ cap under that instruction?
38. As discussed in footnote 227
above, we recognize that eliminating the public float requirement would allow issuers without a public float—such as non-traded REITs, which currently register offerings on Form S–11—to use Form S–3 (to the extent they satisfy the form’s eligibility requirements). We also recognize that, under current staff interpretation, issuers otherwise required to use Form S–11 may file on Form S–3 if they meet Form S–3’s eligibility requirements and provide the disclosures specified in Items 13 through 16 of Form S–11. Should we codify that staff interpretation by, for example, amending Form S–3 to require those issuers to provide the disclosures specified in Items 13 through 16 of Form S–11? Should we consider making any changes to those disclosure requirements? Are there other real estate-related disclosures that we should consider requiring in Form S–3 to ensure that investors in these issuers, including non-traded REITs, receive all material information necessary to make an informed investment decision? For example, should Form S–3 require these issuers to provide the disclosures called for by Industry Guide 5,258 as supplemented by CF Disclosure Guide Topic No. 6? Would any of those disclosures be inapplicable with respect to an offering on Form S–3? For example, would the Item 20.D undertaking of Industry Guide 5 259 need to be amended? If the Item 20.D undertaking of Industry Guide 5 is no longer necessary when using Form S–3, should we consider any amendments to 17 CFR 210.11–01(b)(4), which includes the application of the Item 20.D undertaking of Industry Guide 5 as a condition to its application?
39. See the preceding request for
comment. As an alternative to our proposal, should we prohibit issuers that are required to use Form S–11 (i.e., REITs and other issuers whose business is primarily that of acquiring and holding for investment real estate or interests in real estate or interests in other issuers whose business is primarily that of acquiring and holding real estate or interest in real estate for investment) from using Form S–3? If so, what would be the impact of that prohibition and what amendments should we make, if any, to Form S–11 to account for the unavailability of Form S–3 to those issuers? For example, should we amend Form S–11 to permit forward incorporation in that form?

260The reference to ‘‘majority-owned subsidiaries’’ would include wholly owned and totally held subsidiaries, each as defined in 17 CFR 230.405. 261Note to General Instruction I.C of Form S–3 currently explains that a guarantee is a separate security that must be concurrently registered. While that instruction provides that the guarantee ‘‘may be registered on the same registration statement as are the non-convertible guaranteed securities’’ (emphasis added), the practical effect of this requirement is that the guarantee and non￾convertible guaranteed securities generally are registered on the parent’s registration statement. See Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities, Release No. 33–10526 (July 24, 2018) [83 FR 49630 (Oct. 2, 2018)] (‘‘Guaranteed Securities Adopting Release’’) (noting that in the context of certain guaranteed offerings, ‘‘[t]he subsidiary is required to file a registration statement for the transaction, which is usually combined with its parent’s registration statement’’). We propose to amend Form S–3 to clarify that the subsidiary’s securities must be registered on the parent’s Form S–3 because we believe doing so would be consistent with market practice and would benefit investors. In this regard, we note that, as a co-registrant, the parent and its officers take on liability for the subsidiary’s offering and related disclosures. Accordingly, we believe a parent would be better incentivized to ensure that such registration statements are free of material misstatements and omissions, which, in turn, would serve to better protect investors. For avoidance of doubt, the proposed co-registrant requirement would not compel the parent to register its own securities on the registration statement (and, in fact, that requirement would apply regardless of whether the parent is registering its own securities on the registration statement). 262See section II.B.2.b below for a discussion of proposed General Instruction I.B.2 of Form S–3. This instruction would facilitate a majority-owned subsidiary’s ability to use an automatic shelf registration statement and avail itself of other Enhanced Registration and Communication Benefits available to eligible listed issuers and seasoned eligible listed issuers (as we propose to define those terms), in reliance on the parent’s eligibility to utilize these benefits. 263See, e.g., Guaranteed Securities Adopting Release at 21984 (‘‘[I]nvestors may benefit from access to more registered offerings that are structured to include guarantees and, accordingly, the additional protections that come with a registered offering. Also, an increase in the overall use of guarantees could reduce structural subordination issues that arise.’’). 264Moreover, because guarantees and the related non-convertible guaranteed securities must be registered concurrently, permitting a majority￾owned subsidiary that is not
Form S–3 eligible to register on the parent’s Form S–3, rather than requiring registration on Form S–1, provides greater certainty regarding, and allows the issuers to more easily align, the timing of the offering.
40. We have addressed certain
potential concerns associated with expanding the pool of issuers eligible to conduct offerings on Form S–3, including shelf offerings. These concerns include the lack of staff review of takedowns and a shorter amount of time for underwriters to conduct due diligence in connection with shelf offerings due to the shorter offering window. Do the various liability provisions under the Federal securities laws and other investor protection￾based mechanisms that would be retained or added under the proposed amendments adequately address these concerns? Would the lack of staff review affect the quality and accuracy of disclosures in these registered offerings?
41. Are there other concerns we have
not addressed that we should consider? If so, do the proposed amendments adequately address such concerns? If not, how should we address those concerns?
42. If the proposed amendments were
adopted, would underwriters have difficulty performing adequate due diligence for shelf offerings of issuers with smaller market capitalizations in comparison to issuers with larger market capitalizations? If so, in what ways does the due diligence process differ for smaller issuers compared to larger issuers such that the proposed amendments pose a greater risk to the due diligence process for smaller issuers (i.e., those with a public float of less than $75 million that would become newly eligible to use Form S–3 without restrictions on the amount that can be raised)?
43. As discussed in section II.A.2.a.v
above, we are proposing to prohibit certain types of issuers from using Form S–3 to reduce risks associated with expanding Form S–3 eligibility. Taking those proposed amendments into account, would those proposed amendments adequately reduce risks associated with the proposal to eliminate Form S–3’s transaction requirements?
c. Form S–3 Eligibility of Majority￾Owned Subsidiaries
We propose to replace existing General Instructions I.C.3, I.C.4, and I.C.5 with new General Instruction I.B.1 to Form S–3. This would permit certain majority-owned subsidiaries 260 that are not Exchange Act reporting companies to nonetheless continue to register Guarantee-Related Offerings on a parent’s Form S–3, provided their parent is eligible to use the form and the parent and subsidiary are identified on the registration statement as co￾registrants.261 Exchange Act reporting majority-owned subsidiaries that do not satisfy the Current and Timely in Exchange Act Reporting requirements or that are prohibited from using Form S– 3 under proposed General Instruction I.A.2 (i.e., because they are one of the types of ‘‘ineligible issuers’’ specified in that proposed instruction) or I.A.3 (i.e., because they are an FPI, asset-backed issuer, investment company, or BDC) would not be able to rely on proposed General Instruction I.B.1 to conduct an offering on Form S–3 by virtue of their relationship with a Form S–3 eligible parent. While we acknowledge that a broader group of majority-owned subsidiaries could use a parent’s Form S–3 in reliance on these instructions because a greater number of parent issuers would become Form S–3 eligible, we propose to preserve this treatment of majority￾owned subsidiaries because we believe it would benefit investors and promote efficient capital formation in the context of parent-subsidiary financing.262 For example, investors may benefit when a guarantee is issued, as it can help mitigate the default risk associated with a parent or subsidiary’s debt offering.263 They also may benefit when these offerings are registered—rather than conducted on an exempt basis—because they receive disclosures about the parent and subsidiary that might not be provided in unregistered offerings, and such disclosures are subject to section 11 and 12(a)(2) liability. In addition, majority-owned subsidiaries that register their debt-like securities or guarantees become subject to the ongoing reporting requirements of
section 15(d), helping ensure investors
remain informed about the subsidiary.264 At the same time, issuers may benefit from an improved credit rating stemming from the guarantee, which can lower borrowing costs. We also propose to eliminate other instructions that currently allow wholly- or majority-owned subsidiaries to rely on a parent’s Form S–3 eligibility to conduct certain offerings because they would no longer be necessary due to our other proposed amendments to Form S–3. Specifically, we propose to eliminate General Instructions I.B.2(iii), I.B.2(iv), I.C.1, and I.C.2 because issuers that generally rely on these provisions likely would become eligible to use Form S–3 under the proposed amendments and no longer would need to rely on these instructions. Eliminating these instructions, therefore, would help simplify Form S– 3 without unduly impacting the scope of registrants eligible to use the form. We discuss in greater detail below why each of these instructions would no longer be necessary. As noted in section II.A.1.a above, General Instruction I.B.2(iii) permits a wholly-owned subsidiary of a WKSI, and General Instruction I.B.2(iv) permits a majority-owned operating partnership of a REIT that qualifies as a WKSI, to register on Form S–3 the offer and sale of non-convertible securities, other than

265This is in contrast with current General Instruction I.C.2, which requires the parent—not the subsidiary—to satisfy the registrant requirements under General Instruction I.A. 266We recognize that some majority-owned subsidiaries may not be current or timely with respect to their Exchange Act reports. In the past, Commission staff has not objected to majority￾owned subsidiaries that were untimely with respect to their Exchange Act filings relying on General Instruction I.C.2 if the parent was current and timely and the majority-owned subsidiary was current in its reporting obligations. Accordingly, some majority-owned subsidiaries that previously have relied on General Instruction I.C.2 may not be eligible to use Form S–3 under the proposed amendments because they are not current or timely with respect to their Exchange Act filings and would be unable to rely on the parent’s satisfaction of the Current and Timely in Exchange Act Reporting requirements. We also acknowledge that certain majority-owned subsidiaries that currently rely on General Instruction I.C.2 could fall within a category of ineligible issuers that we are proposing to prohibit from using Form S–3 and, therefore, these issuers could lose the ability to use Form S–3 under the proposed amendments. Nevertheless, in light of our proposed expansion of Form S–3 eligibility, we believe it is appropriate to require all issuers to remain current and timely in their Exchange Act reporting obligations and to not be ineligible issuers. 267Under the proposed amendments, General Instructions I.C.1 and I.C.2 would be deleted and General Instructions I.C.3, I.C.4, and I.C.5 would be relocated to proposed General Instruction I.B.1. In turn, General Instruction I.D, which governs use of Form S–3 as an automatic shelf registration statement, would be relocated to General Instruction I.C. Accordingly, we propose conforming amendments that would change the references to General Instruction I.D that currently appear in Rule 138 and in the definition of well￾known seasoned issuer in Rule 405 to General Instruction I.C. common equity. To rely on General Instruction I.B.2(iii) or (iv), an issuer must satisfy the registrant requirements under General Instruction I.A, including the requirement that the issuer be subject to the Exchange Act’s reporting requirements and be current and timely with respect to its Exchange Act filings.265 Under the proposed amendments, these Exchange Act reporting subsidiaries would become independently eligible to use Form S–3 if they meet the Current and Timely in Exchange Act Reporting requirements and are not prohibited from using Form S–3 under proposed General Instruction I.A.2. Accordingly, we do not believe it is necessary to retain current General Instruction I.B.2(iii) or (iv). In addition, we are proposing to eliminate General Instruction I.C.1, which currently permits a majority￾owned subsidiary to use Form S–3 if ‘‘the registrant-subsidiary itself meets the
Registrant Requirements and the applicable Transaction Requirement.’’ Even under Form S–3’s existing eligibility requirements, this instruction is unnecessary because a majority￾owned subsidiary that meets the current Form S–3 registrant and transaction requirements could use the form without relying on this instruction. The same is true under the proposed amendments. As such, we do not find it necessary to retain General Instruction I.C.1. Finally, we are proposing to eliminate current General Instruction I.C.2, which permits a majority-owned subsidiary to use Form S–3 if ‘‘the parent of the registrant-subsidiary meets the Registrant Requirements and the conditions of Transaction Requirements B.2 (Primary Offerings of Non￾Convertible Securities Other than Common Equity) are met.’’ We believe this instruction would become superfluous under the proposed amendments because, in accordance with our understanding of current market practice, majority-owned subsidiaries do not rely on General Instruction I.C.2 unless they are themselves Exchange Act reporting companies. Accordingly, all such issuers would become independently eligible to use Form S–3 under the proposed amendments and, therefore, would no longer need to rely on General Instruction I.C.2.266 We seek comment, however, as to whether any such issuers would be ineligible to use Form S–3 under the proposed amendments and the extent to which the proposed amendments could impose undue burdens on such issuers.267 Request for Comment
44. We are proposing to relocate the
substance of General Instructions I.C.3, I.C.4, and I.C.5 to proposed General Instruction I.B.1. Should we relocate these instructions as proposed? Alternatively, should we delete these instructions? For example, would these provisions no longer be necessary in light of the broader reforms to Form S– 3 eligibility criteria we are proposing? Are there risks associated with this approach that we have not discussed and should consider? Are there any issuers that currently rely on these instructions that are not Exchange Act reporting companies?
45. We are proposing to eliminate
current General Instructions I.B.2(iii) and (iv). Should we eliminate these instructions as proposed? Are there any issuers that currently rely on these instructions that would not be eligible to use Form S–3 under the proposed amendments?
46. We are proposing to eliminate
current General Instructions I.C.1 and I.C.2. Should we eliminate these instructions as proposed? To what extent do issuers rely on the existing instructions? For example, are there any issuers that currently rely on these instructions that would not be eligible to use Form S–3 under the proposed amendments? If so, what are the anticipated regulatory burdens on these issuers stemming from the proposed amendments?
47. In light of the proposed expansion
to Form S–3 eligibility, which would make Form S–3 available to a greater number of issuers including majority￾owned subsidiaries, should we no longer allow subsidiaries to rely on a parent’s Form S–3 status to conduct offerings on the form? Would this benefit issuers and other market participants by, for example, simplifying Form S–3? Would this affect the issuance of guarantees in debt offerings? If so, what would be the impact on investors and issuers?
48. Instead of limiting the types of
offerings that can be conducted by majority-owned subsidiaries in reliance on a parent’s Form S–3 status to Guarantee-Related Offerings, should we allow majority-owned subsidiaries to register any type of offering? If so, what types of investor protection measures should be implemented? For example, should the subsidiaries be required to be co-registrants with the parent on the same registration statement?
49. We propose to clarify that, for a
Guarantee-Related Offering on Form S– 3 where a majority-owned subsidiary relies on its parent’s Form S–3 eligibility, the offering must be registered on the parent’s Form S–3 registration statement. Should we adopt the amendment as proposed? Would this requirement differ from existing market practice? Would this requirement impede capital formation with respect to these Guarantee-Related Offerings?
50. Item 12(c) of Form S–3 contains
several requirements for an issuer that seeks to incorporate by reference into its registration statement, including that it must: state that it will provide to each person to whom a prospectus is delivered copies of the documents incorporated by reference, and that it will provide these reports or documents upon written or oral request and without charge; provide the contact information where requests for those documents must be made; identify the reports and other information that it files with the Commission; state that the Commission maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission and state the address of that site; and disclose its internet address, if available. Is each of these requirements necessary? Should

268ATM offerings may be conducted on a primary or resale basis. Although we believe this is well understood in the marketplace, we propose to amend Rule 415(a)(4) to expressly state that ATM offerings may be conducted by or on behalf of a registrant (i.e., primary ATM) or by or on behalf of a person or persons other than the registrant (i.e., secondary ATM). 269See 17 CFR 230.415(a)(4) (‘‘In the case of a registration statement pertaining to an at the market offering of equity securities by or on behalf of the registrant, the offering must come within paragraph (a)(1)(x) of this section.’’). Rule 415(a)(1)(x) permits offerings of ‘‘[s]ecurities registered (or qualified to be registered) on Form S–3 or Form F–3 . . . , or on Form N–2 . . . pursuant to General Instruction A.2 of that form, which are to be offered and sold on an immediate, continuous or delayed basis by or on behalf of the registrant, a majority-owned subsidiary of the registrant or a person of which the registrant is a majority-owned subsidiary.’’ Offerings registered on an automatic shelf registration statement or conducted pursuant to Rules 415(a)(1)(vii), (ix), and (x) may be offered and sold only if not more than three years have elapsed since the initial effective date of the registration statement under which they are offered and sold. We are not proposing to amend this three-year expiration period. 270The term ‘‘ATM offering’’ often is used to refer to a specific type of offering in which an issuer sells its securities into the market over time through one or more broker-dealers acting as sales agents. See, e.g., Anna T. Pinedo, Brian D. Hirshberg & Kwaku D. Osebreh, What’sthe Deal?—At-the-Market Offerings (Mayer Brown, June 30, 2020), https:// www.mayerbrown.com/-/media/files/perspectives￾events/publications/2020/06/wtd--atm-offerings.pdf (‘‘An ATM offering is a follow-on offering of securities utilized by publicly traded companies in order to raise capital over a period of time. In an ATM offering, an issuer sells newly issued shares into the trading market through a designated sales agent at prevailing market prices. These offerings are conducted pursuant to an equity distribution or sales agreement entered into between the issuer and one or more sales agents.’’). The term ‘‘ATM offering’’ also may be used more broadly to describe other types of offerings, including by selling shareholders, in which securities are sold into an existing trading market at prevailing market prices, but not necessarily pursuant to equity distribution agreements or through sales agents. Rule 415(a)(4) and the discussion in this release is intended to encompass all offerings of securities sold into an existing trading market at other than a fixed price. 271See, e.g., Barbara J. Endres & Kersti Hanson, At-the-Market Offerings—Implications Under Regulation M, 43 Rev. Sec. & Commodities Reg. 1 (2010) (‘‘ATM programs offer certain advantages in a volatile equity market, including the ability of an
issuer to raise capital in an incremental fashion, while avoiding many of the risks associated with large underwritten offerings through the low profile, best-efforts nature of the offering.’’). 272See, e.g., Delayed or Continuous Offering and Sale of Securities, Release No. 33–6334 (Aug. 6,
1981) [46 FR 42001, 42010 (Aug. 18, 1981)] (noting
that ATM offerings ‘‘raise novel market and disclosure concerns’’); Integrated Disclosure Adopting Release (adopting rules permitting ATM offerings, but with certain restrictions because these offerings ‘‘raise concerns for the public and for the marketplace’’). But see Securities Offering Reform Adopting Release at 44776 (eliminating certain restrictions on ATM offerings because ‘‘[t]he market today has greater information about seasoned issuers than it did at the adoption of the ‘at the market’ limitations, due to enhanced Exchange Act reporting’’ and ‘‘trading markets for these issuers’ securities have grown significantly since that time’’). 273OTC Link ATS is a registered broker-dealer and operates pursuant to the Regulation ATS exemption. As such, OTC Link ATS is not required to register as a national securities exchange on the condition that it comply with the applicable conditions of Regulation ATS. See 17 CFR 242.301– 303. 274OTC Markets Group, Inc. launched the OTCID Basic Market tier on July 1, 2025. On that date, the Pink Current Market tier ceased to exist. 275The OTCQX tier currently has an initial bid price requirement of $0.25 and an ongoing minimum bid price requirement of $0.10, and the OTCQB tier currently has a minimum bid price requirement of $0.01 per share for each of the last 30 calendar days. Other tiers of the OTC Link ATS currently do not have minimum bid price requirements. The OTCQX and OTCQB tiers currently require an issuer to have at least 50 beneficial shareholders, each owning at least 100 shares. Other tiers of the OTC Link ATS currently do not have minimum shareholder requirements. The OTCQX and OTCQB tiers currently require an issuer to have a minimum public float of at least 10% of the total shares issued and outstanding of the class of security to be traded on the respective market. See OTC Markets, OTCQX Rules for U.S. Companies (Oct. 23, 2024), available at https:// www.otcmarkets.com/files/OTCQX_Rules_for_US_ Companies.pdf; OTC Markets, OTCQX Rules for International Companies (Oct. 23, 2024), available at https://www.otcmarkets.com/files/OTCQX_ Rules_for_International_Companies.pdf; OTC Markets, OTCQB Rules (Nov. 30, 2024), available at https://www.otcmarkets.com/files/OTCQB_ Standards.pdf. These requirements are subject to change at any time without Commission oversight or approval, as the OTC Link ATS tiers are not exchanges or self-regulatory organizations. 276This proposed limitation on ATM offerings would apply to both primary and resale ATM offerings. We do not believe that further restrictions on ATM offerings beyond the proposed amendments would be necessary. Although concerns were raised regarding the potential for manipulative practices with respect to ATM offerings when the Commission first adopted rules permitting these types of offerings, the Commission stated that it did not ‘‘perceive a need for special rules to prevent manipulation in connection with at the market shelf offerings’’ and
noted that ‘‘[t]he current framework of substantive anti-manipulative rules, together with the existing disclosure requirements, appears to provide sufficient protection against market abuses.’’ Delayed or Continuous Offering and Sale of Securities, Release No. 33–6334 (Aug. 6, 1981) [46 FR 42001, 42011 (Aug. 18, 1981)]. We continue to believe it is appropriate to rely on such ‘‘framework of anti￾manipulative rules’’ and ‘‘existing disclosure requirements’’ to ensure sufficient investor protection against market abuses. 277Rule 415(a)(4) defines ‘‘at the market offering’’ as ‘‘an offering of equity securities into an existing all or any of them be removed? Please explain why. d. ATM Offerings Rule 415(a)(4) defines ‘‘at the market offering’’ as ‘‘an offering of equity securities into an existing trading market for outstanding shares of the same class at other than a fixed price.’’ 268 An issuer must be eligible to register a primary offering on Form S– 3, Form F–3, or Form N–2 to register a primary ATM offering.269 Expanding Form S–3 eligibility, therefore, would increase the population of issuers eligible to conduct primary ATM offerings.270 Issuers often view an ATM offering as an attractive method of raising capital because of the flexibility it affords them in the offering process.271 Thus, as with the proposed amendments to Form S–3, expanding access to primary ATM offerings could facilitate capital formation. At the same time, expanding access to primary ATM offerings also may present or exacerbate some of the investor protection concerns discussed in section II.A.1 above with respect to the proposed amendments to Form S–3 eligibility.272 To address such concerns, the Commission staff historically has not objected to registration of ATM offerings if the issuer’s securities are listed on a national securities exchange or qualify for the OTCQX Best Market tier or OTCQB Venture Market tier of the OTC Link alternative trading system (‘‘OTC Link ATS’’).273 By contrast, the staff has objected to ATM offerings of securities that are, for example, on a tier of the OTC Link ATS with reduced eligibility criteria, such as the OTCID Basic Market 274 or Pink Limited Market. The staff’s distinction between securities in the OTCQX Best Market and OTCQB Venture Market tiers of the OTC Link ATS, on the one hand, and those in other tiers of the OTC Link ATS, on the other hand, has been based on the qualification and issuer reporting criteria of the OTCQX and OTCQB tiers, including the general requirement that annual financial statements be audited by an auditor registered with the Public Company Accounting Oversight Board, as well as minimum bid price requirements, minimum shareholder requirements, and minimum public float requirements.275 The staff also has distinguished these two tiers from others based on the number of securities quoted, dollar volume, share volume, trading volume per quoted security, and the number of market makers in these tiers. To
ensure the proposed amendments would expand access to ATM offerings (and, therefore, facilitate capital formation) in a manner that is consistent with investor protection, we propose to amend Rule 415(a)(4) to limit eligibility to conduct ATM offerings to securities listed or traded only in specified markets.276 Specifically, we are proposing to amend Rule 415(a)(4) to specify that the term ‘‘trading market’’ means that the securities are listed and traded on a national securities exchange or, if not listed and traded on a national securities exchange, the securities are traded in a market designated by the Commission.277 The proposed

trading market for outstanding shares of the same class at other than a fixed price.’’ Although the rule specifies that an ‘‘at the market offering’’ is one in which securities are sold into ‘‘an existing trading market,’’ the Commission has not previously specifically defined ‘‘trading market.’’ The original definition of ‘‘at the market offering,’’ however, specified that such offerings had to be conducted ‘‘on or through the facilities of a national securities exchange or to or through a market maker otherwise than on an exchange.’’ Integrated Disclosure Adopting Release. As part of Securities Offering Reform, the Commission eliminated the reference to ‘‘on or through the facilities of a national securities exchange to or through a market maker or otherwise than on an exchange,’’ but did not explain the reasons for doing so. 278See, e.g., Ryan Davis, Todd Griffith, Bonnie Van Ness & Robert Van Ness, Modern OTC Market Structure and Liquidity: The Tale of Three Tiers, 64 J. of Fin. Mkts. 100815, 100815 (2023) (finding that liquidity improves for stocks moving up the tiered market structure) ISSN 1386–4181, available at https://doi.org/10.1016/j.finmar.2023.100815. 279See supra note 275. 280Securities Offering Reform Adopting Release at 44796. 281 Id. at 44791. The Commission noted that ‘‘non-reporting issuers’’ are not required to file reports pursuant to section 13 or 15(d) of the Exchange Act, regardless of whether they are filing such reports voluntarily; ‘‘unseasoned issuers’’ are required to file reports pursuant to section 13 or 15(d) of the Exchange Act, but do not satisfy the requirements of Form S–3 or Form F–3 for a primary offering of their securities; and ‘‘seasoned issuers’’ satisfy the requirements of Form S–3 or Form F–3 to register primary offerings of securities. amendment also would provide a non￾exclusive list of attributes that the Commission would consider in determining whether to designate a market, including the market’s: (1) information reporting requirements, including whether annual financial statements are required to be audited by an auditor registered with the Public Company Accounting Oversight Board; (2) minimum bid price requirements; (3) minimum shareholder requirements; (4) minimum public float requirements; (5) number of securities quoted; (6) dollar volume; (7) share volume; (8) trading volume per quoted security; and (9) number of market makers. We believe these attributes are important for determining whether a market may be designated as a ‘‘trading market’’ for purposes of Rule 415(a)(4) because they would protect investors in ATM offerings by helping to ensure both adequacy of information about the issuer and sufficient market liquidity.278 The existence of all the listed attributes would not be requisite to a designation, and no single attribute would be required or dispositive. Designation of markets would be done on a case-by￾case basis by the Commission, and the Commission would make its
determination regarding designation upon consideration of all the facts pertaining to a particular market. Based on the proposed attributes and their current eligibility criteria,279 we believe that an offering of securities that qualify for the OTCQX Best Market tier or OTCQB Venture Market tier of the OTC Link ATS would continue to qualify as offerings into an existing ‘‘trading market’’ for purposes of Rule 415(a)(4). The proposed designation mechanism in Rule 415(a)(4), however, would give us the flexibility to subsequently recognize additional markets as a ‘‘trading market’’ or withdraw recognition of the OTCQX or OTCQB tiers if their eligibility criteria or operations change or if such tiers undergo rebranding or name changes. Any determinations to recognize a market as a ‘‘trading market,’’ or withdraw a market’s status as a ‘‘trading market,’’ would be based on the criteria described in the preceding paragraph. Request for Comment
51. The proposed amendments to
Rule 415(a)(4) would limit ATM offerings to those conducted on specified trading markets. Under the proposal, the term ‘‘trading market’’ would be defined to mean a market on which securities are listed and traded on a national securities exchange or, for securities not so listed and traded, a market designated by the Commission. Should ATM offerings be limited to trading on national securities exchanges and markets designated by the Commission? Should other markets, or other tiers of the OTC Link ATS, such as OTCID, be designated as ‘‘trading markets’’? Should the ‘‘trading markets’’ designated by the Commission be limited to alternative trading systems or markets or tiers of an alternative trading system? Are the proposed attributes to be considered in connection with a designation determination appropriate? Should other criteria be considered? If so, what criteria?
52. Would the proposed amendments
meaningfully expand issuer access to ATM offerings while maintaining appropriate investor protection? Are there potential risks to investors that we should consider? What investor protection concerns, if any, would permitting an issuer to conduct a primary ATM offering within its first year of being an Exchange Act reporting company raise?
53. Instead of setting up a process in
Rule 415(a)(4) for the Commission to designate which markets constitute a ‘‘trading market,’’ should Rule 415(a)(4) identify the OTCQX Best Market and OTCQB Venture Market tiers of OTC Link ATS as ‘‘trading markets’’ for purposes of Rule 415(a)(4)? If we take this approach, how should we address the risk that by identifying specific markets as ‘‘trading markets’’ (i.e., OTCQX Best Market and OTCQB Venture Market tiers of OTC Link ATS) in the rule text, our rule may become outdated if, for example, the eligibility criteria for, or the names of, those markets change? Are there tiers or markets of other alternative trading systems that we should consider identifying as ‘‘trading markets’’?
54. As discussed in footnote 269, we
are not proposing to amend or eliminate the requirement in Rule 415(a)(5) to file a new registration statement every three years with respect to securities offerings registered on an automatic shelf registration statement or conducted pursuant to Rule 415(a)(1)(vii), (ix), or (x). Should we amend or eliminate this requirement? B. The Enhanced Registration and Communication Benefits We are proposing to extend the Enhanced Registration and Communication Benefits, including automatic shelf registration, to a larger set of issuers. These proposed amendments are intended to provide a greater number of issuers the flexibility to access the public securities markets on demand using automatic shelf registration statements and to benefit from other offering-related flexibilities while also ensuring that investors remain appropriately protected. We also are proposing to amend the definition of WKSI in Rule 405 so that it would no longer apply to domestic issuers.

1. Background
   In 2005, as part of Securities Offering Reform, the Commission adopted rules that modified and advanced significantly the registration, communication, and offering processes under the Securities Act.280 In determining which issuers should be eligible to utilize those rules, the Commission categorized issuers into the following four tiers: ‘‘non-reporting issuers,’’ ‘‘unseasoned issuers,’’ ‘‘seasoned issuers,’’ and ‘‘well-known seasoned issuers’’ (or ‘‘WKSIs’’).281 The tier into which an issuer fell depended on its Exchange Act reporting history and market following (as evidenced by its public float or participation in the debt markets), with WKSIs requiring the most extensive Exchange Act reporting history and market following. Relatedly, an issuer’s eligibility to use the benefits that the Commission adopted depended on the tier into which it fell, with WKSIs being granted the greatest flexibility.

282See supra section II.A for a discussion of the current Form S–3 registrant requirements. The registrant requirements in General Instruction I.A of Form F–3 and General Instruction A.2.a and A.2.b of Form N–2 are consistent with the registrant requirements in Form S–3. 283For ease of reference, this release refers to this threshold as the ‘‘registered debt’’ threshold. 284See 17 CFR 230.405, paragraphs (ii)(A), (ii)(B)(1), (ii)(B)(2), and (ii)(C) of the definition of ‘‘well-known seasoned issuer.’’ 285An issuer cannot be a WKSI if it is an ineligible issuer, as defined in Rule 405, an asset￾backed issuer, as defined in 17 CFR 229.1101(b), or an investment company registered under the Investment Company Act (other than a registered closed-end investment company). See 17 CFR 230.405. An issuer may qualify as a WKSI if, as of the date on which its status as a WKSI is determined, it:

• Meets the registrant requirements of
  General Instruction I.A of Form S–3 or Form F–3, or General Instruction A.2.a and A.2.b of Form N–2,282 and either:
  Æ as of a date within 60 days of its eligibility determination date, has a public float of $700 million or more; or Æ as of a date within 60 days of its eligibility determination date, has issued in the last three years, at least $1 billion aggregate principal amount of non-convertible securities, other than common equity, in primary offerings for cash, not exchange, registered under the Securities Act.283
• Is a majority-owned subsidiary of a
  parent that is a WKSI where the following securities are to be registered:
  Æ non-convertible securities (other than common equity) of the majority￾owned subsidiary that are fully and unconditionally guaranteed by the parent; or Æ the securities of the majority-owned subsidiary are guarantees of:
  D non-convertible securities (other than common equity) of the parent; or D non-convertible securities (other than common equity) of another majority-owned subsidiary that also are guaranteed by the parent; or Æ the securities of the majority-owned subsidiary meet the conditions of General Instruction I.B.2 of Form S–3 or Form F–3.284 Among other things, WKSI status also is conditioned on the issuer not being an ‘‘ineligible issuer,’’ as that term is defined in Rule 405.285 The following table sets forth the Enhanced Registration and Communication Benefits currently available to WKSIs and notes whether those benefits are available to non￾WKSIs. BILLING CODE 8011–01–P

BILLING CODE 8011–01–C
EP26MY26.211</GPH>

286Securities Offering Reform Adopting Release at 44793. 287 Id. 288 Id. 289See infra section II.B.2.c for a discussion of the continued application of the WKSI definition to FPIs. 290As an illustration of how the ‘‘12 calendar months and any portion of a month immediately preceding’’ measurement period functions, an issuer that became subject to the Exchange Act’s reporting requirements on July 19, 2025 would satisfy the seasoning requirement for purposes of assessing whether it is a SELI on Aug. 1, 2026. 291FPIs that qualify as WKSIs would remain eligible for these benefits, even though they would not be permitted to use Form S–3. 292When seeking to use an FWP in an offering conducted pursuant to Rule 415, an issuer must determine whether it is an ineligible issuer at ‘‘the earliest time after the filing of the registration statement covering the offering at which the issuer, or in the case of an underwritten offering the issuer or another offering participant, makes a bona fide offer.’’ See 17 CFR 230.164(e) and (f). 293We propose to remove the first sentence of Rule 430B(a), which states that ‘‘[a] form of prospectus filed as part of a registration statement for offerings pursuant to Rule 415(a)(1)(x) (§ 230.415(a)(1)(x)) may omit from the information required by the form to be in the prospectus information that is unknown or not reasonably available to the issuer pursuant to Rule 409 (§ 230.409).’’ In our view, 17 CFR 230.409 (‘‘Rule 409’’) operates independently of Rule 430B(a), and an issuer need not be eligible to rely on Rule 430B(a) to omit the type of information specified in Rule 409. The proposed amendment would be a non-substantive change, and registration statements filed in reliance on Rule 430B could continue to omit information pursuant to Rule 409. We also propose making a conforming change to Rule 430B(b) by removing from that paragraph the provision that permits issuers conducting a registered resale pursuant to Rule 415(a)(1)(i) to ‘‘omit the information specified in paragraph (a)’’ of Rule 430B if those issuers are eligible to conduct primary offerings on Form S–3 or Form F–3 pursuant to current General Instruction I.B.1, or are eligible to conduct primary offerings under current General Instruction A.2 of Form N–2. The reference to ‘‘the information specified in paragraph (a)’’ of Rule 430B refers exclusively to the ability to omit information that is unknown or not reasonably available to the issuer pursuant to Rule 409 and, accordingly, this reference would become moot by In Securities Offering Reform, the Commission anticipated that these benefits would ‘‘facilitate capital formation, and possibly lower the cost of capital, by improving access to the public capital markets.’’ 286 The Commission stated that issuers meeting the definition of WKSI would ‘‘have an Exchange Act record, a broad following of their Exchange Act filings, and the contemplated attention directed to their Exchange Act reports by analysts and
institutional investors, and the staff of the Division of Corporation Finance that will produce the greatest likelihood of Exchange Act reports that not only are reliable but also are broadly scrutinized by investors and the markets.’’ 287 Thus, the Commission’s adoption of these new Securities Act rules, along with the conditions that an issuer must meet to use those rules, reflected its attempt to facilitate capital formation consistent with investor protection. The Commission stated ‘‘that it would be appropriate to revisit the thresholds in a few years.’’ 288 The Commission has not, however, revisited those thresholds since they were adopted more than 20 years ago.
2. Proposed Amendments
As discussed in section I.B above, and for many of the same reasons we are proposing to amend the Form S–3 eligibility requirements, we also believe it is appropriate to revise the eligibility requirements to qualify for the Enhanced Registration and Communication Benefits. Specifically, we are proposing to replace the WKSI eligibility criteria, including criteria based on public float and amount of registered debt, with new requirements. These proposed amendments are intended to expand the population of issuers that are eligible for some or all of the Enhanced Registration and Communication Benefits currently available to WKSIs and certain other issuers, thereby reducing the costs of engaging in registered offerings for these newly eligible issuers. At the same time, the proposed amendments would retain important investor protections and preserve the tier-based framework for categorizing issuers that the Commission described in Securities Offering Reform, albeit with different criteria for determining which issuers are eligible for some or all of the Enhanced Registration and Communication Benefits. a. Eligible Listed Issuer and Seasoned Eligible Listed Issuer Categories We are proposing to eliminate the WKSI definition (as it relates to all issuers other than FPIs 289) and establish two new categories of issuers: Eligible Listed Issuer (‘‘ELI’’) and Seasoned Eligible Listed Issuer (‘‘SELI’’), both of which would be defined in Rule 405. We are proposing to define an ELI as an issuer that meets Form S–3’s proposed registrant requirements and is exchange￾listed (which, as noted in footnote 19 above, would require the issuer to have at least one class of common equity securities listed on a national securities exchange). We are proposing to define a SELI as an ELI that has been subject to the Exchange Act’s reporting requirements for a period of at least 12 calendar months and any portion of a month immediately preceding the relevant measurement date.290 Thus, with respect to the Enhanced Registration and Communication Benefits, the proposed amendments essentially would eliminate the three current categories of issuers— ‘‘unseasoned issuers,’’ ‘‘seasoned issuers,’’ and ‘‘WKSIs’’—and create three new tiers: (1) Form S–3 eligible issuers, (2) ELIs, and (3) SELIs. Issuers that are not Form S–3 eligible would not be able to use any of the Enhanced Registration and Communication Benefits.291 Under the proposed amendments, the determination date for whether an issuer qualifies as an ELI or SELI would be the latest of:

• The date the issuer files a
  registration statement on Form S–3;
• The date of the most recent
  amendment to a Form S–3 made to comply with section 10(a)(3) of the Securities Act (or if such amendment has not been made within the time period required by section 10(a)(3), the date on which such amendment is required); or
• If the issuer has not filed or
  amended a registration statement to comply with section 10(a)(3) of the Securities Act for 16 months, the date of filing its most recent annual report on Form 10–K or Form 20–F (or if such report has not been filed by its due date, such due date). These determination dates would be consistent with those currently applied to WKSIs. As a result, ELI and SELI status would be determined on an approximately annual basis. As is the case with WKSIs today, because eligibility would be determined only on these dates, an issuer would remain eligible to use the Enhanced Registration and Communication Benefits even if an intervening event would otherwise cause it to lose ELI or SELI status between determination dates.292 We believe limiting eligibility determinations to approximately once per year gives market participants greater certainty regarding an issuer’s ability to use these benefits. Under the proposed amendments, SELIs would be the only type of issuer that would be eligible for automatic shelf registration (a benefit for which only WKSIs currently are eligible). As the ‘‘top’’ tier of issuers under our proposed framework, SELIs also would be eligible for all the benefits available to ELIs and Form S–3 eligible issuers. Further, under the proposed amendments, certain other benefits— which currently are available only to WKSIs—would be available to all ELIs. Specifically, ELIs would be eligible to rely on Rules 163, 163A, 164, 413, 430B(a),293 456(b), and 457(r) regardless

the proposed removal of the first sentence of Rule 430B(a). Because those issuers that are eligible to rely on Rule 430B(b) would continue to be eligible to omit information in reliance on Rule 409, the proposed amendment would not be a substantive change. 294See 17 CFR 230.163 (providing flexibility with respect to certain pre-filing communications); 17 CFR 230.163A (providing flexibility with respect to certain pre-filing communications); 17 CFR 230.164 (providing flexibility with respect to certain post￾filing communications). 295See 17 CFR 230.413(b). 296See 17 CFR 230.430B(a). 297See 17 CFR 230.456(b); 17 CFR 230.457(b). 298See 17 CFR 230.139. The Commission noted in 2005 that ‘‘[f]or brokers and dealers subject to the global research analyst settlement, their ability to continue to distribute independent research during a registered securities offering depends on concluding that the independent research distribution by the broker or dealer satisfies the conditions of the research rule at the time of the distribution or is otherwise not an offer.’’ Securities Offering Reform Adopting Release at n.353; see also Litigation Release No. 18438 (Oct. 31, 2003); Press Release 2004–120 (Aug. 26, 2004). The global research analyst settlement subjected twelve brokerage firms and two individuals to changes designed to ensure structural separation between the firm’s analysts and investment bankers. The Financial Industry Regulatory Authority (commonly known as ‘‘FINRA’’) adopted and implemented Rule 2241 (Research Analysts and Research Reports), which addressed conflicts of interest between research analysts and investment bankers within registered broker-dealers. On December 5, 2025, the Commission consented to the termination of the remaining undertakings in the global research analyst settlement. See Litigation Release No. 26434 (Dec. 5, 2025). 299See 17 CFR 230.430B(b). Currently, the only non-WKSIs that are eligible to omit this information are those issuers that are eligible for primary offerings under General Instruction I.B.1 of Form S– 3 or offerings under General Instruction A.2 of Form N–2 if certain conditions set forth in 17 CFR 230.430B(b)(2) (‘‘Rule 430B(b)(2)’’) are met. 300See 17 CFR 230.433. Currently, an FWP may be used without being accompanied or preceded by a statutory prospectus if the issuer is a seasoned issuer or WKSI or the offering is for certain registered non-variable annuity securities. 301As discussed in section II.B.2.c below, we propose to retain the WKSI definition in Rule 405 but clarify that only FPIs would qualify as WKSIs. Accordingly, FPIs that are also WKSIs would continue to have access to the Enhanced Registration and Communication Benefits already available to them under the current rules. Thus, the
table reflects the impact of the proposed rule on
domestic issuers only. of how long they have been subject to Exchange Act reporting requirements. Those rules would provide ELIs with the following benefits:

• The ability to exercise greater
  flexibility with respect to pre-filing and post-filing communications.294
• The ability to register additional
  securities or additional classes of securities, including securities of majority-owned subsidiaries, by filing a post-effective amendment to a non￾automatic shelf registration statement before the issuer satisfies the 12-month Exchange Act reporting requirement to be a SELI.295
• The ability to omit information as to
  whether an offering is a primary offering or an offering on behalf of persons other than the issuer, or a combination thereof, the plan of distribution for the securities, a description of the securities registered other than an identification of the name or class of such securities, and the identification of other issuers.296
• The ability to pay filing fees at the
  time of the takedown, rather than at the time of filing a Form S–3.297 ELIs also would be eligible for all the benefits available to Form S–3 eligible issuers. Finally, under the proposed amendments, certain other benefits— which currently are available to both WKSIs and certain non-WKSIs—would be available to all Form S–3 eligible issuers. Specifically, Rules 139, 430B(b), and 433 would be available to all Form S–3 eligible issuers regardless of whether they are exchange-listed. Those rules would provide Form S–3 eligible issuers with the following benefits:
• The ability of broker-dealers
  participating in a distribution of securities to issue an issuer-specific research report about the issuer or any of its securities without such report constituting an ‘‘offer’’; 298
• The ability to omit the identities of
  selling security holders and amounts of securities to be registered on their behalf; 299 and
• The ability to use an FWP without
  it being preceded or accompanied by a prospectus.300 The following table lists the Enhanced Registration and Communication Benefits and compares the types of domestic issuers that would qualify for these benefits under current rules versus under the proposed amendments: 301 BILLING CODE 8011–01–P

302For example, our proposal to extend to more issuers the ability to register additional securities or additional classes of securities under Rule 413(b) via a post-effective amendment to a non-automatic shelf registration statement (ELIs) or automatic shelf registration statement (SELIs), as applicable, would provide more issuers that register subject debt securities with greater flexibility to comply with the Trust Indenture Act’s trust indenture qualification requirement. An issuer that registers subject debt securities under the Securities Act without the ability to add securities or classes under Rule 413(b), must file a trust indenture to be qualified in the initial filing of or a pre-effective amendment to the related registration statement. An ELI or SELI that post-effectively registers subject debt securities pursuant to Rule 413(b), however, is permitted to file the related trust indenture to be qualified by the time the post-effective amendment becomes effective. BILLING CODE 8011–01–C Consistent with our proposed amendments to the Form S–3 eligibility requirements, these proposed amendments are intended to facilitate streamlined access to the public markets for more Exchange Act reporting issuers and promote efficient and flexible capital formation for a greater number of such issuers.302 As noted in section IV below, in 2024, approximately 36 percent of Exchange Act reporting issuers were WKSIs and, therefore, were eligible to rely on all Enhanced Registration and Communication Benefits. Under our proposed amendments, approximately 74 percent of Exchange Act reporting issuers in 2024 would be SELIs and, therefore, eligible to rely on all of the Enhanced EP26MY26.212</GPH>

303See infra section IV.C.2.a; see also Securities Offering Reform Adopting Release at 44793 (‘‘We anticipate that the rules will facilitate capital formation, and possibly lower the cost of capital, by improving access to the public capital markets. The rules are designed to eliminate unnecessary regulatory impediments to capital formation and provide more flexibility to issuers to conduct registered securities offerings. . . . The rules provide the most flexibility under the communications rules and the automatic shelf registration system to eligible well-known seasoned issuers.’’). 304See, e.g., letter from New York City Bar Ass’n to The Hon. Paul S. Atkins dated May 27, 2025 (recommending certain actions to promote capital formation, including expanding the availability of WKSI status), available at https://www.nycbar.org/ reports/letter-to-sec-chairman-atkins-with￾recommendations-for-rulemaking-and-guidance/. 305As discussed supra note 199, the proposed scope of issuers that would be ineligible to use Form S–3 under this proposed new instruction (and, therefore, would not be an ELI or a SELI) would be narrower than the scope of ‘‘ineligible issuers’’ that currently cannot qualify as WKSIs (and, therefore, currently cannot use at least some of the Enhanced Registration and Communication Benefits). For example, whereas paragraph (iv) of the definition of ‘‘ineligible issuer’’ in Rule 405 currently disqualifies issuers that have filed for bankruptcy or insolvency during the past three years and paragraph (iii) of that definition disqualifies limited partnerships offering securities other than in a firm commitment underwritten offering, the proposed amendments would not specifically exclude these issuers. We do not believe a separate ineligibility trigger based on bankruptcy or insolvency is necessary because issuers that file for bankruptcy generally are unable to meet the requirements for continued listing and trading on an exchange, and the exchanges have discretion to initiate suspension and delisting procedures with respect to such issuers. See, e.g., Nasdaq Rule 5110(b); section 802.01D of the NYSE Listed Company Manual; NYSE American LLC Company Guide, section 127. As such, to the extent issuers are not exchange-listed, they would not be able to qualify as an ELI or SELI under the proposed amendments. We recognize, however, that some issuers may enter into bankruptcy proceedings without an impact to their exchange-listed status. In addition, it appears the Commission did not extend WKSI status to certain limited partnerships due to concerns related primarily to roll-up transactions. Securities Offering Reform Adopting Release at 44745 (citing Limited Partnership Reorganizations and Public Offerings of Limited Partnership Interests, Release No. 33–6900 (June 17,
1991) [56 FR 28979]). We believe concerns related
to roll-up transactions have been adequately addressed by other Commission rules, including the disclosure requirements under 17 CFR 229.901 through 915 (Roll-Up Transactions). We also note that Form S–4 is the appropriate registration form for roll-up transactions and, as such, an issuer conducting a roll-up transaction could not avail itself of automatic shelf registration on Form S–3 to conduct a roll-up transaction. 306See supra section I.B. 307See Securities Offering Reform Adopting Release at 44797 (‘‘Unlike smaller or less mature issuers, large, seasoned public issuers tend to have a more regular dialogue with investors and market participants through the press and other media. The communications of these well-known seasoned issuers are subject to scrutiny by investors, the financial press, analysts, and others who evaluate disclosure when it is made.’’). Although the Commission in Securities Offering Reform suggested that offerings by smaller issuers may pose greater risks to investors than offerings by larger issuers, part of the Commission’s concern was based on the assumption that smaller issuers may be more likely to engage in ‘‘offerings by a blank check company, offerings by a shell company, and offerings of penny stock.’’ Id. at 44798. Under our proposed amendments, issuers that are BSP issuers would not be eligible to use Form S–3 and, therefore, also would not be eligible for any Enhanced Registration and Communication Benefits. As such, the proposed amendments would not only preserve the existing investor protection safeguards with respect to these issuers that ‘‘pose the greatest risk of abuse,’’ but also would extend that treatment in the context of Form S–3 eligibility, as discussed in section II.A.2 above. Id. 308See supra section II.A.2.a.1. 309National securities exchanges establish and amend their listing standards by filing proposed rule changes, pursuant to section 19(b) of the Exchange Act [15 U.S.C. 78f(b)] and 17 CFR 240.19b–4 thereunder, for Commission review. 310See, e.g., Nasdaq Rule 5250(b); NYSE Listed Company Manual, sections 201 and 202; NYSE American LLC Company Guide, section 401. Registration and Communication Benefits. Since the Commission adopted the Enhanced Registration and Communication Benefits over 20 years ago, they have helped facilitate capital formation as the Commission anticipated in Securities Offering Reform.303 We believe, therefore, that expanding the population of issuers eligible for those benefits would further promote capital formation by reducing the costs of capital in connection with registered offerings for a larger set of issuers.304 While the proposed amendments would significantly expand the population of issuers eligible to file automatic shelf registration statements and take advantage of other Enhanced Registration and Communication Benefits, we seek to do so only to the extent such revisions do not compromise investor protection. Accordingly, we propose to retain or add
important investor protection requirements, including requiring compliance with the Current and Timely in Exchange Act Reporting requirements in Form S–3 and prohibiting use of these accommodations by certain ineligible issuers. By requiring that ELIs and SELIs meet the Form S–3 eligibility requirements, issuers that would newly qualify for the Enhanced Registration and Communication Benefits would continue to be subject to ineligibility triggers related to: (i) BSP issuer status; (ii) criminal convictions; (iii) antifraud related decrees and orders; (iv) section 8 proceedings and orders; and (v) pending section 8A cease and desist proceedings.305 We also seek to protect investors by limiting the majority (and most significant) of these benefits to exchange-listed issuers and, in the case of automatic shelf registration, to issuers that are exchange-listed and have satisfied a one-year Exchange Act seasoning requirement. Under the proposed amendments, an issuer’s ability to avail itself of these benefits would no longer be dependent on its public float or the amount of debt issued in registered offerings. For the reasons discussed above,306 we do not believe the extent of an issuer’s market following should determine which issuers should qualify for these benefits. Instead, we believe the more appropriate consideration is whether investors can readily obtain issuer￾specific information through the issuer’s Exchange Act reports. Further, to the extent that the Commission intended the WKSI public float and registered debt thresholds to serve an investor protection function (i.e., by limiting the availability of the Enhanced Registration and Communication Benefits to larger companies whose offerings may pose less of a risk to investors as compared to smaller companies 307), we believe that our proposed ELI criteria would achieve this goal in a more targeted manner (i.e., by requiring an issuer be exchange-listed in order to qualify as an ELI). In addition to excluding many types of ‘‘ineligible issuers,’’ we believe that eligibility for the Enhanced Registration and Communication Benefits should depend on the availability of adequate and accurate information about an issuer in order for investors to make an informed investment decision.308 Accordingly, issuers would need to be current and timely in their Exchange Act reporting obligations to qualify for any of these benefits. This requirement would be achieved by requiring issuers to be eligible to use Form S–3, which itself would be conditioned, as today, on an issuer being current and timely in its Exchange Act reporting obligations. Further, we believe it would be appropriate to limit eligibility for most of the Enhanced Registration and Communication Benefits to exchange￾listed issuers. Exchanges, through their continued listing standards, may help further facilitate and promote dissemination of material information about an issuer into the marketplace allowing investors to readily obtain
issuer-specific information, thereby adding an additional layer of investor protection.309 For example, exchange￾listed issuers are required to promptly disclose any material information that would reasonably be expected to affect the value of an issuer’s securities or influence investors’ decisions.310 In addition, exchange-listed issuers are required to provide notice of such disclosure to the exchanges at least 10 minutes prior to public announcement

311See, e.g., Nasdaq IM–5250–1; NYSE Listed Company Manual, section 202.06(B); NYSE American LLC Company Guide, section 401(a). 312See, e.g., Nasdaq Rule 5250(c); NYSE Listed Company Manual, section 802.01E; NYSE American LLC Company Guide, section 1007. 313See, e.g., Nasdaq Rule 5810(c); NYSE Listed Company Manual, section 802.01E; NYSE American LLC Company Guide, section 1007. 314As discussed in section II.A.2.a.v above, while an issuer otherwise barred from using Form S–3 solely because it was formerly a SPAC would be excepted from the three-year lookback for shell companies and, therefore, would be able to use Form S–3 if it was not a shell company at the time of filing the registration statement, such issuers would not be permitted to take into account the Exchange Act reporting history of the former shell company for purposes of determining whether it qualifies for automatic shelf registration as a SELI. Other than with respect to a predecessor that is a SPAC, see supra note 196, a successor issuer would be able to rely on its predecessor’s Exchange Act reporting history for purposes of determining whether the successor satisfies the 12-calendar month seasoning requirement. 315See paragraph (1)(i) of the WKSI definition in Rule 405, which conditions WKSI status on an issuer having satisfied the requirements of General Instruction I.A of Form S–3 or Form F–3, which includes a 12-month Exchange Act reporting requirement. 316We recognize that some issuers may choose not to file a Form S–3 registration statement during the first year of Exchange Act reporting compliance and, instead, wait until they are eligible to file an automatic shelf registration statement. In this case, the staff would not have an opportunity to review an issuer’s first Form S–3 registration statement or any subsequent Form S–3 registration statements filed by that issuer for so long as the issuer maintains its SELI status. We note, however, that the same can be true under current rules if an issuer qualifies as a WKSI at the time it first files a Form S–3. 317As discussed in more detail in sections II.A.2.a.iv and v above, proposed General Instruction I.A.2 would prohibit certain ineligible issuers from using Form S–3, and proposed General Instruction I.A.3 would prohibit FPIs, asset-backed issuers, investment companies, and BDCs from using Form S–3. Because the majority-owned subsidiary would not be required to meet the requirements of proposed General Instruction I.A.1, it would not need to be subject to the Exchange Act’s reporting requirements or meet the Current and Timely in Exchange Act Reporting requirements. 318By ‘‘independently eligible to use Form S–3,’’ we mean that the subsidiary satisfies the requirements of proposed General Instruction I.A of Form S–3. 319A majority-owned subsidiary may be independently eligible to use Form S–3 but not qualify as an ELI if it is not exchange-listed. Similarly, a majority-owned subsidiary may be independently eligible to
use Form S–3 and qualify as an ELI, but not qualify as a SELI if it has not been an Exchange Act reporting company for 12 calendar months. if the information involves certain events.311 Among other things, this prior notice allows the exchanges to assess whether it is necessary or appropriate to implement a trading halt to allow full dissemination of the news to the public and to maintain an orderly trading market. Moreover, the exchanges foster Exchange Act reporting compliance because continued listing is contingent on compliance with these reporting obligations.312 Issuers that become delinquent in their Exchange Act reporting can become subject to delisting proceedings and, when left uncorrected, delisted.313 Accordingly, exchange-listed issuers are incentivized to comply with their reporting obligations to maintain their listing. We also are proposing to condition SELI status, and in turn automatic shelf registration, on satisfaction of a 12- calendar month Exchange Act seasoning requirement,314 consistent with the current requirements for WKSI status.315 Although we do not believe a seasoning requirement is necessary for purposes of Form S–3 eligibility generally, we are not prepared to extend automatic shelf registration to all Form S–3 eligible issuers at this time. Retaining the seasoning requirement for the ability to file automatic shelf registration statements would give the staff an opportunity to monitor an issuer’s Exchange Act reporting compliance during that first year. This incremental expansion also would give the Commission an opportunity to evaluate the appropriateness of a seasoning requirement and to consider whether future revision or elimination of this requirement would be appropriate.316 We recognize that these proposed amendments represent a departure from the Commission’s prior approach, particularly with respect to the public float and registered debt thresholds currently necessary to qualify for the Enhanced Registration and Communication Benefits. We believe, however, that removing these thresholds and replacing them with alternative criteria would help facilitate capital formation while, at the same time, helping ensure that investors remain appropriately protected. In this regard, we believe that replacing the public float and registered debt thresholds with an exchange-listing requirement would allow more issuers to access the public markets quickly and efficiently while protecting investors by helping ensure investors have access to the information necessary to make informed investment decisions. In addition, this proposed incremental expansion of the Enhanced Registration and Communication Benefits to a broader group of issuers would give the Commission an opportunity to monitor and re-evaluate expansion of these benefits in the future. b. Availability of Enhanced Registration and Communication Benefits to Majority-Owned Subsidiaries Our proposed amendments would permit majority-owned subsidiaries of ELIs and
SELIs to avail themselves of the Enhanced Registration and Communication Benefits, including the ability to register on an automatic shelf registration statement, under the same general circumstances in which a majority-owned subsidiary of a WKSI currently may do so (as set forth in paragraphs (1)(ii)(A), (1)(ii)(B)(1), (1)(ii)(B)(2), and (1)(ii)(C) of the current WKSI definition in Rule 405). Specifically, we propose treating majority-owned subsidiaries as ELIs or SELIs, even if they do not independently qualify as such, and extending the Enhanced Registration and Communication Benefits to them, in certain registered offerings when their parent is an ELI or SELI. Under proposed General Instruction I.B.2 of Form S–3, a majority-owned subsidiary that is not an ELI or SELI would be treated as an ELI or SELI based on its parent’s status if the majority-owned subsidiary and parent are co-registrants on the same registration statement and:

• The majority-owned subsidiary
  meets the requirements of proposed General Instructions I.A.2 and I.A.3 of Form S–3 317 and is registering a Guarantee-Related Offering on Form S– 3; or
• The majority-owned subsidiary is
  independently eligible to use Form S– 3 318 and is registering non-convertible securities, other than common equity, on Form S–3.319 If the parent were an ELI, but not a SELI, the majority-owned subsidiary could be treated as an ELI with respect to the offering, but not a SELI. In this situation, in addition to utilizing the benefits available to all Form S–3 eligible issuers, the majority-owned subsidiary would be eligible to use Rules 163, 163A, 164, 413, 430B(a), 456(b), and 457(r) with respect to the offering. If the parent were a SELI, the majority-owned subsidiary could be treated as a SELI with respect to the offering. In this situation, in addition to utilizing the benefits available to all Form S–3 eligible issuers and ELIs, the issuer could register the offering on an automatic shelf registration statement with the parent as a co-registrant. As previously noted in this section, the proposed amendments generally are intended to preserve the current ability of majority-owned subsidiaries of WKSIs to qualify for the Enhanced Registration and Communication Benefits. At the same time, we recognize that the number of majority-owned subsidiaries that would be newly

320 General Instruction I.B.2 currently requires an issuer to (i) have issued $1 billion in non￾convertible securities, other than common equity, over the past three years, (ii) have outstanding at least $750 million of non-convertible securities, other than common equity, that was issued in primary offerings for cash, (iii) be a wholly-owned subsidiary of a WKSI, or (iv) be a majority-owned operating partnership of a REIT that qualifies as a WKSI. 321See 17 CFR 230.405, paragraph (ii) of the definition of ‘‘well-known seasoned issuer’’ (providing that a WKSI is an issuer that is a majority-owned subsidiary of a WKSI and ‘‘the subsidiaries’ securities that are being or may be offered on that parent’s registration statement’’ meet certain requirements (emphasis added)). 322See section 6 of the Securities Act [15 U.S.C. 77f]. 323See 15 U.S.C. 77l(a)(2) (making a person liable to purchasers for offers or sales by means of a prospectus or oral communication that includes an untrue statement of material fact or omits to state a material fact that makes the statements made, based on the circumstances under which they were made, not misleading). 324See 15 U.S.C. 77q(a) (making it unlawful for any person in the offer or sale of a security to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading). 325See 15 U.S.C. 78j(b) (making it unlawful to ‘‘use or employ, in connection with the purchase or sale of any security’’ a ‘‘manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe’’). 326See 17 CFR 240.10b–5 (making it unlawful, in connection with the purchase or sale of any security, to employ any device, scheme, or artifice to defraud; make any untrue statement of a material fact or omit to state a material fact necessary to make the statements made not misleading; or engage in any act, practice, or course of business that operates or would operate as a fraud or deceit on any person). 327For avoidance of doubt, the proposed co￾registrant requirement would not compel the parent to register its own securities on the registration statement (and, in fact, that requirement would apply regardless of whether the parent is registering its own securities on the registration statement). 328See FPI Concept Release. 329See id. at 24237, n.73 (‘‘There is a comparatively small number of FPIs electing to file on Form 10–K [in] any given year. For example, using a textual search of all Forms 10–K filed in calendar year 2023, the staff identified only nine such FPIs.’’). eligible for those benefits by virtue of their parent’s eligibility could increase significantly. For example, the proposed expansion of the issuers eligible for the Enhanced Registration and Communication Benefits (from WKSIs to ELIs and SELIs) could, in turn,
expand the population of majority￾owned subsidiaries eligible for those benefits. In addition, under paragraph (1)(ii)(C) of the WKSI definition, other than with respect to Guarantee-Related Offerings, majority-owned subsidiaries of WKSIs may be treated as WKSIs only to the extent that they meet the conditions of existing General Instruction I.B.2 of Form S–3.320 Under the proposed amendments, majority￾owned subsidiaries would not be required to meet these requirements, which would further expand their ability to qualify for the Enhanced Registration and Communication Benefits by virtue of their parents’ eligibility. In light of the proposed expansion of the population of majority-owned subsidiaries eligible for the Enhanced Regulation and Communication Benefits by virtue of their parents’ eligibility, we believe it is appropriate to extend those benefits to majority-owned subsidiaries only when they are conducting an offering that is registered on the parent’s registration statement. We believe that requiring these offerings to be registered on the parent’s registration statement, consistent with existing rules,321 serves an important investor-protection function. In this regard, a parent and its principal executive officer or officers, principal financial officer, comptroller or principal accounting officer, and a majority of its board of directors or persons performing similar functions must sign the registration statement.322 These signatories, among others, assume liability under section 11 of the Securities Act for any material misstatements or omissions in the registration statement (subject to a due diligence defense for all parties other than an issuer) and will thereby be held accountable to investors for the accuracy of the disclosures in the registration statement. Parents also may be liable under section 12(a)(2) of the Securities Act,323 section 17(a) of the Securities Act,324 section 10(b) of the Exchange Act,325 and Rule 10b–5.326 Because a parent would take on liability for offerings by majority-owned subsidiaries registered on the parent’s registration statement, we believe such parent would be incentivized to ensure that the registration statement is free of material misstatements and omissions and that the offering process is not abused.327 As a result, although there may be more majority-owned subsidiaries that qualify for these benefits under the proposed amendments compared to today, we believe the requirement to conduct these offerings on the parent’s registration statement would help ensure investors are appropriately protected.
c. Elimination of WKSI Category of
Issuer for Domestic Issuers Finally, we propose to retain the WKSI definition in Rule 405 but amend the definition to clarify that only FPIs could qualify as WKSIs. Because our proposal would extend the Enhanced Registration and Communication Benefits to issuers based on factors other than the WKSI criteria (e.g., whether the issuer is exchange-listed) and according to new issuer categories (i.e., Form S–3 eligible issuers, ELIs, and SELIs), the current WKSI definition would become superfluous for domestic issuers. In light of our concept release soliciting public comment on the definition of FPI,328 we are not proposing to extend the benefits of the proposed amendments to FPIs. We expect there to be minimal impact from excluding FPIs from the proposed amendments as very few FPIs would qualify for the expanded benefits under the proposed amendments based on our understanding that a small number of such issuers currently are eligible to use Form S–3.329 The proposed amendments would apply to foreign issuers, other than foreign governments and FPIs. Request for Comment
55. We are proposing to replace three
current categories of domestic issuers— ‘‘unseasoned issuers,’’ ‘‘seasoned issuers,’’ and ‘‘WKSIs’’—with three new categories of issuers: ‘‘Form S–3 eligible issuers,’’ ‘‘eligible listed issuers,’’ and ‘‘seasoned eligible listed issuers.’’ In addition, we are proposing to extend the Enhanced Registration and Communication Benefits, including automatic shelf registration, to a larger set of domestic issuers by replacing the current WKSI criteria, including criteria based on public float and amount of registered debt, with new requirements. Should we adopt the amendments as proposed? If not, please explain.
56. We propose to establish
determination dates for assessing ELI and SELI status that are consistent with those currently used for WKSI status. Should we adopt this approach as proposed? Alternatively, should issuers be required to evaluate ELI and SELI status more frequently; for example, each time they seek to use an Enhanced Registration and Communication Benefit?
57. Should we expand access to the
Enhanced Registration and Communication Benefits even further than proposed? For example, should all Form S–3 eligible issuers also be eligible for all of the Enhanced Registration and Communication Benefits? Alternatively, should we make some of the Enhanced Registration and Communication Benefits available to all issuers conducting registered offerings (i.e., not only to issuers that would be Form S– 3 eligible, ELIs, or SELIs under the

330Petition for Rulemaking—Proposed Amendments to Securities Act Rules 163B and 169 to Harmonize IPO Communication Rules with Regulation Crowdfunding and Regulation A+ Extending Retail ‘‘Testing the Waters’’ Provisions to IPOs (Mar. 26, 2026), available at https:// www.sec.gov/files/rules/petitions/2026/petn4- 892.pdf. proposed amendments)? For example, should we amend Rule 413 to allow all issuers conducting registered offerings to register additional securities or additional classes of securities, including securities of majority-owned subsidiaries, by filing a post-effective amendment to a registration statement?
58. Should we expand issuers’ access
to other communication rules beyond those included in the Enhanced Registration and Communication Benefits? For example, should we expand access to 17 CFR 230.163B or 17 CFR 230.169 to a broader set of issuers? 330
59. Rather than eliminating the WKSI
definition (as it relates to all issuers other than FPIs) as proposed, should we retain it but reduce the public float and registered debt-based thresholds to expand WKSI eligibility? If so, what would be an appropriate threshold under each test? Alternatively, should we replace those criteria with other indicia of market following or potentially reduced risk to investors? For example, should we base the Enhanced Registration and Communication Benefits on the issuer’s Exchange Act filer status?
60. Under the proposed amendments,
an issuer would qualify as an ELI if it met the proposed registrant requirements of Form S–3 and had a class of common equity securities listed on a national securities exchange, and an issuer would qualify as a SELI if it met the requirements to be an ELI and had been subject to the Exchange Act’s reporting requirements for at least 12 calendar months. Should we adopt the amendments as proposed?
61. For purposes of the proposed
definition of ‘‘eligible listed issuer,’’ the term ‘‘exchange-listed’’ would mean that an issuer has a class of common equity securities listed on a national securities exchange. Is it appropriate to limit ‘‘exchange-listing’’ to only those issuers with a class of common equity securities listed on a national securities exchange, or should ‘‘exchange-listed’’ also include issuers with another class of securities (e.g., debt or preferred equity) listed on a national securities exchange?
62. Should an issuer be excluded from
ELI or SELI status if its exchange-listed securities are the subject of a trading suspension, if it is the subject of a delisting notice, or if delisting proceedings have commenced?
63. Although the net result of the
proposed amendments would be to expand the number of issuers eligible for the Enhanced Registration and Communication Benefits, we recognize that some issuers today may be WKSIs but not qualify as an ELI or SELI because they do not have a class of common equity securities listed on a national securities exchange. For those issuers, should we provide a transition period during which they would remain eligible for the Enhanced Registration and Communication Benefits but after which their eligibility would be assessed anew? If so, what is the appropriate duration of that transition period?
64. Under the proposed amendments,
all Form S–3 eligible issuers would be eligible to rely on Rules 139, 430B(b), and 433, regardless of whether they were exchange-listed; ELIs would be eligible to rely on Rules 163, 163A, 164, 413, 430B(a), 456(b), and 457(r), in addition to the rules available to all Form S–3 eligible issuers, regardless of how long they had been subject to Exchange Act reporting requirements; and SELIs would be eligible to use automatic shelf registration statements, in addition to all benefits available to all Form S–3 eligible issuers and ELIs. Should we adopt the amendments as proposed?
65. We are proposing to keep the 12-
calendar month Exchange Act reporting seasoning requirement for purposes of qualifying for automatic shelf registration as a SELI. Should we adopt the amendment as proposed? If not, please explain.
66. As discussed in footnote 290, the
12-calendar month Exchange Act reporting seasoning requirement to be a SELI would require an issuer to have been subject to the Exchange Act’s reporting requirements for 12 calendar months and any portion of a month immediately preceding the relevant measurement date. Should we revise this standard to instead require only a 12-month (or one-year) lookback? Under this alternative approach, an issuer that became subject to the Exchange Act’s reporting requirements on July 19, 2025 would satisfy the seasoning requirement for purposes of assessing whether it is a SELI on July 19, 2026 (rather than August 1, 2026). Why or why not?
67. We are proposing to permit certain
majority-owned subsidiaries to be treated as ELIs or SELIs, as applicable, with respect to specified offerings registered on a parent’s registration statement if the subsidiary’s parent is an ELI or SELI, including the ability to conduct these specified offerings on a parent’s automatic shelf registration statement if the parent qualifies as a SELI. Should we adopt the amendments as proposed? If not, please explain.
68. Except for majority-owned
subsidiaries conducting Guarantee￾Related Offerings, the proposed amendments would require a majority￾owned subsidiary to be independently Form S–3 eligible in order to be treated as an ELI or SELI based on its parent’s status as such in certain offerings. To be independently Form S–3 eligible under the proposed amendments, an issuer must, among other things, be subject to the Exchange Act’s reporting requirements. Should majority-owned subsidiaries that are not Exchange Act reporting companies, but that comply with proposed General Instruction I.B.1 of Form S–3, be eligible to be treated as an ELI or SELI based on their parents’ status as such, as proposed?
69. The proposed amendments would
require that a majority-owned subsidiary must be conducting certain registered offerings on its parent’s registration statement on Form S–3 in order to be treated as an ELI or SELI based on its parent’s status as such. Would this requirement be consistent with current market practice in this context, including with respect to an offering by a majority-owned subsidiary of non-convertible securities, other than common equity, that is not guaranteed by the parent?
70. We are proposing to remove the
first sentence of Rule 430B(a), which specifies that an issuer eligible to rely on that rule may omit from the prospectus information that is unknown or not reasonably available to the issuer pursuant to Rule 409. Should we adopt the amendment as proposed?
71. We are proposing to remove from
Rule 430B(b) the provision that permits issuers conducting a registered resale pursuant to Rule 415(a)(1)(i) to ‘‘omit the information specified in paragraph (a)’’ of Rule 430B if those issuers are eligible to conduct primary offerings on Form S–3 or Form F–3 pursuant to proposed General Instruction I.B.1, or are eligible to conduct primary offerings under proposed General Instruction A.2 of Form N–2. Should we adopt the amendment as proposed?
72. We are proposing to eliminate the
WKSI definition as it applies to domestic issuers and foreign issuers (other than foreign governments and FPIs) but retain it for FPIs. Should we adopt the amendment as proposed? If not, please explain. If we amend the definition of ‘‘well-known seasoned issuer’’ in Rule 405 to note that only an FPI can be a WKSI, as proposed, should

331The term ‘‘asset-backed issuer’’ is defined in 17 CFR 229.1101(b). 332See Form S–1, General Instruction VII.A. 333See Form S–1, General Instruction VII.B. 334See Form S–1, General Instruction VII.C. 335See Form S–1, General Instruction VII.D. 336See Form S–1, General Instruction VII.E. 337See Form S–1, General Instruction VII.F. 338See Form S–1, Item 12(a)(1). 339See Form S–1, Item 12(a)(2). we also amend the other rules and forms that would continue to refer to WKSIs to note that only FPIs can be WKSIs?
73. We are proposing to revise current
General Instruction II.G of Form S–3 by replacing its current text with a cross￾reference to Rule 430B(b) and relocating it to proposed General Instruction II.E. Should we adopt the amendment as proposed?
74. We are proposing to amend Form
10–K to add check boxes requiring issuers to identify whether they are an FPI that is a WKSI, an ELI, or a SELI. Should we adopt this amendment as proposed?
75. In the Filer Status Proposal, we
are proposing to amend Item 1B of Form 10–K to require all registrants to disclose material unresolved comments on Exchange Act filings issued by Commission staff. If that proposed amendment is not adopted, should we amend Item 1B of Form 10–K to include SELIs as an additional category of issuers subject to this requirement? Alternatively, should we amend Item 1B of Form 10–K to include ELIs (and not just SELIs) as an additional category of issuers subject to this requirement?
C. Form S–1
We are proposing to modernize Form S–1 with respect to an issuer’s ability to backward incorporate and forward incorporate on that form. These proposed amendments are intended to allow a larger population of issuers to backward and forward incorporate on Form S–1 to avoid the duplicative disclosure and additional compliance costs that they otherwise would incur and, as a result, facilitate capital formation in a manner that is consistent with investor protection. Form S–1, as it would read under the proposed amendments, is attached to this release as Appendix A.

1. Background
   Form S–1 is the default form that issuers can use to register securities offerings under the Securities Act. Form S–1 is referred to as the ‘‘default’’ form because it may be used by any issuer, other than foreign governments and asset-backed issuers,331 for an offering for which no other form is authorized or prescribed and without any additional eligibility requirements. Form S–1 permits issuers to backward incorporate previously filed Exchange Act reports if they satisfy the form’s eligibility criteria to incorporate by reference. Form S–1 does not, however, permit issuers other than SRCs to automatically update information in the prospectus via forward incorporation of their Exchange Act filings. General Instruction VII of Form S–1 sets forth the requirements an issuer must meet to be eligible to incorporate by reference. All issuers that meet those requirements are permitted to backward incorporate. Items 11A and 12 of Form S–1 contain related provisions (as discussed below), and Item 12(b) of Form S–1 addresses forward incorporation. General Instruction VII specifies that an issuer must satisfy each of the following requirements to be eligible to incorporate by reference:

• Exchange Act Reporting. The issuer
  is required to file reports pursuant to
  section 13 or 15(d) of the Exchange
  Act.332
• Current in Exchange Act Reporting.
  The issuer has filed all the reports and other materials required to be filed pursuant to sections 13(a), 14, or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file the reports and materials).333
• Annual Report Filed. The issuer has
  filed an annual report required to be filed pursuant to section 13(a) or 15(d) of the Exchange Act for its most recently completed fiscal year.334
• Blank Checks, Shells, Penny Stocks,
  and Business Combinations. The issuer is not:
  Æ And during the past three years neither the issuer nor any of its predecessors was:
  D A blank check company as defined in Rule 419(a)(2); D A shell company, other than a business combination related shell company, each as defined in Rule 405; or D An issuer for an offering of penny stock as defined in 17 CFR 240.3a51–1. Æ Registering an offering that effectuates a business combination transaction as defined in 17 CFR 230.165(f)(1).335
• Successor Issuers. An issuer that is
  a successor is deemed to have satisfied all the above requirements, except those related to blank check and shell companies and penny stock offerings, if:
  Æ Its predecessor and it, taken together, satisfy the above requirements, provided that the succession primarily was to change the predecessor’s state of incorporation or form a holding company, and the successor issuer’s assets and liabilities were substantially the same as the predecessor’s when the succession occurred; or Æ All predecessors met the above requirements when the succession occurred, and the successor issuer has continued to do so since the succession.336
• internet Access to Exchange Act
  Reports: The issuer makes its reports filed pursuant to section 13 or 15(d) of the Exchange Act that are incorporated by reference pursuant to Item 11A or 12 of Form S–1 readily available and accessible on a website maintained by or for the issuer that contains information about the issuer.337 Item 11A provides that an issuer that elects to backward incorporate pursuant to General Instruction VII must describe material changes in the issuer’s affairs that have occurred since the end of the latest fiscal year for which audited financial statements were included in the latest Form 10–K except to the extent described in a Form 10–Q or Form 8–K. Item 12 generally addresses what an issuer that elects to incorporate by reference must do in addition to any update Item 11A requires. Item 12(a) requires an issuer that backward incorporates to state in the prospectus that it specifically incorporates by reference the following:
• The issuer’s latest annual report on
  Form 10–K filed pursuant to section 13(a) or 15(d) of the Exchange Act that contains financial statements for the issuer’s latest fiscal year for which a Form 10–K was required to have been filed; 338 and
• All other reports filed pursuant to
  section 13(a) or 15(d) of the Exchange
  Act or proxy or information statements filed pursuant to section 14 of the Exchange Act since the end of the fiscal year covered by the Form 10–K required to be incorporated by reference.339 Item 12(b) provides that an SRC also is permitted to forward incorporate. If an SRC elects to do so, it must state in the prospectus that all documents it later files pursuant to sections 13(a), 13(c), 14, or 15(d) of the Exchange Act before it terminates the offering are deemed incorporated by reference. Finally, Item 12(c) requires an issuer that elects to incorporate by reference to do the following:
• State that it will provide to each
  person to whom a prospectus is delivered copies of documents incorporated by reference, and that it

340See Form S–1, Item 12(c)(1)(i) through (iii). 341See Form S–1, Item 12(c)(1)(iv). 342See Form S–1, Item 12(c)(1)(v). 343See Form S–1, Item 12(c)(2)(i). 344See Form S–1, Item 12(c)(2)(ii). 345Securities Offering Reform Adopting Release at 44781. 346 Id. 347See letter in response to Securities Offering Reform Proposing Release from Alston & Bird LLP (Feb. 11, 2005). 348See letter in response to Securities Offering Reform Proposing Release from Cleary Gottlieb Steen & Hamilton LLP (Jan. 31, 2005). 349See letter in response to Securities Offering Reform Proposing Release from Davis Polk & Wardwell (Jan. 31, 2005). 350See letter in response to Securities Offering Reform Proposing Release from The Association of the Bar of the City of New York (Jan. 28, 2005). 351Securities Offering Reform Adopting Release at 44782. 352See Simplification of Disclosure Requirements for Emerging Growth Companies and Forward Incorporation by Reference on Form S–1 for Smaller Reporting Companies, Release No. 33–10003 (Jan. 13, 2016) [81 FR 2743 (Jan. 19, 2016)] (‘‘Simplification and Forward Incorporation Release’’). 353 Id. 354See letters in response to Simplification and Forward Incorporation by Reference Release from Davis Polk & Wardwell LLP (Feb. 18, 2016) (‘‘Davis Polk’’), Ernst & Young LLP (Feb. 22, 2016) (‘‘EY’’), Securities Industry and Financial Markets Association (Feb. 18, 2016) (‘‘SIFMA’’), and Sullivan & Cromwell LLP (Feb. 18, 2016) (‘‘Sullivan’’). The comment letters submitted in response to the Simplification and Forward Incorporation Release are available at https:// www.sec.gov/comments/s7-01-16/s70116.htm. 355See letters in response to Simplification and Forward Incorporation Release from Davis Polk, EY, SIFMA, and Sullivan. 356See letter in response to Simplification and Forward Incorporation Release from Davis Polk. 357See letters in response to Simplification and Forward Incorporation Release from Davis Polk and Sullivan. 358See letter in response to Simplification and Forward Incorporation Release from Davis Polk. 359See letters in response to Simplification and Forward Incorporation Release from Davis Polk and Sullivan. 360See FAST Act Adopting Release at 12683. 361See supra section I.A.1.b. If Form S–1 were amended as proposed, it effectively would serve as a short-form registration statement for issuers that are eligible for and choose to use backward and forward incorporation by reference. Nonetheless, there would still be key distinctions between Form S–1 and Form S–3. Importantly, delayed shelf and ATM offerings by or on behalf of an issuer under Rule 415 would remain limited to offerings registered or qualified to be registered on Form S– 3. 362The Commission did not explain why it decided to adopt General Instruction VII.C when it first permitted incorporation by reference in Form S–1 in connection with Securities Offering Reform. 363See 17 CFR 210.3–01(b) and (c); 17 CFR 210.8– 08(a) and (b). But see Semiannual Reporting Proposal
(proposing amendments to the rules with will provide these reports or documents upon written or oral request and without charge; 340

• Provide the name, address,
  telephone number, and email address, if any, to which the request for these reports or documents must be made; 341
• Specify the issuer’s website address
  where the reports and other documents may be accessed; 342
• Identify the reports and other
  information it files with the Commission; 343 and
• State that the Commission
  maintains a website that contains filed reports, proxy and information statements, and other information and provide the Commission’s website address.344 In 2005, as part of Securities Offering Reform, the Commission amended Form S–1 to add the option to backward incorporate ‘‘as part of [its] initiatives to integrate further the Exchange Act and Securities Act.’’ 345 The Commission noted that commenters ‘‘strongly supported’’ permitting backward incorporation and that ‘‘[s]ome commenters suggested that Form S–1 . . . should allow forward incorporation by reference.’’ 346 Some of the commenters that supported permitting forward incorporation cited, as a basis for their support, ready access to filings incorporated by reference,347 no significant risk of decreased information,348 no reason to distinguish between previously filed and to-be-filed Exchange Act reports,349 and ‘‘cost and timing benefits to issuers . . . greatly outweigh[ing] any detriment to investors from the exclusion from the written registration statement of the information . . . incorporated by reference.’’ 350 The Commission declined to adopt forward incorporation at that time ‘‘[b]ecause the purpose of the proposal was not to extend short￾form registration to all reporting issuers, but to further integrate disclosures under the Securities Act and Exchange Act without impacting investor protection.’’ 351 In 2016, the Commission adopted interim final rules that, among other things, amended Form S–1 to provide SRCs the option to forward incorporate.352 The Commission adopted these rules to implement
  section 84001 of the Fixing America’s
  Surface Transportation (‘‘FAST’’) Act.353 Several commenters on the interim final rules favored extending forward incorporation to all issuers on Form S–1.354 Some commenters stated that it would be anomalous to permit SRCs to forward incorporate but not allow larger issuers to do so 355 given the ease,356 speed,357 and reliability 358 of access to issuers’ filings on EDGAR.359 Finally, in 2019, the Commission amended Form S–1 by ‘‘restrict[ing] . . . the ability . . . to cross-reference and incorporate by reference information into the financial statements,’’ stating ‘‘[w]e think these changes will reduce potential confusion and make it less cumbersome for investors to determine what pieces of financial statements form a set of audited or reviewed financial statements.’’ 360

2. Proposed Amendments
   We are proposing to amend Form S– 1’s incorporation by reference provisions by (1) eliminating the requirement in General Instruction VII.C that the issuer must have filed an annual report for its most recently completed fiscal year (as well as revising related provisions in General Instruction VII.D.1 and Items 11A, 12(a)(1), and 12(a)(2) of Form S–1 accordingly and eliminating General Instruction VII.E of Form S–1) and (2) amending Item 12(b) of Form S–1 to expand forward incorporation to all issuers that otherwise meet the incorporation by reference requirements. We also are proposing to amend General Instruction I of Form S– 1 to no longer allow FPIs to use the form. Similar to the proposed amendments to Form S–3, the proposed amendments to Form S–1 would expand the population of issuers eligible for short￾form registration, as described in section I.A.1.b above.361 While we recognize that the proposed amendments would depart from the Commission’s current approach, we believe that they would facilitate capital formation consistent with investor protection for the reasons discussed below. a. Incorporation by Reference We are proposing to eliminate General Instruction VII.C, which specifies that an issuer must have filed a Form 10–K for its most recently completed fiscal year to be eligible to use incorporation by reference in Form S–1.362 As a result of this requirement, issuers that conduct an offering on Form S–1 prior to filing a Form 10–K for their most recently completed fiscal year cannot use incorporation by reference and, instead, must include the information directly in the registration statement. We believe this instruction is inconsistent with the informational requirements of Form S–
3. In this regard, we note that Exchange
   Act reporting companies are not required to update third-quarter interim financial statements until after the 45th day following the fiscal year end or, if certain conditions are met, the 90th day for non-accelerated filers and SRCs, the 75th day for accelerated filers, and the 60th day for large accelerated filers.363

respect to the age of financial statements to account for the proposed ability for a company to elect to report semiannually). 364One commenter on the Simplification and Forward Incorporation Release recommended removing the backward incorporation requirement that the issuer has filed an annual report for its most recently completed fiscal year. See letter in response to Simplification and Forward Incorporation Release from EY (stating that ‘‘the other eligibility conditions of General Instruction VII . . . should be sufficient to protect investors and appropriately limit incorporation by reference’’). 365See supra section II.A.2 (noting, for example, widespread access to issuer information, including the use of EDGAR, which makes an issuer’s Exchange Act reports that would be incorporated by reference under the proposed amendments immediately available to the public, as well as liability provisions under the Federal securities laws to protect against material misstatements and omissions). 366 In light of the proposed amendments to Form S–3, we believe the primary users of Form S–1 (other than issuers that currently are not Exchange Act reporting companies) would likely be issuers ineligible to use Form S–3. In our view, the primary consequence of being ineligible to use Form S–3 should be the inability to conduct delayed shelf and primary ATM offerings. To the extent an issuer is current in its Exchange Act reports and is not a BSP issuer at the time of filing a Form S–1, we believe such an issuer should be able to incorporate by reference reports and other materials filed with the Commission in satisfaction of the disclosure requirements of Form S–1. 367See supra note 366. 368For the reasons discussed in section II.A.2.a.v above, a former SPAC would not be deemed to be a shell company and, as a result, a BSP issuer solely because it or any of its predecessors was formerly a SPAC. 369 Item 12(a)(1) of Form S–1 also would provide that a filing contains Form 10 information even if it omits the information required by Item 202 of Regulation S–K with respect to a class of securities registered on this Form. See supra note 152 for a discussion of this proposed language in the context of Form S–3. 370Eliminating the requirement to backward incorporate by reference proxy or information statements previously filed under section 14 of the Exchange Act would conform proposed Item 12(a)(2) of Form S–1 to Item 12(a)(2) of both current and proposed Form S–3. Consistent with current and proposed Form S–3, we believe it unnecessary beyond the extent that Part III information of Form 10–K is incorporated by reference from the proxy or information statement. Because this Part III information is already incorporated by reference— either directly or indirectly—through the Form 10– K, a separate requirement to incorporate all proxy materials under section 14(a) or 14(c) is not needed. Continued Because issuers are permitted to conduct offerings on Form S–1 during
these periods despite not having filed a Form 10–K for the most recently completed fiscal year, we do not believe incorporation by reference should be conditioned on having filed a Form 10– K for the most recently completed fiscal year. Instead, we believe issuers should be able to incorporate by reference the Form 10–K for the year immediately preceding the most recently completed fiscal year until the date on which the annual audited financial statements for the most recently completed fiscal year are required to be disclosed in the registration statement. The proposed amendment would allow issuers that are not eligible to use Form S–3 to use incorporation by reference prior to filing a Form 10–K for an issuer’s most recently completed fiscal year. It also would permit an issuer to use incorporation by reference during its first year as an Exchange Act reporting company when it had not yet been required to file a Form 10–K.364 We believe it is appropriate to remove this eligibility requirement for the same reasons we believe it is appropriate to eliminate the One-Year Seasoning requirement for Form S–3 eligibility.365 In addition, this proposed change is intended to reduce the costs of preparing a registration statement on Form S–1 (including when an issuer is ineligible to use Form S–3 366) by eliminating duplicative disclosure and reducing additional compliance costs that it otherwise would incur as a result of directly including the disclosure in the registration statement. We also believe that under this proposed amendment, investors would be adequately protected for the same reasons we believe they would be if we eliminated the One-Year Seasoning requirement for Form S–3 eligibility.367 Relatedly, we would retain other provisions in Form S–1 that would, among other things, require the issuer to be current in its Exchange Act reports, disallow BSP issuers from using incorporation by reference,368 and ensure investors have access to the reports and other materials incorporated by reference. Further, in connection with our proposal to eliminate General Instruction VII.C—the result of which would be to allow issuers to use incorporation by reference immediately after becoming subject to Exchange Act reporting requirements—we also are proposing to amend General Instruction VII.D and Items 11A, 12(a)(1), and 12(a)(2) of Form S–1. We propose to amend General Instruction VII.D.1 by replacing the current text with a provision that would render ineligible for incorporation by reference on Form S–1 a ‘‘BSP issuer’’ as proposed to be defined in Rule 405. The provision would render ineligible all the same issuers that General Instruction VII.D.1 currently does, except that an issuer would not be rendered ineligible solely because during the past three years either the issuer or any of its predecessors was a special purpose acquisition company (SPAC), as defined in Item 1601(b) of Regulation S–K, for the reasons discussed in section II.A.2.a.v. We
propose to amend Items 11A, 12(a)(1), and 12(a)(2) of Form S–1 as follows:

• Amend Item 11A to require an
  issuer to describe any and all material changes in the registrant’s affairs which have occurred since the end of the most recent fiscal year covered by the audited annual financial statements required to be included in the Form S–1 pursuant to Item 11(e) of Form S–1 and that have not been described in a Form 10–Q or Form 8–K filed under the Exchange Act. The form currently requires disclosure of such changes that have occurred since the end of the latest fiscal year for which audited financial statements were included in the latest Form 10–K, but, as proposed, we would eliminate the current incorporation by reference condition that the issuer has filed a Form 10–K for the most recently completed fiscal year.
• Amend Item 12(a)(1) to require an
  issuer to incorporate by reference a Form 10–K that contains financial statements for the issuer’s most recently completed fiscal year but, if the issuer has not yet filed such a Form 10–K, instead require it to incorporate by reference a Securities Act or Exchange Act filing that contains Form 10 information. ‘‘Form 10 information’’ would be defined as information that is required by Form 10 to register under the Exchange Act each class of securities the Form S–1 is registering.369 The form currently requires incorporation by reference of the financial statements for the latest fiscal year for which a Form 10–K was required to have been filed, but, as proposed, we would eliminate the current incorporation by reference condition that the issuer has filed a Form 10–K for the most recently completed fiscal year.
• Amend Item 12(a)(2) to require an
  issuer to incorporate by reference all reports filed pursuant to section 13(a) or 15(d) of the Exchange Act since the end of the most recent fiscal year covered by the audited annual financial statements required to be included in the Form S– 1 pursuant to proposed Item 12(a)(1) of Form S–1. The form currently requires incorporation by reference of all reports filed pursuant to section 13(a) or 15(d) of the Exchange Act or proxy or information statements filed pursuant to
  section 14 of the Exchange Act since the
  end of the fiscal year covered by the Form 10–K that is required to be incorporated by reference pursuant to Item 12(a)(1), but, as proposed, Item 12(a)(1) no longer would require a Form 10–K to be incorporated by reference.370

Notwithstanding Rule 411(e), when an issuer incorporates by reference a Form 10–K that itself incorporates by reference Part III information from a proxy or information statement within the timeframe specified in General Instruction G.(3) of Form 10–K, we view the Part III information as incorporated by reference into Form S–1. 371See supra note 336 and accompanying text. 372 General Instruction VII.E also deems a successor registrant to have satisfied General Instruction VII.D.2, which provides that a registrant may not use incorporation by reference if the registrant is registering an offering that effectuates a business combination transaction as defined in 17 CFR 230.165(f)(1), if the conditions of General Instruction VII.E.1 or VII.E.2 are met. It appears that the reference to General Instruction VII.D.2 in General Instruction VII.E was added inadvertently by the Commission when incorporation by reference was first permitted in Form S–1. See Securities Offering Reform Adopting Release at 44781, 44819. Moreover, we note that General Instruction VII.E’s reference to General Instruction VII.D.2 is unnecessary because General Instruction VII.D.2 operates independently of an issuer’s status as a successor registrant. 373The proposed amendments would allow issuers to satisfy their undertakings under 17 CFR 229.512(a)(1)(i), (ii), and (iii) via forward incorporation if the information required by those provisions is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or 15(d) of the Exchange Act. See 17 CFR 229.512(a)(1)(B). These issuers, however, would not be eligible to conduct delayed offerings under Rule 415(a)(1)(x). 374As noted above, several commenters stated that the current approach is anomalous. See letters in response to Simplification and Forward Incorporation Release from Davis Polk, EY, SIFMA, and Sullivan. 375We propose to amend Item 12(b) of Form S– 1 to remove the reference to section 14 of the Exchange Act for the same reasons we propose to make the same change to Item 12(b) of Form S–3. See supra note 151. These proposed amendments to Items 11A, 12(a)(1), and 12(a)(2) are intended to reduce the burden on issuers using Form S–1. At the same time, these proposed amendments are intended to ensure that such issuers provide their investors with the same information as required under current rules when they provide the information required by Form S–1 directly in the registration statement. We also propose to eliminate General Instruction VII.E, which establishes when a successor registrant is deemed to satisfy certain other requirements of General Instruction VII for purposes of determining eligibility to use incorporation by reference in Form S–
1.371 In our view, if we adopt our
proposal to eliminate General Instruction VII.C’s requirement to have filed an annual report for the most recently completed fiscal year, issuers would no longer need to rely on General Instruction VII.E for purposes of establishing eligibility to use incorporation by reference in Form S–1. In that case, a successor issuer that had not yet filed an annual report for the most recently completed fiscal year would not need to rely on the predecessor having filed such an annual report for purposes of establishing eligibility to use incorporation by reference. As long as the issuer was current in its Exchange Act reporting requirements and met the other requirements of General Instruction VII, it would be eligible to incorporate by reference. While we recognize that an issuer could become a successor registrant to a predecessor that was delinquent in its Exchange Act reporting obligations prior to or at the time of the succession, we believe a successor issuer would only need to consider its own Exchange Act reporting history for reasons similar to those discussed in
section II.A.2.a.vi above.372
Further, we are proposing to amend Item 12(b) of Form S–1 to provide that any issuer that is permitted to backward incorporate by reference would be permitted to forward incorporate, whereas Form S–1 currently permits only SRCs to forward incorporate. This proposed change is intended to enable all Form S–1 issuers to forward incorporate and, as a result, would allow more issuers to avoid duplicative disclosure and additional compliance costs that result from post-effective amendments and prospectus supplement updates. We believe that there would be no loss in investor protection from extending forward incorporation as proposed because forward incorporated filings would be readily accessible on EDGAR and issuers would be required to incorporate by reference (or otherwise disclose) and take liability for the same issuer-related information as under current rules.373 Finally, extending forward incorporation as proposed would eliminate the current anomalous approach of permitting SRCs to forward incorporate but prohibiting larger issuers from doing so.374 Item 12(b) also currently provides that an issuer that forward incorporates must state in its prospectus that all documents it files later pursuant to sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to terminating the offering, will be deemed incorporated by reference into the prospectus. We are proposing to amend Item 12(b) to remove the references to sections 13(c) and 14 of the Exchange Act.375 Section 13(c) provides, ‘‘If in the judgment of the Commission any report required under subsection (a) is inapplicable to any specified class or classes of issuers, the Commission shall require in lieu thereof the submission of such reports of comparable character as it may deem applicable to such class or classes of issuers.’’ We are not aware of the Commission having previously relied on
section 13(c) to exempt any specified
class or classes of issuers from any report(s) required by section 13(a). To the extent the Commission has exercised such authority or does so in the future, however, we believe that any reports filed by a class of issuers that are prescribed pursuant to the Commission’s authority under section 13(c) would be deemed to be filed in accordance with section 13(a). Accordingly, we are proposing to eliminate the reference to section 13(c). Request for Comment
76. We are proposing to eliminate the
General Instruction VII.C requirement that an issuer must have filed an annual report for its most recently completed fiscal year to be permitted to incorporate by reference on Form S–1. We also are proposing to make related changes to Items 11A and 12(a)(1) that essentially would require issuers to incorporate by reference a filing made with the Commission pursuant to the Securities Act or Exchange Act that contains the audited annual financial statements required to be included in the Form S– 1 pursuant to Item 11(e) of Form S–1 and update business information and reflect material changes in the registrant’s affairs since the end of the most recent fiscal year covered by the audited annual financial statements required to be included in the Form S– 1 pursuant to Item 11(e) of Form S–1. Should we adopt these amendments as proposed? If not, please specify which we should not adopt and explain why not.
77. Should we require an issuer that
has filed an annual report on Form 10– K that contains the audited annual financial statements required to be included in the Form S–1 pursuant to Item 11(e) of Form S–1 to incorporate by reference that Form 10–K rather than any document filed under the Securities Act or Exchange Act that contains such financials?
78. Should we retain other
requirements to incorporate by reference or permit any filer to backward or forward incorporate if it complies with the requirements of Item 11A and 12 of Form S–1 as proposed to be revised?
79. We are proposing to amend
General Instruction VII.D.1’s incorporation by reference eligibility requirement with text that is substantively equivalent except, as proposed, an issuer would not be rendered ineligible solely because during the past three years either the issuer or any of its predecessors was a special purpose acquisition company

376See FPI Concept Release.
377See id. at 24237, n.73 (‘‘There is a comparatively small number of FPIs electing to file on Form 10–K [in] any given year. For example, using a textual search of all Forms 10–K filed in calendar year 2023, the staff identified only nine such FPIs.’’). 378See supra note 217 and accompanying text. (SPAC), as defined in Item 1601(b) of Regulation S–K. Should we adopt this amendment as proposed?
80. We are proposing to eliminate
General Instruction VII.E, which establishes when a successor registrant is deemed eligible to use incorporation by reference in Form S–1. Under the proposed amendments, a successor registrant would not be required to take into account a predecessor’s reporting history for purposes of determining eligibility to use incorporation by reference in Form S–1. Accordingly, an issuer that becomes a successor registrant to a predecessor that was delinquent in its Exchange Act reporting obligations would nevertheless be eligible to use incorporation by reference in Form S–1 as long as the successor registrant was current and timely in making its Exchange Act filings and satisfied the other requirements of General Instruction VII. Should we instead require a successor registrant to take into account a predecessor’s reporting history when determining eligibility to use incorporation by reference in Form S–1? Does the proposed approach create the potential for abuse by an issuer seeking to incorporate by reference?
81. We also are proposing to amend
Item 12(b) of Form S–1 to extend the ability to forward incorporate to all issuers. Should we adopt this amendment as proposed? If not, please explain why not.
82. As discussed in section II.C.1
above, Item 12(c) of Form S–1 requires that an issuer seeking to incorporate by reference into its registration statement must: (1) state that it will provide to each person to whom a prospectus is delivered copies of the documents incorporated by reference, and that it will provide these reports or documents upon written or oral request and without charge; (2) provide the contact information where requests for those documents must be made; (3) specify the issuer’s website address where the reports and documents may be accessed; and (4) identify the reports and other information that it files with the Commission. Our proposed amendments would move the requirement to specify the issuer’s website address where the incorporated reports and other documents may be accessed from Item 12(c)(1)(v) to proposed Item 12(c)(2)(iii) and revise it to simply require the issuer’s website address, if any. As noted with respect to that general instruction, we believe there is no need to require an issuer to post incorporated documents on its own website due to their ready availability on EDGAR. Should we adopt the amendment as proposed? Are each of these requirements necessary? Should all or any of them be removed? Please explain why.
83. As discussed in section II.A.2.a.v
above, we are proposing to amend the Form S–3 eligibility requirements to prohibit certain types of ‘‘ineligible issuers’’ from using Form S–3. Those types of issuers, therefore, would be unable to conduct shelf offerings under Rule 415(a)(1)(x). Under the proposed amendments, however, with the exception of BSP issuers, these issuers would be able to forward incorporate information into Form S–1, including in the context of continuous offerings conducted on that form. Does the ability to forward incorporate information into Form S–1 (especially in the context of continuous offerings) present the same investor protection concerns as the ability to conduct a shelf offering on Form S–3? We note, for example, that an issuer may fundamentally change the terms of a continuous offering via an Exchange Act report that is forward incorporated into Form S–1 and, therefore, is not reviewed by Commission staff. If this does present the same investor protection concerns, should the eligibility requirements to forward incorporate on Form S–1 be more consistent with the eligibility requirements to use Form S–3? For example, should we require that to forward incorporate on Form S–1 an issuer not only be current, as proposed, but also be timely in its filings under
Section 13 or 15(d) of the Exchange Act
(subject to the Form 8–K exceptions as in Form S–3)? If we do align those two sets of eligibility requirements, what types of issuers would avail themselves of the proposed expansion of the ability to forward incorporate on Form S–1?
84. Should BSP issuers be precluded
from backward or forward incorporating into Form S–1, as is currently the case? See current General Instruction VII of Form S–1. Why or why not?
85. Under 17 CFR 243.100 (‘‘Rule 100
of Regulation FD’’), when an issuer, or any person acting on its behalf, discloses material nonpublic information regarding that issuer or its securities to specified persons, it must publicly disclose that information simultaneously if intentional and promptly if non-intentional, via a method specified by 17 CFR 243.101(e) (i.e., a Form 8–K furnished to or filed with the Commission or another method or methods reasonably designed to provide broad, non-exclusionary distribution to the public). Under 17 CFR 243.103(a) (‘‘Rule 103(a) of Regulation FD’’), for purposes of Forms S–3, S–8, SF–3, and N–2, a failure to make a public disclosure required solely by Rule 100 of Regulation FD does not affect whether an issuer is deemed current or timely, as applicable, in its filings under Section 13 or 15(d) of the Exchange Act. Should we expand Rule 103(a) of Regulation FD to include Form S–1 because it requires an issuer to be current in these filings to incorporate by reference? b. Foreign Private Issuers, Investment Companies, and BDCs Finally, we are proposing to amend Instruction I of Form S–1 to no longer allow FPIs to use the form for the same reasons we are proposing to amend Form S–3 to no longer allow FPIs to use that form. Given the Commission’s ongoing evaluation of whether the definition of FPI appropriately balances the protection of investors with the promotion of capital formation, we believe it is prudent not to extend the benefits of the proposed amendments to FPIs at this time, prior to completion of the Commission’s more comprehensive review of the FPI framework.376 We expect there to be minimal impact from the proposed amendment based on our understanding that few FPIs file on domestic forms 377 and because FPIs may file on Form F–1. Nevertheless, we seek comment on whether to amend this instruction in this manner. We also are proposing to amend General Instruction I of Form S–1 to expressly prohibit investment companies and BDCs from using that form because these issuers are required to use other forms adopted by the Commission for investment companies and BDCs.378 Request for Comment
86. We are proposing to amend Form
S–1 to no longer allow FPIs to use the form. Should we adopt the amendment as proposed?
87. We are proposing to amend Form
S–1 to expressly prohibit investment companies and BDCs from using the form. Should we adopt the amendment as proposed? D. Business Development Companies and Closed-End Funds In addition to amending the registration and offering process for issuers that register securities on Form S–1 and Form S–3 (which we refer to in

379BDCs are a category of closed-end investment companies that do not register under the Investment Company Act but rather elect to be subject to the provisions of sections 55 through 65 of the Investment Company Act. See section 2(a)(48) of the Investment Company Act [15 U.S.C. 80a– 2(a)(48)]. Congress established BDCs for the purpose of making capital more readily available to small, developing and financially troubled companies that do not have ready access to the public capital markets or other forms of conventional financing. See H.R. Rep. No. 1341, 96th Cong., 2d Sess. 21 (1980). In this section, we generally use the term ‘‘operating company’’ to refer to issuers that are not affected funds or, more broadly, registered investment companies. 380See CEF Offering Reform Adopting Release; see also Section 509(a) of Economic Growth, Regulatory Relief, and Consumer Protection Act, Public Law 115–174, 132 Stat. 1296 (2018); Section 803(b) of Small Business Credit Availability Act, Public Law 115 –141, 132 Stat. 348 (2018). 381 ‘‘Interval funds’’ are a type of registered CEF or BDC that make periodic repurchase offers pursuant to Rule 23c–3 under the Investment Company Act. See 17 CFR 270.23c–3 (‘‘Rule 23c– 3’’). 382See CEF Offering Reform Adopting Release. 383As described above, in a Rule 415(a)(1)(x) shelf offering, an eligible issuer can register an unallocated dollar amount of securities for sale at a later time, and then take down securities ‘‘off the shelf’’ for sale in a public offering as market conditions warrant. Off-the-shelf offerings benefit eligible affected funds by, among other things, allowing them to quickly access the public securities markets from time to time to take advantage of favorable market conditions. See supra
section II.A.1.
384With regard to securities registered on Form N–2, eligibility for shelf offerings under Rule 415(a)(1)(x) is limited to offerings eligible to use General Instruction A.2 of that form, which in turn references the criteria of General Instructions I.A.1, I.A.2, and I.B.1 of Form S–3. See 17 CFR 230.415(a)(1)(x); General Instruction A.2.a and b of Form N–2. Form S–3 eligibility criteria are discussed in section II.A.1.a. An FPI also can satisfy the requirements of General Instruction I.A by meeting the registrant requirements of Form F–3, in lieu of Form S–3. However, because a foreign investment company generally cannot make a public offering of its securities in the United States, we focus here on the requirements of Form S–3. See
section 7(d) of the Investment Company Act [15
U.S.C. 80a–7(d)].
385See General Instruction A.2.c of Form N–2 and General Instruction I.B of Form S–3. 386See supra section II.A.1.a. 387See General Instruction A.2.b of Form N–2. 388See, e.g., CEF Offering Reform Adopting Release at n.18 and accompanying text. 389See 17 CFR 230.430B(d); General Instruction F.3.b of Form N–2 (permitting forward incorporation by reference of certain materials filed under the Exchange Act); see also 17 CFR 230.409 (allowing seasoned affected funds registering shelf offerings under Rule 415 to omit required information from the base prospectus that is unknown or not reasonably available to the fund when the registration statement becomes effective). 390See supra section II.B.1 and accompanying
table detailing the Enhanced Registration and
Communication Benefits.
391See 17 CFR 230.430B(a).
392See 17 CFR 230.462(e) and (f). Issuers that rely on Rule 415(a)(1)(x) must file a new registration statement every three years, with unsold securities and unused fees carried forward to the new this section as ‘‘operating companies’’), the proposed amendments would extend similar modifications to the registration and offering process for BDCs and registered CEFs under the Securities Act.379 The proposed amendments would build on amendments the Commission adopted in 2020, as directed by Congress, that streamlined the registration process for affected funds in parity with operating companies.380 Consistent with Congress’ directive in 2018, the amendments we are proposing are designed to provide parity across the registration, offering, and communication rules for affected funds and operating companies, where appropriate. As discussed in more detail below, the proposed amendments would treat categories of affected funds differently just as categories of operating companies are treated differently under the proposal. For example, some of the proposed amendments would apply to all affected funds—that is, all BDCs and registered CEFs—while others only to affected funds that are exchange-listed. The proposal also would maintain the current offering framework for certain unlisted affected funds (e.g., most interval funds, tender offer funds, and non-traded BDCs) because such funds rely on a funds-specific rule under the Securities Act designed to accommodate their offering structure.381 Specifically, as it relates to affected funds, the proposed amendments would:

• Extend the eligibility requirements
  to use the short-form shelf registration statement on Form N–2 (‘‘Short-Form N–2’’), allowing a broader group of exchange-listed affected funds to more quickly and efficiently respond to market opportunities; and
• Extend certain benefits currently
  reserved for WKSIs (which we refer to in this release as the ‘‘Enhanced Registration and Communication Benefits’’), including automatic shelf registration and pre-filing and post￾filing communication flexibility, to a larger set of affected funds.

1. Background
   a. Shelf Offerings (Seasoned Affected Funds) As described in section II.D, in 2020, the Commission adopted reforms to the offering process for affected funds that were designed to allow them to generally use the same offering rules available to operating companies where feasible.382 Accordingly, as is the case with operating companies, affected funds seeking to conduct shelf offerings may utilize Rule 415(a)(1)(x), the provision for offerings made on a delayed basis.383 And, notwithstanding that affected funds typically register their offerings on Form N–2, as with operating companies, the eligibility of affected funds to make shelf offerings under Rule 415(a)(1)(x) depends upon their ability to meet the registrant and transaction requirements in General Instruction I.A and I.B of Form S–3.384 Issuers, including affected funds, can meet the transaction eligibility requirements of Form S–3 for a primary offering if the issuer’s public float is $75 million or more.385 Similarly, issuers generally will meet the registrant eligibility requirements of Form S–3 if they have timely filed all reports and other materials required under the Exchange Act during the prior 12 calendar months.386 With regard to registered CEFs only, the fund also must have been registered under the Investment Company Act for at least 12 calendar months immediately preceding the filing of the registration statement and have timely filed all reports required to be filed under section 30 of the Investment Company Act during that time.387 We have previously described affected funds that are able to meet these criteria as ‘‘seasoned affected funds.’’ 388 Seasoned affected funds have the option to register securities by filing Short-Form N–2, which functions like a Form S–3 registration statement as applied to operating companies. Like operating companies, seasoned affected funds can also rely on certain Securities Act rules, such as Rule 430B, to omit certain information from their base prospectus and later provide that information in a prospectus filed pursuant to Rule 424(b) or in a subsequent Exchange Act report incorporated by reference into the prospectus and statement of additional information (‘‘SAI’’).389 This capability allows seasoned affected funds to avoid the need to file post-effective amendments in most cases. b. WKSIs Currently, as with operating companies, affected funds that qualify as WKSIs have additional flexibilities regarding the offering process beyond those afforded to seasoned affected funds.390 For example, a WKSI can register unspecified amounts of different types or classes of securities on an automatic shelf registration statement without specifying a total dollar amount to be allocated among the various types or classes of securities.391 An automatic shelf registration statement and any amendments to the registration statement will be effective immediately upon filing.392 Automatic shelf

registration statement. See 17 CFR 230.415(a)(5). If the new registration statement is an automatic shelf registration statement filed by a WKSI, it is effective immediately upon filing. 393See 17 CFR 230.457(r); 17 CFR 230.456(b). 394See paragraph (1)(i)(A) of the WKSI definition in Rule 405; see also supra section II.B.1 (identifying alternative bases for an issuer to qualify as a WKSI, including that an issuer may qualify if it has issued, for cash, within the last three years, at least $1 billion in aggregate principal amount of non-convertible securities, other than common equity, in primary offerings registered under the Securities Act). 395See definition of ‘‘ineligible issuer’’ in Rule 405; see also paragraph (1)(i)(A) of the WKSI definition in Rule 405. 396See 17 CFR 230.486 (‘‘Rule 486’’). Rule 486 may be used by a registered CEF or BDC which makes periodic repurchase offers under Rule 23c– 3 or which offers securities under Rule 415(a)(1)(ix). Affected funds that qualify as seasoned funds or WKSIs cannot rely on Rule 486 because they rely on a separate framework that permits forward incorporation by reference to update their registration statements. 397 17 CFR 230.486(a) (‘‘Rule 486(a)’’) allows eligible funds (i.e., unlisted interval funds or continuously offered tender offer funds) to make material changes to their registration statements on an automatically effective basis 60 days after filing. Under Rule 486(a), a registrant may designate a later date for effectiveness (which must not be later than 80 days after filing). In addition, the Commission, having due regard to the public interest and the protection of investors, may declare an amendment or registration statement effective under Rule 486(a) on an earlier date. Under Rule 486(b), such eligible funds may amend their registration statements on an automatically and immediately effective basis for the purposes specified in Rule 486(b)(1), including updating their financial statements under section 10(a)(3) of the Securities Act and making any non￾material changes which the registrant deems appropriate. 398See supra section II.A.2.a.iv (discussing the proposed amendments that would limit application of paragraph (vi) of the definition of ‘‘ineligible issuer,’’ for purposes of Form S–3 and Short-Form N–2 eligibility, to the types of antifraud violations that are most likely to suggest that the issuer may pose a greater risk of non-compliance with Exchange Act reporting); see also proposed General Instruction I.A.2 of Form S–3. registration provides WKSIs with significant flexibility to take advantage of market windows, structure terms of securities on a real-time basis to accommodate investor demand, and determine or change the plan of distribution in response to changing market conditions. WKSIs using an automatic shelf registration statement further benefit by being able to pay filing fees at any time in advance of a shelf takedown or on a ‘‘pay-as-you-go’’ basis at the time of
each takedown off the shelf registration statement in an amount calculated for that takedown.393 These Enhanced Registration and Communication Benefits also include the ability to omit certain additional information from the base prospectus and to exercise greater flexibility with respect to pre-filing and post-filing communications. To qualify as a WKSI, affected funds generally must meet the registrant requirements of Form S–3 and generally must have at least $700 million in public float.394 An affected fund is not eligible for WKSI status if, among other bases: (1) it is not current and timely in its Exchange Act and Investment Company Act reports, or (2) it is the subject of a judicial or administrative decree or order arising out of a governmental action involving violations of the antifraud provisions of the Federal securities laws (the ‘‘antifraud prong’’ of the ineligible issuer definition).395
c. Rule 486 Offerings (Unlisted Funds)
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). Instead, Rule 415(a)(1)(ix) and (xi) are the provisions that unlisted affected funds use to conduct delayed or continuous offerings of their securities. Rule 415(a)(1)(ix) allows affected funds to engage in continuous offerings but does not allow delayed (or ‘‘shelf’’) offerings and is typically used by unlisted tender offer funds and certain non-traded BDCs. Rule 415(a)(1)(xi) allows unlisted affected funds that make periodic repurchase offers pursuant to Rule 23c– 3 (i.e., interval funds) to engage in delayed or continuous offerings. The Commission has established a tailored registration process for these funds under 17 CFR 230.486 (‘‘Rule 486’’).396 Rule 486 is designed to provide affected funds that do not qualify as seasoned affected funds or WKSIs with many of the same benefits available to operating companies and affected funds that qualify as seasoned issuers and WKSIs, including the ability to raise capital more efficiently as the opportunity arises. Unlisted affected funds registering shares under Rule 415(a)(1)(ix) (e.g., tender offer funds) and interval funds registering shares under Rule 415(a)(1)(xi) rely on Rule 486 to file post-effective amendments and certain registration statements that are either immediately effective upon filing under Rule 486(b) or automatically effective 60 days after filing under Rule 486(a).397 These unlisted affected funds, like seasoned affected funds and WKSIs, therefore also have the ability to update their registration statements with filings that are automatically effective and thus are able to raise capital as the need arises without first having to file and have Commission staff review and declare effective an update to the fund’s registration statement.
2. Proposed Amendments
a. Shelf Offerings (Eligible Listed Issuer Affected Funds & Seasoned Eligible Listed Issuer Affected Funds) Consistent with the proposed amendments to Form S–3, we are proposing to amend certain eligibility requirements that determine which affected funds may file on Short-Form N–2. The proposed amendments are designed to simplify the form and expand eligibility, thereby allowing more affected funds to take advantage of the flexibility to access the public securities markets on demand. Specifically, Short-Form N–2 would be available for affected funds that qualify as ELIs or SELIs which we propose to define in Rule 405 (herein referred to as ‘‘ELI affected funds’’ and ‘‘SELI affected funds,’’ respectively). The proposed amendments to Rule 405 would define an ELI as an issuer that meets Form S–3’s proposed registrant requirements and is exchange￾listed. As discussed in sections II.A.2.a and II.A.2.b above, we are proposing to amend Form S–3 eligibility by removing the One-Year Seasoning requirement and by eliminating the form’s transaction requirements, including the requirement that a registrant has at least $75 million in public float. Accordingly, and in parity with the amendments proposed for operating companies, an affected fund that is exchange-listed would qualify as an ELI, provided that it has timely filed all required Exchange Act and Investment Company Act reports during the preceding 12 calendar months, or such shorter period that the affected fund had been required to file such reports. Consistent with the proposed amendments for operating companies, the amendments also would prohibit certain ‘‘ineligible issuers,’’ as defined in Rule 405, from using Short￾Form N–2.398 As is the case for operating companies, technological developments have helped transform how information is disseminated into the marketplace and helped facilitate widespread access to information about affected funds. While Commission filings have been electronically available since the mid￾1990s, internet and smartphone adoption have dramatically expanded since the Commission last considered increasing flexibility to the framework

399See supra section I.B. 400See infra section II.D.2.b. for registered securities offering, enabling investors to access Commission filings instantly from anywhere at minimal cost.399 This widespread accessibility has mitigated the information disparity concerns that originally justified restricting Form S–3 and Short-Form N–2 eligibility based on the extent of an issuer’s market following (as evidenced by the issuer’s public float and reporting history). Thus, we no longer believe that the extent of an affected fund’s market following is a necessary consideration for Short-Form N–2 and shelf eligibility. Instead, the more appropriate consideration is whether investors can readily obtain issuer-specific information that can be incorporated by reference into a prospectus and the related registration statement to make an informed investment decision. An affected fund’s Exchange Act and Investment Company Act filings provide the basic source of information to the market, and investors in the secondary market use that information in making their investment decisions. Quarterly portfolio holdings disclosures on Form N–PORT and semi-annual reports on Form N–CSR, for example, provide key information to the market that is analyzed in a similar manner to how market participants analyze financial statements for operating companies to determine changes in prospects for growth and performance. In contrast to the proposed framework for operating companies, however, Short-Form N–2 and shelf registration eligibility would be reserved for affected funds that are exchange-listed (i.e., ELI affected funds and SELI affected funds). As discussed in more detail below, unlike operating companies, unlisted affected funds have a tailored registration process that, although different in certain respects from that of operating companies, provides many of the same benefits, including the ability to raise capital more efficiently as the opportunity arises.400 Under the proposed amendments, an affected fund would qualify as a SELI if it meets the ELI definition and has been subject to Exchange Act and Investment Company Act reporting requirements for a period of at least 12 calendar months. Just as with operating companies, under the proposed amendments, only SELI affected funds would be eligible for automatic shelf registration (a benefit for which only WKSIs currently are eligible). Although we do not believe an initial seasoning requirement is necessary for purposes of Short-Form N–2 eligibility generally, we are not proposing to extend automatic shelf registration to all ELI affected funds at this time. This one-year seasoning condition would give the staff an opportunity to monitor an affected fund’s Exchange Act and Investment Company Act reporting compliance during that first year prior to the affected fund’s ability to use automatic shelf registration on Short-Form N–2. Certain other benefits that are currently only available to affected funds that qualify as WKSIs
would be available to ELI affected funds (i.e., affected funds that are exchange-listed, regardless of whether they have been Exchange Act/Investment Company Act reporters for 12 calendar months). These benefits include, among other features, the ability to exercise greater flexibility with respect to pre-filing communications, the ability to omit certain information from a base prospectus, and the ability to pay filing fees at the time of the takedown. We are not, however, proposing to extend to affected funds certain Enhanced Registration and Communication Benefits that the proposed amendments would extend to a broader range of operating companies. This is because either a fund-specific rule currently applies the benefit to affected funds, or the benefit, as applied to operating companies, is not applicable to the equivalent category of affected funds. The following table lists the Enhanced Registration and Communication Benefits and compares the types of affected funds that qualify for these benefits under current rules versus the types of affected funds that would qualify for these benefits under the proposed amendments:
BILLING CODE 8011–01–P

EP26MY26.213</GPH>

401See supra section II.D.1.c.
BILLING CODE 8011–01–C
The proposed amendments are designed to streamline the registration and communication process for affected funds in parity with operating companies where feasible. By eliminating the transaction requirements in Form S–3 (including the public float requirement in General Instruction I.B.1), the proposed amendments would allow a greater number of affected funds to raise capital more efficiently and would provide more affected funds flexibility to manage the timing of their offerings in response to market opportunities. At the same time, the proposed amendments would include important investor protections and preserve the tier-based framework for categorizing affected funds that the Commission described in the CEF Offering Reform Adopting Release, albeit with different criteria for determining which issuers are eligible to use the Enhanced Registration and Communication Benefits. b. Maintain Rule 486 Offering Framework (Unlisted Affected Funds) We are not proposing to expand the eligibility criteria to use Short-Form N– 2 to unlisted affected funds. As described in section II.D.1.c above, the Commission has established under Rule 486 a tailored registration process for affected funds that do not list their securities on an exchange.401 Following the 2020 CEF Offering Reform Adopting Release, this framework allows unlisted affected funds registering offerings under Rule 415(a)(1)(ix) (e.g., tender offer funds) and unlisted interval funds registering offerings under Rule 415(a)(1)(xi) to rely on Rule 486 to file post-effective amendments and certain registration statements that are either immediately effective upon filing under Rule 486(b) or automatically effective 60 days after filing under Rule 486(a). This framework was designed to provide unlisted affected funds with many of the same efficiencies available to operating companies that currently qualify as WKSIs and seasoned issuers, such as automatic and immediate effectiveness for amendments to bring financial statements up to date under section 10(a)(3) of the Securities Act, allowing such affected funds to efficiently maintain effective registration statements while they engage in continuous or delayed offerings. This framework continues to offer unlisted affected funds with a comparable offering framework to that which would be afforded to exchange-listed affected funds under the proposed amendments. Unlisted affected funds therefore would continue to rely on the Rule 486 registration and offering process. Request for Comment
88. Is the proposed expansion of the
eligibility criteria for affected funds to utilize Short-Form N–2 to include affected funds that qualify as ELIs or SELIs under amended Rule 405 appropriate? Why or why not? Would this proposed expansion, including the proposal to eliminate the requirement that funds have a minimum public float, be beneficial to affected funds and/or their shareholders? Why or why not?
89. Do the proposed amendments
provide functional parity between operating companies and affected funds as they relate to the registration and offering process? Why or why not? Are there other revisions the Commission should make to achieve that objective?
90. The proposal would retain the 12-
month Exchange Act and Investment Company Act reporting seasoning requirement for purposes of qualifying for automatic shelf registration as a SELI affected fund. Should we adopt the amendment as proposed? Why or why not?
91. Does Rule 139 provide any
benefits to operating companies that should also be provided to covered investment funds in Rule 139b? The proposed amendments to Rule 139b would expand the rule’s scope to include unlisted registered investment companies and unlisted BDCs (including unlisted registered open-end funds). Should Rule 139b apply to unlisted affected funds and unlisted open-end investment companies? Why or why not?
92. Does Rule 433 provide any
advantages to affected funds that Rule 482 would not provide? Should affected funds, or a certain subset of affected funds, be permitted to rely on Rule 433 rather than, or in addition to, Rule 482? Why or why not?
93. Do affected funds currently rely
on Rule 430B(b) to omit information from their Short-Form N–2 related to resales by a person other than the affected fund? Why or why not? Should the scope of the proposed amendments to Rule 430B(b) include affected funds?
94. The proposal would expand the
universe of affected funds that may defer payment of registration filing fees and, instead, pay fees on a ‘‘pay-as-you￾go’’ basis at the time of takedown. Is this expansion appropriate? Why or why not?
95. Rule 24f–2 under the Investment
Company Act allows certain registered investment companies, such as mutual funds, ETFs, and interval funds, to register an indefinite amount of securities upon their registration statements’ effectiveness and pay registration fees based on their annual net issuance of shares. Should we permit additional categories of issuers to pay registration statement fees on an annual net basis as under Rule 24f–2 (or on a ‘‘pay-as-you-go’’ basis)? For example, should tender offer funds be permitted to pay registration fees in this manner? Are funds that have historically made periodic tender offers voluntarily—but for which these offers are not a fundamental policy— EP26MY26.214</GPH>

402Registration for Index-Linked Annuities and Registered Market Value Adjustment Annuities; Amendments to Form N–4 for Index-Linked Annuities, Registered Market Value Adjustment Annuities, and Variable Annuities; Other Technical Amendments, Investment Company Act Release No. 35273 (July 1, 2024) [89 FR 59978 (July 24, 2024)] (‘‘RILA Adopting Release’’). References to RILAs and registered MVA annuities include both stand￾alone annuity contracts and any relevant options available under a combination annuity contract. 403See Registration for Index-Linked Annuities; Amendments to Form N–4 for Index-Linked and Variable Annuities, Investment Company Act Release No. 35028 (Sept. 29, 2023) [88 FR 71088 (Oct. 13, 2023)] at sections II.A. through II.E. 404Unlike the separate accounts supporting variable annuities, however, issuers of registered non-variable annuities are not registered investment companies and are not subject to the requirements of the Investment Company Act. 405 Issuers of securities that are subject to insurance regulation, such as registered non￾variable annuities, can avail themselves of an exemption from the duty under section 15(d) of the Exchange Act to file reports required by section 13(a) of the Exchange Act with respect to securities registered under the Securities Act if certain conditions are met. 17 CFR 240.12h–7 (‘‘Rule 12h– 7’’). Many issuers of registered non-variable annuities rely on this exemption and, therefore, do not make the Exchange Act reports necessary to qualify for use of Form S–3. 406See RILA Adopting Release, supra note 402, at section II.G.2; see also Registration for Index￾Linked Annuities; Amendments to Form N–4 for Index-Linked and Variable Annuities, Investment Company Act Release No. 35028 (Sep. 29, 2023) [88 FR 71088 (Oct. 13, 2023)] (‘‘RILA Proposing Release’’) at section II.F (discussing the reasons why the Commission did not propose amendments to rule 482 to include RILAs and requesting comment on the Commission’s approach). Unless otherwise indicated, comments cited in this section of the release are the public comments received regarding the RILA Proposing Release, which are available at https://www.sec.gov/comments/s7-16-23/ s71623.htm. sufficiently similar to interval funds or open-end funds such that their paying registration fees under Rule 24f–2 would be appropriate?
96. Does Rule 486 provide unlisted
affected funds with a comparable offering framework to that which would be afforded to exchange-listed issuers under the proposed amendments? Are there any features that would be available to exchange-listed affected funds that should be available for unlisted affected funds relying on Rule 486? Should we, for example, permit unlisted affected funds relying on Rule 486 to forward incorporate certain Exchange Act and Investment Company Act reports into their prospectus, allowing these funds to avoid the need to file post-effective amendments in many cases?
97. Should we permit a broader group
of affected funds to rely on Rule 486? Why or why not? If we permitted exchange-listed affected funds to rely on Rule 486, would affected funds that would be eligible to file a Short-Form Form N–2 choose to use Rule 486(b) to update their registrations statements, or would they choose to update it through Exchange Act reports incorporated by reference?
98. General Instruction F.3.b of Form
N–2 currently provides that an issuer that forward incorporates must state in its prospectus that all documents it files later pursuant to sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to terminating the offering, will be deemed incorporated by reference into the prospectus. In parity with the proposed amendments to Form S–3, the proposal would amend General Instruction F.3.b of Form N–2 to remove the reference to section 13(c) of the Exchange Act because we are not aware of the Commission having previously relied on section 13(c), which allows the Commission to exempt any specified class or classes of issuers from any report(s) required by section 13(a). Should we adopt this amendment as proposed? If not, please explain why not. E. Registered Non-Variable Annuity Advertising We are proposing to amend the advertising provisions applicable to certain types of insurance products by permitting insurance companies to utilize Rule 482 under certain circumstances for broad-based advertising and making certain conforming changes to other rules as discussed below. This action would provide for a consistent advertising framework for these products.

1. Background
   On July 1, 2024, the Commission adopted rule and form amendments to provide a tailored form to register the offerings of registered index-linked annuities (‘‘RILAs’’) and registered market value adjustment annuities (‘‘registered MVA annuities,’’ and collectively with RILAs, ‘‘registered non-variable annuities’’) to enhance the disclosures made to investors about these products as well as to make the registration process for these offerings similar to that for variable annuities (the ‘‘registered non-variable annuity rulemaking’’).402 A RILA is one of several types of annuity contracts offered by insurance companies. A RILA investor’s gains or losses are based, at least in part, on whether a selected benchmark, typically an index, goes up or down over a set period of time. These annuities also have a ‘‘bounded return structure,’’ meaning that the annuity usually will limit an investor’s losses when the index goes down, but at the cost of limiting that investor’s gains when the index goes up. Registered MVA annuities are annuity contracts that offer fixed investment options and apply market value adjustments (‘‘MVAs’’) to amounts withdrawn from a fixed option before the end of the fixed option’s term, where the offering is required to be registered with the Commission because of the MVA. The registered non-variable annuity rulemaking required insurance companies to register offerings of non￾variable annuities on Form N–4, the form used to register most variable annuities under the Investment Company Act and register the offerings of their securities under the Securities Act. Form N–4 is designed to provide investors with product-specific information about annuity contracts and uses a layered disclosure framework. A variable annuity is an annuity product under which an investor receives interests in a separate account, which is an investment company subject to substantive regulation under the Investment Company Act. Variable annuities, like registered non-variable annuities, are retirement products where any investment gains will grow on a tax-deferred basis and that include certain insurance features, such as the ability to turn account value into a stream of periodic income payments. Due to their similarities with variable annuities, among other reasons, the Commission applied the variable annuity registration, filing, and disclosure framework to registered non￾variable annuities.403 The offering process and disclosure requirements for registered non-variable annuities therefore are generally consistent with the requirements for variable annuities.404 Before the registered non￾variable annuity rulemaking, in contrast, insurance companies registered offerings of non-variable annuities with the Commission under the Securities Act on either Form S–3 or Form S–1.405 As part of the registered non-variable annuity rulemaking, the Commission considered whether to apply the specialized advertising rules for registered investment companies, including
   variable annuity separate accounts,406 to registered non-variable annuities because that rulemaking was otherwise generally applying the registration, disclosure, filing, prospectus delivery, and communication requirements for registered investment companies to registered non-variable annuities. Specifically, the Commission considered applying Rule 482 to registered non-variable annuities based on commenters’ responses to its request

407Rule 482 advertisements are treated as prospectuses under section 10(b) of the Securities Act for purposes of potential civil liability under
section 12(a)(2) of the Securities Act and the anti￾fraud provisions of the Federal securities laws.
408This limited change was made in the registered non-variable annuity rulemaking to maintain the previous status quo wherein issuers of registered non-variable annuities that registered those annuities on Form S–3 were permitted to use FWPs without prospectus delivery, but those registered on Form S–1 were not. See RILA Adopting Release at section II.G.2. 409See supra note 405. 410Rule 405 under the Securities Act defines a registered non-variable annuity as any RILA or registered MVA annuity. Those, in turn, are each defined under the Rule as an annuity or an option available under an annuity that must be deemed a security, offered or sold in a registered offering, issued by an insurance company that is subject to the supervision of either the insurance or bank commissioner of any State or agency or officer performing like functions as a commissioner, and is not issued by an investment company. A RILA is further defined as an annuity whose contract value, either during accumulation period or after annuitization or both, will earn positive or negative interest based, in part, on the performance of any index, rate, or benchmark. A registered MVA annuity is further defined as an annuity whose contract value may reflect a positive or negative adjustment (based on calculations using a predetermined formula, a change in interest rates, or some other factor or benchmark) if amounts are withdrawn before the end of a specified period. We are also proposing to fix a typographical error in paragraph 3 of the Rule 405 definition of RILA and amending Rule 482(h) to account for the updated name of FINRA. 411Because the proposed amendments to Rule 482 would provide for the same treatment of all registered non-variable annuity advertisements, we propose to rescind the provision in Rule 433 added in the registered non-variable annuity rulemaking that permits Form S–3 eligible registered non￾variable annuity issuers to use FWPs without the prospectus delivery requirement. 412These requirements would apply to both stand-alone registered non-variable annuities as well as combination contracts that include registered non-variable annuity options. See Rule 405 (definition of ‘‘registered non-variable annuity’’). 413For these purposes, performance data of the RILA would include historic or hypothetical performance of the RILA or any element of that RILA (e.g., historical application of upside limits). A registered MVA annuity is an annuity or option under an annuity (other than a RILA) whose contract value may reflect a positive or negative adjustment if amounts are withdrawn before the end of a specified period. See Rule 405 (definition of ‘‘registered market value adjustment annuity’’). We are not proposing to apply the provision prohibiting the inclusion of historical or hypothetical performance information by RILAs to registered MVA annuities, which offer returns based on a fixed, guaranteed rate of interest. In contrast, the concerns stated herein regarding RILA
performance are a result of specific RILA features not present in registered MVA annuities. 414See RILA Adopting Release at section II.G.1 (discussing amendments to 17 CFR 230.156 (‘‘Rule 156’’)). 415See supra note 406. for comment. However, the Commission ultimately determined not to take action at that time as any expansion of Rule 482 would benefit from further consideration. Rule 482 permits registered investment companies to provide advertisements or other sales material (‘‘advertisements’’) to investors without being accompanied or preceded by a statutory prospectus (‘‘prospectus delivery requirements’’) pursuant to certain requirements.407 This provides flexibility for investment companies to advertise, including broad-based advertisements like television advertisements for variable annuities where delivering a prospectus before or contemporaneously with the advertisement is impractical. Because Rule 482 does not currently apply to them even though they register with the Commission using the identical registration statement form as variable annuities, registered non-variable annuity advertisements continue to rely on the FWP provisions of Rule 433. However, Rule 433, as amended in the registered non-variable annuity rulemaking, permits a registered non￾variable annuity issuer to advertise without satisfying the prospectus delivery requirement only if the issuer would otherwise be eligible to register certain offerings on Form S–3, notwithstanding its required use of Form N–4 to register offerings of the registered non-variable annuity.408 To meet the eligibility requirements of Form S–3, an insurance company must have timely filed certain reports required under the Exchange Act, even though insurance companies could rely on the exemption from these reporting requirements in Rule 12h–7.409 An insurance company eligible to rely on Rule 12h–7 therefore must determine whether to rely on that rule’s exemption or to file Exchange Act reports solely to meet Form S–3’s eligibility requirements in order to advertise more flexibly under Rule 433.
2. Proposed Amendments
After further consideration, we are now proposing to amend Rule 482 to apply it to the advertisements for registered non-variable annuities, as defined by Rule 405.410 The proposal would permit a registered non-variable annuity issuer to engage in broad-based advertising for the registered non￾variable annuity, such as through print advertisements, television commercials, and similar media, without needing to satisfy Form S–3’s eligibility requirements or adhere to the prospectus delivery requirements of Rule 433, subject to certain conditions. This action would provide a consistent advertising framework for all registered non-variable annuities by permitting all issuers and intermediaries of registered non-variable annuities to utilize Rule 482 for their advertisements in the same way that issuers and intermediaries of variable annuities can today.411 A consistent advertising framework is appropriate given that registered non￾variable annuities and variable annuities are registered on the same form and thus investors in these annuities have access to similar information about the annuity and its issuer. Providing a consistent framework for combination contracts (i.e., annuity contracts that include index-linked, variable, and/or fixed options, including fixed options subject to an MVA), in particular, would be efficient for insurance companies that otherwise would have to apply conflicting requirements related to advertising a single annuity contract. This result also removes a distinction in treatment based on the Exchange Act reporting status of the issuer. The ability to advertise a registered non-variable annuity should not turn on whether the insurance company has filed Exchange Act reports that the Commission has determined in Rule 12h–7 may be unnecessary. Our proposal is designed to provide greater flexibility to advertise and, as a result, communicate with prospective investors, while also ensuring important investor protections. We are proposing three key changes to Rule 482 to put in place tailored requirements for the advertisements of registered non-variable annuities.412 Under the proposal, an insurance company would not be permitted to rely on Rule 482 with respect to a communication that contained performance information of a RILA.413 In the registered non-variable annuity rulemaking, the Commission discussed its concern that showing the performance of a RILA may be misleading to investors.414 Further, the Commission sought comment on the decision at that time not to amend Rule 482 to include RILAs due to the difficulty in applying rule 482’s standardized performance requirements to RILAs and the rule’s inconsistencies with current RILA advertising practices.415 These challenges directly relate to the design of RILAs themselves and have prevented the Commission from developing standardized performance requirements for RILAs similar to performance presentation requirements for variable annuities and other open-end investment
companies that are the focus of Rule 482. For example, RILAs typically limit investor gains as the index’s performance improves (‘‘upside rates’’) in exchange for some protection from losses if the

416See RILA Proposing Release at section II.B.4 (defining a point-to-point index crediting methodology as the amount that is credited to the contract based upon a comparison of the index’s performance at two points in time, such as the beginning and end of the crediting period). 417The same concern is not present for registered MVA annuity advertising as they relate to fixed investment options. As a result, the Commission is proposing to permit registered MVA annuities to use Rule 482 without this restriction. Unlike RILAs, registered MVAs credit a fixed rate of interest which is known in advance of the crediting period, which generally is between one to ten years. There is no retroactive crediting of interest. Advertising current or past fixed rates of interest does not raise the same concerns as a RILA’s historical or hypothetical performance. 418See Comment Letter of the Committee of Annuity Insurers (Nov. 28, 2023); Comment Letter of the Insured Retirement Institute (Nov. 28, 2023). 419See Item 6(d)(2)(iv)(B) of Form N–4. Because registered MVA annuities do not calculate interest retroactively based, in part, on the performance of an index, they would not be included in this requirement. 420Specifically, this legend reads:
The bar chart shown below provides the Index’s annual returns for the last 10 calendar years (or for the life of the Index if less than 10 years), as well as the Index returns after applying a hypothetical 5% cap and a hypothetical –10% buffer. The chart illustrates the variability of the returns from year to year and shows how hypothetical limits on Index gains and losses may affect these returns. Past performance is not necessarily an indication of future performance. The performance below is NOT the performance of any Index-Linked Option. Your performance under the Contract will differ, perhaps significantly. The performance below may reflect a different return calculation, time period, and limit on Index gains and losses than the Index-Linked Options, and does not reflect Contract fees and charges, including surrender charges and the Contract Adjustment, which reduce performance. 421See RILA Adopting Release at section II.G.1. Specifically, in discussing the amendments to Rule 156 in the registered non-variable annuity rulemaking, the Commission stated that including historical index performance in an advertisement would be misleading if it, for example, suggested that the performance shown is predictive of future performance of the index or a RILA. On the other hand, the Commission stated that using the index’s historical performance solely to illustrate how a RILA works in a fair and balanced way would be consistent Rule 156 assuming appropriate caveats to ensure that the illustrations are not misleading and do not suggest that the illustrations show the performance of the RILA or a particular index￾linked option. 422See Rule 482(i); proposed Rule 482(k)(3)(i). 423See Item 7(e) of Form N–4. 424See Rule 482(j); proposed Rule 482(k)(3)(ii). 425See Item 4 of Form N–4. The proposed statements are consistent with other statements required by Rule 482 to alert investors about the Continued index’s performance declines (‘‘downside rates’’), all over a set period of time (‘‘crediting period’’). Because upside rates for new crediting periods under a RILA may change daily (or in most cases, weekly or monthly), and may also vary depending on the date of contract purchase, the contract’s distribution channel, or the election of certain contract features, past performance is irrelevant to current investors who are not able to invest at the past upside rates in their new crediting period. Past performance is similarly irrelevant with respect to RILAs where the downside rates may change frequently. In addition, to the extent that a RILA is using a point-to￾point index crediting methodology, which compares the performance of the index on one date to the performance of the index on another date, that RILA’s return to an investor would be particularly sensitive to the specific date the investor purchased the RILA and when the crediting period ends for the index-linked option chosen by the investor.416 This further increases the likelihood of a current
investor’s investment experience deviating from the historical performance of a given RILA, even when that RILA had similar terms to those currently offered.417 Similarly, industry stakeholders likewise have been unable to develop consensus standards on the presentation of RILA performance and have suggested that the Commission could condition the use of Rule 482 with regards to RILA advertisements with a prohibition on including past performance for RILAs without adverse impacts in that RILA issuers do not utilize such performance metrics in RILA advertisements.418 Although under the proposal Rule 482 would not be applicable to RILA advertisements containing performance data about the annuity itself, the proposal would not prevent the inclusion of historical performance data of an index to explain how a RILA works in advertisements, provided the index’s performance is presented in a manner that complies with the requirements for RILA prospectus disclosure relating to historical index performance.419 This provision would require that the advertisement show a bar chart of the index’s annual returns for each of the last 10 calendar years (or life of the index if less than 10 years) and provide a hypothetical example alongside each index return that reflects the return after applying a five percent cap and a ¥10 percent buffer. In addition, the bar chart must be preceded by a legend explaining that the performance of the index is not the performance of the RILA.420 These items are designed to provide context for the RILA and to help ensure that the advertisement is not misleading, consistent with prior Commission guidance on this topic.421 Presenting historical index information alone without this information could mislead investors into thinking that the historical rates of returns of the index are what they would have received had they invested in the RILA. Under the proposal, and like Rule 482’s requirements for advertisements for variable annuities, if a registered non-variable annuity advertisement includes fee or expense figures, or states that there are no fees or expenses associated with the registered non￾variable annuity, the advertisement also would be required to include the maximum amount of any sales load, or any other non-recurring fee, potential loss from a contract adjustment and annual contract expenses, if any, based on the method required to be used to show fees and expenses in the registered non-variable annuity’s prospectus, and presented at least as prominently as any other fee or expense information included in the advertisement.422 For example, a registered non-variable annuity advertisement providing fees and expenses would also be required to show, as a percentage, the maximum loss resulting from a negative contract adjustment.423 We propose to include registered non-variable annuity advertisements that state that there are no fees or expenses associated with the annuity in this provision as in those cases the annuity may
still be subject to potential losses from a contract adjustment. Further, similar to variable annuity advertisements that include fee and expense figures, any fee and expense information contained in a registered non-variable annuity advertisement would be required to be as of the date of the insurance company’s most recent prospectus for the registered non￾variable annuity.424 The proposal also would require that any RILA advertisement providing fee or expense figures or stating that there are no fees or expenses associated with the RILA include two statements, one to the effect that, in addition to the fees and expenses described or notwithstanding that there are no fees or expenses, the insurance company limits the amount an investor can earn on the RILA and that as a result, the investor’s returns may be lower than the index’s returns. The other would be a statement to the effect that, in return for accepting this limit on index gains, the investor will receive some protection from index losses. These proposed statements are based on the disclosure that is required in the prospectus fee table for a RILA, and is designed to alert the investor of the unique and ongoing trade-offs associated with RILAs and to help ensure that the advertisement would not be misleading.425 While RILA investors

limits of various variable annuity or fund features. See, e.g., Rule 482(i). 426See, e.g., Rules 482(h) and 497(a) and (i). In practice, advertisements have been filed with FINRA and not the Commission. The proposal would provide the same procedure for advertisements of registered non-variable annuities. See proposed Rule 497(m). 427See, e.g., Comment Letter of the Committee of Annuity Insurers (Nov. 28, 2023). 428See proposed Rule 482(b)(1). 429See proposed Rule 482(b)(2). This legend generally is a prominent statement that the information in the prospectus will be amended or completed, that a registration statement has been filed with the Commission, the securities may not be sold until the registration statement becomes effective, and that the prospectus is not an offer to sell or soliciting an offer to buy the securities in any state where that is prohibited. 430See proposed Rule 482(c). 431See Rule 482(b)(5). These include, for example, requiring certain type size requirements in print advertising relating to some of the disclosures called for in the rule. Further, consistent with other Rule 482 advertisements, registered non-variable annuity advertisements would not be required to include the Commission legend required in 17 CFR 230.481(b)(1). 432Supplemental sales literature refers to sales literature that is preceded or accompanied by a prospectus. See Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements, Investment Company Act Release No. 34731 (Oct. 26, 2022) [87 FR 72758 (Nov. 25, 2022)]. 433Rule 156 does not prohibit or permit any particular representation or presentation, rather it is an interpretive rule that provides factors to be weighed in considering whether, in the specific context of sales literature, a statement involving a material fact is or might be misleading for purposes of the Federal securities laws. See Mutual Fund Sales Literature Interpretive Rule, Investment Company Act Release No. 10915 (Oct. 26, 1979); [44 FR 64070 (Nov. 6, 1979)]. 434RILA Adopting Release at section II.G.1. are not typically charged direct ongoing fees or expenses, RILAs do typically limit an investor’s ability to participate in upside performance. This approach is also consistent with Rule 156(b)(4), which provides that representations about fees or expenses associated with an investment in a registered non￾variable annuity could be misleading ‘‘because of statements or omissions made involving a material fact, including situations where portrayals of the fees and expenses associated with an investment in the fund or registered non-variable annuity omit explanations, qualifications, limitations, or other statements necessary or appropriate to make the portrayals not misleading.’’ Consistent with the requirements for other Rule 482 advertisements, registered non-variable annuity advertisements would also be required to be filed with either the Commission or FINRA.426 This
would permit appropriate regulatory oversight of these advertisements, consistent with variable annuity advertisements. It is also consistent with recommendations made by commenters in the registered non￾variable annuity rulemaking.427 It would also be consistent with current practice as the Commission understands that many insurance companies currently voluntarily file registered non￾variable annuity advertisements with FINRA. Registered non-variable annuity advertisements would be subject to the other requirements of Rule 482 that apply to all advertisements that utilize that rule. In particular, the advertisement would be required to include a statement that advises an investor to consider the investment objectives, risks, and charges and expenses of the registered non-variable annuity carefully before investing, explains that the prospectus (and, if available, the summary prospectus) contains this and other information about the registered non-variable annuity, identifies a source from which an investor may obtain a prospectus (and, if available, the summary prospectus), and states that the prospectus (and if available, the summary prospectus) should be read carefully before investing.428 If the advertisement is used prior to effectiveness of the registration statement or determination of the public offering price, it would be required to include a subject to completion legend found in 17 CFR 230.481(b)(2).429 The advertisement also would not be permitted to contain or be accompanied by any application by which a prospective investor may invest in the registered non-variable annuity.430 The advertisement, as a prospectus, would also be subject to the legibility requirements of 17 CFR 230.420. The registered non-variable annuity advertisements would also be subject to Rule 482’s presentation requirements.431 These are long-standing investor protections that are as applicable to registered non-variable annuities as they are to variable annuities and other products subject to these requirements. Registered non-variable annuity advertisements, and other sales literature such as supplemental sales literature,432 would continue to be subject to Rule 156, which provides guidance on whether a statement involving a material fact is misleading in sales literature, depending on an evaluation of the context in which it is made.433 The Commission has previously offered guidance on the application of Rule 156 in the specific context of registered non-variable annuities that may continue to provide assistance in considering whether a particular representation involving a material fact is misleading.434 Request for Comment
99. Would the proposed amendments
enhance the communications available to investors with respect to registered non-variable annuity communications while also ensuring important investor protections? Are there other considerations or goals that the Commission should evaluate?
100. Should we, as proposed, rescind
the exception in Rule 433 that permits Form S–3 eligible registered non￾variable annuity issuers to use FWPs without the prospectus delivery requirement given that all registered non-variable annuity issuers would be permitted to use Rule 482 instead? Is there a reason to retain the exception?
101. Should Rule 482 be limited in
application to RILA advertisements that do not include performance data of the annuity as proposed? Are there other approaches that the Commission could take to ensure that the advertisements containing performance information would not be materially misleading? For example, is there a way to standardize RILA past performance information?
102. Is it clear what constitutes
performance data of a RILA? Should performance data, as proposed, be considered to be the historic or hypothetical performance of the RILA or any element of the RILA?
103. Is it appropriate to condition the
use of historical index performance on it being presented in a manner consistent with RILA prospectus requirements? Would it be practical to provide the required disclosure in advertisements? Are there more appropriate ways to ensure that it is clear this information is not related to the RILA’s performance?
104. Should we require the disclosure
on fees and expenses, as proposed, including alerting the investor about the limits that the insurer imposes on the investor’s returns in exchange for the investor receiving some protection from index losses? Is it important to alert investors about these limits on gains in a RILA advertisement?
105. Should we, as proposed, require
that registered non-variable annuity advertisements be filed with the Commission or FINRA? Should such a requirement be limited to certain types of advertisements, and what types of advertisements for registered non￾variable annuities should be required to be filed? Alternatively, should registered non-variable annuity advertisements be required to be filed

435 15 U.S.C. 77r(a).
436 15 U.S.C. 77r(b)(3).
437The proposed new definition of ‘‘qualified purchaser’’ under section 18(b)(3) of the Securities Act does not relate to or affect the definition of the term ‘‘qualified purchaser’’ under section 2(a)(51) of the Investment Company Act and the rules thereunder. 438 15 U.S.C. 77r(a)(1) through (3). 439See 15 U.S.C. 77r(c)(1) through (3). 440Securities of the same issuer that are equal or senior in seniority to ‘‘a security described in’’
section 18(b)(1)(A) are also covered securities. See
15 U.S.C. 77r(b)(1)(B).
441See 15 U.S.C. 77r(b)(2).
442 15 U.S.C. 77r(b)(4)(A).
443 15 U.S.C. 77d(a)(1).
444 15 U.S.C. 77d(a)(3).
445See generally, Gerry Griffith, Providing Equal Access to Capital in the Age of the Startup: the Case for Federal Preemption of State Blue Sky Laws, 13 J. Bus. Entrepreneurship & L. 121 (2020). 446Rutheford B. Campbell, Regulation A: Small Business’ Search for ‘‘A Moderate Capital,’’ 31 Del. J. Corp. L. 77, 106–107 (2006). 447According to the North American Securities Administrators Association (‘‘NASAA’’), ‘‘[t]he Uniform Law Commission’s current model is the Uniform Securities Act of 2002. This model supersedes two prior models, known as the Uniform Securities Act of 1956 and the Revised Uniform Securities Act of 1985, as amended in 1988.’’ N. Am. Secs. Adm’rs Ass’n:Uniform Securities Acts, available at https://www.nasaa.org/ industry-resources/uniform-securities-acts/ (last visited Mar. 28, 2026). NASAA further notes that ‘‘[m]ost state securities laws are based on one of these three models; i.e., most states have either adopted one of these models or used a model as the basis for their statutes. Some state statutes furthermore incorporate elements from multiple models. On the other hand, a few states have adopted securities laws that are unique or that are loosely based on one of these three models.’’ Id. only? with FINRA? Should we adopt the conforming amendments to Rule 497, as proposed?
106. Are there any particular
considerations to be made with regard to the application of the other requirements of Rule 482 to registered non-variable annuity advertisements?
107. Are there any particular
considerations that we should give in applying Rule 482 to advertisements for registered MVA annuities? F. Preemption of State Securities Law Registration and Qualification
Section 18(a) of the Securities Act
provides that States may not require registration or qualification of ‘‘covered securities.’’ 435 Section 18(b)(3) of the Securities Act states that a security ‘‘is a covered security with respect to the offer or sale of the security to qualified purchasers, as defined by the Commission by rule.’’ 436 We are proposing to 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.437 Defining ‘‘qualified purchaser’’ as we propose would result in ‘‘covered security’’ status for securities offered and sold in connection with a registered offering, thereby preempting State securities law registration and qualification requirements for such offerings. The proposed amendment is intended to lower the cost of a registered offering of unlisted securities (i.e., securities that are not listed or approved for listing on a national securities exchange) and, as a result, facilitate capital formation in a manner that is consistent with investor protection.

1. Background
   Section 18(a) of the Securities Act
   provides, in relevant part, that no law, rule, regulation, order, or other administrative action of any State (or political subdivision thereof) requiring (or with respect to) the registration or qualification of securities or securities transactions shall directly or indirectly:
   (1) apply to a covered security or to a security that will be a covered security upon completion of the transaction; (2) prohibit, limit, or impose any conditions upon the use of any offering document that is prepared by or on behalf of the issuer, among other things; or (3) prohibit, limit, or impose any conditions based on the merits of such offering or issuer, upon the offer or sale of any covered security.438 Notwithstanding the preemption provided by section 18(a), section 18(c) of the Securities Act preserves State authority with respect to ‘‘covered securities’’ in several ways. Pursuant to
   section 18(c), States: (1) retain
   jurisdiction to investigate and bring enforcement actions with respect to fraud or deceit or unlawful conduct by brokers or dealers; (2) may require the filing of any document filed with the Commission (together with annual or periodic reports of the value of securities sold or offered to be sold to persons located in such State, if such sales data is not included in documents filed with the Commission), solely for notice purposes and the assessment of any fee, together with a consent to service of process and any required fee; and (3) have the power to suspend the offer or sale of securities within the State as a result of the failure to submit any required filing or fee permitted by
   section 18.439
   Section 18(b) of the Securities Act
   enumerates several types of securities that are covered securities. For example, under section 18(b)(1)(A), the term ‘‘covered securities’’ includes securities that are listed or approved for listing on a national securities exchange.440 The term ‘‘covered securities’’ also includes securities that are issued by an investment company registered under the Investment Company Act.441 In addition, section 18(b)(4)(A) 442 provides that a security is a ‘‘covered security’’ with respect to secondary sales that are exempt pursuant to
   section 4(a)(1) 443 or 4(a)(3) 444 of the
   Securities Act if the issuer files reports under section 13 or 15(d) of the Exchange Act. Importantly, under
   section 18(b)(3), the term ‘‘covered
   securities’’ also includes securities sold to ‘‘qualified purchasers,’’ as defined by the Commission. Section 18(b)(3) further provides that the Commission may ‘‘define the term ‘qualified purchaser’ differently with respect to different categories of securities, consistent with the public interest and the protection of investors.’’ Currently, the term ‘‘covered securities’’ does not encompass all securities offered and sold pursuant to a registered offering. Many securities offered and sold pursuant to a registered offering are covered securities because they are listed or approved for listing on a national securities exchange or are issued by a registered investment company. Many unlisted securities offered or sold pursuant to a registered offering, however, currently are not covered securities. These offerings, therefore, are currently subject to State securities law registration and qualification requirements. For instance, non-traded BDCs that issue securities publicly do not list their shares on a national securities exchange nor are they registered investment companies (instead they are companies that have elected to be subject to certain provisions of the Investment Company Act). Accordingly, the securities issued by non-traded BDCs, unlike the securities issued by exchange-listed BDCs or registered investment companies, currently are not ‘‘covered securities’’ under section 18(b) of the Securities Act. State securities law registration and qualification requirements are intended to protect investors. Those requirements, however, also raise the cost of accessing the capital markets.445 Issuers must comply with the registration and qualification requirements for each state in which the securities are offered and sold.446 State securities laws have varying frameworks that often are based on one or more model acts.447 Further, issuers seeking to sell securities in merit-review states must satisfy potentially different substantive standards for each state or

448Louis Loss, Joel Seligman, & Troy Paredes, Securities Regulation (7th ed. 2025). 449When using its authority to define ‘‘qualified purchasers’’ under section 18(b)(3), the Commission is not prohibited from concluding that all offerees and purchasers in an offering are qualified purchasers. See Lindeen v. SEC, 825 F.3d 646, 654, 656 (D.C. Cir. 2016). 450Following a registered offering, the issuer would be subject to section 13 or 15(d) of the Exchange Act and, as a result, secondary sales that are exempt pursuant to section 4(a)(1) or 4(a)(3) of the Securities Act would be exempt from State securities law registration and qualification requirements pursuant to section 18(b)(4)(A) as long as the issuer continues to file reports under section 13 or 15(d). 451Cf. Gerry Griffith, Proving Equal Access to Capital in the Age of the Startup: The Case for Federal Pre-Emption of State Blue-Sky Laws, 13 J. Bus. Entrepreneurship & L. 121–152 (2020) (discussing the inefficiencies and burdens imposed by blue-sky laws on startups, particularly in raising capital, and arguing that these laws have become outdated and redundant due to the Commission’s robust Federal regulatory framework), available at https://digitalcommons.pepperdine.edu/jbel/vol13/ iss2/4; Rutheford B. Campbell, The Role of Blue Sky Laws After NSMIA and the JOBS Act, 66 Duke L.J. 605–631 (2016) (advocating complete Federal preemption of state registration authority to achieve efficient regulation of capital formation, especially for small businesses), available at https:// scholarship.law.duke.edu/cgi/ viewcontent.cgi?article=3874&context=dlj. 452Public Law 104–290, 110 Stat. 3416 (Oct. 11, 1996). 453H.R. Rep. No. 622, 104th Cong. 2d Sess. at 1 (1996) (House Report). 454See 2015 Regulation A Release at section II.H.3.d (quoting House Report at 16). 455See, e.g., Crowdfunding, Release No. 33–9470 (Oct. 23, 2013) [78 FR 66427 (Nov. 5, 2013); 2015 Regulation A Release. 456See 17 CFR 232.101(a)(1)(i) (requiring Securities Act registration statements to be filed electronically on EDGAR). 457As discussed in section II.B.2.a, exchange listing provides certain investor benefits. For the reasons discussed in this section, we believe that the proposed definition of ‘‘qualified purchaser’’ is consistent with the public interest and protection of investors, notwithstanding the fact that it would cover the offer and sale of unlisted securities. 458See, e.g., Form S–1, Items 3 (requiring risk factor disclosure via 17 CFR 229.105 (‘‘Item 105 of Regulation S–K’’)), 11(e) (requiring audited financial statements via Regulation S–X), and 11(h) (requiring management’s discussion and analysis of financial condition and results of operations via 17 CFR 229.303 (‘‘Item 303 of Regulation S–K’’). Relatedly, an issuer must update its registration statement for fundamental changes to the information set forth in the registration statement, see 17 CFR 229.512(a)(1), and as required by section 10(a)(3) of the Securities
Act. 459Liability may arise, for example, under section 11, 12(a)(2), or 17(a) of the Securities Act or section 10(b) of the Exchange Act as discussed in section II.A.2 above. 460These requirements provide information to investors after registration. See, e.g., Form 10–K, Items 1A (requiring risk factor disclosure via Item 105 of Regulation S–K), 7 (requiring management’s discussion and analysis of financial condition and risk being unable to sell in that state, which could impact issuers’ ability to raise capital and investors’ ability to access the capital markets.448 Consequently, attempting to comply with State securities law registration and qualification requirements may involve interacting with multiple states, retaining ‘‘blue sky’’ counsel, and addressing varying complex provisions and potentially duplicative requirements, all of which may lead to transactional delays. As discussed in more detail in the next section, registered offerings often are national in nature. Thus, absent preemption, issuers engaging in such offerings may be required to bear the costs of complying with several states’ registration and qualification requirements. We believe these costs are likely to be unduly burdensome in the context of a registered offering in light of the national nature of registered offerings and the investor protections that the Federal securities laws provide for such offerings.
2. Proposed Amendments
To address the concerns described in
section II.F.1 above, we are proposing to
use our authority under section 18(b)(3) to add a new definition of ‘‘qualified purchaser’’ to preempt State securities law registration and qualification requirements with respect to any offering of securities registered under the Securities Act. Specifically, we are proposing to add the term ‘‘qualified purchaser’’ to Rule 146 and, for purposes of section 18(b)(3), define the term to include any person to whom securities are offered or sold pursuant to an offering registered under the Securities Act.449 As a result, these securities would be ‘‘covered securities’’ and, consequently, exempt from State securities law registration and qualification requirements.450 For the reasons discussed in more detail below, we believe this proposed amendment would be consistent with the public interest and the protection of investors. The proposed definition is intended to enhance efficiency, reduce compliance costs, and promote capital formation by reducing redundant regulatory oversight, thereby simplifying the process for conducting registered offerings of unlisted securities.451 We believe this goal is consistent with the legislative intent underlying the preemption provisions in section 18. Congress established these provisions when it enacted the National Securities Markets Improvement Act of 1996 (‘‘NSMIA’’).452 The legislative history suggests that Congress intended for these provisions to ‘‘eliminate the costs and burdens of duplicative and unnecessary regulation by, as a general rule, designating the Federal government as the exclusive regulator of national offerings of securities.’’ 453 Further, the Commission has understood the policy underlying NSMIA’s enactment to suggest that States should ‘‘generally retain their authority to regulate small, regional, or intrastate securities offerings.’’ 454 Registered offerings are not geographically limited under the Federal securities laws and often involve offers and sales to investors without regard to their location. As such, registered offerings are inherently national in nature. This can make the review and qualification of registered offerings a difficult and inefficient task to conduct on a state-by-state basis. The Commission has previously observed that offerings made through the internet could result in an issuer potentially violating State securities laws absent preemption of State-level registration and qualification requirements.455 We believe preemption is necessary and appropriate to allow issuers to communicate with potential investors across State lines and publish offering materials on the internet, which often occurs within the ordinary course of a registered offering (including as a result of the Commission’s electronic filing requirements with respect to Securities Act registration statements 456). The proposed amendments would be consistent with the public interest and protection of investors. In particular, the Federal securities laws applicable to registered offerings contain
investor protections that address potential concerns regarding the preemption of State securities law registration and qualification requirements.457 These investor protections include, for example, the following:

• Registration statement disclosure
  requirements that include, among other requirements, risk factors, audited financial statements, and management’s discussion and analysis of financial condition and results of operations; 458
• Liability for material misstatements
  and omissions in a registration statement under specified circumstances; 459
• Potential Commission staff review
  of Securities Act registration statements and other filings made in connection with a registered offering;
• Post-registration periodic reporting
  requirements and additional requirements for interim current event updates that include, in some instances, risk factors, management’s discussion and analysis of financial condition and results of operations, annual audited financial statement, and principal executive officer and principal financial officer certification requirements; 460

results of operations via Item 303 of Regulation S– K), 8 (requiring annual audited financial statements via Regulation S–X), and 15(b) (requiring principal executive and principal financial officer certifications via 17 CFR 229.601(b)(31)). Periodic and interim reporting obligations are subject to suspension after the fiscal year the registration statement goes effective depending, in general, on the number of record holders and, in some cases, asset value. 461For example, liability under section 18 of the Exchange Act exists under specified circumstances for any statement in a periodic or interim report that, at the time and in light of the circumstances under which it was made, was false or misleading with respect to any material fact. 462As required by section 408 of Sarbanes-Oxley, Commission staff undertake some level of review of each reporting company at least once every three years and reviews a significant number of companies more frequently. See supra note 247 and accompanying text. 463See supra note 439 for a discussion of the authority that States retain under section 18(c). 464 17 CFR 230.473. 465See, e.g., Forms F–7, F–8, and F–80 (17 CFR 239.37, 17 CFR 239.38, and 17 CFR 239.41); Form F–10 (17 CFR 239.40) relating to an offering being made contemporaneously in the United States and the issuer’s home jurisdiction; Form S–8 (17 CFR 239.16b); Forms S–3 and F–3 (17 CFR 239.13 and 17 CFR 239.33) relating to a dividend or interest reinvestment plan or relating to an automatic shelf registration statement; Form S–4 (17 CFR 239.25) complying with General Instruction G of that Form; and registration statements and post-effective amendments that become automatically effective pursuant to Rule 462.

• Liability for periodic and interim
  report material misstatements and omissions under specified circumstances; 461 and
• Recurring staff review of periodic
  and interim reports.462
  Further, as noted in section II.F.1 above, notwithstanding the fact that our proposed amendment would preempt State securities law registration and qualification requirements, States would retain other authority under section 18(c) that would help ensure investors in registered offerings remain appropriately protected.463 Finally, to the extent preemption is a contributing factor to an issuer’s decision to engage in an exempt rather than registered offering of unlisted securities, removing that factor, as proposed, could lead to more registered offerings with their correspondingly greater investor protections. Request for Comment

108. Should we define ‘‘qualified
     purchaser’’ as proposed? If not, please explain why not.
109. What are the specific costs and
     burdens of complying with State securities law registration and qualification requirements for issuers conducting registered offerings of unlisted securities? Please describe and quantify any such costs and burdens and their significance.
110. Are there potentially significant
     transactional delays associated with complying with State qualification and registration requirements? If so, please describe those delays and how the qualification and registration requirements cause those delays.
111. Section 18(b)(3) allows us to
     define the term ‘‘qualified purchaser’’ differently with respect to different categories of securities. Rather than preempting all registered offerings as proposed, should we instead preempt only certain types of registered offerings? For example, should we limit the definition to registered offerings of equity securities? G. Other Rule Amendments
     1. Delaying Amendments
     a. Background
     Section 8(a) of the Securities Act
     provides that registration statements filed under that Act shall become effective on the 20th day after filing or such earlier date as the Commission shall determine. Section 8(a) also specifies that the filing of an amendment to a registration statement establishes a new filing date and restarts the 20-day period. Prior to 1961, it was the practice of issuers to file technical or so-called ‘‘delaying’’ amendments to prevent registration statements from becoming effective through the lapse of time. In 1961, the Commission adopted Rule 473 to allow issuers to delay the effectiveness of a registration statement without the need to file one or more amendments to the registration statement.464 Rule 473 allows issuers to include a legend on the facing page of the registration statement that serves the purpose of delaying effectiveness of the registration statement until either (1) the issuer files an amendment specifically stating that the registration statement will become effective in accordance with section 8(a) of the Securities Act or (2) until the Commission accelerates the effectiveness of the registration statement. This legend is colloquially referred to as a ‘‘delaying amendment.’’ Although the delaying amendment procedure generally has worked well, it also may be viewed as an unnecessary regulatory approach that can sometimes create regulatory uncertainty and unnecessarily increase burdens on issuers and Commission staff. For example, issuers have at times inadvertently failed to include delaying amendments on the facing page of a registration statement, requiring the issuer to make an additional filing solely for the purpose of adding the delaying amendment. In some cases where a delaying amendment has been omitted, the registration statement has become effective before the omission was discovered, prematurely subjecting the issuer to section 15(d)’s reporting obligations and risking commencement of stop order proceedings, which imposes burdens on issuers and Commission staff. b. Proposed Amendments To address the concerns described in
     section II.G.1.a above, we are proposing
     to amend Rule 473. Specifically, we would revise Rule 473 to provide that effectiveness of a registration statement filed with the Commission, other than those that become automatically effective in accordance with our rules and forms,465 would be deemed to be delayed, unless the issuer included on the registration statement’s facing page a legend stating that the registration statement is to become effective in accordance with the provisions of
     section 8(a) of the Securities Act. Under
     the proposed amendment, issuers would no longer need to include a delaying amendment for purposes of delaying a registration statement’s effectiveness. An issuer desiring a registration statement to become effective on the twentieth day after filing would affirmatively notify the Commission and the staff by including the legend described in section II.G.1.a above on the facing page of the registration statement. We believe that requiring issuers to affirmatively state their reliance on section 8(a) would help simplify the regulatory process on issuers and Commission staff and provide greater certainty regarding an issuer’s intent. Request for Comment
     112. Should the Commission amend
     Rule 473 as proposed? Are there reasons not to amend the rule in the manner proposed?
     113. Are there other Commission
     rules or forms that we should amend to reflect the proposed amendment to Rule 473?
     2. Elimination of Certain Conditions
     Relating to Age of Financial Statements a. Background The requirements concerning the age of financial statements included in a registration statement or proxy statement are contained in 17 CFR 210.3–12 (‘‘Rule 3–12 of Regulation S– X’’) for non-SRCs and 17 CFR 210.8–08 (‘‘Rule 8–08 of Regulation S–X’’) for SRCs. Under each of these rules, registrants are not required to provide,

466See 17 CFR 210.3–12(b); 17 CFR 210.8–08(a). 467Under Rule 3–01(i)(1) of Regulation S–X, the grace period is 14 days for a large accelerated filer, 29 days for an accelerated filer, and 44 days for all other registrants (other than SRCs, which are governed by Rule 8–08 of Regulation S–X). 468The conditions in Rule 8–08(b) of Regulation S–X are similar, but not identical, to the conditions in Rule 3–01(c) of Regulation S–X. Under the first condition of Rule 3–01(c), a company must be an Exchange Act reporting company and if it is, then it must have filed all reports due in order to receive additional time. Under the first condition of Rule 8–08(b), a company that is an SRC does not need to be an Exchange Act reporting company, but if it is, then it must have filed all reports due in order to receive additional time. With respect to the second and third conditions, the conditions for an SRC are based on income from continuing operations attributable to the registrant before taxes. The conditions correlate to line item 13 in 17 CFR 210.5–03(b) (‘‘Rule 5–03(b) of Regulation S–X’’) after adding back tax expense per line 11 and subtracting income attributable to the noncontrolling interest per line 19. In contrast, the conditions applicable to a non-SRC under Rule 3– 01(c) of Regulation S–X are based on income attributable to the registrant after taxes. It is income after reported discontinued operations, and correlates to line item 18 in Rule 5–03(b) of Regulation S–X after subtracting income attributable to the noncontrolling interest per line 19. 469For convenience, this section of the release refers generically to proxy solicitations and proxy statements. Such references, however, include proxy solicitations that require the filing of a proxy statement on Schedule 14A as well as actions taken by written authorization or consent that require the filing of an information statement on Schedule 14C. 470 In the Filer Status Proposal, the Commission is proposing to amend Article 8 of Regulation S–
X. Among other things, those proposed
amendments would expand to a broader group of issuers the ability to comply with the age of financial statements requirements under Rule 8–08 of Regulation S–X. 471For example, consider a calendar year end SRC that is subject to section 13 or 15(d) of the Exchange Act that reported losses from continuing operations attributable to the registrant, before taxes. If it files a registration statement on February 15 (assuming it is not a weekend or holiday)— which would be the 46th day after the end of the fiscal year—the registration statement would require audited financial statements for the most recently completed fiscal year even though the Form 10–K is not due until March 31. Under the proposed amendments, financial statements for the most recently completed fiscal year would not have to be included in the registration statement until the Form 10–K is due. We also propose a non￾substantive amendment to 17 CFR 210.3–01(i)(1)(i) (‘‘Rule 3–01(i)(1)(i)’’) to remove an outdated reference to fiscal years ending before December 15, 2006. 472Although the Commission has not previously articulated a policy rationale for imposing these income-based requirements, it has recognized that failure to satisfy the requirements could temporarily prevent issuers from raising capital. Uniform Instructions as to Financial Statements—Regulation S–X, Release No. 33–6234 (Sept. 2, 1980) [45 FR 63682, 63685 (Sept. 25, 1980)] (stating that ‘‘the Commission recognizes that for some short period of time these companies may be prevented from going to the market’’). The Commission also has stated that ‘‘it is reasonable to delay registration until [audited financial statements for the most recent fiscal year] become available’’ should a registrant not meet the conditions and that the conditions ‘‘[are] in the best interest of the investing public and will not create any burden on the large majority of registrants.’’ Id. in a registration statement or proxy statement, audited financial statements for the most recently completed fiscal year when the date of effectiveness of such registration statement or mailing date of such proxy statement falls within the first 45 days after such fiscal year end (which we refer to in this release as a ‘‘grace period’’).466 Under Rule 3–12(b) of Regulation S–X, a registrant’s grace period may be extended by an additional 14 to 44 days, depending on the registrant’s filer status,467 if it meets three conditions set forth in Rule 3–01(c) of Regulation S–X:

• The registrant files annual,
  quarterly, and other reports pursuant to
  section 13 or 15(d) of the Exchange Act
  and all reports due have been filed;
• For the most recent fiscal year for
  which audited financial statements are not yet available, the registrant reasonably and in good faith expects to report income attributable to the registrant, after taxes; and
• For at least one of the two fiscal
  years immediately preceding the most recent fiscal year the registrant reported income attributable to the registrant, after taxes. Under Rule 8–08(b) of Regulation S– X, an SRC may receive an additional 45- day grace period to file such updated annual financial statements if it meets three similar conditions:
• If the SRC is a reporting company,
  all reports due must have been filed;
• For the most recent fiscal year for
  which audited financial statements are not yet available, the SRC reasonably and in good faith expects to report income from continuing operations attributable to the registrant before taxes; and
• For at least one of the two fiscal
  years immediately preceding the most recent fiscal year the SRC reported income from continuing operations attributable to the registrant before taxes.468 We refer to the additional grace periods provided in Rule 3–01(c) and Rule 8–08(b) of Regulation S–X as ‘‘extended grace periods.’’ The conditions imposed under Rule 3–01(c) and Rule 8–08(b) of Regulation S–X may result in a situation in which loss-generating issuers—which may have a greater need for capital but are ineligible for the extended grace periods—incur greater compliance costs in connection with filing a registration statement or conducting certain proxy solicitations than higher-income registrants.469 Specifically, such registrants may face unnecessary delays in raising capital via registered offerings, or completing strategic transactions through a proxy solicitation, or otherwise incur additional costs associated with expediting the preparation of audited annual financial statements for the most recently completed fiscal year before they would otherwise be required in an annual report on Form 10–K. b. Proposed Amendments We are proposing to eliminate the income-related conditions in Rules 3– 01(c)(2) and (3) and 8–08(b)(2) and (3) of Regulation S–X.470 As a result, under the proposed amendments, an SRC that is either an Exchange Act reporting company that has filed all 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 or proxy statement, unless such financial statements become available earlier. Additionally, a non-SRC Exchange Act reporting company that has filed all required 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. These proposed amendments are intended to address the concerns described in section II.G.2.a above and reduce the costs of conducting registered offerings and certain proxy solicitations by expanding the population of issuers eligible for the extended grace periods. The existing conditions limit certain issuers’ ability to avail themselves of the extended grace periods, requiring these issuers to prepare audited financial statements earlier than they otherwise would be required. The proposed amendments, therefore, may promote capital formation and facilitate other strategic transactions without compromising investor protection. In addition, harmonizing when a registration or proxy statement is required to include audited annual financial statements with the annual report deadline for most issuers may simplify compliance and, in turn, reduce burdens on those issuers.471 With respect to Rules 3–01(c)(2) and (3) and 8–08(b)(2) and (3) of Regulation S–X, we no longer believe the availability of an extended grace period should be conditioned on an issuer’s
  profitability.472 Instead, the more appropriate consideration is whether the issuer discloses all information necessary for investors to make an informed investment decision, and we

473See supra section II.A.2.a.ii.
474See supra notes 161–164 and accompanying text. do not believe an issuer’s ability to provide such information is dependent on its degree of profitability. In this regard, the income conditions do not necessarily improve the accuracy or usefulness of financial or other disclosures or otherwise protect investors; they merely restrict an issuer’s ability to raise capital or commence a business combination or similar transaction based on whether or not the issuer is profitable, which does not affect the reliability or transparency of the information within the financial statements. Moreover, we also believe these income-related tests can disproportionately restrict access to capital for issuers that may need it most. For these reasons, conditioning access on profitability may disproportionately affect these issuers and their shareholders without a corresponding investor benefit. In addition, consistent with our rationale for proposing to eliminate the ‘‘Certain Failures to Make Payments and Defaults’’ requirement for Form S–3 eligibility,473 we believe that conditioning the availability of the extended grace periods on an issuer’s profitability to be an inappropriate qualitative measure. We also believe those conditions are unnecessary because the Commission’s disclosure requirements should provide investors the information necessary to evaluate an issuer’s financial health.474 Accordingly, we propose to eliminate the income conditions in Rules 3– 01(c)(2) and (3) and 8–08(b)(2) and (3) of Regulation S–X. Request for Comment
114. Should we adopt the proposal to
eliminate the income-related conditions in Rule 3–01(c)(2) and (3) and Rule 8– 08(b)(2) and (3) of Regulation S–X to receive an extended grace period before a registration or proxy statement must include audited annual financial statements for the most recently completed fiscal year? Why or why not?
115. We are proposing to eliminate
the income-related conditions in Rule 3–01(c)(2) and (3) and Rule 8–08(b)(2) and (3) of Regulation S–X. Should we also eliminate the requirement in Rule 3–01(c)(1) and Rule 8–08(b)(1) of Regulation S–X that an issuer that is a reporting company must be current in Exchange Act reporting to be eligible for an extended grace period? Why or why not? Similarly, should we require any additional conditions for either an SRC or a non-SRC to receive an extended grace period?
3. Conforming and Technical
Amendments
The table below describes each of our conforming amendments to rules and forms in response to the proposed amendments discussed herein. BILLING CODE 8011–01–P

EP26MY26.215</GPH>

EP26MY26.216</GPH>

EP26MY26.217</GPH>

The table below describes each of the non-substantive, technical amendments proposed in connection with the proposed amendments. EP26MY26.218</GPH> EP26MY26.219</GPH>

EP26MY26.220</GPH>

475Exchange Act section 3(f) requires us, when engaging in rulemaking that requires us to consider or determine whether an action is necessary or appropriate in the public interest, to consider, in addition to the protection of investors, whether the action will promote efficiency, competition, and capital formation. 15 U.S.C. 78c(f). Exchange Act
section 23(a)(2) requires us, when adopting rules
under the Exchange Act, to consider the impact that any new rule would have on competition and prohibits any rule that would impose a burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. 15 U.S.C. 78w(a)(2). See also section 2(b) of the Securities Act (15 U.S.C 77b(b)) and section 2(c) of the Investment Company Act (15 U.S.C. 80a–2(c)). 476See text accompanying infra note 567 for the definition of ‘‘pre-issue selling pressure’’ as used in this economic analysis. BILLING CODE 8011–01–C Request for Comment
116. Should we make these
conforming and technical amendments as proposed?
117. Are there other conforming or
technical amendments that we should make including, for example, in connection with the proposed elimination of the Form S–3 transaction requirements (or any of the other proposed amendments)?
III. Other Matters
This action is an economically significant regulatory action under
section 3(f)(1) of Executive Order 12866
and has been reviewed by the Office of Management and Budget. This action, if finalized as proposed, is expected to be an Executive Order 14192 deregulatory action.
IV. Economic Analysis
We are attentive to the costs imposed by, and the benefits obtained from, the proposed amendments.475 The discussion below addresses the potential economic effects of the proposed amendments, including the likely benefits and costs, as well as the likely effects on efficiency, competition, and capital formation. We also analyze the potential costs and benefits of reasonable alternatives to the proposed amendments. A. Overview By reducing regulatory barriers associated with registered offerings for many issuers, the proposed amendments are expected to promote capital formation in the public securities markets. These proposed amendments, which range from broadening the population of issuers eligible to use Form S–3 and the Enhanced Registration and Communication Benefits to expanding issuers’ abilities to incorporate by reference on Form S–1, are intended to give issuers more flexible, cost-effective, and faster channels, such as shelf registration, for raising capital. Expanding issuers’ abilities to use Form S–3 and the Enhanced Registration and Communication Benefits has been shown to lower the cost of capital for many issuers in a number of ways, such as facilitating capital raising during more favorable market conditions, lowering illiquidity penalties, and mitigating pre-issue selling pressure.476 By further enabling the ability of issuers to communicate more freely with the market at the time of capital formation, the proposed amendments could enable issuers to provide more timely and relevant information to investors precisely when capital is being raised. In turn, this could reduce information asymmetry and support more efficient price discovery. Therefore, enhanced communications at this pivotal moment not only empower investors to make better-informed decisions, but they also help issuers to reach a broader investor base and potentially achieve more favorable pricing. To further safeguard investors, the proposed amendments would prohibit certain issuers that may pose a higher risk of non-compliance with Exchange Act reporting requirements from using Form S–3. EP26MY26.221</GPH>

477 In this context, ‘‘publicly available information’’ refers to information beyond what is required pursuant to the Exchange Act. This includes information provided by market participants such as analysts and media as well as voluntary information provided by the issuer (i.e., information the issuer voluntarily discloses beyond what is required). See infra note 577. 478See, e.g., Nasdaq v. SEC, 34 F.4th 1105, 1111– 14 (D.C. Cir. 2022). This approach also follows Commission staff guidance on economic analysis for rulemaking. See SEC Staff, Current Guidance on Economic Analysis in SEC Rulemaking (Mar. 16, 2012), available at https://www.sec.gov/divisions/ riskfin/rsfi_guidance_econ_analy_ secrulemaking.pdf (‘‘The economic consequences of proposed rules (potential costs and benefits including effects on efficiency, competition, and capital formation) should be measured against a baseline, which is the best assessment of how the world would look in the absence of the proposed action.’’); id. at 7 (‘‘The baseline includes both the economic attributes of the relevant market and the existing regulatory structure.’’). 479For purposes of the baseline, we consider an issuer to have filed a Form 10–K if the issuer filed any of the following forms: Form 10–K, Form 10– K/A, Form 10–KT, and Form 10–KT/A in CY 2024. We exclude asset-backed issuers as they are unable to use Form S–3 currently and would not be able to use Form S–3 under the proposed amendments. We exclude BDCs in this section as they are discussed in section IV.B.2. Finally, we exclude current shell companies because they would not be eligible to use Form S–3 under the proposed amendments. The baseline includes FPIs that file on domestic forms currently and may satisfy current Form S–3 eligibility requirements but would not satisfy Form S–3 eligibility requirements under the proposed amendments. The number of FPIs that file on domestic forms, however, is likely to be small. See supra note 329. 480We gather public float data from the cover
page of registrants’ Form 10–K filings, which is
reported as of the last day of their second fiscal quarter. We are missing public float data for five registrants in the sample because these registrants did not report public float information in their Form 10–K filed in 2024. For purposes of the baseline, registrants with missing public float data were assumed to have a public float of less than $75 million. 481Exchange-listed status is determined by merging our population of domestic issuers with data from the Center for Research in Security Prices (‘‘CRSP’’) database, which contains daily and monthly market and corporate action data for securities with primary listings on the NYSE, NYSE American, Nasdaq, and NYSE Arca exchanges. Issuers that have trading data for common shares on CRSP in the CY 2024 are considered to be listed on a national securities exchange for purposes of this economic analysis. This methodology does not account for issuers with common shares on a different national securities exchange such as LTSE or Cboe BZX unless the issuer is dual listed on NYSE or Nasdaq. 482See supra section II.A.1.a. 483See supra section II.A.2.a. 484See Form S–3, General Instruction I.B.5; see also supra section II.A.2.a.iv. 485As noted above, these estimates do not account for other conditions of Form S–3 eligibility It is possible that smaller issuers could pose a greater risk of information asymmetry and that expanding Form S– 3 eligibility to such issuers could raise concerns about adverse selection and moral hazard. Empirical studies of previous reforms to shelf registration, however, have found little to no evidence supporting these risks. To the extent smaller issuers may tend to have less publicly available information about them,477 we nonetheless believe our proposed amendments to Form S– 3 are appropriate. As discussed in
section I.B above, we believe Form S–
3 eligibility should depend on whether investors can readily obtain issuer￾specific information that is incorporated by reference into a prospectus and the related registration statement to make an informed investment decision. Thus, if an issuer is current and timely with respect to its Exchange Act reporting obligations, then an investor’s ability to obtain such issuer-specific information will not depend on the issuer’s size. We also are proposing certain other amendments, including revising Rule 473, eliminating certain conditions in Regulation S–X relating to the age of financial statements, and proposing a new definition of ‘‘qualified purchaser’’ to preempt State securities law registration and qualification requirements with respect to all registered offerings. We address these proposed amendments as well in this economic analysis. B. Baseline The baseline against which the costs, benefits, and effects on efficiency, competition, and capital formation of the proposed amendments are measured consists of the current state of the market and the current regulatory framework with respect to registered offerings.478 The parties affected by the proposed amendments include certain Exchange Act reporting issuers, registered CEFs, BDCs, and investors. Below we provide information about the current nature of the affected parties. Because the affected issuers face different requirements to register new offerings, we discuss Form N–2 (registered CEFs and BDCs) and insurance company issuers and the remaining affected issuers separately.

1. Form S–1 and Form S–3 Issuers
   a. Affected Parties
   The proposed amendments would affect certain issuers of registered offerings in several ways. First, more issuers would become eligible to use Form S–3 to register securities offerings under the Securities Act. Second, issuers currently limited to raising up to one-third of their public float on Form S–3 would be eligible to register and sell unlimited amounts of securities. Third, several benefits currently reserved for WKSIs and other seasoned issuers (i.e., the Enhanced Registration and Communication Benefits) would be extended to more issuers. Fourth, the ability to backward and forward incorporate by reference on Form S–1 would be extended to more issuers. Fifth, all securities offered and sold in a registered offering would be preempted from State securities law registration and qualification requirements. We use information from reporting issuers that filed a Form 10–K 479 in calendar year (‘‘CY’’) 2024 to estimate the number of issuers that are eligible to use Form S–3 under the current rules as well as the number of issuers that are not eligible under the current rules but would be eligible under the proposed amendments. These estimates are based on information that we could reasonably quantify, including public float 480 and exchange-listed status.481 These estimates do not account for all current Form S–3 eligibility requirements, such as the Current and Timely in Exchange Act Reporting requirements.482 These estimates also do not account for all Form S–3 eligibility requirements under the proposed amendments (including, as previously noted, the Current and Timely in Exchange Act Reporting requirements).483 Therefore, the estimates may not accurately quantify the number of issuers currently eligible to use Form S–3 or the number of issuers currently ineligible to use Form S–3 that would become eligible to use the form under the proposed amendments. We excluded BDCs from the analyses in this section, as we discuss them in section IV.B.2 below. We also excluded asset-backed issuers from our analyses as these issuers currently are not eligible to use Form S– 3 (and would remain ineligible under the proposed amendments).484 Finally, we excluded current shell companies because they would be ineligible to use Form S–3 under the proposed amendments. We note that any shell company that is currently eligible to use Form S–3 would become ineligible under the proposed amendments. We identified 288 shell companies that filed a Form 10–K in CY 2024, of which 76 shell companies had a public float of at least $75 million. None of these shell companies, however, filed a Form S–3 in CY 2024. As reported in Table 1, there were 5,555 Exchange Act reporting companies (excluding asset-backed issuers, shell companies, and BDCs) that filed a Form 10–K in 2024. Of these issuers, we estimate that 3,405 were eligible to use Form S–3 under General Instruction I.B.1 because they had a public float of $75 million or more.485

such as whether these issuers satisfy the Current and Timely in Exchange Act Reporting requirements. Further, the estimates in Table 1 do not account for the One-Year Seasoning requirement, which is discussed separately because companies are only affected by this requirement for up to 12 months. 486A security listed on a national securities exchange must be registered under section 12(b) of the Exchange Act. Accordingly, exchange-listed issuers are subject to the reporting requirements of
section 13(a) of the Exchange Act.
487See Form S–3, General Instruction I.B.6 (requiring that ‘‘the aggregate market value of securities sold by or on behalf of the registrant pursuant to this Instruction I.B.6. during the period of 12 calendar months immediately prior to, and including, the sale is no more than one-third of the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant’’). 488The Form 10–K filers that we reviewed were assumed to have satisfied the One-Year Seasoning requirement if none of the following forms were filed within the previous 12 calendar months relative to their fiscal end date: EFFECT, Form S– 1, Form 10–12B, Form 10–12G (including amended filings), or if the issuer filed a Form 10–K in CY 2023 and CY 2022. DERA staff manually examined relevant registration statements for the remaining issuers to identify whether the issuers were subject to the requirements of section 12 or 15(d) of the Exchange Act for a period of at least 12 calendar months relative to the filing date of their Form 10– K that was filed in CY 2024. 489See supra note 487. We identify an additional 1,023 issuers with a public float less than $75 million that are eligible to use Form S–3 pursuant to General Instruction I.B.6 because they are not shell companies and are exchange-listed.486 The aggregate market value of securities sold by or on behalf of these issuers under General Instruction I.B.6, however, cannot exceed one-third of their public float over a rolling 12-month period.487 Separately, we examine the effect of the One-Year Seasoning requirement. Out of the 5,555 Form 10–K filers in our baseline, 152 of them had been an Exchange Act reporting company for less than 12 months as of when they filed their Form 10–K in CY 2024.488 These issuers therefore do not meet the One-Year Seasoning requirement and are currently ineligible to use Form S– 3 until they have been an Exchange Act reporting company for at least 12 months.
Table 2 presents estimates for issuers
that are currently ineligible to use Form S–3 (i.e., unlisted issuers with public float less than $75 million) but would become eligible under the proposed amendments, as well as issuers currently subject to the one-third limit under General Instruction I.B.6 that would no longer be subject to such limits under the proposed amendments.489 Based on public float and exchange-listed status, we estimate that 1,127 issuers currently ineligible to use Form S–3 could become eligible under the proposed amendments and 1,023 issuers currently subject to the one-third limit would no longer face that limit under the proposed amendments. Taken together, we estimate that Form S–3 eligibility without capital raising limits would be extended to 2,150 additional issuers under the proposed amendments. EP26MY26.222</GPH>

490 Initial proposed proceeds data is based on DERA staff review of Intelligize registered offerings data supplemented by manual collection of missing values. In cases where co-registrants filed a duplicate Form S–3, only one of the duplicates was counted. Only the initial Form S–3 filings (i.e., excluding amendments) were included in the analyses. There are some filings for which initial proceeds data could not be determined. For example, of the 976 Form S–3 filings in CY 2024, 41 did not contain data on initial proposed proceeds. Initial proposed proceeds come from Exhibit 107 of the initial registration statement (i.e., excluding amendments). They represent the maximum aggregate offering price and therefore do not necessarily reflect the actual amount of capital raised using Form S–3. These counts do not distinguish between Forms S–3 that went effective and those that did not. These statistics do not include Form S–3ASR filings, which are discussed later in this section. Finally, the counts do not include Form S–3D filings. There were only eight Form S–3D filings filed in CY 2024 and six Form S–3D filings filed in each of the preceding three years. 491We use Intelligize to identify whether a Form S–1 filing is related to an IPO. Intelligize categorizes Form S–1 filings into different offering types such as ‘‘Follow-On Offering/Primary’’ or ‘‘IPO/ Primary.’’ We remove any Form S–1 filing with an offering type that includes ‘‘IPO’’ in the name (e.g., IPO/Bank Conversion, IPO/Piggyback, IPO/Primary, IPO/Secondary, IPO/Spinoff, etc.). The remaining Form S–1 filings are identified as non-IPO Form S– 1 filings. There were 35 instances for which Intelligize did not provide a category, so we manually checked these 35 filings to identify offering type. 492 Initial proposed proceeds data is based on DERA staff review of Intelligize registered offerings data supplemented by manual collection of missing values. In rare cases where multiple entities filed a duplicate Form S–1, one of the duplicates was not counted. Only the initial unamended filings (Form S–1) were included in the analyses. Of the 705 Form S–1 filings, eight did not contain data on initial proposed proceeds. Initial proposed proceeds come from Exhibit 107 of the initial registration statement. They represent the maximum aggregate offering price and therefore do not necessarily reflect the actual amount of capital raised using Form S–1. Finally, this count does not distinguish between Forms S–1 that went effective and those that did not.
Table 3 provides statistics on Form S–
3 usage in CY 2020 through CY 2024.
There were 976 Form S–3 filings (excluding amendments) that were made in CY 2024. The total amount of proceeds that issuers registered for offerings through these Form S–3 filings made in 2024 was $193 billion, with an average (median) of $206 million ($71 million) per filing.490 With respect to Form S–1, we identified 933 filings (excluding amendments) that were filed in CY
2024. Because the proposed
amendments primarily pertain to follow-on offerings, we provide statistics for Form S–1 filings that were identified as not being related to IPOs.491 Table 4 provides statistics on Form S–1 usage between CY 2020 and CY 2024 that did not pertain to IPOs (‘‘non-IPO Form S–1 filings’’). There were 705 non-IPO Form S–1 filings in 2024 with combined initial proposed proceeds of roughly $72 billion and an average (median) of $103 million ($11 million) per filing.492 Of the 705 non￾IPO Form S–1 filings, 75 filings (roughly EP26MY26.223</GPH> EP26MY26.224</GPH>

493For instance, these issuers could be using Form S–1 because although they had a public float greater than $75 million, they may not have satisfied one or more of the other Form S–3 eligibility requirements (e.g., they may not have been timely in their Exchange Act reporting). 494See supra note 224. 495 Initial proposed proceeds data is based on DERA staff review of Intelligize registered offerings data supplemented by manual collection of missing values. Only the initial unamended filings (Form S–
11) were included in the analyses. There is one
filing in 2021 for which initial proceeds data could not be determined. Initial proposed proceeds come from Exhibit 107 of the initial registration statement. They represent the maximum aggregate offering price and therefore do not necessarily reflect the actual amount of capital raised using Form S–11. 496As discussed in section II.B.1, above, some Enhanced Registration and Communication Benefits are available to certain non-WKSIs that are Form S– 3 eligible. 497Registrants are required to check a box on their annual report to indicate whether they are a WKSI. For purposes of the baseline, we identify WKSI status based on registrants that have checked the box on their annual report. 498See supra section II.B.1. 11 percent) were filed by issuers with a public float of $75 million or more. While some or all of these issuers may not have been eligible to use Form S– 3 due to reasons beyond the public float requirement,493 some of them could have chosen to use Form S–1 instead of Form S–3. Still, it is evident that Form S–3 is generally preferred over Form S– 1 to raise capital. As noted in section II.A.2.b.i., by eliminating the public float requirement, the proposed amendments would allow certain REITs without a public float, which currently register offerings on Form S–11, to use Form S–
3.494 Table 5 provides statistics on Form
S–11 usage between CY 2020 and CY
2024. There were 13 initial Form S–11
filings that were filed in CY 2024. The total amount of proceeds that issuers registered for offering through the initial Form S–11 filings made in 2024 was $26 billion, with an average (median) of $2 billion ($400 million) per filing.495 With respect to WKSIs and other seasoned issuers, we estimate the number of issuers currently eligible for some or all of the Enhanced Registration and Communication Benefits as well as the number of issuers currently not eligible for those benefits but that would become eligible under the proposed amendments.496 We identified the current population of WKSIs by reviewing Form 10–K filings in CY 2024 to see how many issuers had self￾identified as a WKSI via a check box in their Form 10–K.497 As reported in
Table 6, there were 2,039 Form 10–K
filers (excluding asset-backed issuers, shell companies, and BDCs) that self￾reported as WKSIs in CY 2024. One thousand eight hundred thirty-three, or roughly 90 percent, of these WKSIs have a public float of $700 million or more, suggesting that the other 206, or 10 percent, of them met the other requirements of the current WKSI definition: either (i) issued at least $1 billion aggregate principal amount of non-convertible securities, other than common equity, in the last three years, or (ii) are majority-owned subsidiaries of parents that are WKSIs and are conducting certain specified registered offerings.498 The remaining 215 Form 10–K filers with a public float of $700 million or more that did not identify as WKSIs may not have qualified as a WKSI because they do not meet certain Form S–3 eligibility requirements (e.g., the issuer has failed to file a report in a timely manner during the preceding 12 calendar months or has defaulted on indebtedness or a long-term lease), or they are considered an ineligible issuer under Rule 405. EP26MY26.225</GPH> EP26MY26.226</GPH>

499See section II.B.2 for a discussion of the Enhanced Registration and Communication Benefits available to ELIs and SELIs under the proposed amendments. 500See supra note 496. 501For example, existing domestic WKSIs that are not exchange-listed currently can use all of the Enhanced Registration and Communication benefits. Because those issuers are not exchange￾listed, however, they generally would not qualify as an ELI or SELI under the proposed amendments (unless they are a majority-owned subsidiary of an ELI or SELI). The proposed amendments would not affect the Form S–3 eligibility status of existing domestic WKSIs, regardless of whether they are exchange-listed. 502 2,039¥1,855 = 184. 503See supra section II.B.2.b. 504The number of non-WKSI issuers with public float less than $75 million that are exchange-listed (1,012) is different from the number of exchange￾listed issuers with public float less than $75 million reported in Table 1 (1,023). The difference can be explained by 11 WKSIs that have public float less than $75 million.
Table 7 estimates the number of
issuers that would be eligible for the Enhanced Registration and Communication Benefits under the proposed amendments. There were 4,203 issuers that would likely be ELIs under the proposed amendments and qualify for most of the Enhanced Registration and Communication Benefits (i.e., all of the benefits other than automatic shelf registration), and 4,114 of these ELIs would likely also be SELIs under the proposed amendments and qualify for all Enhanced Registration and Communication Benefits (including automatic shelf registration).499 These estimates are based on exchange-listed status and how long the issuers have been subject to the Exchange Act’s reporting requirements for reporting companies— not including asset-backed issuers, shell companies, or BDCs—that filed a Form 10–K in CY 2024.500 These estimates do not incorporate factors that we could not reasonably quantify, such as whether issuers were current and timely in Exchange Act reporting, and therefore may overstate the actual number of potential ELIs and SELIs. The proposed amendments are expected to affect issuers differently based on their current Form S–3 eligibility and WKSI status. For example, current WKSIs that file domestic reports already qualify to use Form S–3 and already may use all of the Enhanced Registration and Communication Benefits. Therefore, the direct impact of the proposed amendments on most current WKSIs should be minimal. Some current WKSIs that file domestic reports, however, would become ineligible for some of the Enhanced Registration and Communication Benefits under the proposed amendments.501 Table 8 reports that, of the 4,203 issuers that would likely be ELIs under the proposed amendments, 1,855 are WKSIs and therefore currently are eligible for all of the Enhanced Registration and Communication Benefits. Based on the 2,039 WKSIs reported in Table 6, this suggests that up to 184 WKSIs 502 could potentially lose some of the Enhanced Registration and Communication Benefits because they would not be ELIs under the proposed amendments. This effect would be mitigated, however, to the extent that these WKSIs are majority-owned subsidiaries of ELIs or SELIs under the proposed amendments and are conducting certain specified registered offerings.503 The effect would be mitigated further to the extent these issuers choose to list on a national securities exchange. The remaining 2,348 issuers that would likely be ELIs under the proposed amendments, but are not currently WKSIs, would become newly eligible for many of the Enhanced Registration and Communication Benefits under the proposed amendments. Further, 1,012 of these issuers that currently are eligible to conduct only limited primary offerings on Form S–3 of up to the equivalent of one-third of their public float over any period of 12 calendar months under General Instruction I.B.6 would become eligible to use Form S–3 without such limits and also likely would be ELIs and, therefore, eligible for some or all of
the Enhanced Registration and Communication Benefits under the proposed amendments.504 The ELIs that have been subject to the Exchange Act’s reporting requirements for a period of at least 12 calendar EP26MY26.227</GPH> EP26MY26.228</GPH>

505We identified three issuers that do not meet the One-Year Seasoning requirement but are WKSIs because each of them is a majority-owned subsidiary of a WKSI. Therefore, these issuers would be SELIs by virtue of majority-owned subsidiary status. This results in 1,855 current WKSIs that would become SELIs. 506We identified an additional 61 Form S–3ASR filings that were filed by issuers that were not classified as WKSIs in our analysis. This phenomenon could be the result of timing differences between when the Form S–ASR was filed and the release of the Form 10–K from which WKSI status was determined. It could also be the result of a filing error or an issuer’s failure to check the WKSI box on the cover of its Form 10–K. This breakdown excludes WKSIs that filed a Form S–3D (of the eight Form S–3D filings in 2024, three of them were filed by a WKSI). months would also be SELIs. Of the 4,114 issuers that would likely be SELIs under the proposed amendments, 1,852 of them currently are WKSIs and therefore already are eligible for the benefits that would be available to SELIs under the proposed amendments.505 The remaining 2,262 issuers that are not currently WKSIs would be newly eligible for all of the Enhanced Registration and Communication Benefits under the proposed amendments. Further, 951 of these issuers that currently are eligible to conduct only limited primary offerings on Form S–3 of up to the equivalent of one-third of their public float over any period of 12 calendar months under General Instruction I.B.6 would become eligible to use Form S–3 without such limits and also likely would be SELIs and therefore eligible for all of the Enhanced Registration and Communication Benefits. Currently, WKSIs can file automatic shelf registration statements on Form S– 3 (which have the submission type Form S–3ASR in EDGAR). Table 9 presents the number of Form S–3 filings and the number of automatic shelf registration statements on Form S–3 filed by WKSIs during CY 2024. The data suggests that WKSIs tend to use automatic shelf registration statements, as 92 percent of the Form S–3 filings by WKSIs were automatic shelf registration statements.506 There were 44 Form S–3 filings that were made by WKSIs that were not automatic shelf registration statements. It is not entirely clear why automatic shelf registration was not used in these instances, but two possibilities are that some or all of these self-reported WKSIs were not in fact WKSIs at the time of filing the registration statement, or that the issuers were WKSIs but elected not to utilize automatic shelf registration for other reasons. EP26MY26.229</GPH> EP26MY26.230</GPH>

507For a more detailed description of the applicable requirements of Form S–3, see supra
section II.A.1.a.
508See Form S–3, General Instruction I.A.1. 509See Form S–3, General Instruction I.A.2. 510See Form S–3, General Instruction I.A.3(a). 511See id. 512See Form S–3, General Instruction I.A.3(b). 513See Form S–3, General Instruction I.A.4. 514See Form S–3, General Instruction I.A.7(a). 515See Form S–3, General Instruction I.A.7(b). 516See Form S–3, General Instruction I.A.5. 517See Form S–3, General Instruction I.A.6. See also supra note 62 for a description of the specified conditions. 518See 17 CFR 230.415(a)(1)(x). 519Regarding WKSIs, this includes information as to whether an offering is a primary or secondary offering, the plan of distribution for the securities, a description of the securities to be offered other than an identification of the name or class of such securities, and the identification of other issuers. See 17 CFR 230.430B(a). 520See supra section II.A for a discussion of the current Form S–3 registrant requirements. The registrant requirements in General Instruction I.A of Form F–3 and General Instruction A.2.a and A.2.b of Form N–2 are consistent with the registrant requirements in Form S–3. 521See 17 CFR 230.405, paragraphs (ii)(A), (ii)(B)(1), (ii)(B)(2), and (ii)(C) of the definition of ‘‘well-known seasoned issuer.’’ 522An issuer cannot be a WKSI if it is an ineligible issuer, as defined in Rule 405, an asset￾backed issuer, as defined in 17 CFR 229.1101(b), or an investment company registered under the Investment Company Act (other than a registered closed-end investment company). See 17 CFR 230.405. b. Current Regulatory Requirements Consistent with the discussion in
section II above, this section provides a
general overview of the applicable regulatory requirements.
i. Form S–3
Form S–3 is a short-form registration statement currently available to issuers that satisfy the form’s registrant requirements and at least one of the form’s transaction requirements.507 As discussed in section II.A.1.a above, an issuer must satisfy the current registrant requirements related to U.S. Issuer status,508 Exchange Act Reporting,509 One-Year Seasoning,510 Current in Exchange Act Reporting,511 Timely in Exchange Act Reporting,512 Certain Failures to Make Payments and Defaults,513 Electronic Filings,514 and Interactive Data Files requirements.515 Foreign issuers, other than foreign governments, currently can use Form S– 3 if they satisfy all the registrant requirements, other than the ‘‘U.S. Issuer’’ eligibility requirement, and file the same Exchange Act reports as domestic issuers.516 Additionally, successor registrants may use Form S– 3 if specific conditions are met.517 In addition to satisfying the registrant requirements, an issuer also must satisfy at least one of Form S–3’s transaction requirements in order to use the form. For example, under current General Instruction I.B.1, an issuer may register any primary offering of its securities on the form if, among other requirements, the issuer’s public float is $75 million or more. If an issuer does not have a public float of $75 million or more, it may still use Form S–3 if it meets one of the other transaction requirements. For example, under current General Instruction I.B.6, an issuer that is not a shell company may register any primary offering if it is exchange-listed and the aggregate market value of securities sold by or on behalf of the issuer under the instruction during the 12 months immediately prior to, and including, the sale is no more than one-third of the issuer’s public float. The ability to use Form S–3 confers several benefits on eligible issuers. For example, issuers eligible to use Form S– 3 for primary offerings are permitted to conduct immediate, continuous or delayed offerings (including ‘‘at the market’’ offerings) under Rule 415 518 and omit certain information from the base prospectus under Rule 430B.519 Additionally, Form S–3 permits issuers to backward and forward incorporate by reference its Exchange Act filings.
ii. WKSI Eligibility
An issuer may qualify as a WKSI if, as of the date on which its status as a WKSI is determined, it:

• Meets the registrant requirements of
  General Instruction I.A of Form S–3 or Form F–3, or General Instruction A.2.a and A.2.b of Form N–2,520 and either:
  Æ as of a date within 60 days of its eligibility determination date, has a public float of $700 million or more; or Æ as of a date within 60 days of its eligibility determination date, has issued in the last three years, at least $1 billion aggregate principal amount of non-convertible securities, other than common equity, in primary offerings for cash, not exchange, registered under the Securities Act.
• Is a majority-owned subsidiary of a
  parent that is a WKSI where the following securities are to be registered:
  Æ non-convertible securities (other than common equity) of the majority￾owned subsidiary that are fully and unconditionally guaranteed by the parent; or Æ the securities of the majority-owned subsidiary are guarantees of:
  D non-convertible securities (other than common equity) of the parent; or D non-convertible securities (other than common equity) of another majority-owned subsidiary that also are guaranteed by the parent; or Æ the securities of the majority-owned subsidiary meet the conditions of General Instruction I.B.2 of Form S–3 or Form F–3.521 Among other things, WKSI status also is conditioned on the issuer not being an ‘‘ineligible issuer,’’ as that term is defined in Rule 405.522 If an issuer qualifies as a WKSI, it is eligible to use all of the Enhanced Registration and Communication Benefits. The following table sets forth the Enhanced Registration and Communication Benefits currently available to WKSIs and notes whether those benefits are available to non￾WKSIs:
  BILLING CODE 8011–01–P

EP26MY26.231</GPH>

523See Form S–1, General Instruction VII.A. 524See Form S–1, General Instruction VII.B. 525See Form S–1, General Instruction VII.D. 526See Form S–1, General Instruction VII.F. 527See Form S–1, General Instruction VII.E. 528 15 U.S.C. 77r(a)(1) through (3). BILLING CODE 8011–01–C
iii. Form S–1
Issuers that are ineligible to file on Form S–3 often register their offerings on Form S–1, which has fewer eligibility requirements than Form S–3. Form S–1 is the default form that issuers can use to register securities offerings under the Securities Act. Form S–1 is referred to as the ‘‘default’’ form because it may be used by any issuer, other than foreign governments and asset-backed issuers, for an offering for which no other form is authorized or prescribed and without any additional eligibility requirements. There are some other differences between Form S–1 and Form S–3. For example, issuers filing registration statements on Form S–1 are not permitted to register primary shelf offerings under Rule 415 and therefore cannot register securities in advance of an actual offering. Form S–1 permits issuers to backward incorporate previously filed Exchange Act reports if they satisfy the form’s eligibility criteria to incorporate by reference. General Instruction VII of Form S–1 sets forth the requirements an issuer must meet to be eligible to incorporate by reference. All issuers that meet those requirements are permitted to backward incorporate. Items 11A and 12 of Form S–1 contain related provisions (as discussed in section IV.C.3 below), and Item 12(b) of Form S–1 addresses forward incorporation. In order to be eligible to incorporate by reference on Form S–1, an issuer currently must meet the following requirements: Exchange Act Reporting; Current in Exchange Act Reporting; 523 Annual Report Filed; 524 Blank Checks, Shells, Penny Stocks, and Business Combinations; 525 and internet Access to Exchange Act Reports.526 In addition, successor registrants may incorporate by reference on Form S–1 if specific conditions are met.527 Form S–1 does not, however, permit issuers other than SRCs to automatically update information in the prospectus via forward incorporation of their Exchange Act filings.
iv. Definition of Covered Security and
Preemption of State Securities Law Registration and Qualification
Section 18(a) of the Securities Act
provides, in relevant part, that no law, rule, regulation, order, or other administrative action of any State (or political subdivision thereof) requiring (or with respect to) the registration or qualification of securities or securities transactions shall directly or indirectly:
(1) apply to a covered security or to a security that will be a covered security upon completion of the transaction; (2) prohibit, limit, or impose any conditions upon the use of any offering document that is prepared by or on behalf of the issuer, among other things; or (3) prohibit, limit, or impose any conditions based on the merits of such offering or issuer, upon the offer or sale of any covered security.528 Currently, the term ‘‘covered securities’’ does not encompass all securities offered and sold pursuant to a registered offering. Many securities offered and sold pursuant to a registered offering are covered securities because they are listed or approved for listing on a national securities exchange. Any unlisted securities offered or sold pursuant to a registered offering, EP26MY26.232</GPH>

529See supra section II.F.1 for a more detailed discussion of preemption of State securities law registration and qualification requirements. 530See Rule 3–12 of Regulation S–X for non-SRCs (17 CFR 210.3–12) and Rule 8–08 of Regulation S– X for SRCs. (17 CFR 210.8–08). For a more detailed description of these requirements, see supra section II.G.2.a. 531Under Rule 3–01(i)(1) of Regulation S–X, the grace period is 14 days for a large accelerated filer, 29 days for an accelerated filer, and 44 days for all other registrants (other than SRCs, which are governed by Rule 8–08 of Regulation S–X). 532 Id. 533See Rule 8–08(b) of Regulation S–X. 534See Filer Status Proposal. Additionally, the Filer Status Proposal would eliminate accelerated filer and SRC filer statuses. Id. 535LAFs would remain subject to existing non￾scaled disclosure requirements. Id. The Filer Status Proposal would align reporting requirements and deadlines more closely with company size, so that the largest companies (by market capitalization) continue to provide the most comprehensive and timely disclosures, while smaller companies benefit from reduced regulatory burdens. 536 Id. 537 Id. Specifically, the proposed amendments would extend smallest non-accelerated filers filing deadline for Form 10–K from 90 days to 120 days after fiscal year end, as well as their filing deadline for Form 10–Q from 45 days to 50 days after fiscal quarter end. 538See Semiannual Reporting Proposal. 539The average of net assets of registered interval funds is $735 million. 540 Data on prices and shares outstanding, which is used to calculate the public float, is taken from CRSP. Since some N–CEN filers cannot be matched to CRSP, public float values are unavailable for those cases. however, would not be covered securities. Those offerings, therefore, would be subject to State securities law registration and qualification requirements. As a result, issuers conducting those offerings may need to comply with multiple and potentially disparate registration and qualification requirements in each State where they offer or sell securities.529
v. Rule 473
Section 8(a) of the Securities Act
provides that registration statements filed under that Act shall become effective on the twentieth day after filing or such earlier date as the Commission shall determine. Section 8(a) also specifies that the filing of an amendment to a registration statement establishes a new filing date and restarts the 20-day period. Rule 473 allows issuers to include a legend on the facing
page of the registration statement that
serves the purpose of delaying effectiveness of the registration statement until either: (1) the issuer files an amendment specifically stating that the registration statement will become effective in accordance with section 8(a) of the Securities Act, or (2) until the Commission accelerates the effectiveness of the registration statement. This legend is colloquially referred to as a ‘‘delaying amendment.’’
vi. Rules 3–01(c)(2) and (3) and 8–
08(b)(2) and (3) of Regulation S–X Registrants currently are not required to provide, in a registration statement or proxy statement, audited financial statements for the most recently completed fiscal year when the date of effectiveness of such registration statement or mailing date of such proxy statement falls within the first 45 days after such fiscal year end (‘‘grace period’’).530 Under Rule 3–12(b) of Regulation S–X, a non-SRC’s grace period may be extended by an additional 14 to 44 days, depending on the registrant’s filer status if it satisfies three conditions.531 Those three conditions require that the registrant is current in Exchange Act reporting, reasonably expects to report income for the most recent fiscal year, and has reported income in at least one of the two preceding fiscal years.532 Under Rule 8–08(b) of Regulation S–X, an SRC’s grace period may be extended by an additional 45 days if it meets three similar conditions.533
c. Other Proposed Commission
Rulemakings That Could Affect the Proposed Amendments Concurrently with these proposed amendments, the Commission separately is proposing amendments to streamline filer statuses for Exchange Act reporting companies. If adopted as proposed, the Filer Status Proposal would establish two primary categories of filer statuses: (1) large accelerated filers (‘‘LAFs’’) and (2) non-accelerated filers (‘‘NAFs’’).534 The Filer Status Proposal would increase the public float threshold to become an LAF from $700 million to $2 billion in public float and increase the seasoning threshold to become an LAF from 12 to 60 consecutive calendar months. The Filer Status Proposal would establish that registrants that do not qualify as LAFs would be classified as NAFs. Additionally, the Filer Status Proposal would extend to all NAFs the scaled disclosure and other accommodations currently available to SRCs and emerging growth companies 535 These accommodations would include less burdensome financial and executive compensation disclosures, omission of certain disclosures, simplified governance disclosures, and exemption from the auditor attestation requirement for internal control over financial reporting (‘‘ICFR’’).536 Finally, the Filer Status Proposal would create a subcategory for the smallest non-accelerated filers, defined as those with total assets below $35 million as of the end of an issuer’s two most recent second fiscal quarters, and extend their deadlines for filing periodic reports.537 Additionally, the Commission recently issued the Semiannual Reporting Proposal to amend the rules related to periodic reporting under the Exchange Act to allow certain reporting companies to meet their interim reporting obligations by filing either quarterly reports or semiannual reports at the election of the company.538 If adopted as proposed, a reporting company that elects semiannual reporting would file one semiannual report and one annual report for each fiscal year. Registrants that elect to report quarterly would continue to file quarterly and annual reports, as under the current procedures for reporting companies.
2. Form N–2 and Insurance Company
Issuers a. Affected Parties The proposed amendments would affect registered CEFs and BDCs. We estimated that, based on CY 2025 data, there were 871 funds that would be affected, including 699 registered CEFs and 172 BDCs. To estimate the number of registered CEFs, we rely on data extracted from Form N–CEN filings. We identify 378 registered CEFs that were exchange-listed in 2025. There were 321 unlisted registered CEFs in 2025, including 138 interval funds. The average net assets of the exchange-listed registered CEFs is approximately $597 million, while the average net assets of the unlisted registered CEFs is approximately $631 million.539 Based on trading data as of December 31, 2025, 358 of the listed registered CEFs have public float greater than $75 million (i.e., one of the transaction requirement thresholds for primary offering under the Short-Form N–2 registration instruction), and 89 of those funds have public float greater than $700 million (i.e., the WKSI public float threshold).540 We use data from Form 10–K filings in 2025 to estimate the number of BDCs. We identify 53 exchange-listed BDCs and 119 unlisted BDCs. The average net assets of the exchange-listed BDCs is approximately $1.4 billion, and the average of their total assets is $2.9 billion. Of these listed BDCs, 40 have a public float greater than $75 million and

541BDC registrant counts and assets information were obtained from issuers’ Form 10–K filings. 542This analysis uses Form N–2 family filings (N– 2, N–2/A, N–2ASR, N–2POSASR, and N–2MEF). The combined event dataset includes 2,114 chronological registration events across 589 CIKs and 650 file numbers. Filings are retained based on form type and whether they become effective. We retain automatically effective filings (N–2ASR, N– 2POSASR, N–2MEF) and traditional Form N–2/A filings made on or before the first EFFECT notice. Post-effective amendments are also retained if they become effective. Non-automatic filings lacking an EFFECT record may still be effective or simply missing data. To avoid undercounting, we retain the most recent non-withdrawn Form N–2 filing. Applying this rule produces a final filing-level dataset of 626 records: 571 N–2s, 81 N–2ASRs, 10 N–2/As, seven N–2MEFs, and two N–2POSASRs covering 538 issuers/CIKs. 22 have a public float above $700 million.541
Table 10 provides information about
the characteristics of Form N–2 filings by different categories of affected funds for filings from January 1, 2022 to December 31, 2025.542 BILLING CODE 8011–01–P

EP26MY26.233</GPH>

543The registered amount in this analysis reflects the ‘‘proposed maximum aggregate offering price’’ as stated in each filing’s fee table. In a non-shelf Form N–2, it caps a specific, non-delayed offering. In a shelf Form N–2, it represents the overall capacity available for delayed or continuous offerings. Shelf registrations had a mean of $942 million and a median of $65 million, while non￾shelf registrations had a mean of $134 million and a median of $2.6 million. For a FormN–2ASR (or Form N–2POSASR), it indicates the total intended shelf capacity (or the restated/remaining capacity). In a Form N–2MEF, the figure reflects only the incremental, top-up registration amount permitted. 544This analysis uses the most recent effective filing for each issuer to represent their current state. If a registrant had multiple active filings, we used the latest one. Therefore, Table 11 counts unique entities. BILLING CODE 8011–01–C During the analysis window, 626 effective Form N–2 family filings were identified across four registrant categories. Unlisted registered CEFs accounted for the largest share of filing activity (323 filings, 52 percent), followed by exchange-listed registered CEFs (184 filings, 29 percent), exchange￾listed BDCs (70 filings, 11 percent), and unlisted BDCs (49 filings, eight percent). Across all fund types, 82 percent of filings (512 of 626) relied on Rule 415 for delayed or continuous offerings. Rule 415 usage comprised the vast majority of Form N–2 filing activity, representing 90 percent of exchange￾listed CEFs, 76 percent of unlisted CEFs, 86 percent of exchange-listed BDCs, and 84 percent of unlisted BDCs. General Instruction A.2 qualification was present in 88 percent of exchange-listed CEF filings and 77 percent of exchange￾listed BDC filings, compared to two percent and six percent for their unlisted counterparts, respectively. Regarding automatic shelf registration under General Instruction B (Rule 462(e)), 26 percent of exchange-listed CEF filings and 41 percent of exchange￾listed BDC filings used automatic shelf procedures, compared to less than one percent of unlisted CEF filings and six percent of unlisted BDC filings. The overall mean registered amount ($791 million) substantially exceeded the median ($29 million). This imbalance was most pronounced for unlisted BDCs, where the mean was $4.3 billion against a median of $2.5 billion. For both listed and unlisted CEFs, the median registered amount was $1 million. Only 52 filings (eight percent) were declared effective pursuant to section 8(c), with the practice concentrated in unlisted CEFs (30 filings) and listed CEFs (19 filings). Post-effective amendments under Rule 413(b) were rare, with only three filings, all by exchange-listed CEFs.
Table 11 provides information about
the characteristics of registrants by different categories of affected funds from Form N–2 filings from January 1, 2022 to December 31, 2025.544 BILLING CODE 8011–01–P EP26MY26.234</GPH>

545See Registration for Index-Linked Annuities and Registered Market Adjustment Annuities; Amendments to Form N–4 for Index-Linked Annuities, Registered Market Value Adjustment Annuities, and Variable Annuities; Other Technical Amendments, Release Nos. 33–11294, 34–100450, IC–35273 (July 1, 2024) [89 FR 59978 (July 24, 2024)] at 60052. BILLING CODE 8011–01–C This analysis is based on a registrant￾level dataset of 538 unique entities that filed effective Form N–2 registration statements during the period window. Unlisted registered CEFs constitute the largest category (317 registrants, 59 percent), followed by exchange-listed registered CEFs (150 registrants, 28 percent), exchange-listed BDCs (43 registrants, eight percent), and unlisted BDCs (28 registrants, five percent). Nearly half of the registrants (256 issuers (48 percent)) are new entrants, a trend driven mostly by unlisted CEFs, where 240 of 317 registrants (76 percent) were new entrants. In contrast, new registrants represent only four percent of exchange-listed CEFs and no exchange-listed BDCs. A.2 qualification is present for 96 percent of exchange-listed CEFs and 91 percent of exchange-listed BDCs, compared to one percent of unlisted CEFs and 11 percent of unlisted BDCs. WKSI eligibility shows similar pattern:
23 percent of exchange-listed CEFs and 51 percent of exchange-listed BDCs qualify, while one unlisted CEF and three unlisted BDCs do. Listed BDCs have the highest WKSI rate of any category. Interval fund status is heavily concentrated among unlisted CEFs. Of the 153 interval funds registrants, 151 (99 percent) are unlisted CEFs and two are exchange listed CEFs. Interval funds registrants represent 48 percent of all unlisted CEF registrants. Emerging Growth Companies (EGCs) is concentrated among BDCs, with 17 of 28 unlisted BDCs and five of 43 exchange￾listed BDC registrants classified as EGCs. The proposed amendments would also affect registered RILAs and registered MVA annuities. As of December 31, 2025, there were 168 RILAs registered with the Commission issued by 30 insurance companies.545 There were also 175 registered MVA annuities registered with the EP26MY26.235</GPH>

546See id.
547CEF Offering Reform Adopting Release at
33296. BDCs and registered CEFs are permitted to
file a short-form registration statement if: (i) for either a BDC or a registered CEF, the fund meets both the registrant requirements and the transaction requirements of Form S–3 (i.e., the fund could register the offering on Form S–3 if it were an operating company); and (ii) for registered CEFs only, the fund also has been registered under the Investment Company Act for at least 12 calendar months immediately preceding the filing of the registration statement and has timely filed all reports required to be filed under section 30 of the Investment Company Act during that time. 548See id. 549BDCs and registered CEFs qualify as WKSIs if they satisfy the same $700 million float requirement that applies to operating companies. See id. at 33300. 550See id. at 33299. 551See id. 552See id. at 33306–08. 553See supra note 408. 554These favorable market conditions can include, for instance, periods of low volatility, low information asymmetry, or high valuations. See Carlson, M., Fisher, A., & Giammarino, R., SEO Risk Dynamics, REV. FIN. STUD., 23(11), pp. 4026–4077 (2010). Additional discussion about the importance Commission issued by 18 insurance companies.546 b. Current Regulatory Requirements Registered CEFs and BDCs register offerings with the Commission on Form N–2. Registered CEFs and BDCs generally are eligible to use a Short￾Form N–2 (pursuant to General Instruction A.2 of Form N–2) if they meet certain filing and reporting requirements and have a public float of $75 million or more.547 A short-form registration statement on Form N–2 functions like a Form S–3 registration statement does for operating companies, with registered CEFs and BDCs permitted to register any of the securities offerings that operating companies are permitted to register on Form S–3.548 For example, registered CEFs or BDCs can file short-form registration statements to register shelf offerings, including automatic shelf registration statements that are filed by entities that qualify as WKSIs,549 and can satisfy Form N–2’s disclosure requirements by incorporating by reference information from the issuer’s periodic reports. Further, registered CEFs and BDCs that meet the eligibility requirements are able to use the process operating companies follow to file prospectus updates pursuant to Rule 424(f).550 Also like operating companies, registered CEFs and BDCs that meet the eligibility requirements are able to rely on Rule 430B in order to omit certain information from their registration statements and rely on the prospectus to provide the omitted information.551 Finally, registered CEFs and BDCs are allowed to take advantage of certain Enhanced Registration and Communication Benefits available to operating companies, such as communications safe harbors for certain factual business information and forward-looking information, and the ability to pay filing fees at the time of the takedown.552 Insurance companies register offerings of RILAs and MVA annuities with the
Commission on Form N–4, the form used to register most variable annuities under the Investment Company Act and register the offerings of their securities under the Securities Act. Although they register with the Commission using the identical registration form as variable annuities, registered non-variable annuity advertisements rely on the FWP provisions of Rule 433. Rule 433 permits a registered non-variable annuity issuer to advertise without satisfying the prospectus delivery requirement only if the issuer would otherwise be eligible to register certain offerings on Form S–3, notwithstanding its use of Form N–4 to register offerings of the non-variable annuity.553 Rule 482 applies to registered variable annuity offerings. Rule 482 permits registered investment companies to provide advertisements or other sales material to investors without being accompanied or preceded by a statutory prospectus pursuant to certain requirements. The flexibility provided by Rule 482 allows investment companies to advertise, including broad-based advertisements for variable annuities where delivering a prospectus before or contemporaneously with the advertisement is impractical. Finally, Rule 497 requires advertisements of registered variable annuity offerings to be filed with either the Commission or FINRA.
C. Benefits and Costs
In this section, we consider the potential benefits and costs of the proposed amendments and their likely effects on efficiency, competition, and capital formation. Many of the benefits and costs are difficult to quantify or estimate with any degree of certainty. For example, it is difficult to quantify with precision the extent to which the proposed amendments would promote future use of Form S–3 or Form N–2. Similarly, there is some uncertainty regarding the effect of certain provisions in the proposed amendments would have on investor protection. Therefore, much of the discussion is qualitative in nature but, where possible, we provide quantitative estimates of the potential benefits and costs of the proposed amendments.

1. Benefits and Costs of Proposed
   Amendments to Form S–3 Eligibility Eliminating the $75 million public float requirement and all transaction requirements under General Instruction I.B would allow a broader range of issuers to use Form S–3 to conduct any type of primary or secondary offering, except for exchange offers and business combination transactions. Specifically, the proposed amendments would benefit two categories of issuers: (1) 1,127 issuers that cannot currently use Form S–3 for primary offerings because they have a public float of less than $75 million and do not have a class of common equity securities listed on a national securities exchange (and, therefore, cannot conduct limited primary offerings under General Instruction I.B.6); and (2) 1,023 issuers that are currently eligible to conduct only limited primary offerings under General Instruction I.B.6, which limits the amount of securities that can be sold in a primary offering on Form S–3 to no more than one-third of an issuer’s public float over any period of 12 calendar months. a. Benefits The proposed elimination of all transaction requirements, in conjunction with the proposed removal of the One-Year Seasoning and other eligibility requirements, would reduce the cost of capital for affected issuers, enhance their ability to raise capital, and broaden their access to investment opportunities that would otherwise be infeasible due to cost of capital constraints. These issuers would be able to conduct shelf and ATM offerings without a regulatory offering limit, thereby increasing their ability to access the public securities markets from time to time in response to changes in the market and the issuer’s capital needs. They would be eligible to register securities offerings prior to planning any specific offering and, once the registration statement is effective, issue securities in one or more offerings without waiting for further Commission or staff action. By having more control over the timing of their offerings, these issuers would be able to take advantage of favorable market conditions, thus allowing them to raise capital on more favorable terms (such as a higher equity price or lower debt interest rate) and adjust key offering terms quickly.554

of being able to take advantage of these favorable market conditions can be found within Baker, M., & Xuan, Y., Under New Management: Equity Issues and the Attribution of Past Returns, J. Fin. Econ., 121(1), pp. 66–78 (2016) and Graham, J. R., & Harvey, C. R., The Theory and Practice of Corporate Finance: Evidence from the Field, J. Fin. Econ., 60(2–3), pp. 187–243 (2001). 555See Umar, T., Yimfor, E., & Zufarov, R., Discounting Restricted Securities, J. Fin.& Quant. Anal., 58(1), pp. 419–448 (2023). 556See Autore, D., Kumar, R., & Shome, D. K., The Revival of Shelf-Registered Corporate Equity Offerings, J. Corp. Fin., 14(1), pp. 32–50 (2008). These researchers discuss how the 1992 universal shelf rule expanded the option value of shelf registration by allowing issuers to issue equity or debt without advanced notice. However, other researchers have noted that volatility is also a feature that can deter issuances more generally due to concerns about informational asymmetry from investors. See Denis, D. J., Shelf Registration and the Market for Seasoned Equity Offerings, J. Bus., 64(2), pp. 189–212 (1991) and Carlson, M., Fisher, A., & Giammarino, R., SEO Risk Dynamics, Rev. Fin. Stud., 23(11), pp. 4026–4077 (2010). 557According to recent empirical evidence, the removal of the illiquidity penalty (via registered direct offerings) tied to trading restrictions found in private placements is the key channel through which discounts fell from the 2007 expansion of Form S–3 eligibility. See Umar, T., Yimfor, E., & Zufarov, R., Discounting Restricted Securities, J. Fin. & Quant. Anal., 58(1), pp. 419–448 (2023). It should be noted that, because liquidity can vary over time, the market timing channel can remain important even public markets. 558See Gustafson, M. T., & Iliev, P., (2017). The Effects of Removing Barriers to Equity Issuance, Journal of Financial Economics, 124(3), 580–598 (2017) and Umar, T., Yimfor, E., & Zufarov, R., Discounting Restricted Securities, J. Fin. & Quant. Anal., 58(1), pp. 419–448 (2023). 559See Gustafson, M. T., & Iliev, P., (2017). The Effects of Removing Barriers to Equity Issuance, J. Fin. Econ., 124(3), pp. 580–598 (2017). General Instruction I.B of Form S–3 currently sets forth the scenarios in which issuers with less than $75 million public float can use Form S–3. 560The Baby Shelf Adopting Release has shown to have resulted in a significant increase in the proportion of smaller companies that issue equity in registered offerings. For companies with public float between $10 million and $70 million affected by the Baby Shelf Adopting Release, the percentage of registered equity offerings rose from 30 percent in 2007 to 85 percent in 2008. By comparison, companies with public float between $80 million and $150 million saw their share of public issuances rise from 70 percent to 95 percent over the same period. By 2012, the gap in registered equity offerings between these two groups (85 percent versus 95 percent) had nearly
disappeared. Researchers interpret these findings as evidence that ‘‘many PIPEs were a second-best alternative used because small companies could not access the more efficient shelf registration.’’ See Gustafson, M. T., & Iliev, P., The Effects of Removing Barriers to Equity Issuance, J. Fin. Econ., 124(3), 580–598 (2017). Researchers also observed very few debt offerings by small issuers occurred in their sample from 2002–2012, as consistent with prior research showing that the smallest quartile of public issuers rely on private markets for 99 percent of their debt. Accordingly, their analysis focuses primarily on equity offerings. See id. See also Gomes, A., & Phillips, G., Why Do Public Firms Issue Private and Public Securities?, J. Fin. Intermed., 21(4), pp. 619– 658 (2012). 561 ‘‘The net effect is a 5.7 percentage point or 49% increase in the annual probability of raising equity.’’ See Gustafson, M. T., & Iliev, P., The Effects of Removing Barriers to Equity Issuance, J. Fin. Econ., 124(3), pp. 580–598 (2017). 562We expect these benefits to also apply to issuers who currently are eligible to conduct limited primary offerings on Form S–3. 563For newly Form S–3 eligible issuers to see the same benefits (e.g., reductions in cost of capital) that entities experienced after becoming newly eligible as a result of the Baby Shelf Adopting Release, these newly eligible issuers must take advantage of their ability to conduct shelf offerings and conduct such offerings during, for instance, favorable market conditions. 564See Gustafson, M. T., & Iliev, P., The Effects of Removing Barriers to Equity Issuance, J. Fin. Econ., 124(3), pp. 580–598 (2017). The authors also note that leverage decreased for companies affected by the Baby Shelf Adopting Release as issuers were observed to be raising more equity proceeds while no change was seen in total debt issuance frequency or debt proceeds. Further research more broadly indicates that the relationship between capital raised and subsequent investment is particularly strong for companies with low market-to-book ratios. See Kim, W., & Weisbach, M. S., Motivations for Public Equity Offers: An International Perspective, J. Fin. Econ., 87(2), pp. 281–307 (2008). 565See DeAngelo, H., DeAngelo, L., & Stulz, R. M., Seasoned Equity Offerings, Market Timing, and the Corporate Lifecycle, J. Fin. Econ., 95(3), pp. 275–295 (2010). 566See Kim, W., & Weisbach, M. S., Motivations for Public Equity Offers: An International Perspective, J. Fin. Econ., 87(2), pp. 281–307 (2008). Research on the effects of the Baby Shelf Adopting Release indicates that issuers of equity in shelf offerings were able to complete their offerings more quickly, as individual takedowns from shelf registration statements generally are not reviewed by Commission staff (unlike offerings on FormS–1, which require staff action before securities may be offered or sold).555 Research also suggests that the ability to conduct shelf offerings creates option
value—such as the flexibility to defer or abandon offerings—which becomes more valuable for issuers with higher volatility (i.e., more uncertainty in market conditions).556 In addition, we expect that these proposed amendments would enable smaller issuers to raise more capital through public offerings than they otherwise would be able to if they sought other financing alternatives, such as conducting exempt offerings. These issuers could also avoid pricing discounts often associated with exempt offerings to compensate for the illiquidity of restricted securities.557 Recent studies reveal that prior Commission amendments expanding Form S–3 eligibility to smaller issuers have resulted in meaningful declines in offering discounts (i.e., the discount of the offering price relative to the market price).558 Specifically, researchers have found that following the Baby Shelf Adopting Release, issuers with less than $75 million in public float experienced a significant reduction in offering discounts relative to issuers unaffected by that change.559 This decrease in issuers’ cost of capital was accompanied by increased public equity issuances and a transition away from reliance on exempt offerings, specifically, private investments in public equity (‘‘PIPEs’’).560 Notably, the net effect of this transition was an increase in equity issued.561 If newly Form S–3 eligible issuers 562 behave similarly to those issuers affected by the Baby Shelf Adopting Release and choose to utilize shelf offerings—meaning the proposed amendments facilitate more efficient capital raising 563—we can expect significant reductions in the cost of capital for these smaller issuers. In addition, a lower cost of capital may enable newly Form S–3 eligible issuers to use proceeds from shelf offerings for additional investments and strategic activities. In particular, for companies facing time-sensitive investment opportunities, shelf offerings provide a mechanism to secure funding from investors more quickly and potentially at a lower cost. A study of the Baby Shelf Adopting Release found that affected issuers—i.e., issuers that became eligible to conduct limited primary offerings on Form S–3 under General Instruction I.B.6—increased investment activity by channeling proceeds from shelf offerings into capital expenditures.564 As some researchers have observed, meeting near-term cash obligations is a key motive of follow-on equity offerings.565 Other investment-related uses and strategic activities that are positively influenced by a lower cost of capital include expanding inventories, financing acquisitions, and reducing long-term debt.566 Moreover, because shelf offerings also enable issuers to more effectively raise capital at favorable prices, even if they do not have an immediate use for the funds, issuers can increase their cash reserves during periods of favorable market conditions, and then later deploy this capital to pursue investment opportunities, acquisitions, or other
strategic initiatives as they arise without the need to return to the market under (potentially) less favorable conditions. This flexibility would be especially valuable for issuers during periods of volatile markets or when the timing of investment opportunities is uncertain. Increased ability to conduct shelf offerings can also help mitigate pre￾issue selling pressure (i.e., net selling unrelated to issuer fundamentals that affects short-term, but not long-term, prices) and reduce manipulative trading by market participants external to the

567The term ‘‘pre-issue selling pressure’’ refers to increased sales of a company’s securities by its investors during the lead-up to an offering that is unrelated to the company’s fundamentals (i.e., its financial metrics) and affects the prices of the company’s securities. Those pricing effects generally do not persist in the long-term. Researchers provide evidence that 17 CFR 242.105’s prohibition on covering short sales made within five days of the offering with shares obtained in the offering was not effective in eliminating short selling near the issue date. Researchers note that no evidence of such manipulative short selling was found for shelf offerings. See Tyler R. Henry & Jennifer L. Koski, Short Selling Around Seasoned Equity Offerings, Rev. Fin. Stud., 23(12), pp. 4389– 4418 (Dec. 2010). Other researchers note that 17 CFR 242.105 cannot fully eliminate manipulative pre-issue trading because traders can replicate short sales in other markets (e.g., option markets) that put downward pressure on the issuer’s stock price. See Gustafson M. T., Price Pressure and Overnight Seasoned Equity Offerings, J. Fin. & Quant. Anal., 53(2), pp. 837–866 (2018). 568See Gustafson M. T., Price Pressure and Overnight Seasoned Equity Offerings, J. Fin. & Quant. Anal., 53(2), pp. 837–866 (2018). See also Safieddine, A., & Wilhelm Jr, W. J., An Empirical Investigation of Short-Selling Activity Prior to Seasoned Equity Offerings, J. Fin., 51(2), pp. 729– 749 (1996). 569 ‘‘Accelerated offerings’’ are a type of shelf offering that is executed very quickly—often within one or two trading days—after the issuer announces the deal. There is typically no road show; instead, underwriters reach out to a select group of institutional investors to build the order book quickly. Accelerated offerings include accelerated bookbuilds and bought deals. 570Research attributes the growth of overnight shelf offerings—from 7 percent of overnight shelf offerings in 2000 to approximately 75 percent in 2014—to technological advances that have improved information dissemination and execution speed. See Gustafson M. T., Price Pressure and Overnight Seasoned Equity Offerings, J. Fin. & Quant. Anal., 53(2), pp. 837–866 (2018). 571 In particular, the speed and unpredictability of shelf-registered accelerated or overnight offerings, which are made possible by shelf registration, limits the window in which traders can anticipate and exploit an upcoming offering. This reduces the window of opportunity and makes it much harder for market participants to engage in manipulative trading strategies that would otherwise depress the issuer’s stock price prior to the offering. See Gustafson M. T., Price Pressure and Overnight Seasoned Equity Offerings, J. Fin. & Quant. Anal., 53(2), pp. 837–866 (2018). 572See Tyler R. Henry, Jennifer L. Koski, Short Selling Around Seasoned Equity Offerings, Rev. Fin. Stud., 23(12), pp. 4389–4418 (Dec. 2010); and Dutordoir M., Strong N., & Sun P., Shelf versus
Traditional Seasoned Equity Offerings: The Impact of Potential Short Selling, J. Fin. & Quant. Anal., 54(3), pp. 1285–1311 (2019). When the issuer sets the offering price at a discount relative to the closing price the day before the offering, a trader could manipulate the offering discount via short selling, which affects the order flow that helps determine the offering discount, see Gerard, B., & Nanda, V., (1993). Trading and Manipulation Around Seasoned Equity Offerings, J. Fin., 48(1), pp. 213–245 (1993). Manipulative short selling can occur through trading strategies designed to artificially depress the stock price prior to an offering, with the intent of influencing the offering price or increasing the offering discount. On the other hand, informed short selling refers to trading based on investors’ own proprietary information about the issuer’s fundamentals and is not inherently manipulative or harmful to market integrity. Other researchers have also observed that ‘‘a substantial portion of short sellers’ trading advantage comes from their ability to analyze publicly available information.’’ See Engelberg, J. E., Reed, A. V., & Ringgenberg, M. C.,How Are Shorts Informed?: Short Sellers, News, and Information Processing, J. Fin. Econ., 105(2), pp. 260–278 (2012). Therefore, informed short selling refers to trading based on superior analysis of public information or an investor’s own proprietary information with the anticipation that the stock price will decrease. In contrast to manipulative short selling, informed short selling can improve market efficiency by accelerating the incorporation of negative news into stock prices. 573See Bortolotti, B., Megginson, W., & Smart, S. B., The Rise of Accelerated Seasoned Equity Underwritings, J. Appl. Corp. Fin., 20(3), pp. 35–57 (2008). For instance, according to researchers, the sum of gross underwriter spread and professional service expenses paid by the issuer scaled by offer proceeds are on average one percent lower for shelf offerings relative to non-shelf offerings. See Autore, D., Kumar, R., & Shome, D. K., (2008). The Revival of Shelf-Registered Corporate Equity Offerings, J. Corp. Fin., 14(1), pp. 32–50 (2008); and Gao, X., & Ritter, J. R., The Marketing of Seasoned Equity Offerings, Journal of Financial Economics, 97(1),pp. 33–52 (2010). For a more recent discussion, see Umar, T., Yimfor, E., & Zufarov, R., .Discounting Restricted Securities, J. Fin. & Quant. Anal., 58(1), pp. 419–448 (2023). 574Research shows that issuers using ATM offerings tend to be smaller with lower sales and profitability. Therefore, smaller issuers are more likely to benefit from expanded access to ATM offerings. See Billett, M. T., Floros, I. V., & Garfinkel, J. A., At-the-Market Offerings, J. Fin. & Quant. Anal., 54(3), pp. 1263–1283 (2019). 575See Humphery-Jenner, M., Karpavicius, S., & Suchard, J. A., Underwriter Relationships and Shelf Offerings, J. Corp. Fin., 49, pp. 283–307 (2018). For a given issuer,
these cost savings may depend on the market conditions and how often the issuer conducts offerings. 576Under-certified is a conceptual term used in the academic finance literature to broadly refer to an offering lacking sufficient certification, which can include but is not limited to extensive due diligence or approval by a reputable underwriter. See Denis, D. J., Shelf Registration and the Market for Seasoned Equity Offerings, J. Bus., 64(2), pp. 189–212 (1991). A poorly subscribed shelf takedown could in principle result in a steep discount to the offering price, undermining the cost-of-capital advantage typically associated with shelf offerings. As an example, researchers have found that first-time shelf issuers following an abnormally large pre-filing stock price run-up can experience steep market discounts. See Autore, D., Kumar, R., & Shome, D. K., The Revival of Shelf￾Registered Corporate Equity Offerings, J. of Corp. Fin., 14(1), pp. 32–50 (2008). 577 If an issuer is current and timely with respect to its Exchange Act reporting obligations, then investors will have access to the issuer-specific information that they need to make an informed investment decision. As such, as noted in sections I.B and II.A.2.b.i above, we believe it is appropriate to extend Form S–3 eligibility to issuers regardless of their size. There is other information about an issuer, however, that may be publicly available beyond the information required pursuant to the Exchange Act. This includes information provided by market participants such as analysts and media as well as voluntary information provided by the issuer (i.e., information the issuer voluntarily discloses beyond what is required). Furthermore, smaller companies are often younger and therefore have a less extensive Exchange Act reporting history. See, e.g., Richard Frankel & Xu Li, Characteristics of a Firm’s Information Environment and the Information Asymmetry Between Insiders and Outsiders, 37 J. Acct. & Econ. 229 (2004) (surveying prior literature and noting that ‘‘research suggests that size proxies for the amount of prior information available about a firm’’ and stating that issuer.567 Research suggests that pre￾issue selling pressure, which disadvantages issuers, can stem from traders selling existing holdings to free up cash and create space in their portfolio for newly issued shares, or from attempts to depress market prices to influence the offering price.568 Issuers conducting accelerated offerings,569 particularly overnight follow-on offerings (with zero trading days between announcement and issuance), benefit from technological advancements 570 and information dissemination that allow them to avoid much of this selling pressure and issue shares closer to the pre-announcement price.571 Other studies find that shelf offerings are effective tools against manipulative short selling (as opposed to informed short selling), which typically exacerbates offering discounts.572 In addition to the
capital market￾driven benefits of expanding Form S–3 eligibility, issuers would likely realize direct cost savings from shelf offerings. Shelf offerings generally involve lower underwriting fees and reduced professional service expenses, such as legal and accounting costs.573 The proposed amendments would allow a greater number of issuers to offer securities directly into the marketplace, via ATM equity offerings, without relying on the traditional underwriting or syndication process.574 Research further supports these cost savings, noting that shelf offerings can improve the ability to engage alternative underwriters, which enhances issuers’ bargaining power and promotes competition among investment banks, ultimately driving down fees.575 Moreover, eligibility to use Form S–3 provides issuers with the ability to file a short-form registration statement, which has lower costs as compared to a registration statement that does not permit incorporation by reference. In some circumstances, issuers conducting shelf offerings may not experience all of the benefits discussed in this section. We note, for example, that one of the key drivers of these benefits is the speed with which issuers may complete shelf offerings. If information asymmetry between an issuer and its potential investors is high, however, such issuer may lack sufficient visibility or ready demand for its shares as its offering may be viewed by investors as ‘‘under-certified.’’ 576 Such information asymmetry is more common in smaller companies, which may tend to have less publicly available information about them.577 In these

‘‘Elliot et al. (1984) hypothesize that because fewer analysts follow smaller firms, small firms’ prices do not ‘completely reflect information,’ and insiders can more successfully use private information.’’ Id. (quoting John Elliott et al., The Association Between Insider Trading and Information Announcements, 15 Rand J. Econ. 521 (1984)). See also Mark H. Lang & Russell J. Lundholm, Cross-Sectional Determinants of Analyst Ratings of Corporate Disclosures, 31 J. Acct. Rsch. 246 (1993) (providing evidence consistent with company size being positively correlated with the amount and quality of information provided). 578A ‘‘fully marketed offering’’ is a type of offering where the issuer and underwriters conduct an extensive marketing process before the sale of securities. This process typically includes roadshows and investor presentations, as well as bookbuilding (where underwriters gauge investor interest and collect indications of interest to help establish the offering price). Unlike accelerated or overnight offerings, fully marketed offerings take several days or longer to complete because of the more extensive marketing efforts. 579See Gao, X., & Ritter, J. R., The marketing of seasoned equity offerings. Journal of Financial Economics, 97(1), pp. 33–52 (2010); and Huang R, Zhang D. Managing Underwriters and the Marketing of Seasoned Equity Offerings, J. Fin. & Quant. Anal., 46(1), pp. 141–170 (2011). 580By being able to issue shares at a lower discount relative to the market price, issuers can raise the same amount of proceeds with fewer new shares created, hence less dilution. Nevertheless, while shelf offerings can reduce dilution, they may increase the frequency of offerings, which could still lead to dilution or negative price pressure if not properly managed by issuers. 581We have requested comment on whether to adopt a transition period for these issuers to preserve their Form S–3 eligibility for a time. 582See supra note 477 and accompanying text. 583The proposed amendments also would prohibit certain ineligible issuers that are at greater risk of non-compliance with Exchange Act reporting obligations from using Form S–3, and issuers would still be subject to the same reporting requirements and liability standards, both of which would help mitigate any concerns arising from information asymmetry. 584Researchers have observed that shelf offerings are often used by issuers to alleviate tight financial situations (e.g., high leverage, low cash levels). See Heron, R. A., & Lie, E., A Comparison of the Motivations for and the Information Content of Different Types of Equity Offerings, J. Bus., 77(3), pp. 605–632 (2004). For a more recent discussion see Autore, D., Kumar, R., & Shome, D. K., The Revival of Shelf-Registered Corporate Equity Offerings, J. Corp. Fin., 14(1), pp. 32–50 (2008). 585This type of corporate behavior is most pronounced in companies with high market-to-book ratios, which has been recognized in the research literature
as an extremely influential metric highlighted in the Nobel Prize-winning work of Eugene Fama. See Kim, W., & Weisbach, M. S., Motivations for public equity offers: An international perspective, J. Fin. Econ., 87(2), pp. 281–307 (2008). See Baker, M., & Wurgler, J., The Equity Share in New Issues and Aggregate Stock Returns, J. Fin., 55(5), pp. 2219–2257 (2000); Baker, M., & Wurgler, J. Market timing and capital structure. J. Fin., 57(1), pp. 1–32 (2002); Khan, M., Kogan, L., & Serafeim, G., Mutual Fund Trading Pressure: Firm-Level Stock Price Impact and Timing of SEO, J. Fin., 67(4), pp. 1371–1395 (2012); Loughran, T., & Ritter, J. R., The New Issues Puzzle, J. Fin., 50(1), pp. 23–51 (1995); and Loughran, T., & Ritter, J. R., (1997). The Operating Performance of Issuers Conducting Seasoned Equity Offerings, J. Fin., 52(5), pp. 1823–1850 (1997). 586Recent evidence from overnight offerings reveal that overnight issuance does not significantly increase the ability for issuers to time the market. See Gustafson M. T., Price Pressure and Overnight Seasoned Equity Offerings, J. Fin. & Quant. Anal., 53(2), pp. 837–866 (2018). 587See Dittmar, A., Duchin, R., & Zhang, S., The Timing and Consequences of Seasoned Equity Offerings: A Regression Discontinuity Approach, J. Fin. Econ., 138(1), pp. 254–276 (2020). But see supra note 583 and accompanying text. 588See Denis, D. J., Shelf Registration and the Market for Seasoned Equity Offering, J. BUS., 64(2) pp. 189–212 (1991) and Sherman, A. E., Underwriter Certification and the Effect of Shelf Registration on Due Diligence, Fin. Mgmt., pp. 5– 19 (1999). But see Autore, D., Kumar, R., & Shome, D. K., The Revival of Shelf-Registered Corporate Equity Offerings, J. Corp. Fin., 14(1), pp. 32–50 Continued cases, issuers may find it more advantageous to pursue a fully marketed offering,578 which can boost demand and support a higher offering price.579 Such fully marketed offerings, however, can take some time, thereby limiting some of the speed-related benefits of shelf registration. The proposed amendments are also expected to provide several benefits for investors. For follow-on equity offerings, the resulting lower cost of capital ultimately accrues to current investors while reducing dilution for existing shareholders.580 For affected issuers that would, absent the ability to conduct a shelf offering pursuant to the proposed amendments, rely on exempt offerings to raise capital, both current and prospective investors benefit from the enhanced disclosure and liability standards associated with registered offerings. In addition, the proposed prohibition on certain ineligible issuers from using Form S–3, as discussed in
section II.A.2.a.iv above, would help
protect investors by preventing offerings by issuers that may pose a higher risk of non-compliance with their Exchange Act reporting obligations. b. Costs While the proposed amendments would provide issuers and investors with certain benefits discussed above, we acknowledge that they could also give rise to several costs. Each of these potential costs is addressed, in turn, below. First, while the proposed amendments would extend the ability to conduct shelf offerings to more issuers, they also would prohibit certain ‘‘ineligible issuers,’’ as defined in Rule 405, from using Form S–3. These ‘‘ineligible issuers’’ could include issuers that currently are eligible to use Form S–3 but would become ineligible under the proposed amendments. These issuers, therefore, could lose the attendant benefits they currently enjoy.581 Second, eliminating the minimum public float requirement and the One￾Year Seasoning requirement would result in smaller issuers that may have less publicly available information (for example, voluntary disclosures, analysts, and media coverage) and a less extensive Exchange Act reporting history becoming newly eligible for Form S–3. Such issuers may have greater information asymmetry between themselves and investors.582 Greater information asymmetry between an issuer and its investors tends to increase the risk of adverse selection and moral hazard by issuers. However, the proposed amendments would help address this risk by retaining the Current and Timely in Exchange Act Reporting requirements. Those requirements help to ensure that issuers provide their investors with information necessary to make an informed investment decision and, therefore, help to mitigate information asymmetry with respect to material information.583 Third, not all newly eligible Form S– 3 issuers may conduct shelf offerings for productive purposes, such as financing positive net present value investment opportunities, or other needs like alleviating tight financial conditions.584 As researchers have observed, market￾timing motivations, especially under conditions of high information asymmetry, can prompt issuers to conduct offerings when they believe their shares are overvalued.585 Investors who purchase such overvalued shares may incur losses when prices revert to valuations as dictated by fundamental financial metrics, effectively transferring wealth from new shareholders to existing ones. Some research suggests, however, that shelf equity offerings do not readily lead to opportunistic timing by issuers.586 Nonetheless, certain risks remain. For example, there is a risk that some newly Form S–3 eligible issuers may use shelf offerings to quickly finance lower-quality acquisitions, which is a phenomenon recognized in some research literature.587 Fourth, by enabling newly Form S–3 eligible issuers to transition away from PIPE transactions, the anticipated increase in shelf offerings—and corresponding reduction in PIPE usage—as mentioned in the discussion
of the benefits, could also reduce the level of monitoring and due diligence associated with these offerings (as opposed to if these issuers were to use PIPEs). Some researchers have noted that the speed at which shelf offerings occur can limit underwriters’ ability to perform comprehensive due diligence because of the time constraints inherent with shelf takedowns.588 In contrast,

(2008) (‘‘the evidence indicates that the way firms now use shelf offerings resolves the shelf under￾certification problem and results in no larger market penalties and significantly lower underwriter fees relative to non-shelf offerings’’). In some cases, underwriters have experienced financial losses as a consequence of accelerated offerings, described above. In block trades—a form of accelerated offering—banks purchase large blocks of shares directly from issuers who may possess private information about the firm’s prospects. For examples of these cases, see discussion by Bortolotti, B., Megginson, W., & Smart, S. B., The Rise of Accelerated Seasoned Equity Underwritings, J. Appl. Corp. Fin., 20(3), pp. 35–57 (2008). We note that underwriters are held strictly liable under sections 11 and 12(a)(2) of the Securities Act for any material misstatements or omissions made in connection with a registered offering, except to the extent they can demonstrate that they conducted adequate due diligence or exercised reasonable care, respectively. Underwriters also can be held liable under section 10(b) of the Exchange Act and Rule 10b-5. Therefore, underwriters face strong incentives to develop procedures that would allow them to conduct the requisite due diligence. For instance, in the past, the practice of continuous due diligence techniques has been utilized to work within the tight time constraints associated with shelf takedowns. 589For evidence on the provision of monitoring and due diligence services by PIPE investors, see Wruck, K., Equity ownership concentration and firm value: Evidence from private equity financings. J. Fin. Econ., 23(1), pp. 3–28 (1989) and Hertzel, M., & Smith, R. L., Market Discounts and Shareholder Gains for Placing Equity Privately, J. Fin., 48(2), pp. 459–485 (1993). According to Wruck et al. (1989), a concentrated shareholder base helps increase monitoring. PIPEs lower the cost of information production. See Wu, Y., The Choice of Equity￾Selling Mechanisms, J. Fin. Econ., 74 (1), pp. 93–
119. (2004). PIPEs are also shown to be useful in
mitigating problems related to adverse selection and moral hazard for investors. See Cronqvist, H., & Nilsson, M., The Choice Between Rights Offerings and Private Equity Placements, J. Fin. Econ., 78(2), pp. 375–407 (2005) and Chaplinsky, S., & Haushalter, D., Financing Under Extreme Risk:
Contract Terms and Returns to Private Investments in Public Equity, Rev. Fin. Stud., 23(7), pp. 2789– 2820 (2010). For more recent discussion about PIPEs with regards to adverse selection and moral hazard, see Gustafson, M. T., & Iliev, P., The Effects of Removing Barriers to Equity Issuance J. Fin. Econ., 124(3), pp. 580–598 (2017). 590See id. 591For instance, researchers have pointed out how issuers can deceive investors by utilizing earnings management to push up the price of their offerings in order to boost proceeds especially in environments of high information asymmetry. See Teoh, S. H., Welch, I., & Wong, T. J., Earnings Management and the Underperformance of Seasoned Equity Offerings. J. Fin. Econ., 50(1), pp. 63–99 (1998) and Kim Y, Park M. S., Pricing of Seasoned Equity Offers and Earnings Management, J. Fin. & Quant. Anal., 40(2), pp. 435–463 (2005). 592One consequence of less underwriter diligence is also reduced revenue for underwriters. 593See Gustafson, M. T., & Iliev, P., The Effects of Removing Barriers to Equity Issuance, J. Fin. Econ., 124(3), pp. 580–598 (2017). 594See Interactive Data Adopting Release. 595For clarity, the proposed amendments to Form S–3 registrant requirements would not affect foreign issuers that do not qualify as FPIs. They would also not affect FPIs that do not file the same reports with the Commission under section 13(a) or 15(d) of the Exchange Act as a domestic registrant. 596The new category of SELIs would be a subset of ELIs—specifically, those that have been subject some research indicates that PIPEs may mitigate information asymmetry and agency problems.589 Therefore, according to those researchers, greater reliance on shelf offerings at the expense of PIPEs could exacerbate risks of adverse selection and moral hazard.590 As noted in section IV.A above, however, empirical studies of previous reforms to shelf registration have found little to no evidence supporting these risks. Fifth, one potential consequence of worsened adverse selection and moral hazard is an increase in issuer behavior that results in harm to investors, such as pump-and-dump schemes or other forms of fraud and insider manipulation.591 Some issuers may exploit expanded Form S–3 eligibility to place more offerings that lead to excessive share dilution. These types of issuer behavior, which can occur more easily when there is less Commission staff review and underwriter diligence,592 can lead to investor harm and more investor litigation against issuers that misuse the speed and flexibility afforded by shelf registration. However, historical data on class action lawsuits following the Baby Shelf Adopting Release show no material increase in litigation.593 Nevertheless, if the proposed amendments enable shelf registration for issuers with a known history of misconduct or elevated fraud risk, investor harm could rise. The proposed amendment to exclude certain ‘‘ineligible issuers’’ from Form S–3 eligibility would help mitigate this
concern. Finally, as discussed in section II.A.2.a.vi, the proposed amendments would allow issuers that are successor registrants to predecessors that are delinquent in their Exchange Act reporting obligations—and, therefore, ineligible to use Form S–3—to use Form S–3 despite the predecessor’s delinquencies. We realize that an issuer may take measures to more quickly regain Form S–3 eligibility, but we believe the likely associated costs (for example, legal, accounting, administrative, and concerns from investors) and reputational impacts would deter issuers from taking such measures. The proposed amendments also would eliminate the Electronic Filings and Interactive Data Files requirements for Form S–3 eligibility, which were designed to incentivize the transition from paper to electronic filings and to provide structured data in an Interactive Data File for the first time.594 Because issuers must now make their Commission filings electronically via EDGAR, we believe the Electronic Filings requirement is no longer necessary as a condition to Form S–3 eligibility. Similarly, as discussed in
section II.A.2.a.iii above, we believe
issuers are now sufficiently accustomed to complying with the Commission’s Interactive Data File requirements such that conditioning Form S–3 eligibility on compliance with these requirements is no longer necessary. We expect these changes to lead to a more simplified regulatory framework for issuers and should create no costs for investors. With respect to FPIs that file the same reports with the Commission under
section 13(a) or 15(d) of the Exchange
Act as a domestic registrant, the proposed amendments would exclude these entities from being able to use Form S–3.595 We expect the impact of this change to be minimal in terms of both benefits and costs as such FPIs can continue to use Form F–3, which has similar eligibility requirements and benefits in terms of short-form and shelf registration.
2. Benefits and Costs of Amendments to
Eligibility for the Enhanced Registration and Communication Benefits In addition to the significant benefits stemming from expansion of Form S–3 eligibility, there are important benefits associated with extending the Enhanced Registration and Communication Benefits to additional issuers. Under the proposed amendments, some of these benefits would be available to all Form S–3 eligible issuers, while others would be available only to ELIs and SELIs, with automatic shelf registration reserved exclusively for SELIs. a. Benefits Under the proposed amendments, the following categories of issuers that are not currently eligible for the Enhanced Registration and Communication Benefits would become eligible for some or all of these benefits:

• Listed and unlisted issuers that
  currently are not eligible to conduct primary offerings under General Instruction I.B.1 of Form S–3 that would become eligible to conduct primary offerings on that form; and
• Exchange-listed issuers that
  currently are Form S–3 eligible but are not WKSIs. Under the proposed amendments, all Form S–3 eligible issuers would be eligible for some of the Enhanced Registration and Communication Benefits. ELIs would be eligible for all of these benefits, with the exception that only ELIs that qualify as SELIs would be eligible for automatic shelf registration.596 Each of these issuers

to the Exchange Act’s reporting requirements for a period of at least 12 calendar months. 597As discussed in section IV.C.2.b. below, omitting such information can also increase the risk of adverse selection. 598See Autore, D., Kumar, R., & Shome, D. K., The revival of shelf-registered corporate equity offerings, J. Corp. Fin., 14(1), pp. 32–50 (2008). 599Registration fees are nonrefundable. See 17 CFR 230.111. Under certain circumstances, where all or a portion of the securities offered under a registration statement remain unsold after the offering’s completion or termination, or withdrawal of the registration statement, the aggregate total dollar amount of the filing fee associated with those unsold securities may be offset against the total filing fee due for a subsequent registration statement or registration statements. See 17 CFR 230.457(p). With respect to registration statements that expire in accordance with 17 CFR 230.415(a)(5), where a replacement registration statement is filed, the issuer may include on the new registration statement any unsold securities covered by the expiring registration statement. See 17 CFR 230.415(a)(6). 600An issuer benefits from an automatic shelf registration statement, as compared to a non￾automatically effective Form S–3, with respect to the speed with which the automatic shelf registration statement becomes effective. Once effective, all registration statements on Form S–3 (regardless of whether they are automatic shelf registration statements) provide issuers with the same ability to conduct a shelf takedown without prior Commission staff review. 601See Gustafson M. T., Price Pressure and Overnight Seasoned Equity Offerings. J. Fin. & Quant. Anal., 53(2), pp. 837–866 (2018). 602For a discussion, see Clinton, S. B., White, J. T., & Woidtke, T., Differences in the information environment prior to seasoned equity offerings under relaxed disclosure regulation, J. Acct. & Econ., 58(1), pp. 59–78 (2014). would face fewer restrictions with respect to registered offerings and pre￾and post-filing communications in connection with those offerings. These benefits are discussed below. First, the proposed amendments would expand the group of issuers eligible to use Rule 413 to register additional securities or additional classes of securities, including securities of a majority-owned subsidiary, via automatically effective post-effective amendments. This benefit, which is currently limited to WKSIs, would be available to ELIs and SELIs. These issuers would benefit from this expansion by avoiding the time and costs associated with preparing and filing a new, separate registration statement for the purpose of registering additional securities or additional classes of securities, including securities of a majority-owned subsidiary. This flexibility would allow a greater number of issuers to align their capital raising needs with market conditions or financing goals. For example, they would be able to add one or more
subsidiary guarantees to a debt offering, if market conditions require. Moreover, because the post-effective amendment to an automatic shelf registration statement would be automatically effective upon filing, SELIs would benefit from expedited execution and certainty in timing their offerings. Second, the proposed amendments would expand the group of issuers eligible to omit from the registration statement at the time of effectiveness the following information in reliance on Rule 430B(a):

• information as to whether an
  offering is a primary offering or an offering on behalf of persons other than the issuer, or a combination thereof;
• the plan of distribution for the
  securities;
• a description of the securities
  registered other than an identification of the name or class of such securities; and
• the identification of other issuers.
  The ability to rely on Rule 430B(a), which is currently limited to WKSIs and would be extended to all ELIs and SELIs under the proposed amendments, facilitates an issuer’s ability to conduct a shelf offering. Accordingly, issuers that become newly eligible to rely on Rule 430B(a) would gain additional registration benefits, including the ability to execute offerings more efficiently when market conditions are favorable, greater flexibility to structure offerings in response to market dynamics, and reduced administrative burdens by permitting certain information to be added later through a prospectus supplement, post-effective amendment, or an Exchange Act report that is incorporated by reference into the prospectus. Third, the proposed amendments also would expand to all Form S–3 eligible issuers the ability—with respect to resale registration statements—to omit the identities of selling security holders and amounts of securities to be registered on their behalf at the time of effectiveness in reliance on Rule 430B(b). This information can be added after effectiveness by post-effective amendment, prospectus supplement, or an Exchange Act report incorporated by reference into the prospectus. Currently, this benefit is available only to WKSIs and certain Form S–3 eligible issuers. The ability to omit this information from the initial registration statement offers issuers a more convenient method to identify selling security holders in registration statements because they can defer disclosure of this information until the time of the offering at which point there will be greater certainty as to the identities of the selling security holders. The omission of this information and whether the offering is primary or secondary can be beneficial for selling shareholders who can rapidly sell their shares in a registered offering during favorable market conditions.597 Fourth, the proposed amendments to Rules 456(b) and 457(r) would broaden access for ELIs and SELIs to pay registration fees on a ‘‘pay-as-you-go’’ basis, allowing issuers to defer payment until a takedown occurs and pay only the amount due for that offering. For issuers newly eligible for this option, the benefits include cost savings from no longer having to pay fees upfront for all potential takedowns—fees that may prove excessive if the full registered amount is not utilized. In cases where no takedowns occur (i.e., the Form S–3 filing does not lead to any shelf offering), which some research indicates is relatively common,598 ‘‘pay-as-you￾go’’ eliminates wasted fees entirely.599 For cases where the fully registered amount is used in subsequent offerings, issuers benefit from pay-as-you-go from the standpoint of the time-value of money saved by not paying the whole fee upfront. Because issuers do not have to pay these fees upfront, issuers can also benefit from this proposed amendment by registering a broader variety and greater amount of securities. This could enable issuers to maximize
  their future capital-raising options by registering multiple classes or types of securities without the cost of paying fees for securities that may never be offered. For issuers with access to automatic shelf registration, however, this particular benefit may be more limited, because even if issuers choose not to register all classes or types of securities on an automatic shelf registration statement, they can always do so later on subsequent Forms S– 3ASR because they will be automatically effective. Fifth, the proposed amendments also would expand automatic shelf registration, which is currently limited to WKSIs, to all SELIs. For these newly eligible SELIs, Form S–3 filings could become effective immediately upon filing, providing them with the ability to conduct registered offerings without Commission staff review that might otherwise occur with other Securities Act registration statements (such as a Form S–1 or a non-automatically effective Form S–3 600). Research shows that automatic shelf registration grants issuers maximum flexibility and speed for raising capital, with many offerings completed overnight.601 This flexibility and speed can also lower the cost of capital because automatic shelf registration can prevent market overhang,602 which can create downward pressure on share price as the market anticipates future dilution

603We propose to extend the applicability of certain communication rules, or specific provisions within those rules, currently limited to WKSIs, to all ELIs. We propose to amend: (i) Rule 163 to allow ELIs to engage in pre-filing communications that meet the conditions of this rule; (ii) Rule 163A(b)(2) to permit communications by ELIs made more than 30 days before a registration statement is filed in connection with a registered offering on Form S– 8; and (iii) Rule 164(g) to permit the use of FWPs by ELIs in connection with a registered offering on Form S–8. We also propose to amend Rule 433(b)(1) that would permit all Form S–3 eligible issuers to use FWPs without them being preceded or accompanied by a prospectus that satisfies the requirements of section 10 of the Securities Act. 604See Gustafson M. T., Price Pressure and Overnight Seasoned Equity Offerings, J. Fin. & Quant. Anal., 53(2), pp. 837–866, at 856 (2018). 605See Clinton, S. B., White, J. T., & Woidtke, T., (2014). Differences in the Information Environment Prior to Seasoned Equity Offerings Under Relaxed Disclosure Regulation, J. Acct. & Econ., 58(1), pp. 59–78. (2014). 606See Clinton, S. B., White, J. T., & Woidtke, T., (2014). Differences in the Information Environment Prior to Seasoned Equity Offerings Under Relaxed Disclosure Regulation, J. Acct. & Econ., 58(1), pp. 59–78 (2014). 607See Zufarov, R., (2025). Revealed Proprietary Information Disclosure, Acct. Rev., 100(2), 441–472 (2025). 608See Shroff, N., Sun, A. X., White, H. D., & Zhang, W., (2013). Voluntary Disclosure and Information Asymmetry: Evidence from the 2005 Securities Offering Reform, J. Acct. Res., 51(5), pp. 1299–1345 (2013). 609 In other words, when investors have access to richer and more timely information prior to the offering, the negative market reaction typically observed at the time of the announcement is reduced. See Shroff, N., Sun, A. X., White, H. D., & Zhang, W., (2013). Voluntary disclosure and information asymmetry: Evidence from the 2005 Securities Offering Reform, J. Acct. Res., 51(5), pp. 1299–1345 (2013). 610See Gustafson M. T., Price Pressure and Overnight Seasoned Equity Offerings, J. Fin. & Quant. Anal., 53(2), pp. 837–866 (2018). 611See Shroff, N., Sun, A. X., White, H. D., & Zhang, W., Voluntary Disclosure and Information Asymmetry: Evidence from the 2005 Securities Offering Reform, J. Acct. Res.≤, 51(5), pp. 1299– 1345 (2013) and Zufarov, R., Revealed Proprietary Information Disclosure, Acct. Rev., 100(2), pp. 441– 472 (2025). 612See Lang, M. H., & Lundholm, R. J. (2000). Voluntary Disclosure and Equity Offerings:
Reducing Information Asymmetry or Hyping the Stock?, Contemp. Acct. Res., 17(4), pp. 623–662 (2000) and more recent discussion by Shroff, N., Sun, A. X., White, H. D., & Zhang, W., Voluntary Disclosure and Information Asymmetry: Evidence from the 2005 Securities Offering Reform. J. Acct. Res., 51(5), pp. 1299–1345 (2013). 613For a discussion that suggests how companies could hype their stocks before issuing equity, see Morrissey, J. F., Rhetoric and Reality: Investor Protection and the Securities Regulation Reform of 2005, Cath. U. L. Rev., 56, 561. (2006) and Lang, M. H., & Lundholm, R. J., Voluntary Disclosure and Equity Offerings: Reducing Information Asymmetry or Hyping the Stock?, Contemp. acct. res., 17(4), pp. 623–662 (2000). For more recent discussion, see Shroff, N., Sun, A. X., White, H. D., & Zhang, W., Voluntary Disclosure and Information Asymmetry:
Evidence from the 2005 Securities Offering Reform, J. Acct. Res., 51(5), pp. 1299–1345 (2013). While researchers do not completely rule out the existence of market conditioning by issuers, their analysis shows an absence of linkage between disclosures of pre-seasoned equity offering (‘‘SEO’’) good news and abnormal returns post-SEO. See Shroff, N., Sun, A. X., White, H. D., & Zhang, W., Voluntary Disclosure and Information Asymmetry: Evidence from the 2005 Securities Offering Reform, J. Acct. Res., 51(5), pp. 1299–1345 (2013). Further research shows that more information tends to be released leading up to a SEO after the Securities Offering Reform Adopting Release, but it was usually negative, i.e., ‘‘in untabulated results, we find that management earnings forecasts provided during the month before the issue date post-SOR have a greater proportion of downward revisions, which gives additional evidence against opportunistic management earnings forecasts.’’ See Clinton, S. B., White, J. T., & Woidtke, T., Differences in the Information Environment Prior to Seasoned Equity Offerings Under Relaxed Disclosure Regulation, J. Acct. & Econ., 58(1), pp. 59–78 (2014). after the filing of a registration statement. Issuers that are concerned can reduce the window for overhang by using automatic shelf registration to minimize the time between registration and offering and avoid a prolonged period of market overhang. As a result of the proposed amendments, automatic shelf registration would facilitate immediate market access and promote efficient capital formation for a greater number of issuers. Sixth, the proposed amendments to certain rules governing pre- and post￾filing communications would allow a greater number of issuers to communicate more freely about an offering before and after a registration statement is filed by extending these benefits to ELIs.603 Seventh, the proposed amendment to Rule 139 would permit a broker or dealer participating in an offering to publish issuer-specific research reports about a broader group of issuers (i.e., any Form S–3 eligible issuer) without such reports being treated as ‘‘an offer for sale or offer to sell’’ securities that are the subject of an offering pursuant to a registration statement if the requirements of that rule are satisfied. This more relaxed communications environment would benefit more issuers by allowing them and their agents (e.g., a broker-dealer that is participating or will participate in the registered offering of the issuer’s securities) to share offering-related information and market their securities to prospective investors through a broader range of communication channels, such as FWPs and electronic road shows.604 Research indicates that such permissive communication rules, which are to be expanded to additional issuers under the proposed amendments, have historically enhanced the information environment, producing a number of positive effects that facilitate capital formation for issuers
and analysis of investment opportunities by investors.605 The specific positive effects include increases in both the quantity and accuracy of management earnings forecasts (i.e., lower error and bias), more disclosures through Form 8– K filings, and higher stock returns in the weeks preceding the offering date, with no evidence of post-issue reversals in stock returns.606 According to research, reduced information asymmetry— which, in such research, often was achieved through voluntary disclosure of proprietary information—has been shown to significantly improve the offering price.607 Further effects of diminished information asymmetry include narrower bid-ask spreads, greater market depth, and improved analyst forecast accuracy.608 These improvements to the information environment are associated with smaller stock price declines for issuers around the time of a follow-on offering announcement.609 For issuers with access to automatic shelf registration, research suggests that the ability to use FWPs, which allows such issuers to communicate with investors more freely without concerns about potential
section 5 violations, further enhances
the rapid process of conducting a registered offering via automatic shelf registration.610 Issuers may not use the Enhanced Registration and Communication Benefits to provide additional voluntary disclosures to the extent they view existing mandatory disclosure requirements of material information (e.g., Form 8–K) as sufficient or to the extent they conclude that their costs associated with voluntarily disclosing such information exceed the corresponding benefits.611 b. Costs While the proposed amendments offer significant benefits, they may also involve some potential costs. First, expanded access to the Enhanced Registration and Communication Benefits could create opportunities for some issuers to mislead the market. Newly eligible issuers might misuse these benefits by, for instance, conditioning the market—‘‘hyping’’ their offering—at the expense of investors who could experience inferior returns post-issuance.612 Research indicates that issuers have, in the past, taken advantage of these communication tools by releasing a disproportionate amount of positive information in the period leading up to an offering.613 We note, however, that issuer liability for false or misleading statements applies to all of the pre-filing and post-filing communications. In addition, investors also would have the

614Securities Offering Reform Adopting Release at 44796. 615See Item 1B of Form 10–K (17 CFR 249.310). As noted in section II.B above, the Filer Status Proposal proposes to amend Item 1B of Form 10– K to require all registrants to disclose material unresolved comments on Exchange Act filings issued by Commission staff. To the extent that proposal is not adopted, we are requesting comment on whether we should amend Item 1B of Form 10– K to require SELIs (or, alternatively, all ELIs) to comply with that item. 616See Denis, D.J., Shelf Registration and the Market for Seasoned Equity Offerings, J. Bus., 64(2), 189–212 (1991). 617Expanded access to shelf registration and Enhanced Registration and Communication Benefits would not guarantee that every newly eligible issuer would find accelerated offerings to be cost￾competitive versus other forms of raising capital. 618See Autore, D., Kumar, R., & Shome, D.K., The Revival of Shelf-Registered Corporate Equity Offerings, J. Corp. Fin., 14(1), pp. 32–50 (2008) and Grennan, J., & Musto, D.K., Who Benefits from Bond Market Modernization?, (Working Paper, Aug. 30, 2018, available at https://ssrn.com/ abstract=2713865. The former report a discount for first-time seasoned equity offering issuers experiencing a runup in stock prices before filing. The latter report a discount in the bond market for issuers who use a new covenant for the first time that appears to differ from others and when the final terms and conditions of the bond issuance are different from the registration statement. Both sets of authors find these discounts to be short-term costs. After investors become familiarized with the issuer, these penalties disappear. A related study by other researchers also finds substantial market penalties for issuers utilizing shelf registration while exhibiting high information asymmetry, see Bethel, J.E., & Krigman, L., Managing the Costs of Issuing Common Equity: The Role of Registration Choice, Q. J. Fin. & Acct., pp. 57–85 (2008). Nevertheless, we acknowledge there has been some empirical evidence that points to ‘‘lower quality issuers’’ using accelerated offerings as a way to avoid the scrutiny of a full due diligence. See Autore, D.M., Hutton, I., & Kovacs, T., Accelerated Equity Offers and Firm Quality, Eur. Fin. Mgmt., 17(5), pp. 835–859 (2011). 619See Grennan, J., & Musto, D.K., (2018). Who Benefits from Bond Market Modernization?, (Working Paper, Aug. 30, 2018), available at https:// ssrn.com/abstract=2713865. 620As a caveat, we acknowledge the possibility that investors can be misled into overpaying for securities through hyping by issuers though the empirical evidence has suggested that such behavior by issuers has generally not been very effective, see Shroff, N., Sun, A.X., White, H.D., & Zhang, W., (2013). Voluntary disclosure and information asymmetry: Evidence from the 2005 Securities Offering Reform, J. Acct. Res., 51(5), pp. 1299–1345 (2013). These researchers also point out that investors
can discount overly positive disclosures related to SEO announcements. This point is supported by analysis in the broader economics literature that discusses the ability for receivers of information to discount exaggerated statements in a more general setting. See Wittman, D., (1989). Why Democracies Produce Efficient Results, J. Pol. Econ., 97(6), pp. 1395–1424 (1989). While one concern might be that some investors are not sophisticated enough to parse out the truth, we expect this concern to be less of an issue given researchers have highlighted that investor participation in accelerated offerings tend to be primarily for institutional investors. See Bortolotti, B., Megginson, W., & Smart, S.B., The Rise of Accelerated Seasoned Equity Underwritings, J. Appl. Corp. Fin., 20(3), pp. 35–57 (2008). benefit of the complete prospectus in connection with any eventual sales. These should mitigate the risk of certain issuers misleading the market. Second, similar concerns as described above relating to adverse selection and moral hazard are also salient here, especially in the context of automatic shelf registration statements. As noted in the Securities Offering Reform Adopting Release, issuers may have less incentive to correct deficient disclosure in Exchange Act reports or in the registration statement itself than they would if their registration statements were subject to pre-effective staff review.614 We believe this concern is mitigated by the requirement to disclose any unresolved staff comments on periodic and current reports that were issued more than 180 days prior to the fiscal year end covered by the report, that the issuer considers material, and that remain unresolved at the time of filing the annual report.615 Finally, depending on issuer type and offering terms, expanded access to these benefits could lead to greater share dilution from additional offerings that might not occur under the current baseline as issuers are more likely to conduct dilutive issuances if barriers to entry (e.g., costs associated with Commission staff review of a registration statement) are decreased. While there are concerns about adverse selection and moral hazard (e.g., issuers potentially taking advantage of expanded access to the Enhanced Registration and Communication Benefits to introduce fraudulent investment opportunities to investors), there are several reasons to expect such behavior to be limited. According to research, the history of shelf registration shows that, when there is too much information asymmetry associated with the investment opportunities provided by shelf offerings, the market simply backs away despite the option for issuers to conduct shelf offerings.616 For instance, if the issuer chooses to omit information about whether the shelf offering is primary versus secondary, then the increased risk of adverse selection can induce some investors to shy away. If this holds back a sufficient amount of investor demand, then the issuer may
choose a different financing channel or simply provide the additional information sought by these investors. Here, it is important to recognize that the proposed amendments are not forcing issuers to choose one form of financing over another. As such, issuers would still be able to use other financing channels (such as PIPEs) even under the proposed amendments to the extent they view those as comparatively favorable. This implies that, if the proposed amendments expand access to shelf offerings and the Enhanced Registration and Communication Benefits to an issuer that investors do not sufficiently understand or trust when presented with an accelerated offering by that issuer, then the issuer may end up using a different route of raising capital (e.g., PIPE) due to severe offering discounts or simply a lack of investor interest.617 Research on the Enhanced Registration and Communication Benefits and shelf offerings provides evidence that, in both equity and debt markets, investors may request discounts when they have limited familiarity with a particular issuer or with that issuer’s pattern of capital raising.618 These findings relate to information asymmetries rather than to the regulatory framework itself for shelf offerings, which has been in place for many years. As the proposed amendments would expand eligibility to a set of smaller issuers that historically have not utilized Enhanced Registration and Communication Benefits, it is possible that some of these issuers could still face investor uncertainty during accelerated offerings, particularly where investors have had limited prior interaction with the issuer or where underwriters have less time to conduct due diligence. In such cases, market participants might employ contractual or procedural safeguards to mitigate these information frictions. For instance, in the bond markets, researchers have found that the growth of bond covenants and standardization is a market-driven solution (in lieu of traditional due diligence) to help issuers facilitate rapid access to public debt markets when permitted by their WKSI status.619 Similarly, for issuers that would be newly eligible for shelf offerings and the Enhanced Registration and Communication Benefits under the proposed amendments, if these frictions arise, market and issuer responses (e.g., additional disclosure, underwriter safeguards, or, where appropriate, use of existing alternative financing channels discussed in the baseline) can mitigate investor protection concerns. Accordingly, while the proposed amendments expand access to Enhanced Registration and Communication Benefits, adoption and offering choices can still be influenced by issuer characteristics and market conditions.620

621The benefits discussed in this section will not apply to FPIs as the proposed amendments would prohibit FPIs from using Form S–1. 622See Green, R.C., Presidential Address: Issuers, Underwriter Syndicates, and Aftermarket Transparency, J. Fin., 62(4), pp. 1529–1550 (2007); and Huang R, Zhang D., Managing Underwriters and the Marketing of Seasoned Equity Offerings, J. Fin. & Quant. Anal., 46(1), pp. 141–170 (2011). 623See Samuel C. Keltner, Supporting Retail Investors with AI-Enhanced Disclosure, 52 Sec. Reg. L.J. 1 (2024) (‘‘Where the Commission sought to make documents intelligible by requiring most of them to be in plain English, the Commission also made it more difficult for retail investors to find information by allowing issuers to incorporate information from other documents.’’). 624See 17 CFR 230.411(d). 625For a discussion of the role of artificial intelligence in helping retail investors process information, see Samuel C. Keltner, Supporting Retail Investors with AI Enhanced Disclosure, 52 Sec. Reg. L.J. 1 (2024). 626See Stuart R. Cohn, Securities Counseling for Small and Emerging Companies, Burdens of State Registration § 12:11 (2025–6) (two of the three ‘‘principal problem areas’’ encountered with state registration are the timing and costs). Eliminating multiple state-level reviews would likely allow issuers to move more quickly and take advantage of favorable market conditions. See id. (‘‘Review of registration statements by state administrators can be a lengthy process, depending upon such factors as issuer’s business history, complexity of the offering, risk elements, and compliance with merit regulation standards. Add to this the problem of multistate coordination, and it is easy to appreciate that state registered offerings will not necessarily proceed at a pace consistent with issuer’s desires or financial demands.’’). 627See, e.g., Cohn, Securities Counseling, Merit Review § 12:8 (describing merit review as ‘‘the authority of state administrators to deny, suspend or revoke an offering because the administrator believes that the offering has substantive weaknesses in structure, financial strength or fairness to investors’’). States with merit review may not apply their standards with equal rigor. See id. 628 2015 Regulation A Release at 21886. 629See U.S. Gov’t Accountability Off., Factors That May Affect Trends in Regulation A Offerings, GAO–12–839 (Jul. 2012), available at http:// www.gao.gov/assets/600/592113.pdf (the ‘‘GAO Report’’). The GAO Report also cites other factors that may have discouraged issuer use of the Regulation A exemption, including a comparatively low $5 million offering limit, a slow and costly filing process associated with Commission qualification, and the availability of other exemptions under the Federal securities laws. 630See Scott Bauguess et al., Capital Raising in the U.S.: An Analysis of the Market for Unregistered Securities Offerings, 2009–2017 at 2 (SEC, DERA White Paper, Aug. 2018),
available at https:// www.sec.gov/files/dera-white-paper_regulation-d_ 082018.pdf. The white paper focused on the $1 million and $5 million thresholds because Rule 504 and Rule 505 imposed offering limits of $1 million and $5 million, respectively, for the vast majority of the time period studied. The $1 million offering limit under Rule 504 was raised to $5 million on January 20, 2017, see Exemptions to Facilitate Intrastate and Regional Securities Offerings, Release No. 33–10238 (Oct. 26, 2016) [81 FR 83494, 83494 & 83514 (Nov. 21, 2016)] (‘‘Intrastate and Regional Securities Offerings Release’’), and further raised to $10 million in 2021, see Harmonization Adopting Release at 3496 & 3535. Rule 505 had a $5 million offering limit until the rule was repealed on May 22, 2017. See Intrastate and Regional Securities Offerings Release at 83494 & 83516.
3. Benefits and Costs of Amendments to
Incorporation by Reference in Form S– 1 The proposed amendments would permit incorporation by reference in Form S–1 beyond the set of issuers described in the baseline.621 The immediate benefit to affected issuers would be cost savings from not having to provide otherwise duplicative statements and avoiding associated compliance burdens. While investors would have access to the same set of information as under current rules, they may incur additional search costs to the extent they need to track down and locate relevant information through other documents. As researchers have shown, these search costs could be a barrier to accessing publicly available information.622 For instance, for some investors, piecing together disparate chunks of information could prove challenging.623 We note that this challenge has been mitigated by the Commission’s adoption of a requirement to include an active hyperlink to information incorporated by reference into a registration statement or prospectus,624 the prevalence of internet access described in section II.B above, and the increasing role of artificial intelligence tools that aid investors in summarizing and compiling information.625
4. Benefits and Costs of Amendments To
Preempt State Regulation and Qualification The proposed amendments would 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. The proposed definition of ‘‘qualified purchaser’’ would extend ‘‘covered security’’ status to securities of unlisted issuers offered and sold in connection with a registered offering, thereby preempting State securities law registration and qualification requirements for those offerings. a. Benefits The proposed preemption of State securities law registration and qualification requirements would eliminate the burdens of multiple State￾level reviews for the same registered offering, resulting in a more streamlined offering process for registered offerings. This change would likely reduce issuers’ time and compliance costs, making it less expensive to raise capital as well as accelerating the offering process.626 Each jurisdiction may have its own requirements, which typically include: (i) filing State administrative forms and other paperwork necessary for compliance with State securities law registration requirements; (ii) adhering to disclosure standards; and (iii) in some states, requirements based upon the merits of the offering or issuer.627 We do not have data to estimate costs of complying with State securities law registration and qualification requirements for registered offerings. In a previous rulemaking, however, the Commission received an estimate that for offerings made in reliance on the Regulation A exemption, an issuer seeking State securities law registration in 50 states would incur $50,000 to $70,000 in filing fees and $80,000 to $100,000 in legal fees.628 Additionally, a 2012 GAO report found that compliance with State securities law registration and qualification requirements was among the factors contributing to the infrequent use of Regulation A by small businesses, before the Commission preempted such requirements for purchasers in Regulation A Tier 2 offerings in 2015.629 Similarly, a whitepaper showed that issuers seeking to raise up to $1 million and up to $5 million in exempt offerings under Regulation D from 2009 to 2017 overwhelmingly relied on 17 CFR 230.506(b) (pursuant to which State securities law registration and qualification is preempted) even though such amounts could be raised (without preemption) under 17 CFR 230.504 (‘‘Rule 504’’) and since rescinded 17 CFR 230.505 (‘‘Rule 505’’) of Regulation D.630 Because registered offerings are often national in nature, another potential benefit of the proposed preemption of State securities law registration and qualification requirements is that issuers could broaden their search for investors across multiple states without the costs associated with registration and qualification, thereby accessing a larger investor pool at a lower cost than available without
preemption. For investors, this can also mean a reduction in regulatory frictions that might otherwise limit or delay their participation. These benefits may be more pronounced for larger offerings, which typically seek a broader investor base and are more likely to span multiple states. In addition, preempting State securities law registration and qualification requirements could benefit investors in registered offerings if issuers’ cost savings are ultimately passed on to them in the form of improved offering terms. We lack comprehensive, independent data to

631See, e.g., SEC.gov | Filing Review Process; But see, e.g., Susanna Kim Ripken, Paternalism and Securities Regulation, 21 Stanford J.L., Bus. & Fin. 1, 40 (2015) (‘‘Merit regulation, as adopted by the states, blocks investors from purchasing securities deemed too risky by state administrators. Such paternalistic interference with investors’ access to certain securities is unnecessary and inhibits capital markets.’’). 632See section 18(c)(1) of the Securities Act. 633See CEF Offering Reform Adopting Release. 634As discussed in section II.E, insurance companies that offer annuity contracts that include variable and non-variable investment options otherwise would have to apply conflicting requirements related to advertising a single annuity contract. 635See Comment Letter of the Committee of Annuity Insurers (Nov. 28, 2023) (discussing that:
(1) the absence of uniformity between the regulation of non-variable and variable annuity products complicates the compliance function; (2) issuers with both non-variable and variable products Continued estimate the precise magnitude of these potential benefits. Additionally, investors would benefit if the proposed amendments led to an increase in registered offerings. Registered offerings generally have more robust disclosure requirements than unregistered offerings and additional liability protections under the Securities Act. b. Costs We recognize that preempting State securities law registration and qualification requirements may remove an additional layer of investor protection provided by the State review process. This may include additional investor protections arising from the resources of State regulators that may help detect fraud and facilitate additional disclosure. In addition, merit-based review conducted by some states may, in some cases, offer investor protections distinct from the Commission staff’s disclosure-based review program for registered offerings.631 However, these concerns could be mitigated by the investor protections that the Federal securities laws provide for offerings registered under the Securities Act. States also will retain jurisdiction to bring anti-fraud enforcement actions.632 If, however, investors perceive greater investment risk as a result of preemption (e.g., reduced oversight from lack of State regulatory review), issuers may face a higher cost of capital.
5. Business Development Companies,
Closed-End Funds, and Registered Non￾Variable Annuity Advertising a. Business Development Companies and Closed-End Funds In addition to amending the registration and offering process for issuers that register securities on Form S–1 and Form S–3, the proposed amendments would extend similar modifications to the registration and offering process for affected funds under the Securities Act. The proposed amendments would build on amendments the Commission adopted in 2020, that streamlined the registration process for affected funds in parity with issuers that register securities on Form S–1 and Form S–
3.633 Specifically, the proposed
amendments would:

• Extend the eligibility requirements
  to use Short-Form N–2 to a broader group of exchange-listed affected funds to more quickly and efficiently respond to market opportunities; and
• Extend the Enhanced Registration
  and Communication Benefits, including automatic shelf registration and pre￾filing and post-filing communications flexibility, to a larger set of affected funds.
• Preempt State securities law
  registration and qualification requirements for non-traded BDCs that issue securities publicly, by redefining the term ‘‘qualified purchaser’’ to include securities offered and sold through a registered offering.
• Permit ELI affected funds (i.e., all
  exchange-listed BDCs and registered CEFs) to forward incorporate by reference on Form N–2.
• Revise Rule 473 to provide that
  registrants, including those who use Form N–2, would no longer need to include a delaying amendment for purposes of delaying a registration statement’s effectiveness. Because the proposed amendments are designed to provide parity across the registration, offering, and communications rules for affected funds and issuers that register securities on Form S–1 and Form S–3 where appropriate, the benefits and costs of the amendments we are proposing for affected funds are as described for issuers that register securities on Form S–1 and Form S–3, in section IV.C.1 and
  section IV.C.2.
  b. Registered Non-Variable Annuity Advertising We are proposing to amend Rule 482 to make its provisions applicable to the advertisements of registered non￾variable annuities, as defined by Rule 405 under the Securities Act. The proposal would permit a registered non￾variable annuity issuer or intermediary to engage in broad-based advertising for the registered non-variable annuity without needing to adhere to the prospectus delivery requirements, subject to certain conditions.
  i. Benefits
  This action would provide a consistent advertising framework for all registered non-variable annuities by permitting all issuers and intermediaries of registered non-variable annuities to utilize Rule 482 for their advertisements in the same way that issuers and intermediaries of variable annuities can today. Providing a consistent framework would be efficient for insurance companies and intermediaries that otherwise would have to apply conflicting requirements.634 The proposed amendments are designed to provide greater flexibility to advertise and, as a result, communicate with prospective investors, while also ensuring important investor protections. Providing insurance companies and intermediaries with greater flexibility in communicating with prospective investors could benefit investors in multiple ways. For example, certain investors, while aware of variable annuities, simply may not be aware of non-variable annuities as investment options. Communication could lead to greater investor awareness of non￾variable annuities as an investment option and also facilitate investor comparison of variable and non-variable annuities. To the extent that investors become more aware of non-variable annuities as an investment option and are better able to compare variable and non-variable annuities, investors may be more likely to make more informed decisions that better align with their investment goals. The proposed amendments could also benefit insurance companies and intermediaries. The proposed amendments would allow issuers and intermediaries to advertise non-variable annuities in ways in which delivering a prospectus before or contemporaneously with the advertisement is impractical (e.g., magazine or newspaper advertisements, television advertisements). Further, by permitting all issuers and intermediaries of registered non-variable annuities to utilize Rule 482 for their advertisements in the same way that issuers and intermediaries of variable annuities can today, the proposed amendments would provide a consistent advertising framework for all registered variable and non-variable annuities. A consistent advertising framework could provide efficiencies for issuers and intermediaries that offer both non￾variable and variable products as well as for issuers and intermediaries that offer combination contracts.635

dedicate substantial time and resources to analyzing marketing practices against differing legal frameworks; (3) issuers with both non-variable and variable products have to closely monitor the activities of business and marketing professionals, as well as financial intermediaries, to ensure that their activities are compliant with whichever framework applies to the products that they are dealing with at the time; (4) issuers offering combination contracts have to apply conflicting requirements, and insurance company families have to apply different regulatory requirements from company to company). See also Comment Letter of the Committee of Annuity Insurers (Nov. 28, 2023) and Comment Letter of Gainbridge Life Insurance Company (Nov. 28, 2023) discussing an amendment to allow all RILA issuers to use Rule 433 (which permitted Form S–3 eligible issuers to use FWPs without the prospectus delivery requirement) would eliminate a regulatory preference for variable annuity contracts over RILAs, by eliminating prospectus delivery requirements for some RILA issuers that do not apply to registered variable annuity contracts by virtue of their ability to rely on Rule 482. 636See also Comment Letter of the Committee of Annuity Insurers (Nov. 28, 2023) asserting that RILA issuers and intermediaries already file advertisements with FINRA voluntarily. 637Under the current rules, if the Commission staff does not have enough time to review the registration statement and there is no delaying amendment, the Commission may institute stop order proceedings. 638 Items 1.01 and 1.02 of Form 8–K. 639 Item 1.03 of Form 8–K. 640 Item 2.01 of Form 8–K. 641 Item 2.06 of Form 8–K. 642 Item 4.02 of Form 8–K.
ii. Costs
The proposed amendments could lead to certain additional costs for issuers and intermediaries. For example, registered non-variable annuity advertisements would be required to be filed with either us or FINRA. We understand that many insurance companies currently voluntarily file registered non-variable annuity advertisements with FINRA.636 As discussed in section II.E., the proposed amendments also would require certain disclosure and legibility requirements and not permit advertisements to contain or be accompanied by any application by which a prospective investor may invest in a registered non￾variable annuity. Because they would already have systems and processes in place to comply with Rule 482, the costs associated with complying with these provisions are expected to be mitigated for insurance companies that currently offer products subject to the rule.
6. Benefits and Costs of Proposed
Amendments to Rule 473 and Regulation S–X a. Amendments to Rule 473 The proposed amendments would revise Rule 473 to provide that effectiveness of a registration statement filed with the Commission, other than one that becomes automatically effective in accordance with our rules and forms, would be deemed to be delayed unless the issuer included on the registration statement’s facing page a legend stating that the registration statement is to become effective in accordance with the provisions of section 8(a) of the Securities Act. This change effectively means that issuers would no longer need to include a delaying amendment for purposes of delaying a registration statement’s effectiveness so as to provide the Commission staff time to review the registration statement.637 The proposed amendments would reduce the risk of being prematurely subject to section 15(d) reporting obligations and would eliminate administrative burdens, including stop order proceedings, that may result from the inadvertent omission of a delaying amendment. If an issuer wants its registration statement to become effective on the twentieth day after filing, the proposed amendments would require the issuer to affirmatively notify the Commission and the staff by including the legend described above on the facing page of the registration statement. We view this change to Rule 473 to be beneficial to issuers by streamlining compliance and lowering the risk of procedural mistakes, thereby simplifying the regulatory process without creating additional costs for either issuers or investors. b. Amendments to Reg S–X The proposed amendments to Rule 3– 01(c) and Rule 8–08(b) of Regulation S– X seek to modify requirements with regards to the age of financial statements included in a registration statement or proxy statement for non-SRCs and SRCs, respectively. Specifically, by removing the income-based conditions necessary to receive an extension to the grace period for audited financial statements for the most recently completed fiscal year, the proposed amendments would benefit issuers that do not meet the income-related conditions who may currently need to raise capital but are not eligible for these extended grace periods. This also may help reduce delays for issuers raising capital via registered offerings, or completing strategic transactions through a proxy solicitation, and may help such issuers avoid incurring additional costs associated with expediting the preparation of audited annual financial statements for the most recently completed fiscal year before they would otherwise be required in an annual report on Form 10–K. The proposed amendments to Rule 3– 01(c) and Rule 8–08(b) of Regulation S– X could, however, result in costs for investors. Issuers with no income would be able to take advantage of the extended grace periods and would have more time to provide audited financial statements for the most recently completed fiscal year, which may lead to investors having
delayed access to those audited financial statements compared to today and less information with which to make an investment decision. Issuers also may be adversely affected to the extent investors require a discount to compensate for the delay in receiving audited financial information. These potential costs may be mitigated, however, by several factors. For example, issuers would continue to be required to disclose material information on Form 8–K—such as entry into or termination of a material agreement,638 entry into bankruptcy or receivership,639 the acquisition or disposition of a significant amount of assets,640 material impairments,641 or a restatement of previously issued financial statements 642—ensuring that material developments are disclosed to the market prior to or during the extended grace period. In addition, financial results for the fiscal year may be disseminated via earnings releases prior to the extended grace period, providing investors with timely financial results even before audited financial statements are filed. Further, investors could benefit to the extent an extended period to complete an audit enhances audit quality, thereby improving the overall reliability of the financial statements. Together, these factors may help mitigate the risk of investor harm associated with the potential delays in the availability of audited financial statements under the proposed amendments.
7. Other Commission Proposals
The Commission contemporaneously has proposed amendments to streamline filer statuses for Exchange Act reporting companies. Additionally, the Commission recently proposed amendments that would permit registrants to provide a single semiannual report instead of three quarterly reports. In this subsection, we discuss the potential interactions these proposals could have with the economic costs and benefits of this proposal. a. Potential Interactions With Filer Status Proposed Amendments The proposed amendments would expand issuer eligibility to use Form S– 3, conduct shelf offerings, and use the Enhanced Registration and