PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Advocate for Small Business Applauds SEC Move to Scale Regulation for Smaller Reporting Companies

By at 28 June, 2018, 2:58 pm

For Immediate Release

Washington, D.C. – Small Business & Entrepreneurship Council president & CEO Karen Kerrigan praised today’s action by the Securities and Exchange Commission (SEC), which voted to expand the definition of a “smaller reporting company” (SRC). This change will allow a greater number of small companies to qualify for certain scaled disclosure accommodations.

“We are delighted that the Commission has taken bold but common-sense steps to scale regulation based on the size and scope of smaller companies. These high-potential companies can now allocate more of their time and capital to innovation, growing and competing in the marketplace. Such regulatory relief is a welcome step as smaller companies will be able to focus more fully on their opportunities in the growing economy. SBE Council applauds SEC Chairman Jay Clayton for his leadership and work to strengthen the public capital markets, making them more appealing for smaller companies while giving Main Street investors more investment options,” said Kerrigan.

As noted by the Commission regarding the amendment adopted today:

The new smaller reporting company definition enables a company with less than $250 million of public float to provide scaled disclosures, as compared to the $75 million threshold under the prior definition.  The final rules also expand the definition to include companies with less than $100 million in annual revenues if they also have either no public float or a public float that is less than $700 million.  This reflects a change from the revenue test in the prior definition, which allowed companies to provide scaled disclosure only if they had no public float and less than $50 million in annual revenues.  The rules will become effective 60 days after publication in the Federal Register.

The Commission estimates that 966 additional companies will be eligible for SRC status in the first year under the new definition. The amendments adopted today do not alter the threshold for “accelerated filers,” but according to the Commission the staff is exploring possible reforms.

See the SEC media release and Fact Sheet here.

CONTACT:  Karen Kerrigan, kkerrigan@sbecouncil.org

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: www.sbecouncil.org. Follow on Twitter: @SBECouncil

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