The Securities and Exchange Commission (SEC) has moved to amend the accelerated filer and large accelerated filer definitions as an effort to reduce the costs for certain lower revenue companies.
The proposed revisions would more appropriately tailor the types of companies categorized as accelerated and large accelerated filers while maintaining effective investor protections.
“The proposed rules build on the JOBS Act of 2012 and are aimed at a subset of smaller companies where the additional requirement of an ICFR auditor attestation may not be an efficient way of benefiting and protecting investors,” SEC Chairman Jay Clayton said. “Investors in these lower-revenue companies will benefit from more tailored control requirements. Many of these smaller companies – including biotech and health care companies – will be able to redirect the savings into growing their companies by investing in research and human capital.”
Under the proposal, smaller reporting companies with less than $100 million in revenues would not be required to obtain an attestation of their internal control over financial reporting (ICFR) from an independent outside auditor, according to the SEC. The proposed amendments would not change key protections from the Sarbanes-Oxley Act of 2002.
The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register.