In March 2020, the Securities Exchange Commission (SEC) amended its definition of accelerated and large accelerated filers. In Release No. 34-88365, the accelerated filer definition under Rule 12b-2 of the Exchange Act of 1934 (Rule 12b-2) was amended to exclude issuers that qualify as a smaller reporting company (SRC) under the SRC revenue test.
As amended, an issuer is categorized as a non-accelerated filer if the issuer has a public float of less than $700 million as of the last annual measurement date and annual revenues of less than $100 million in the most recently completed fiscal year. Issuers meeting those thresholds are not subject to accelerated filing deadlines and will not be required to obtain an auditor’s attestation on internal control over financial reporting (ICFR).
However, the amendments do not change management’s responsibilities to establish and maintain effective ICFR and assess the effectiveness of ICFR, but they will not be required to have management’s assessment of the effectiveness of ICFR attested to, and reported on, by an independent auditor.
For issuers that are designated as an SRC under the public float test, but exceed the SRC revenue test, the designation and requirements as an accelerated filer are still applicable.
We have summarized the requirements in the chart below:
| Filer Status | Public Float | Annual Revenues | Auditor Assessment |
|---|---|---|---|
| Non-accelerated Filer AND SRC | Less than $75 million | N/A | No |
| $75 million to less than $700 million | Less than $100 million | No | |
| Accelerated Filer AND SRC | $75 million to less than $250 million | Greater than $100 million | Yes |
| Accelerated Filer (not SRC) | $250 million to less than $700 million | Greater than $100 million | Yes |
| Large Accelerated Filer (not SRC) | Greater than $700 million | N/A | Yes |
In addition to amending the definitions of accelerated and large accelerated filers, the amendments also increased the exit thresholds under Rule 12b-2. Certain thresholds are required for an issuer to exit accelerated and large accelerated filer status and consultation is recommended.
If you have questions about your current requirements under the recent SEC amendments, contact our experts.
