SEC Moves to Lighten Disclosure Rules in Bid to Lure More Companies to the Market

Bloomberg, SEC, and Reuters contributed to this report.

The SEC is trying to make going public a lot less painful.

On Tuesday, the Wall Street regulator rolled out proposals that would loosen share-offering rules and trim some reporting burdens for public companies, part of a broader push from the Trump administration to get more firms to list on stock exchanges and stay there.

The basic idea is simple: make IPOs cheaper, faster and less of a paperwork grind. SEC Chair Paul Atkins said the goal is to give companies more reason “to go and stay public,” while still keeping investor protections in place.

One of the biggest changes would raise the bar for a company to be treated as a “large accelerated filer” from $700 million to $2 billion in public float. That matters because large accelerated filers face tighter deadlines and tougher disclosure requirements. Under the proposal, newly public companies would also get a five-year grace period before they fall into that category, no matter how big they get.

The SEC is also looking at expanding shelf offerings, which let companies pre-register securities and sell them later when market conditions look better. Right now, firms need at least $75 million in public float and a year of SEC reporting history to use that shortcut. The new proposal would scrap both hurdles.

Officials tried to make clear this is not a free-for-all. The changes would not apply to foreign private issuers, blank-check companies, penny stocks or shell companies. And the agency said the proposals are meant to streamline disclosure, not gut it.

The numbers suggest the rules could reach a lot of companies. SEC officials said roughly 81% of public companies could end up getting the lighter-touch treatment, while the smallest firms would get extra time to file annual and quarterly reports.

The message from the SEC is pretty direct: public markets should be easier to use, not harder. The proposals now go out for 60 days of public comment, and they could still change before becoming final.