SEC Amends Accelerated and Large Accelerated Filer Definitions

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On March 12, 2020, the Securities and Exchange Commission (SEC) adopted amendments to the accelerated filer and large accelerated filer definitions. When classified as an accelerated filer or large accelerated filer, an issuer is subject to, among other things, the requirement that its auditor attest to and report on management’s assessment of the effectiveness of the issuer’s internal control over financial reporting (ICFR).

Following the adoption of the amendments, smaller reporting companies (SRC) with less than $100 million in revenues will no longer be required to obtain a separate attestation on their ICFR from their external auditor. However, these smaller reporting companies will still be required to establish and maintain effective ICFR, and their principal executive and financial officers will continue to certify they are responsible for establishing and maintaining ICFR and have evaluated and reported on the effectiveness of the company’s disclosure controls and procedures.

The table below from the SEC’s final rule lays out the relationship between SRCs and type of filer. Public float is measured on the last day of an issuer’s second quarter, and revenue is as of an issuer’s most recent year-end.

Status Public Float Annual Revenues
SRC and Non-Accelerated Filer Less than $75 million N/A
$75 million to less than $700 million Less than $100 million
SRC and Accelerated Filer $75 million to less than $250 million $100 million or more
Accelerated Filer (not SRC) $250 million to less than $700 million $100 million or more
Large Accelerated Filer (not SRC) $700 million or more N/A

The amendments also increased the transition thresholds for an accelerated filer becoming a non-accelerated filer from $50 million to $60 million, and for a large accelerated filer to becoming an accelerated filer from $500 million to $560 million. The table below from the SEC’s final rule explains the resulting filer status.

Initial Public Float Determination Resulting Filer Status Subsequent Public Float Determination Resulting Filer Status
Less than $700 million but $75 million or more Accelerated Filer Less than $700 million but $60 million or more Accelerated Filer
Less than $60 million Non-Accelerated Filer
$700 million or more Large Accelerated Filer $560 million or more Large Accelerated Filer
Less than $560 million but $60 million or more Accelerated Filer
Less than $60 million Non-Accelerated Filer

The final amendments will become effective 30 days after publication in the Federal Register and apply to an annual report filing due on or after the effective date.