Securities Snapshot: 2nd Quarter 2026

Remodeling the House: SEC Advances Sweeping IPO, Disclosure, and Offering Reforms

If the first quarter of 2026 was about the SEC’s efforts to tidy up its rules and regulations, the second quarter was about remodeling the house. Building on SEC Chair Paul Atkins’s initiative to “Make IPOs Great Again,” the agency advanced one of the most consequential packages of capital-formation and disclosure reform proposals in years—proposing to collapse certain filer categories, open shelf registration to nearly all issuers, permit semiannual reporting, and formally retract the hotly contested climate disclosure rules. In addition, the Division of Corporation Finance fast-tracked tender offer timelines by exemptive order. Together, these developments underscore an SEC moving quickly and on multiple fronts to lighten the regulatory load on public companies and ease the path to—and through—the public markets. In this Snapshot, we examine each of these updates from the last quarter in turn:

SEC Calls to Modernize IPO Process

On May 26, 2026, SEC Chairman Paul Atkins delivered remarks at Stanford University’s Rock Center for Corporate Governance, expressly welcoming public input on how the SEC should improve and modernize the IPO process. His comments suggest the agency’s willingness to reassess whether long-standing rules governing offering communications, routes to the public markets, and disclosure obligations still serve capital formation efficiently.

Specifically, Chairman Atkins solicited public comment on the following areas:

• Loosening the Communication Rules. Atkins lamented the existing “spider web” of IPO communication rules, including the gun-jumping prohibitions that restrict how a company can communicate with investors before a registration statement is effective, calling for reforms that provide greater flexibility and align with contemporary digital communications.
• Retooling the Direct Listing Regulatory Framework. Atkins urged revisiting the regulatory framework for direct listings, including registration, liability, and market-structure considerations. Citing a 2023 U.S. Supreme Court decision limiting Section 11 liability in certain direct-listing contexts, the Chairman questioned whether a Securities Act registration statement still offers meaningful investor protection in a direct listing or instead hinders companies considering that path.
• Expanding Routes to the Public Markets. Finally, Chairman Atkins’ remarks indicate the SEC’s willingness to explore alternative mechanisms by which an issuer can go public—including Special Purpose Acquisition Company (“SPAC”) transactions and direct listings.

While the Chairman’s speech does not itself change the rules, it signals where the SEC may next focus its efforts and dovetails with the broader “Make IPOs Great Again” agenda reflected in the semiannual-reporting, filer-status, and registered-offering proposals. Chairman Atkins requested that comments be submitted via the SEC’s online form by July 27, 2026. Issuers and boards contemplating an IPO should view this as a timely opportunity to help shape a reform agenda that could materially affect transaction planning and market readiness.

SEC Proposes Updates to Filer Statuses and Registered Offering Process

As discussed in our May 26, 2026 client advisory, the SEC on May 19, 2026 unveiled a set of sweeping proposals that would transform the way public companies are classified, as well as the disclosure obligations they must satisfy.

• Simplified Filer Statuses. The first proposed rule, entitled “Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies,” would streamline the various (and often overlapping) filer statuses under the Exchange Act and extend scaled disclosures to a broader group of companies.

The existing framework sorts public companies into five partially overlapping categories—large accelerated filers (LAFs), accelerated filers (AFs), non-accelerated filers (NAFs), smaller reporting companies (SRCs), and emerging growth companies (EGCs). The proposal would condense these into two categories: LAFs and NAFs, with EGC status being renamed to “Small Non-Accelerated Filer” (SNF) as a subcategory of NAF.

Other key changes include:

• Raising the LAF public float threshold from $700 million to $2 billion;
• Extending the seasoning period for LAFs from 12 to 60 months – creating a minimum five year “IPO on-ramp,” regardless of public float; and
• Extending to all NAFs the scaled disclosure accommodations currently available to SRCs and EGCs—including scaled executive compensation disclosure, omission of pay-versus-performance disclosure, no say-on-pay votes, two (instead of three) years of MD&A, and exemption from the ICFR auditor attestation under Section 404(b) of Sarbanes-Oxley.

Under the proposal, Annual Reports on Form 10-K would be due 60 days after the fiscal year-end for LAFs, 90 days for NAFs, and 120 days for SNFs. SNFs would also receive an additional five days (50 days total) to file Quarterly Reports on Form 10-Q. The proposal also extends to NAFs new disclosure requirements on Form 10-K currently applicable to LAFs and AFs, including disclosure of any material unresolved staff comments to the issuer’s current or periodic reports received at least 180 days before the fiscal year-end. Under the current disclosure framework, NAFs are not required to provide this disclosure.

Estimated Impact. According to the SEC, the proposal would reduce the percentage of registrants qualifying as LAFs from roughly 35% to 19%, with NAFs accounting for about 81% of reporting companies. The Commission projects approximately $1.9 billion in compliance cost savings over 10 years, while acknowledging that, combined with the semiannual reporting proposal (discussed below), reduced disclosure could lead to information asymmetry and weaken price efficiency.

Practical Considerations. Companies should model their likely status (LAF, NAF, or SNF) and available accommodations; reassess governance practices, such as say-on-pay and pay-versus-performance, that would no longer be required; weigh whether to continue voluntary ICFR auditor attestation; and evaluate the proposal alongside the companion registered-offering and semiannual-reporting proposals.

• Registered Offering Reform. The SEC’s companion “Registered Offering Reform” proposal would amend the Securities Act of 1933 (the “Securities Act”) to expand issuer eligibility for key registration forms and modernize offering communications. Chairman Atkins characterized the rulemaking package as part of his “Make IPOs Great Again” agenda to incentivize companies to “go and stay public.”

The proposed rule would (i) eliminate Form S-3’s one-year seasoning requirement, making the short-form available immediately after going public (provided the issuer is current and timely in Exchange Act reporting); (ii) remove the electronic-filing/XBRL and certain payment-default conditions; and (iii) eliminate Form S-3’s transaction requirements in General Instruction I.B—including the “baby shelf” rule requiring at least $75 million in public float for unlimited primary offerings. As a result, essentially any current-and-timely that is not ineligible could use the abbreviated Form S-3.

The proposal would also overhaul the well-known seasoned issuer (WKSI) framework, replacing the “unseasoned,” “seasoned,” and “WKSI” categories for domestic issuers with three tiers: (i) Form S-3 Eligible Issuer; (ii) Eligible Listed Issuer (ELI)—a Form S-3 Eligible Issuer with exchange-listed common equity; and (iii) Seasoned Eligible Listed Issuer (SELI)—an ELI with at least 12 months of Exchange Act reporting. Only SELIs could file automatically effective shelf registration statements (S-3ASR), which are currently reserved for WKSIs. The SEC estimates roughly 74% of reporting companies would qualify as SELIs versus about 36% as WKSIs today. ELIs would gain pre- and post-filing communication flexibility and “pay-as-you-go” filing fees, while all Form S-3 Eligible Issuers would gain certain research-report, selling-securityholder, and free-writing-prospectus accommodations. The WKSI definition would be retained only for foreign private issuers (FPIs).

Other notable changes include:

• Form S-1 would be amended to allow backward and forward incorporation by reference for all eligible issuers without requiring a prior Form 10-K filing;
• ATM eligibility under Rule 415(a)(4) would be limited to exchange-listed securities;
• Blank check companies, non-business-combination shells, and penny-stock issuers (collectively, “BSP Issuers”) would be ineligible for Form S-3; FPIs would continue to use Form F-3; and
• Federal preemption of state blue sky requirements would extend to all registered offerings, not just exchange-listed securities.

Current Status: Both proposals are subject to a 60-day comment period that will remain open until late July. Taken together, they represent one of the most significant overhauls to the public company regulatory framework in years—dramatically reducing compliance burdens and expanding scaled disclosure accommodations under the filer-status proposal, while simultaneously broadening access to shelf registration and ATM financing under the registered offering reform.

SEC Proposes Optional Semi-Annual Reporting

As detailed more fully in our May 7, 2026 client advisory, the SEC in early May proposed amendments to Exchange Act Rules 13a-13 and 15d-13 that would allow public companies to file semiannual reports on a new Form 10-S in lieu of sharing quarterly results on Form 10-Q. If adopted, electing companies would file just two periodic reports each year—a semiannual report on Form 10-S and an annual report on Form 10-K—while providing substantially the same financial and narrative disclosures currently required in quarterly reports. Depending on filer status, the Form 10-S would be due 40 or 45 days after the first six-month period.

The proposal would permit issuers to elect (or change) their reporting cadence annually on Form 10-K, with IPO issuers making their initial election in their registration statement. The SEC also proposed related amendments to Regulation S-X to align financial statement disclosure requirements with a semiannual reporting framework.

The proposed amendments reflect the SEC’s broader initiative to modernize the public company disclosure regime by reducing compliance costs and encouraging a longer-term management focus. At the same time, the proposal has generated sizeable debate: some commentators have expressed concern about decreased transparency for investors, while others argue the proposal encourages strategic investment and facilitates entry to the capital markets. The SEC has noted issuers may address timing-gap concerns by continuing to disclose material developments on Form 8-K. If adopted, public companies should carefully evaluate whether the potential cost savings and reduced reporting burden outweigh investor expectations, analyst demands, and prevailing industry practices.

Climate Rule Disclosure Proposed Rescission

On May 29, 2026, the SEC proposed to rescind in their entirety the climate-related disclosure rules adopted in March 2024 under former Chair Gary Gensler. The rules would have required public companies to disclose greenhouse gas emissions and the broader impact of climate change on their businesses, but never took effect following a lengthy legal challenge before the U.S. Court of Appeals for the Eighth Circuit (the “Eighth Circuit”) that left their implementation in limbo. Indeed, the SEC’s proposed rescission comes after the agency notified the Eighth Circuit it would no longer defend the rules.

In the press release announcing the proposed rescission, the SEC described the climate-rules as a “dramatic overreach” of its authority, with Chairman Atkins advocating for a return to disclosures “guided by materiality” rather than “corporate dictat[es].” The agency also cited additional grounds for rescission—pointing to the “substantial costs” of the rules, which it concluded were not outweighed by their informational benefits, as well as the conflict with the agency’s objectives to facilitate capital formation and promote public company status. The proposed rescission is subject to a 60-day comment period, after which the SEC will determine whether to take final action and officially retract the mandatory climate reporting obligations.  

SEC Shortens Minimum Tender Offer Period to 10 Business Days for Certain Transactions

On April 16, 2026, the SEC’s Division of Corporation Finance issued an exemptive order (the “Order”) allowing certain tender offers to remain open for 10 business days, as opposed to the standard 20 business days required under Rule 13e-4(f)(1)(i) and Rule 14e-1(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).

Reporting Company Tender Offers. The Order allows reporting companies to hold open tender offers for equity securities in both issuer tender offers under Rule 13e-4 and third-party tender offers under Regulation 14D, so long as the following conditions are satisfied:

• Offer Structure: In third-party tender offers under Regulation 14D, (i) the offer must be made pursuant to a negotiated merger or similar business combination agreement for all outstanding securities of the subject class; and (ii) the target must file and disseminate a Schedule 14D-9 no later than 5:30pm EST on the first business day after commencement of the offer. In an issuer tender offer, the offer must be for less than all outstanding securities of the subject class.
• Fixed Price, Cash-Only: The consideration must consist solely of cash at a fixed price.
• Going-Private Transactions Not Permitted: The tender offer must not be subject to Rule 13e-3 under the Exchange Act, which governs controlling stockholder going-private transactions.
• No Competing Offers: When the tender offer is announced to the public, the subject securities must not be the subject of a previously announced and/or pending tender offer by another offeror.
• Cross-Border Tender Offers Disallowed: The tender offer cannot rely on the cross-border transaction exemptions set forth in Rule 14d-1(d) or Rule 13e-4(i) under the Exchange Act.
• Timely Communication of Material Changes: Any increase or decrease in the percentage of securities sought in the tender offer (aside from the acceptance of an additional amount not to exceed 2% of the subject securities), or any change in the consideration offered, must be disclosed in a press release or other widely disseminated public announcement by 9:00am EST on the fifth business day before expiration of the tender offer. Any other material change in the terms of the offer must be communicated in the same manner no later than 9:00am EST on the second business day before expiration.
• Press Release and Accessibility Requirements: The offer must be announced via a widely disseminated press release by 10:00am EST on the commencement date, containing the offeror’s identity, the class of equity security sought, the consideration offered, and the expiration date. The announcement must include an active hyperlink to a website where stockholders may access the tender offer materials, letter of transmittal (if any), and related documents.

Non-Reporting Company Tender Offers. The Order is also available to private issuers and their wholly-owned subsidiaries, but only in a tender offer made by the issuer itself (or its subsidiary), subject to the following requirements:

• Fixed Price, Cash-Only: The consideration must consist solely of cash at a fixed price.
• Communication of Material Changes: Private issuers must communicate price, percentage, and other material changes to the tender offer within the same time frame applicable to reporting companies, but may do so by means other than a press release.

Practical Considerations. The Order offers a meaningful opportunity to accelerate negotiated, all-cash tender offers, potentially shortening transaction timelines by as much as two weeks. However, the condensed schedule leaves less room for error and requires careful planning, particularly around launch logistics and the communication of any mid-offer changes. Further, the Division of Corporation Finance issued the Order outside of the traditional rulemaking process and may be revised or revoked at any time. Issuers should therefore confirm their eligibility before commencing a tender offer in reliance on the shortened timeline. Moreover, the Order does not alter the anti-fraud provisions of the federal securities laws, including Section 10(b) and Section 14(e) of the Exchange Act; issuers should continue to exercise care in structuring their disclosures and communications notwithstanding the abbreviated schedule.

SEC Settles with Foot Locker  

On May 22, 2026, the SEC announced settled charges against Foot Locker, Inc. (“Foot Locker”) after the company used separation agreements that required departing employees to waive their rights to receive whistleblower awards for reporting misconduct to the agency. In connection with the settlement, Foot Locker agreed to pay a $148,000 civil penalty.

Notably, the action is the SEC’s first Rule 21F-17(a) settlement since January 2025 and reaffirms the SEC’s position that contractual provisions discouraging employees from reporting potential securities violations will not be tolerated. The Foot Locker action is a timely reminder for public and private issuers alike to audit their employment contracts, separation agreements, and internal policies for language that could be deemed to impermissibly chill whistleblower activity. To that end, confidentiality and non-disclosure provisions should expressly carve out an employee’s right to report possible misconduct to the SEC and to receive any subsequent award.

Should you have any questions or need assistance, please contact us.

F. Mark Reuter
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freuter@kmklaw.com

Allison A. Westfall
513.579.6987
awestfall@kmklaw.com

Olivia M. King
513.579.6988
oking@kmklaw.com

Christopher T. Colloton
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