Executive Summary
- What’s new: On May 19, 2026, the SEC proposed a comprehensive package of amendments intended to overhaul the registered offering framework under the Securities Act of 1933, dramatically expanding Form S-3 eligibility and extending powerful registration accommodations to a far broader set of issuers.
- Why it matters: If adopted, these reforms have the potential to change the “playbook” for newly public, exchange-listed companies, permitting them to promptly file shelf registration statements and take advantage of desirable market conditions quickly and efficiently.
- What to do next: Companies should consider reviewing the proposal carefully and reaching out to counsel to discuss how the proposed changes, if adopted, could affect their capital-raising strategies.
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Introduction
On May 19, 2026, the Securities and Exchange Commission (SEC) proposed a comprehensive package of amendments intended to overhaul the registered offering framework under the Securities Act of 1933 (Securities Act). The proposal represents the most significant rethinking of Form S-3 eligibility and shelf registration mechanics since the SEC adopted Securities Offering Reform in 2005. The proposed amendments would dramatically expand the number of companies eligible to use Form S-3 and extend powerful registration and communication accommodations currently reserved for “well-known seasoned issuers” (WKSIs) to a far broader set of issuers.
If adopted, these reforms (and the others described below) have the potential to change the “playbook” for newly public, exchange-listed companies. Regardless of their public float, these new public companies will be eligible to promptly file a shelf registration statement on Form S-3 for an unlimited amount of securities using the pay-as-you-go accommodation previously available only to WKSIs. Although we expect recent IPO issuers would still be subject to a customary 180-day lockup, we believe many will be keenly interested in filing a shelf registration statement following their IPO, when the likelihood of SEC staff (Staff) review would be exceedingly low. Having an effective Form S-3 registration statement in place will permit these companies to take advantage of desirable market conditions by quickly and efficiently taking securities “off the shelf” as needed to meet their liquidity or other needs (taking into account the limitations of the IPO-lockup).
On the same date, the SEC proposed equally significant and transformative amendments to rationalize the existing Securities Exchange Act of 1934 (Exchange Act) filer status framework (as addressed in our client alert “SEC Proposes Sweeping Overhaul of the Filer Status Framework”), with a view to simplifying reporting and disclosure requirements and reducing burdens on most reporting companies. Together, the proposed rulemakings are aimed at incentivizing companies to go and stay public, thus furthering SEC Chairman Paul Atkins’ agenda to “Make IPOs Great Again.”
In each case, the proposals are currently in the comment period and are not yet final rules. The public comment period will remain open for 60 days following publication in the Federal Register.
Key Takeaways
- Form S-3 eligibility would be dramatically expanded. The amendments would extend the ability to conduct primary shelf and at-the-market (ATM) offerings to significantly more issuers primarily by eliminating from Form S-3 both the 12-month Exchange Act reporting history requirement (“One-Year Seasoning”) and the $75 million public float threshold, such that any Exchange Act reporting company that is current and timely in its filings could use Form S-3 for any primary or secondary offering immediately upon becoming a reporting company (subject to certain exceptions addressed further below).
- Enhanced registration and communication benefits would be extended to more issuers. The proposal would eliminate the WKSI definition for domestic issuers in favor of two new categories — “eligible listed issuers” (ELIs) and “seasoned eligible listed issuers” (SELIs) — with significantly less demanding qualification thresholds. Benefits currently limited to WKSIs, such as pay-as-you-go filing fees, the ability to add additional securities or issuers after effectiveness, prefiling and postfiling communications flexibility, and expanded prospectus omission rights would be available to ELIs and SELIs. SELIs, as currently is the case with WKSIs, would be able to utilize automatically effective shelf registration statements.
- Form S-1 would be modernized. The ability to backward incorporate by reference no longer would require a Form S-1 issuer to have filed a Form 10-K for its most recently completed fiscal year and, more importantly, forward incorporation by reference would be extended to all Form S-1 issuers.
- Conforming accommodations for business development companies and closed-end funds. With a view to fostering parity with the amendments proposed for operating companies, the proposal would expand eligibility to use short-form registration statements on Form N-2 to a broader group of business development companies (BDCs) and registered closed-end funds (CEFs) and extend certain registration and communication benefits currently reserved to WKSIs to the same broader set of BDCs and registered CEFs where feasible.
- State securities law preemption would cover all registered offerings. The proposal would define “qualified purchaser” under Section 18(b)(3) to preempt state registration and qualification requirements for all registered offerings, including offerings of unlisted securities. Such preemption currently applies only to registered offerings of listed securities or securities approved for listing on a national securities exchange.
Expanded Eligibility of Form S-3
Form S-3 is a “short-form” registration statement that eligible issuers can use to register offerings under the Securities Act. Form S-3 offers several significant advantages over a “long-form” Form S-1. Most notably, Form S-3 permits an issuer to automatically update information in the prospectus by forward incorporation by reference of periodic and current reports filed under the Exchange Act, including Forms 10-K and 10-Q, and certain Forms 8-K. Form S-3 also enables shelf registration, whereby an issuer may register securities in advance and offer them from time to time (i.e., a delayed offering) as favorable market conditions arise, as well as ATM offerings that allow for the sale of securities incrementally at prevailing market prices. By contrast, issuers that do not satisfy the eligibility requirements for Form S-3 must rely on Form S-1, which is subject to more frequent SEC staff review and does not accommodate shelf or delayed primary offerings.
Currently, to use Form S-3 an issuer must meet the form’s “registrant requirements” as well as at least one of the form’s “transaction requirements.” The proposal would significantly relax Form S-3’s registrant requirements and eliminate the form’s transaction requirements. With respect to the registrant requirements, the proposed amendments, among other things, would eliminate the “One-Year Seasoning,” “Certain Failures to Make Payments and Defaults” and “Interactive Data Files” eligibility requirements, each as described below. The amendments, however, would retain the “Current in Exchange Act Reporting” and “Timely in Exchange Act Reporting” registrant requirements and would add two new registrant requirements prohibiting a subset of “ineligible issuers,” as that term is defined in Rule 405, and certain other types of issuers from using Form S-3, also as described below.
With respect to the transaction requirements, the proposed amendments would eliminate all of those requirements, most notably the requirement in General Instruction I.B.1 that the issuer have a public float of $75 million or more to offer an unlimited amount of securities for cash on Form S-3. As such, any issuer that meets the proposed registrant requirements would be eligible to use Form S-3 for any primary or secondary offering of the issuer’s securities.
Elimination of the One-Year Seasoning Requirement
Currently, Form S-3 requires an issuer to have been subject to Exchange Act reporting requirements for at least 12 calendar months before filing a registration statement on the form. The proposed amendments would eliminate this One-Year Seasoning requirement.
Under the proposal, an issuer would become eligible to use Form S-3 immediately upon having a class of securities registered under Section 12(b) or 12(g), or becoming subject to Section 15(d), of the Exchange Act — provided it is current and timely with its reporting obligations. Thus, the proposal contemplates the mere availability of Exchange Act disclosure to investors as the touchstone for Form S-3 eligibility. See “Retention of the Current in Exchange Act Reporting and Timely in Exchange Act Reporting Requirements.”
This means, for example, that an issuer could complete its initial public offering or register a class of equity securities on Form 10 in connection with a spin-off and then immediately file a shelf registration statement on Form S-3. The ability to have a shelf registration statement effective and ready for future use shortly after entering the reporting system would be a significant development for newly public companies.
Although the One-Year Seasoning requirement would be eliminated for Form S-3 eligibility generally, it would be retained as a condition for automatic shelf registration (discussed below).
Elimination of the Certain Failures to Make Payments and Defaults Requirement
Currently, Form S-3 requires that the issuer must have not, since the end of the last fiscal year for which audited financial statements of the issuer and its consolidated subsidiaries were included in an Exchange Act periodic report: (a) failed to pay any dividend or sinking fund installment on preferred stock; or (b) defaulted (i) on any installment or installments on indebtedness for borrowed money, or (ii) on any rental on one or more long-term leases, which defaults in the aggregate are material to the financial position of the issuer and its consolidated and unconsolidated subsidiaries, taken as a whole.
The SEC characterizes this criteria as an outdated and inappropriate qualitative measure. As such, the proposed amendments provide that the Form S-3 eligibility no longer would be conditioned on an issuer satisfying the Certain Failures to Make Payments and Defaults requirement.
Elimination of the Electronic Filings and Interactive Data Files Requirements
The proposal would remove the current Form S-3 requirements that condition eligibility on having filed all required electronic filings and having submitted all required Interactive Data Files (XBRL). The SEC noted that these provisions were originally adopted to incentivize the transition from paper to electronic filings and the initial use of structured data, but issuers are now fully accustomed to complying with these requirements, and mandated electronic filings are no longer accepted in paper form absent a hardship exemption. An issuer that fails to submit a required electronic filing timely would in any event be ineligible for Form S-3 under the retained Current and Timely filing requirements.
Retention of the Current in Exchange Act Reporting and Timely in Exchange Act Reporting Requirements
In a number of instances across the proposal, the SEC makes clear its belief that the essential element of Form S-3 and shelf eligibility is whether the requisite information about an issuer is available to investors. As such, Form S-3 eligibility would continue to be contingent on an issuer being subject to the Exchange Act’s periodic reporting requirements and having timely filed all reports and other materials required to be filed under Sections 13(a), 14(a), 14(c) and 15(d) of the Exchange Act, other than specified reports on Form 8-K, during the preceding 12 calendar months and any portion of a month immediately preceding the filing of a Form S-3, or, if an issuer had been subject to such requirements for less than 12 calendar months, during the time the issuer had been required to file such reports and materials.
Consistent with Staff’s current informal practice of not objecting to use of Form S-3 when an untimely filing has been made under certain narrow circumstances, the proposal would permit an issuer to remain Form S-3 eligible notwithstanding an untimely filing having been made during the relevant lookback period so long as: (i) the filing was made within seven calendar days of the original due date (not the Rule 12b-25 due date, where applicable), and (ii) the issuer made only one untimely filing during the relevant lookback period.
Prohibition on Use of Form S-3 by Certain Ineligible Issuers
While the proposed amendments would extend the benefits of Form S-3 and shelf registration to a broader group of issuers, certain categories of issuers that the SEC believes may pose greater potential for noncompliance with the federal securities laws would not benefit from the reforms. In this regard, the proposed amendments would prohibit the use Form S-3 by certain definitional “ineligible issuers,” including “BSP issuers” (as described below), issuers previously convicted of certain felonies and misdemeanors, issuers subject to a decree or order involving a violation of the antifraud provisions of the federal securities laws, issuers that have been subject to any refusal order or stop order under Section 8 of the Securities Act within the past three years, and issuers that are subject to pending proceedings or examinations under Section 8 or 8A of the Securities Act.
BSP issuers would be defined as an issuer that is, or during the past three years the issuer or any of its predecessors was: (i) a blank check company, (ii) a penny stock issuer or (iii) a shell company, other than a business-combination-related shell company, provided, however, that an issuer, other than a foreign private issuer, would not be deemed to be a shell company solely because during the past three years either the issuer or any of its predecessors was a “special purpose acquisition company (SPAC).” On the last point, for sake of clarity, an issuer that was formerly a SPAC would be excepted from the three-year lookback for shell companies and, therefore, eligible to use Form S-3 if the issuer was not a SPAC at the time of filing the registration statement, had not otherwise previously been a shell company and otherwise met the form’s requirements.
Prohibition on Use of Form S-3 by Certain Other Issuers
The proposed amendments also would prohibit the following types of issuers from using Form S-3: (i) a foreign government (or a political subdivision thereof) or a foreign private issuer, (ii) an asset-backed issuer, (iii) an investment company or (iv) a business development company.
Foreign private issuers are discussed under “Implications for Foreign Private Issuers.” Asset-backed issuers currently are precluded from using Form S-3; instead, they use are eligible to use a short-form registration statement on Form SF-3. Finally, and similarly, investment companies and business development companies use Form N-2. See more under “BDCs and Closed-End Funds.”
Elimination of the $75 Million Public Float Requirement
Currently, an issuer must have a public float of $75 million or more to register an unlimited amount of securities on Form S-3 for primary offerings. Issuers with less than $75 million in public float that are exchange-listed can conduct limited primary offerings under the “baby shelf” provision (General Instruction I.B.6), but only up to one-third of their public float over any rolling 12-month period.
The proposed amendments would eliminate the $75 million public float requirement entirely, as well as all other transaction requirements in General Instruction I.B. of Form S-3. Under the proposal, any issuer that satisfies the revised registrant requirements — principally, that it is current and timely in its Exchange Act reporting obligations — would be eligible to use Form S-3 for any primary or secondary offering without regard to the amount of its public float.
The SEC’s rationale reflects a fundamental shift in philosophy. Historically, the SEC relied on public float as a proxy for whether an issuer was widely followed and whether information had been sufficiently disseminated into the marketplace. The SEC now takes the position that, in the era of EDGAR and widespread electronic access to filings, Form S-3 eligibility should depend on whether investors can readily obtain issuer-specific information — which depends on whether an issuer is current and timely in its reporting obligations, not on the size of its public float.
The practical impact would be substantial. Based on the SEC’s data, 1,127 issuers that currently cannot use Form S-3 at all would become eligible, and an additional 1,023 issuers currently subject to the one-third-of-public-float cap would be freed from that limitation.
Majority-Owned Subsidiaries Would Retain Access to Form S-3 Through a Parent’s Eligibility
Under the proposed amendments, majority-owned subsidiaries that are not themselves Exchange Act reporting companies could continue to register Guarantee-Related Offerings (i.e., offerings of nonconvertible debt guaranteed by the parent, or guarantees of the parent’s debt) on a parent’s Form S-3, provided the parent is eligible to use the form and the parent and subsidiary are co-registrants on the same registration statement. In addition, majority-owned subsidiaries that are independently Form S-3 eligible could be treated as ELIs or SELIs based on the parent’s status for purposes of registering nonconvertible securities other than common equity, thereby gaining access to Enhanced Registration and Communication Benefits — including automatic shelf registration — that the subsidiary might not independently qualify for.
New Issuer Categories: ELIs and SELIs Replace WKSIs
One of the most significant structural changes in the proposal is the elimination of the WKSI definition for domestic issuers and its replacement with two new categories: eligible listed issuers (ELIs) and seasoned eligible listed issuers (SELIs).
Currently, to qualify as a WKSI, an issuer must have at least $700 million in public float or have issued at least $1 billion in aggregate principal amount of nonconvertible securities in registered offerings over the prior three years. Only approximately 36% of Exchange Act reporting issuers qualified as WKSIs in 2024.
Under the proposed amendments, an ELI would be defined as an issuer that meets the proposed Form S-3 registrant requirements and has at least one class of common equity securities listed on a national securities exchange. A SELI would be an ELI that has been subject to Exchange Act reporting requirements for at least 12 calendar months. The SEC estimates that approximately 4,203 issuers (about 76% of reporting companies) would qualify as ELIs and approximately 4,114 (about 74%) would qualify as SELIs — compared to only 2,039 WKSIs today.
The following benefits would be allocated among the new tiers:
- SELIs would be eligible for automatic shelf registration (Form S-3ASR), which provides immediate effectiveness upon filing.
- ELIs would be eligible for pay-as-you-go filing fees (Rules 456(b) and 457(r)), registration of additional securities classes via post-effective amendment (Rule 413), prefiling communications (Rules 163 and 163A), postfiling free writing prospectuses on Form S-8 (Rule 164) and expanded prospectus omission authority (Rule 430B(a)).
- All Form S-3 eligible issuers would be eligible to omit selling security holder identities from resale registration statements (Rule 430B(b)) and to use free writing prospectuses without accompanying or preceding them with a statutory prospectus (Rule 433).
It is worth noting that a relatively small number of WKSIs that are not exchange-listed would not have access to certain Enhanced Registration and Communication Benefits under the proposed amendments, because ELI and SELI status requires exchange listing. The SEC has requested comment on whether to provide a transition period for such issuers. Importantly, the vast majority of current WKSIs would not be adversely affected: Of the issuers that self-reported as WKSIs in 2024, more than 90% would qualify as SELIs (and thus retain access to all Enhanced Registration and Communication Benefits, including automatic shelf registration) under the proposed amendments.
Modernization of Form S-1: Expanded Incorporation by Reference
The proposed amendments would make two important changes to Form S-1’s incorporation by reference regime.
First, the proposal would eliminate the requirement in General Instruction VII.C that an issuer must have filed a Form 10-K for its most recently completed fiscal year to be eligible to use backward incorporation by reference. This would permit issuers to use incorporation by reference during their first year as newly public reporting companies, before a Form 10-K has been required.
Second, the proposal would extend forward incorporation by reference to all issuers that otherwise meet Form S-1’s incorporation by reference requirements, eliminating the current limitation that restricts this benefit solely to SRCs. Forward incorporation allows automatic updating of the registration statement through subsequently filed Exchange Act reports, reducing the need for prospectus supplements and, critically, post-effective amendments. The SEC estimates an increase of up to 106% in the number of issuers eligible to forward incorporate on Form S-1.
An important limitation remains: Even with forward incorporation on Form S-1, delayed shelf offerings and at-the-market offerings each will continue to require the issuer to be eligible to register a primary offering on Form S-3 under Rule 415(a)(1)(x), albeit as significantly relaxed as discussed above. Thus, Form S-1 with forward incorporation would not function as a full substitute for Form S-3’s shelf registration capabilities.
Preemption of State Securities Law Requirements
Currently, Section 18(b)(1) of the Securities Act preempts state securities law registration and qualification requirements for registered offerings of securities that are listed or approved for listing on a national securities exchange. This preemption does not, however, cover registered offerings of unlisted securities, meaning issuers conducting registered offerings of unlisted securities must comply with potentially numerous states’ registration and qualification requirements.
The proposed amendments would define “qualified purchaser” under Section 18(b)(3) to include any purchaser of securities offered or sold in a registered offering, thereby preempting state registration and qualification requirements with respect to all registered offerings — whether or not the securities are exchange-listed.
This significant and far-reaching change would eliminate significant costs for issuers conducting registered offerings of unlisted securities, such as nontraded REITs and certain BDCs.
BDCs and Closed-End Funds
Consistent with the proposed changes for operating companies, the proposal includes largely parallel amendments for BDCs and registered CEFs (collectively, affected funds) that register securities on Form N-2. The amendments would extend eligibility to use the short-form registration statement on Form N-2 (Short-Form N-2) to a broader group of affected funds, in part by removing related seasoning and public float requirements. In contrast to the proposed framework for operating companies, however, Short-Form N-2 and shelf registration eligibility would be reserved for affected funds that are exchange-listed (i.e., ELI affected funds and SELI affected funds). An affected fund would qualify as a SELI if it meets the ELI definition and has been subject to the Exchange Act and Investment Company Act reporting requirements for a period of at least 12 full calendar months. Similar to operating companies, only affected SELI funds would be eligible to use automatic shelf registration.
Certain other benefits that are currently only available to affected funds that qualify as WKSIs would be available to ELI affected funds (i.e., affected funds that are exchange-listed) regardless of whether they have been Exchange Act/Investment Company Act reporters for 12 calendar months or their public float. These benefits include the ability to use pay-as-you-go registration fees, greater flexibility with respect to prefiling communications, and the ability to omit certain information from a base prospectus. However, a small number of Enhanced Registration and Communication Benefits that would be available to operating companies would be unavailable to affected funds because either a fund-specific rule currently applies the benefit to affected funds, or the benefit, as applied to operating companies, is not applicable to the equivalent category of affected funds.
Implications for Foreign Private Issuers
Notably, the proposed amendments would exclude foreign private issuers (FPIs) from the expanded benefits described above. The proposal would amend both Form S-3 and Form S-1 to prohibit FPIs from using those forms entirely, without regard to whether the FPI reported on domestic Exchange Act forms (e.g., Form 10-K, Form 10-Q and Form 8-K). The SEC stated that, given its ongoing evaluation of whether the FPI definition appropriately balances investor protection with capital formation — as reflected in the 2025 FPI Concept Release — it is “prudent not to extend the benefits of the proposed amendments to FPIs at this time, prior to completion of [the SEC’s] more comprehensive review of the FPI framework.”
Under the proposed amendments, the WKSI definition in Rule 405 would be retained solely for FPIs, meaning that only FPIs could continue to qualify as WKSIs. Accordingly, FPIs that currently qualify as WKSIs would retain access to the Enhanced Registration and Communication Benefits already available to them under existing rules but would not gain access to any of the new benefits created by the proposed amendments.
Importantly, FPIs would continue to have access to Form F-3 (and Form F-1 for registration on Form S-1’s equivalent), which has eligibility requirements and benefits similar to current Form S-3, including short-form and shelf registration. The SEC noted that very few FPIs currently are eligible to use Form S-3 — Staff identified only nine FPIs filing on Form 10-K in calendar year 2023 — and that no FPI filed a Form S-3 in 2024. Accordingly, the SEC expects minimal practical impact from the prohibition.
Foreign issuers that are not FPIs (other than foreign governments) would remain eligible to use Form S-3 under the proposed amendments, because those issuers are not permitted to use Form F-3 and therefore would be more significantly affected by a loss of Form S-3 eligibility.
Clients with FPI subsidiaries or affiliates, or those considering FPI status, should carefully evaluate these provisions. The SEC has specifically requested comment on whether to adopt the FPI prohibition as proposed and whether FPIs currently eligible to use Form S-3 should continue to be eligible for at least a transition period.
Other Related Amendments
Finally, the proposal includes a series of lesser amendments and technical changes intended to modernize certain existing rules that are relevant to the registration framework discussed above. These include the following:
- Age of financial statements grace periods would be expanded. The proposal would eliminate the conditions in Regulation S-X Rules 3-01(c) and 8-08(b) that currently prevent loss-generating issuers from qualifying for extended grace periods before audited annual financial statements must be included in a registration statement or proxy statement. This welcome change would allow issuers that cannot demonstrate profitability — often those with the greatest need for capital — to raise capital or complete strategic transactions near fiscal year end without being forced to expedite audited financials ahead of their Form 10-K filing deadline.
- Delaying amendments would default to delayed effectiveness. The proposal would revise Rule 473 so that registration statements are deemed delayed unless the issuer affirmatively opts in to Section 8(a) effectiveness, reversing the current default under which issuers must include a delaying amendment legend to prevent premature effectiveness. This change is intended to eliminate the risk that inadvertent omission of the legend could trigger premature reporting obligations or stop order proceedings.
Status and Next Steps
These amendments are proposed and have not been adopted. The SEC has asked interested parties to submit comments on any aspect of the proposed amendments. We encourage companies to consider reviewing the proposal carefully and reaching out to discuss how the proposed changes, if adopted, could affect their capital-raising strategies.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.
For further information, please contact:
Andrew J. Brady, Partner, Skadden
andrew.brady@skadden.com
