What This Bill Does
This bill requires the Securities and Exchange Commission to change the size categories it uses to classify companies for reporting purposes. The bill specifically adjusts thresholds (measurement points) for smaller reporting companies, accelerated filers, and large accelerated filers.
Who It Affects
The Securities and Exchange Commission (the federal agency that oversees the stock market and investment companies) and companies that file reports with it.
Key Provisions
• The SEC must increase the public float threshold (the total market value of a company's stock available to the general public) for smaller reporting companies from $250 million to $500 million (Sec. 1(a)(1)(A)).
• The SEC must increase the annual revenue threshold for smaller reporting companies from $100 million to $250 million (Sec. 1(a)(1)(B)(i)).
• The SEC must use three-year rolling average revenues instead of annual revenues when determining if a company qualifies as a smaller reporting company (Sec. 1(a)(2)).
• The SEC must increase the threshold for a large accelerated filer from $700 million to $750 million in aggregate worldwide market value (Sec. 1(b)(1)).
• The SEC must increase the threshold at which a company stops being a large accelerated filer from $560 million to $750 million in aggregate worldwide market value (Sec. 1(b)(3)).
What Changes
Companies will have higher thresholds to meet before they are classified as smaller reporting companies or accelerated filers. This means more companies may qualify as smaller reporting companies and fewer companies may need to comply with stricter accelerated filer requirements.
Important Definitions
None defined in the bill text.
I
118TH CONGRESS
1ST SESSION H. R. 2603
To require the Securities and Exchange Commission to revise certain thresh-
olds related to smaller reporting companies, accelerated filers, and large
accelerated filers, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 13, 2023
Mr. LUETKEMEYER introduced the following bill; which was referred to the
Committee on Financial Services
A BILL
To require the Securities and Exchange Commission to revise
certain thresholds related to smaller reporting companies,
accelerated filers, and large accelerated filers, and for
other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
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SECTION 1. SMALLER REPORTING COMPANY, ACCELER-
3
ATED
FILER,
AND
LARGE
ACCELERATED
4
FILER THRESHOLDS.
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(a) SMALLER REPORTING COMPANIES.—
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(1) IN
GENERAL.—The Securities and Ex-
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change Commission shall revise the definition of a
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•HR 2603 IH
‘‘smaller
reporting
company’’
under
section
1
229.10(f)(1) of title 17, Code of Federal Regula-
2
tions—
3
(A) in paragraph (i), by adjusting the pub-
4
lic float threshold from $250,000,000 to
5
$500,000,000; and
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(B) in paragraph (ii)—
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(i) by adjusting the annual revenue
8
threshold
from
$100,000,000
to
9
$250,000,000; and
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(ii) in paragraph (B), by adjusting the
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public float threshold from $700,000,000
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to $900,000,000.
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(2) USE
OF
THREE-YEAR
ROLLING
AVERAGE
14
REVENUES.—The Securities and Exchange Commis-
15
sion shall revise paragraphs (1)(ii) and (2)(iii)(B)
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under the definition of ‘‘smaller reporting company’’
17
under section 229.10(f)(1) of title 17, Code of Fed-
18
eral Regulations, by substituting ‘‘three-year rolling
19
average revenues’’ for ‘‘annual revenues’’.
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(3) CONFORMING
CHANGES.—The Securities
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and Exchange Commission shall revise the definition
22
of a ‘‘smaller reporting company’’ under sections
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230.405 and 240.12b–2 of title 17, Code of Federal
24
Regulations, and any other rule of the Commission
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•HR 2603 IH
in the same manner as such definition is revised
1
under paragraphs (1) and (2).
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(b) ACCELERATED FILERS AND LARGE ACCELER-
3
ATED FILERS.—
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(1) LARGE ACCELERATED FILER.—The Securi-
5
ties and Exchange Commission shall revise the defi-
6
nition of a ‘‘large accelerated filer’’ under section
7
240.12b–2(2) of title 17, Code of Federal Regula-
8
tions, to increase the threshold amount (for the ag-
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gregate worldwide market value of the voting and
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non-voting common equity held by non-affiliates of
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an issuer) from $700,000,000 to $750,000,000.
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(2) THRESHOLD TO EXIT ACCELERATED FILER
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STATUS.—The Securities and Exchange Commission
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shall revise section 240.12b–2(3)(ii) of title 17, Code
15
of Federal Regulations, to increase the threshold
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amount (for the aggregate worldwide market value
17
of the voting and non-voting common equity held by
18
non-affiliates of an issuer) at which an issuer is no
19
longer an accelerated filer from $60,000,000 to
20
$75,000,000.
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(3) THRESHOLD TO EXIT LARGE ACCELERATED
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FILER STATUS.—The Securities and Exchange Com-
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mission shall revise section 240.12b–2(3)(iii) of title
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17, Code of Federal Regulations, to increase the
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•HR 2603 IH
threshold amount (for the aggregate worldwide mar-
1
ket value of the voting and non-voting common eq-
2
uity held by non-affiliates of an issuer) at which an
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issuer is no longer a large accelerated filer from
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$560,000,000 to $750,000,000.
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(4) EXCLUSION OF SMALLER REPORTING COM-
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PANIES.—The Securities and Exchange Commission
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shall revise the definitions of an ‘‘accelerated filer’’
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and a ‘‘large accelerated filer’’ under paragraphs (1)
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and (2) of section 240.12b–2 of title 17, Code of
10
Federal Regulations, respectively, to exclude any
11
issuer that is a smaller reporting company, as de-
12
fined under section 229.10(f)(1) of title 17, Code of
13
Federal Regulations.
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Æ
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