The American Bankers Association said today that it supports a Securities and Exchange Commission proposal to expand reporting accommodations for smaller public companies.
In May, the SEC proposed rulemaking to increase the public float threshold to be considered a “large accelerate filer” company for reporting purposes from $700 million to $2 billion, which the agency said hasn’t been updated since it was established in 2005. The proposal also would revise the seasoning requirements from 12 calendar months to five years for large accelerated filers while extending existing accommodations and scaled disclosure requirements to all non-accelerated filers. Finally, it would simplify the current filer status framework by classifying issuers as either large accelerated filers or non-large accelerated filers.
In comments to the SEC, ABA expressed support for expanding access to scaled disclosure accommodations and reducing unnecessary compliance costs for all non-large accelerated filers. The association said the changes would provide meaningful relief to smaller public companies, including community bank issuers for which compliance costs can be significant relative to their size and resources.
ABA said eliminating the auditor attestation requirement for internal control over financial reporting for non-large accelerated filers would provide important relief for SEC-issuer community banks with less than $5 billion in assets. The proposal would align with the FDIC’s recent increase of the 12 CFR Part 363 threshold for internal control attestations from $1 billion to $5 billion, with future inflation indexing, and would benefit nearly half of public issuer banks.
ABA also recommended that the SEC automatically adjust the large accelerated filer public float threshold for inflation. “Indexing would help ensure that the threshold remains appropriately calibrated over time and would prevent issuers from becoming subject to large accelerated filer requirements solely because of inflation-driven increases in market capitalization rather than meaningful changes in size, complexity, or investor needs,” it said.
