A Capital Idea: The SEC Proposes Amendments to Expand Access to Registered Offerings

Public companies may soon find they have more flexibility when it comes to capital formation. On May 19, 2026, the SEC proposed amendments that would fundamentally overhaul the registration framework for public securities offerings. The SEC proposal would expand eligibility for Form S-3, extend registration and communication benefits currently reserved for well-known seasoned issuers (“WKSIs”) to a far broader group of companies, and expand incorporation by reference into Form S-1 registration statements. The SEC estimates that the proposed amendments could increase the number of issuers eligible for Form S-3 by more than 60 percent.

Current Form S-3 Eligibility

Form S-3 is a short-form registration statement that provides eligible issuers with significant advantages in accessing the public capital markets, without the delays associated with a registered offering on Form S-1. To be eligible for Form S-3, an issuer must meet certain registration requirements, including a requirement that the issuer be subject to Exchange Act reporting requirements for at least 12 full calendar months. The issuer must also have $75 million or more in public float to register an unlimited amount of securities on Form S-3. Issuers that do not meet the $75 million threshold may still use Form S-3 for certain limited transactions, and exchange-listed issuers below this threshold may conduct primary offerings up to one-third of their public float in any 12-month period.

Issuers that qualify as WKSIs (either by having a public float of $700 million or more, or at least $1 billion in registered non-convertible debt over the preceding three years) have additional benefits, including automatic effectiveness of shelf registration statements upon filing, the ability to make pre-filing offers under Rule 163, greater flexibility in the use of free writing prospectuses and other significant advantages.

Proposed Changes to Form S-3 Eligibility

The proposed amendments would allow a broader range of issuers to conduct offerings on Form S-3, including the ability to register delayed primary offerings (“shelf offerings”) and at-the-market (“ATM”) offerings.

• Elimination of the One-Year Seasoning Requirement. The proposal would eliminate the requirement that an issuer have been subject to Exchange Act reporting for at least 12 full calendar months prior to filing a registration statement on Form S-3. Under the proposed amendments, 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 upon becoming subject to Section 15(d), of the Exchange Act. This means a newly public company could register its first follow-on offering on Form S-3 immediately after its initial public offering.
• Elimination of the $75 Million Public Float Requirement. The proposal would eliminate the requirement that an issuer have a public float of $75 million to offer an unlimited amount of securities on Form S-3.
• Elimination of All Other Transaction Requirements. In light of the elimination of the $75 million public float threshold, the proposal effectively eliminates other transaction-related requirements for Form S-3 eligibility, including the failure to pay dividends or defaults on debt payments. As a result, any issuer that meets the proposed registrant requirements would be eligible to use Form S-3 for any primary or secondary offering, other than for exchange offers and business combinations.
• Elimination of the Electronic Filings and Interactive Data Files Requirements. The proposal would also eliminate eligibility requirements relating to electronic filing compliance and submission of Interactive Data Files, on the basis that issuers are now sufficiently accustomed to these requirements and conditioning Form S-3 eligibility on compliance is no longer necessary.
• Filings Must Be Current and Timely. The requirement that issuers continue to be current and timely with their Exchange Act reporting obligations has not changed. Currently, an issuer must have timely filed all required reports during the preceding 12 calendar months plus the portion of the month immediately preceding the filing of the registration statement, though the proposal requests comments on whether the lookback period should be shortened to 12 calendar months. Furthermore, an issuer would remain eligible for Form S-3 notwithstanding an untimely filing during the relevant lookback period so long as (1) the filing was made within seven calendar days of the original due date (or in the case of Rule 12b-25, seven days from the filing’s original due date) and (2) the issuer made only one untimely filing during the lookback period.
• Prohibition on Certain Ineligible Issuers. The proposal would add a new Form S-3 eligibility requirement prohibiting use by BSP issuers, defined as issuers that are, or in the past three years were, a blank check company, a shell company other than a business combination related shell company, or a penny stock issuer. However, a former special purpose acquisition company (“SPAC”) would not be deemed a shell company solely on the basis of its former status as a SPAC. As a result, former SPACs that successfully completed a de-SPAC would be eligible to register on Form S-3 to the same extent as a newly public company that conducted a traditional initial public offering. The proposal would also prohibit issuers from using Form S-3 if, within the last three years: (i) the issuer or one of its subsidiaries was convicted of a felony or misdemeanor, (ii) the issuer or one of its subsidiaries was subject to certain judicial or administrative decrees or orders arising out of governmental actions involving antifraud violations in connection with securities filings or (iii) the issuer filed a registration statement that is the subject of any pending proceeding or examination or the subject of any refusal or stop order under Section 8 of the Securities Act. In contrast to the definition of “ineligible issuer” under Rule 405, for the purpose of using Form S-3 under the proposal, eligibility would not be affected by bankruptcy status, nor would it be precluded for limited partnerships offering and selling securities other than through a firm commitment underwritten offering.

In addition, foreign private issuers (“FPIs”) would no longer be permitted to use Form S-3 to register offerings, even if the FPI files domestic periodic and current reports. Under the current rules, FPIs filing domestic reports that also meet Form S-3 eligibility requirements can register offerings on either Form S-3 or Form F-3. The proposal would continue to allow FPIs to register on Form F-3. FPIs also remain eligible for WKSI status.

Expansion of the Enhanced Registration and Communication Benefits

In addition to expanding Form S-3 eligibility requirements, the proposal would replace the WKSI criteria for domestic issuers with two new categories: “Eligible Listed Issuers” (“ELIs”) and “Seasoned Eligible Listed Issuers” (“SELIs”), and provide more issuers with the benefits currently available to WKSIs (see the Annex below for a complete list of benefits and eligible issuers).

Form S-3 Eligible Issuers

Form S-3 eligible issuers generally would receive the following benefits:

• Broker-dealers participating in the offering of the issuer’s securities can issue research reports about the issuer or its securities without the report being considered an “offer”;
• Selling securityholders identities and amount of securities to be registered on their behalf can be omitted from the registration statement;
• The ability to use a free writing prospectus without being preceded or accompanied by a prospectus.

Eligible Listed Issuers

ELIs would be defined as issuers that meet Form S-3’s proposed registrant requirements and have at least one class of common equity securities listed on a national securities exchange. ELIs would be eligible for:

• Increased flexibility in pre- and post-filing communications;
• Registration of additional securities, or classes of securities, through the filing of a post-effective amendment;
• Omission of certain information, including whether an offering is a primary or secondary offering, the plan of distribution for the securities, a description of the securities registered other than the name or class of securities and the identification of other issuers;
• Paying filing fees at the time of offering securities off the shelf registration statement, instead of at the time of filing the Form S-3;
• All other benefits available to Form S-3 eligible issuers.

Seasoned Eligible Listed Issuers

SELIs would be defined as ELIs that have been subject to Exchange Act reporting for at least 12 months. SELIs would be eligible for:

• Automatic shelf registration statements (currently available only to WKSIs); and
• All other benefits available to ELIs .

The determination date for whether an issuer qualifies as an ELI or SELI would be the latest of (1) the date the issuer files a Form S-3, (2) the date of the most recent amendment to a Form S-3, or (3) if the issuer has not filed a Form S-3 or amendment for 16 months, the date of filing of the issuer’s most recent annual report on Form 10-K or Form 20-F.

Proposed Changes to Form S-1

The proposal would also modernize Form S-1 to expand the ability of issuers to incorporate information by reference.

• Elimination of the Annual Report Requirement for Backward Incorporation. Currently, an issuer must have filed a Form 10-K for its most recently completed fiscal year to be eligible to incorporate prior filings by reference into a Form S-1. The proposal would eliminate this requirement, allowing issuers to use backward incorporation immediately after becoming subject to Exchange Act reporting requirements, even before filing their first 10-K. An issuer that has not yet filed a Form 10-K would be allowed to incorporate by reference to a Securities Act or Exchange Act filing containing Form 10 information. The proposal would disallow BSP issuers from incorporating by reference, though issuers would not be ineligible solely on the basis that the issuer or its predecessors were a SPAC.     
• Extension of Forward Incorporation to All Issuers. Currently, only smaller reporting companies may automatically incorporate into a Form S-1 Exchange Act report filed after the registration statement’s effective date by reference into the prospectus. The proposal would extend this ability to all Form S-1 issuers.

If adopted, these amendments would make Form S-1 function similar to Form S-3 in many respects. However, shelf offerings and ATM offerings would continue to be available only for offerings registered on Form S-3.

Preemption of State Securities Law Registration and Qualification

Currently, securities offered and sold in a registered offering are exempt from state blue sky registration and qualification requirements only if they are covered securities, meaning that the securities are listed on a national securities exchange or issued by a registered investment company. The proposal would preempt state registration and qualification requirements by deeming all securities offered and sold in any registered offering as covered securities. Notice filing and fees could still be required by the states.

Key Takeaways

If adopted, these rules would allow a substantial number of Exchange Act reporting companies to access Form S-3. The elimination of the one-year seasoning requirement means that certain issuers could file a shelf registration statement on Form S-3 almost immediately after completing an initial public offering or filing an Exchange Act registration statement. Companies should consider whether and how to take advantage of this flexibility for follow-on capital raises.

With the elimination of the public float requirement, companies may see more reasons to list their securities on an exchange. Only exchange-listed issuers would qualify as ELIs or SELIs and be able to avail themselves of the attendant registration and communication benefits. Companies that are considering whether to list their securities, or whether to remain listed, should carefully consider these benefits.

The comment period is 60 days from publication in the Federal Register, and there is no guarantee that the final rules will mirror the proposal. Vinson & Elkins will continue monitoring these developments. If your company is considering submitting a comment, Vinson & Elkins would be happy to assist.

Annex: Enhanced Registration and Communication Benefits: Current vs. Proposed Eligibility

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.