A few weeks ago, Corp Fin issued a new CDI that didn’t get a lot of attention because the SEC didn’t push out an email alert about it like it normally does.
The upshot of the CDI is that a non-accelerated filer can now continue to be a non-accelerated filer for the fiscal year immediately following loss of “smaller reporting company” status, on the basis that the issuer is eligible to use SRC-scaled reporting until its first quarter Form 10-Q of the year following the loss of SRC status.
This is great news for companies in this category as it will save them—for at least one year—the time and expense associated with a Section 404(b) auditor attestation, as auditor attestations are not required for non-accelerated filers. Hat tip to Cooley’s Asa Henin on this one!
Here is new Exchange Act Rules CDI Question 130.05:
Question: An issuer is a smaller reporting company under the revenue test in paragraph (2) or (3)(iii)(B) of the “smaller reporting company” definition in Rule 12b-2. On the last business day of its second fiscal quarter of 2025, the issuer conducts its annual determination of smaller reporting company status and determines that it no longer qualifies as a smaller reporting company. When the issuer assesses its accelerated filer or large accelerated filer status, as of the end of fiscal year 2025, will this issuer become an accelerated filer or large accelerated filer?
Answer: No. When determining its accelerated filer or large accelerated filer status as of the end of its fiscal year, the issuer must assess, among other things, whether it is “eligible to use the requirements for smaller reporting companies under the revenue test in paragraph (2) or (3)(iii)(B) of the ‘smaller reporting company’ definition” in Rule 12b-2. See paragraph (1)(iv) of the definition of “accelerated filer” and paragraph (2)(iv) of the definition of “large accelerated filer” in Rule 12b-2. In this case, the issuer would be eligible to continue to use the requirements for smaller reporting companies through the end of fiscal year 2025 and until its Form 10-Q for the first fiscal quarter of 2026. See paragraph (3)(i)(C) of the definition of “smaller reporting company” in Rule 12b-2. Accordingly, the issuer would not satisfy the condition in paragraph (1)(iv) of the definition of “accelerated filer” or paragraph (2)(iv) of the definition of “large accelerated filer” as of the end of fiscal year 2025. The issuer would be a non-accelerated filer for filings due in fiscal year 2026 and would be ineligible to use the requirements for smaller reporting companies beginning with its Form 10-Q for the first fiscal quarter of 2026. [August 27, 2025]
Authored by
Broc Romanek