After a brief summer pause, the US Securities and Exchange Commission (SEC) is preparing to release an additional series of proposed rules intended to simplify SEC reporting for public companies. In this update, we discuss several proposals likely to be released in the coming weeks.
SEC Chairman Paul Atkins has made disclosure and offering reform a key element of his regulatory agenda, often promising to “Make IPOs Great Again.” The SEC’s 2026 Regulatory Agenda includes 38 different topics for future rulemakings. Approximately half are relevant to public companies and trading in listed securities. The public comment deadline has passed on several previously released proposals of interest to public companies, including Semi-Annual Reporting, Public Company Filer Status Framework, and the Registered Offering process. Based on public statements and SEC drafts submitted to the Office of Information and Regulatory Affairs, we expect the following SEC rule proposals to be among the next to be released for public comment:
Title: Executive Compensation Disclosure Reform
What to Expect: Chairman Atkins has been a frequent critic of the current state of executive compensation disclosure. The 2006 amendments to Item 402 of Regulation S-K greatly expanded the requirement for dense tables and technical narratives. The Dodd-Frank Act and subsequent SEC rulemaking further expanded the requirements for executive compensation disclosure. The end result is Compensation Discussion and Analysis disclosure that is lengthy, and complex, based on SEC requirements that Chairman Atkins has described as a “Frankenstein patchwork of rules.” We anticipate that the SEC will look to rationalize the volume of executive compensation information by focusing more on materiality and a principles-based regime rather than one that is driven by adherence to line-item details. To that end, we expect fewer mandatory tables collecting financial and statistical information. The SEC may also seek to use its exemptive authority to pare down some of the Dodd-Frank requirements on matters such as CEO pay ratio disclosure, so-called “pay versus performance” disclosure, and the SEC’s compensation clawback rules.
Title: Rescission of Rule 14a-8’s Federal Regulation of Shareholder Proposals and Amendments to Rule 14a-4
What to Expect: Chairman Atkins has made clear that he believes Rule 14a-8 on shareholder proposals is outside the SEC’s authority and that its administration has led to a misallocation of staff resources. As the working title for the rule implies, we expect the proposal will seek a full rescission of Rule 14a-8. The Chairman believes the subject is more properly a matter of state law, and a full repeal will return oversight of shareholder proposals to state law and corporate bylaws. We explain the SEC’s recent actions on Rule 14a-8 for the coming proxy season here, and we also discuss potential implications of repeal here.
Title: Proxy Solicitation and Modernization
What to Expect: The SEC recently proposed to expand electronic delivery of investor communications (including proxy statements), and we expect this proposal to make further headway simplifying the proxy solicitation process. The SEC has teased that the rulemaking will address filing and procedural requirements relating to proxy solicitations and shareholder meetings in an effort to reduce costs and compliance burdens. The proposal may also include features intended to reduce shareholder activism.
Title: Rule 144 Safe Harbor
What to Expect: The public policy justification for SEC Rule 144 is to prevent unregistered distributions of securities by corporate insiders and purchasers of privately placed securities. But the lengthy holding periods and Byzantine operation of the rule seem increasingly anachronistic in the modern era of 24/7 online trading. The “restricted security” concept is also one without an analog in many jurisdictions outside the United States, particularly for publicly traded companies. Further, the SEC’s recent proposal for offerings of crypto asset securities eliminated the concept altogether, and that proposal would permit crypto securities offered under one of the proposed exemptions to be freely tradable without secondary market restrictions. Past amendments to Rule 144 have shortened holding periods and, in the case of companion Rule 145, eliminated most scenarios in which the companion rule applies. We anticipate the SEC will take a similar approach here and propose to shorten the holding periods for restricted securities and narrow the circumstances under which secondary trading is limited.
Title: Rationalization of Disclosure Practices
What to Expect: We expect this proposal to cover a variety of recurring public company disclosure requirements arising under Regulation S-K. Chairman Atkins has also been critical of mission creep in the breadth of public company disclosure, particularly on subjects he views as socially or politically motivated. The repeal of the SEC’s climate reporting rules suggests that Chairman Atkins will also seek to streamline other areas of the public company disclosure rule book. Potential topics may include risk factors, litigation disclosure, cybersecurity, and corporate governance and related party disclosure, among others.
