SEC Adopts New Rules that Revise Financial Reporting for Smaller Firms as Mandated by the FAST Act

Walking to the SEC Securities and Exchange CommissionThe Securities and Exchange Commission (SEC) has adopted “interim final rules” as mandated by the Fixing America’s Surface Transportation or FAST Act that was passed by Congress in December.  These new rules revise financial reporting for emerging growth companies (EGCs) and smaller reporting companies.  EGCs are defined as an issuer with less than $1 billion in total annual gross revenue during its most recent fiscal year. A smaller company is defined in Rule 405 as an issuer with a public float of less than $75 million or having annual revenues of less than $50 million during its most recent fiscal year.

The updated rules specifically address Forms S-1 and F-1 and allow companies to omit certain historical financial information.  The rules also update Form S-1 to allow smaller companies to use incorporation by reference for future filings the companies make under the federal securities laws after the registration statement becomes effective.

The SEC is accepting comments on the revised rules but they are expected to become final following publication in the Federal Register.

See document below.

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