On May 19, 2026, the SEC released two proposed rule amendments aimed at modernizing the registered offering framework and simplifying ongoing reporting obligations for public companies.  The economic analysis accompanying the “Registered Offering Reform” proposal provides a detailed snapshot of the current landscape for business development companies (“BDCs”) and closed-end funds (“CEFs”), including listed and non-traded vehicles, as well as issuers using shelf and at-the-market (“ATM”) programs.  The data is especially notable in revealing structural differences between listed and non-traded vehicles in terms of size, eligibility and capital-raising approaches.

Market Composition and Asset Size

The SEC analyzed a broad set of registered funds and BDCs, including:

  • 378 exchange-listed registered CEFs
  • 321 unlisted registered CEFs (including 138 interval funds)
  • 53 exchange-listed BDCs
  • 119 unlisted (non-traded) BDCs

Average net asset levels vary meaningfully by category:

  • Exchange-listed CEFs: approximately $597 million
  • Unlisted CEFs: approximately $631 million (interval funds average $735 million)
  • Exchange-listed BDCs: approximately $1.4 billion in net assets and $2.9 billion in total assets

Unlisted BDCs represent the largest category by count with 119 of 172 total BDCs highlighting the continued expansion of the non-traded BDC structure.

Eligibility for Streamlined and WKSI Registration

The current federal securities law framework is focused on two key thresholds:

  • $75 million public float for Short-Form N-2 eligibility under General Instruction A.2
  • $700 million for WKSI status

The data shows a distinct split between listed and unlisted issuers:

  • Listed CEFs: 96% meet the $75 million threshold and 23% exceed $700 million
  • Listed BDCs: 91% meet $75 million and 51% exceed $700 million
  • Unlisted CEFs: 1% meet $75 million and less than 1% are WKSI-eligible
  • Unlisted BDCs: 11% meet $75 million and 11% are WKSI-eligible

Among listed issuers, eligibility for streamlined registration is effectively the norm.  Among non-traded funds, it remains the exception.

Capital-Raising Practices: Dominance of Rule 415

From January 2022 through December 2025, the SEC identified 626 effective Form N-2 filings across 538 unique issuers.  The data confirms the significance of Rule 415-based offerings:

  • 82% of filings (512 of 626) relied on Rule 415 for delayed or continuous offerings
  • Listed CEFs: 90%
  • Unlisted CEFs: 76%
  • Listed BDCs: 86%
  • Unlisted BDCs: 84%

Among listed issuers, automatic shelf registration under Rule 462(e) is also significant:

  • 26% of listed CEF filings
  • 41% of listed BDC filings

Shelf registration and continuous offering programs, including ATM structures, are the dominant capital-raising alternative for both listed and non-traded vehicles.  Short-form N-2 qualification was present in 88% of exchange-listed CEF filings and 77% of exchange-listed BDC filings, compared to only 2% and 6% for their unlisted counterparts. 

Unlisted registered CEFs accounted for the largest share of overall filing activity (323 filings, 52%), followed by exchange-listed CEFs (184 filings, 29%), exchange-listed BDCs (70 filings, 11%) and unlisted BDCs (49 filings, 8%).

Distribution of Registered Offering Sizes

The offering size data shows mean values significantly higher than medians across categories:

  • Overall mean registered amount: $791 million and median $29 million
  • Shelf offerings: mean $942 million and median $65 million
  • Non-shelf offerings: mean $134 million and median $2.6 million
  • Unlisted BDCs: mean $4.3 billion and median $2.5 billion
  • CEFs, listed and unlisted: median registered amount approximately $1 million

The divergence between mean and median is most pronounced among unlisted BDCs, reflecting a small number of large programs that account for a disproportionate share of registered capacity.

Breaking out the mean registered amount by fund type: exchange-listed CEFs averaged $97 million, unlisted CEFs $459 million, exchange-listed BDCs $229 million and unlisted BDCs $4.3 billion.  The registered amount for shelf filings reflects total shelf capacity available for delayed or continuous offerings rather than actual issuance, which may overstate the economic significance of the largest programs.

Market Entry and New Registrants

The non-traded segment accounts for a substantial share of new entrants.  Of 538 unique registrants during the analysis period, 48% were new issuers, defined as registered under the 1940 Act for fewer than 12 months prior to filing.  New issuance activity was concentrated in the non-traded CEF segment.  Breakdown by category:

  • Unlisted CEFs: 76% new entrants
  • Unlisted BDCs: 36% new entrants
  • Exchange-listed CEFs: 4% new entrants
  • Exchange-listed BDCs: no new entrants  

The predominance of new entrants in the non-traded segment raises questions about the adequacy of the current disclosure framework for relatively untested issuers that lack extended operating histories or track records with SEC reporting yet are actively raising capital through continuous offerings.

Implications for the Proposed Registration and Offering Framework

Several structural features emerge from the SEC’s data.  Rule 415 offerings, including shelf registrations and ATM programs, already dominate capital formation across both listed and non-traded vehicles.  At the same time, eligibility for streamlined registration remains heavily concentrated among listed issuers.  Non-traded CEFs and BDCs are largely excluded from WKSI and short-form registration benefits despite accounting for a meaningful share of new entrants and issuance activity.  The policy question raised by the proposal is whether the current eligibility framework appropriately reflects the structure of today’s market, particularly the growth of non-traded vehicles, or whether it continues to privilege a subset of larger, seasoned listed issuers.

Speaking today at the Stanford Rock Center for Corporate Governance, Securities and Exchange Commission (“SEC”) Chair Atkins recapped a number of the key achievements and rulemaking proposals, including the two significant proposals released just last week, about which we blogged (see our first post and second post), all of which are intended to encourage more companies to consider undertaking initial public offerings (“IPO”) and remaining public companies. 

The Chair noted that the SEC staff was in the process of formulating recommendations to modernize Regulation S-K disclosure requirements and to address executive compensation disclosure requirements.

He reported he had asked the staff to prepare recommendations to modernize the IPO process itself.  Chair Atkins observed that we may be “stuck” insofar as the IPO process itself and should think about alternative methods of taking a company public.  He discussed direct listings as an example of innovation.  Chair Atkins observed that, in light of the Supreme Court’s decision on tracing, it might be time to ask whether a Securities Act registration statement provides meaningful protections in the context of a direct listing or whether an Exchange Act registration statement (which contains the same disclosure) would accomplish the same objective.  He also asked whether there were other regulatory frictions in the direct listing process that the SEC or its staff might address.  In his remarks, the Chair also noted that some companies combine with SPACs as a “popular workaround to the process of becoming a public company.”

The Chair commented on “gun jumping” and the offering-related communications rules— “the Commission’s spider web of gun-jumping prohibitions and exceptions remains difficult to maneuver.”  The communications rules have not been updated in over 20 years, and the SEC has not addressed social media in even longer.  The Chair observed that he’d “like to see any rulemaking in this area include considerable reforms to these rules.”

The Chair ended his remarks by inviting comments on modernizing IPOs overall, whether that means improving the SEC’s communication or other IPO-related rules, or identifying ways that the agency can remove roadblocks to non-traditional paths to going public.  The SEC will accept written comments by July 27, 2026.  All submissions should refer to File Number CLL-16, and the file number should be included on the subject line if email is used.  Use the SEC’s submission form or send an email to rule-comments@sec.gov with “CLL-16” included in the subject line.

See the full text of the remarks: Remarks at the Stanford Rock Center for Corporate Governance.

On May 19, 2026, the U.S. Securities and Exchange Commission (the “SEC”) published two rulemaking proposals, each of which would substantially revise the requirements of the U.S. federal securities laws applicable to public companies. These proposals mark the next step in SEC Chair Paul Atkins’ mission to grow the U.S. capital markets and “make IPOs great again,” and clearly reflect the SEC’s commitment to this mission.

This Legal Update covers one proposal, titled “Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies” (the “Proposing Release”). The Proposing Release lays out a new simplified structure for the filer status of many domestic U.S. companies that report under Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), along with numerous ideas for comprehensive disclosure simplification and comment requests.

Continue reading.

On May 19, 2026, the U.S. Securities and Exchange Commission (the “SEC” or the “Commission”) proposed extensive amendments to the registered offering framework under the Securities Act of 1933, as amended (the “Securities Act”). The SEC’s rulemaking proposal on Registered Offering Reform (the “Proposal”) has the potential to be the most significant offering reform in over 20 years. Most important, the Proposal would broaden eligibility to register securities offerings on Form S-3 and provide enhanced registration and communication benefits to a broad universe of issuers, changes that may dramatically increase the ability of such issuers to raise capital quickly in the public markets.

In a statement, SEC Chair Paul Atkins remarked that the Proposal “would address impediments, which result from outdated SEC rules, to public companies’ ability to conduct registered offerings quickly.” He noted that the Proposal, along with the second rulemaking proposal aimed at enhancing filer status, “are among the first important steps toward transforming the SEC’s regulatory framework for public companies.”

We discuss the most significant proposed changes in this Legal Update.

Given the continued and growing interest in special purpose vehicles (“SPVs”) as a means of accessing private market investments, we are publishing a series of posts that examine different aspects of these structures.  This is our second post in the series exploring how a single-investment SPV can be structured to obtain the economic exposure investors seek.

As discussed in our introductory post, an SPV’s primary function is to provide investors with economic exposure to a private company without those investors holding the company’s securities directly.  An SPV may accomplish this objective by (1) acquiring securities issued by the underlying company, (2) obtaining indirect exposure through contractual arrangements with securityholders of the underlying company, or (3) creating synthetic exposure through derivative instruments referencing the underlying company’s share price or performance with no involvement by the company.

In our prior post, we introduced a fictional private company, TechCo.  An SPV sponsor evaluating how to structure a TechCo SPV has several available alternatives depending on a range of factors, including TechCo’s stage of development, its willingness to approve secondary transfers, the sophistication and investment objectives of prospective investors and the extent to which investors seek actual ownership rather than purely economic exposure.

Continue reading.

As noted in our earlier post, the Securities and Exchange Commission (“SEC”) released two rulemaking proposals aimed at overhauling how public companies access the capital markets and address their ongoing reporting obligations.

The second rulemaking proposal, “Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies,” would simplify the filer status framework and expand disclosure accommodations to the vast majority of reporting companies.

Currently, public companies that file periodic reports with the SEC are grouped into four filer categories, with different requirements and disclosure accommodations.  These include (1) large accelerated filers, (2) accelerated filers, (3) non-accelerated filers, and (4) smaller reporting companies (“SRCs”).  An additional category of filers, emerging growth companies (“EGCs”), would remain as-is if the proposed rules are adopted.

The SEC’s proposal would collapse the four overlapping filer categories into just two:  large accelerated filers and non-accelerated filers.  As a result, the disclosure accommodations currently reserved for SRCs and EGCs, including scaled executive compensation disclosure, exemption from say-on-pay votes, and fewer required years of financial statements, would become available to roughly 81% of public companies.

Under the proposal:

  • The large accelerated filer threshold would increase from $700 million to $2 billion in public float, measured based on the average stock price over the final 10 trading days of the second fiscal quarter and required to be met for two consecutive years. In addition, no company would qualify as a large accelerated filer until it has been subject to Exchange Act reporting for at least 60 consecutive months.
  • All companies that do not meet the large accelerated filer criteria would be classified as non-accelerated filers, benefiting from expanded disclosure accommodations and an exemption from the requirement to obtain an auditor’s attestation on a company’s internal control over financial reporting.
  • A new subcategory of “small” non-accelerated filers, defined as companies with total assets of $35 million or less for the two most recent years, would receive extended filing deadlines. Small non-accelerated filers would be allowed an additional 30 days for Form 10-K annual reports and an additional five days for Form 10-Q quarterly reports. This subset represents approximately 18% of public companies.

In a statement, SEC Commissioner Hester Peirce noted that “[s]ince the large accelerated filer status was adopted over 20 years ago, the number of companies subjected to our most stringent disclosure requirements has nearly doubled. Recalibrating the large accelerated filer status threshold, which we propose to do, would be a positive step toward right-sizing the regulatory burden of being a public company. Currently, companies with just over $700 million in public float face the same set of requirements as the largest public companies in our markets.”

The public comment period for the proposal will remain open for 60 days following publication of the proposing release in the Federal Register.

Read the SEC’s press release, fact sheet and proposing release. We note that the proposing release is lengthy and detailed.  A client alert will follow in short order analyzing these significant changes.

Today, the Securities and Exchange Commission (“SEC”) proposed two sets of rule amendments aimed at overhauling how public companies access the capital markets and meet their ongoing reporting obligations.  The first rulemaking proposal, “Registered Offering Reform,” seeks to modernize the registered offering framework by, among other things, broadening eligibility for streamlined registration forms and extending communication safe harbors to a wider universe of issuers.  We address the second rulemaking proposal in a separate post.

The SEC’s registered offering reform proposal would:

  • Expand Form S-3 eligibility by removing the $75 million public float requirement and the 12-month reporting seasoning condition, potentially increasing the number of issuers that may conduct shelf offerings by over 60%.
  • Extend key registration and communication benefits, such as automatic shelf registration and free writing prospectus use, to any issuer eligible to use a registration statement on Form S-3 with exchange-listed common equity.  The SEC estimates this could result in an over 200% increase in the number of eligible issuers.
  • Define “qualified purchaser” under Securities Act Section 18(b)(3) in order to preempt state registration and qualification requirements for all registered offerings, including those involving unlisted securities that currently lack federal preemption.
  • Maintain parity for business development companies (“BDCs”) and registered closed-end funds filing on Form N-2, in part by removing seasoning and public float requirements for short-form shelf registration.
  • Amend Rule 482 to permit broad-based advertising for registered index-linked annuities and market value adjustment annuities.
  • Modernize Form S-1 by expanding both backward and forward incorporation by reference, with an estimated increase of up to 106% in the number of issuers eligible to forward incorporate.

In a statement, SEC Chair Paul Atkins noted that the proposals “build upon the legislative and regulatory concepts that have proven successful in the past and aim to extend that success to more companies – particularly small and mid-sized companies – and incentivize them to go and stay public.”

The public comment period for the proposal will remain open for 60 days following publication of the proposing releases in the Federal Register.

Many of the changes that are contemplated in this release and in the accompanying release were considered by the House of Representatives in connection with the INVEST Act, which was adopted with strong bipartisan support. 

Read the SEC’s press release, fact sheet and proposing release.  We note that the proposing release is lengthy and detailed.  A client alert will follow in short order analyzing these significant changes.

On May 1, 2026, the Private Investor Coalition, Inc. (“PIC”) submitted a rulemaking petition to the Securities and Exchange Commission (the “SEC”) requesting amendments to the definitions of “qualified purchaser” (as defined in Section 2(a)(51) of the Investment Company Act of 1940 (the “Investment Company Act”)) and “qualified institutional buyer” (“QIB”) (as defined in Rule 144A(a) under the Securities Act of 1933 (the “Securities Act”)) to include “family offices” and “family clients” in a manner consistent with the SEC’s accredited investor definition in Rule 501(a) under the Securities Act.

PIC argues that rulemaking is necessary and appropriate because existing definitions do not fully account for the sophistication and resources of “family offices” and “family clients” that may be able to evaluate private offerings and bear the associated risks.  The petition follows the SEC’s 2020 amendments to Rule 501(a), which added “family offices” and “family clients” as new accredited investor categories at a $5 million threshold.  Accordingly, PIC requested that the SEC amend the QIB definition under Rule 144A to include “family offices” and “family clients,” using a $100 million threshold rather than the $5 million threshold that applies under the accredited investor definition.  PIC has also requested corresponding treatment for qualified purchasers.

If the SEC adopts these amendments, the practical effect would be to expand the universe of investors able to qualify as qualified purchasers or QIBs.  Private fund sponsors, placement agents, and other market participants would need to update investor questionnaires, subscription documents, Rule 144A representation letters, transfer procedures, and onboarding processes to reflect the revised eligibility standards and may be able to broaden participation in offerings and funds that currently rely on qualified purchaser or QIB status.  Read the full petition here.

In 2012, the SEC Staff granted no action relief to Royal Bank of Canada to register covered bonds on a Registration Statement on Form F-3.  Even though covered bonds are not “asset-backed securities,” that relief was predicated on the covered bond Guarantor complying with certain reporting requirements under Regulation AB.  When Regulation AB was amended in 2014 to add extensive loan level disclosure requirements for residential mortgage loans, continued reliance on the no action relief became impractical if not impossible for covered bonds.

With the creation in 2012 of the extensive Canadian regulatory framework for covered bond registration and issuance under the oversight of the Canadian Mortgage and Housing Corporation, there now has developed an approach under Canadian law for the issuance of Canadian covered bonds, as well as for ongoing reporting requirements.  In light of this development, and following on the SEC’s Concept Release on Residential Mortgage-Backed Securities Disclosures and Enhancements to Asset-Backed Securities Registration, which sought comments on loan level disclosures and the definition of “asset-backed securities,” among other things, we sought a no-action letter to provide Canadian issuers that offer covered bonds compliant with the CMHC framework the option to register these with the SEC without the reporting requirements under Regulation AB.

On May 12, 2026, the SEC Staff granted relief on the terms set forth in its letter.  As noted above, the letter reiterates that covered bonds are not “asset-backed securities” as defined under the Exchange Act.  The letter provides that a CMHC bank registrant may register (with the Guarantor as a co-registrant) the offer and sale of covered bonds on Form F-3.  Loan level disclosure is not required.  No other periodic filings would be required of the Guarantor other than compliance with a requirement to file (not furnish) on Form 6-K the monthly investor report currently required under the CMHC Guide.  See the letter for the specific detailed discussion and conditions.

Read the no action letter and the incoming letter.

The Staff of the Division of Trading and Markets (the “Staff”) of the Securities and Exchange Commission (the “SEC” or the “Commission”) recently issued a statement (the “Statement”) providing its views on the application of the broker-dealer registration requirements under Section 15(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to persons that create, offer, and/or operate certain software interfaces utilized by users to prepare transactions in crypto asset securities (“Covered User Interface Providers”).  The Statement is part of the SEC’s broader effort to provide regulatory clarity on how federal securities laws apply to activities involving digital assets and cryptocurrencies.  According to the Staff, it is an interim step while the SEC continues to consider regulatory issues relating to crypto asset securities activities and the feedback it has received.  As such, absent intervening action by the Commission, the Statement will be considered withdrawn effective five years from April 13, 2026.

A “Covered User Interface” is an interface provided by a website, browser extension, or other software application, such as a mobile app, that may be embedded in a self-custodial wallet or separately available for download.  These interfaces are designed to assist users engaging in user-initiated crypto asset securities transactions on blockchain protocols/blockchain-based smart contracts using the user’s own self-custodial wallet.  Covered User Interfaces convert user-identified transaction parameters (such as buy/sell, volume, crypto asset security, and price or price range) into blockchain-legible commands for signature and transmission via the user’s self-custodial wallet.  Covered User Interfaces may also provide market data (such as potential execution routes, asset prices, and estimated transaction costs or “gas” fees), present educational material to help users formulate and set their desired transaction parameters, and solicit investors to use the interface, with Covered User Interface Providers generally charging users a fixed percentage per transaction.

Under Section 15(a) of the Exchange Act, absent an exception or exemption, it is unlawful for any “broker”, as defined by Section 3(a)(4) of the Exchange Act (generally, any person engaged in the business of effecting transactions in securities for the account of others), to induce or attempt to induce the purchase or sale of any security without registering under Section 15(b) of the Exchange Act.   Provided the following conditions are met, the Staff will not object to a Covered User Interface Provider, including persons who create, offer, and/or operate self-custodial wallets with an associated Covered User Interface, operating without broker-dealer registration under the Exchange Act:

  • the Covered User Interface permits users to customize default transaction parameters and provides educational material to help users set them;
  • the Covered User Interface Provider does not solicit investors to engage in specific crypto asset securities transactions;
  • the Covered User Interface Provider selects default trading venues or distributed ledger trading systems (e.g., automated market maker liquidity pools) to connect with;
  • any affiliations between the Covered User Interface Provider and connected trading venues or distributed ledger trading systems are clearly disclosed, and affiliated venues or systems are accessed on the same terms as unaffiliated ones;
  • if only one execution route is shown, the Covered User Interface provides the user the ability to view additional routes, as applicable; if multiple routes are shown, users can filter or sort them by objective factors (e.g., price or speed);
  • the Covered User Interface does not provide commentary on execution routes (e.g., labeling one as “best price” or “most reliable”);
  • the Covered User Interface uses only pre-disclosed, objective, and independently verifiable software parameters for preparing trading instructions and displaying market data;
  • the Covered User Interface does not exercise control, discretion or decision-making over market information provided or transactions beyond the functions described in the Statement;
  • compensation is limited to a fixed charge to the user, which may be charged per crypto asset securities transaction (either as a flat fee or a percentage of the transaction) or be charged as a flat fee that is based on objective factors, applied consistently, and is product, execution route, execution venue and counterparty agnostic.  In other words, the Covered User Interface Provider cannot receive any compensation based on the size, value, or occurrence of a crypto asset securities transaction from any person other than the user (this would also preclude receipt of payments for order flow by the Covered User Interface Provider);
  • the Covered User Interface Provider maintains policies, procedures and controls to evaluate, onboard, and audit connected trading venues and distributed ledger trading systems based on objective factors, and to periodically reassess default transaction parameters and address any conflicts of interest or risks associated with such parameters; and
  • the Covered User Interface Provider prominently discloses all material facts to users, including its (i) registration status (i.e., a prominent disclaimer that it is not registered with or regulated by the SEC relating to its creation, offering, and/or operation of a Covered User Interface), (ii) fee structure, (iii) material conflicts of interest, (iv) interface limitations, (v) software parameters, (vi) cybersecurity controls, (vii) policies, procedures and controls to protect user trading information, including from potential fraud or manipulation (e.g., involving maximal extractable value strategies), (viii) trading venue or distributed ledger trading system integrations, and (ix) default transaction parameter methodology.

The Statement is expressly limited in scope.  A Covered User Interface Provider that engages in, or holds itself out as providing, any of the following services with respect to securities will not benefit from the Staff’s position:

  • negotiating transaction terms;
  • soliciting specific transactions;
  • making investment recommendations or providing advice;
  • arranging financing;
  • processing trade documentation;
  • conducting independent asset valuations;
  • holding, accessing, handling, managing, or possessing user funds, securities, or stablecoins;
  • executing or settling transactions; or
  • taking or routing orders.

The Statement is the latest in a series of SEC statements aimed at clarifying the application of federal securities laws to crypto asset activities—see, for example the Joint Interpretation from the SEC and Commodity Futures Trading Commission on Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets.  Importantly, the Statement does not address the Staff’s views on persons that create, operate, and/or offer custodial wallets held on behalf of an investor with an associated Covered User Interface.  As with prior staff statements on crypto asset matters, the Statement does not carry the force of a formal rule or regulation.

Read the Staff’s full Statement.