SUMMARY: We are adopting amendments to the definition of “smaller reporting company” as

Conformed to Federal Register Version 
SECURITIES AND EXCHANGE COMMISSION 
17 CFR Parts 210, 229, 230, 239, 240, and 249 
[Release Nos. 33-10513; 34-83550; File No. S7-12-16] 
RIN 3235-AL90 
SMALLER REPORTING COMPANY DEFINITION 
AGENCY:  Securities and Exchange Commission. 
ACTION:  Final rules. 
SUMMARY:  We are adopting amendments to the definition of “smaller reporting company” as 
used in our rules and regulations.  The amendments expand the number of registrants that qualify 
as smaller reporting companies and are intended to reduce compliance costs for these registrants 
and promote capital formation, while maintaining appropriate investor protections.  We are 
amending the definition of “smaller reporting company” to include registrants with a public float 
of less than $250 million, as well as registrants with annual revenues of less than $100 million 
for the previous year and either no public float or a public float of less than $700 million.   We 
also are amending other rules and forms in light of the new definition of “smaller reporting 
company,”  including amendments to the definitions of “accelerated filer” and “large accelerated 
filer” to preserve the existing thresholds in those definitions.  Qualifying as a “smaller reporting 
company” will no longer automatically make a registrant a non-accelerated filer.  The Chairman, 
however, has directed the staff to formulate recommendations to the Commission for possible 
additional changes to the “accelerated filer” definition that, if adopted, would have the effect of 
reducing the number of registrants that qualify as accelerated filers.     
DATES:  The final rules are effective September 10, 2018. 

2 
 
FOR FURTHER INFORMATION CONTACT:  Amy Reischauer or Jennifer Riegel, Office 
of Small Business Policy, Division of Corporation Finance, at (202) 551-3460, U.S. Securities 
and Exchange Commission, 100 F Street, NE, Washington, DC 20549-3628. 
SUPPLEMENTARY INFORMATION:  We are adopting amendments to 17 CFR 230.405 
(“Rule 405”) and Forms S-1,
1
 S -3,
2
 S -4,
3
 S -8,
4
 and S-11
5
 under the Securities Act of 1933 
(“Securities Act”);
6
 17 CFR 240.12b-2 (“Rule 12b-2”) and Forms 10,
7
 10-Q,
8
 and 10-K
9
 under 
the Securities Exchange Act of 1934 (“Exchange Act”);
10
 17 CFR 210.3-05 (“Rule 3-05” of 
Regulation S-X);
11
 and 17 CFR 229.10(f) (“Item 10(f)” of Regulation S-K).
12
   
                                                 
1
    17 CFR 239.11. 
2
    17 CFR.239.13. 
3
    17 CFR 239.25. 
4
    17 CFR 239.16b. 
5
    17 CFR 239.18. 
6
    15 U.S.C. 77a et seq. 
7
    17 CFR 249.210. 
8
    17 CFR 249.308a. 
9
    17 CFR 249.310. 
10
   15 U.S.C. 78a et seq. 
11
   17 CFR 210.1-01 through 210.12-29. 
12
   17 CFR 229.10 through 229.1208. 

3 
 
Table of Contents 
I. Introduction ............................................................................................................................. 5 
II. Final Amendments ................................................................................................................... 9 
A. Amendments to Smaller Reporting Company Definition ................................................ 9 
1. Public Float Test ......................................................................................................... 12 
2. Revenue Test .............................................................................................................. 18 
B. Amendments to Rule 3-05(b)(2)(iv) of Regulation S-X ................................................ 24 
C. Amendments to Accelerated Filer and Large Accelerated Filer Definitions ................. 25 
1. Proposed Amendments ............................................................................................... 25 
2. Comments ................................................................................................................... 27 
3. Final Amendments ...................................................................................................... 30 
III. Other Matters ......................................................................................................................... 32 
IV. Economic Analysis ................................................................................................................ 32 
A. Baseline .......................................................................................................................... 33 
B. Potential Economic Effects ............................................................................................ 38 
1. Introduction ................................................................................................................ 38 
2. Impact on Eligibility for Smaller Reporting Company Status ................................... 42 
3. Estimation of Potential Costs and Benefits ................................................................ 46 
4. Affiliated Ownership and Adverse Selection ............................................................. 57 
5. Effects on Efficiency, Competition and Capital Formation ....................................... 60 
C. Possible Alternatives ...................................................................................................... 61 
V. Paperwork Reduction Act ...................................................................................................... 64 
A. Background .................................................................................................................... 64 
B. Summary of the Final Amendments .............................................................................. 65 
C. Summary of Comment Letters ....................................................................................... 67 
D. Revisions to Burden and Cost Estimates ....................................................................... 68 
1. Form 10-K .................................................................................................................. 69 
2. Form 10-Q .................................................................................................................. 70 
3. Form 8-K .................................................................................................................... 71 
4. Schedule 14A .............................................................................................................. 72 
5. Schedule 14C .............................................................................................................. 72 
6. Form 10....................................................................................................................... 73 
7. Form S-1 ..................................................................................................................... 74 
8. Form S-3 ..................................................................................................................... 74 

4 
 
9. Form S-4 ..................................................................................................................... 75 
10. Form S-11 ................................................................................................................... 76 
VI. Final Regulatory Flexibility Analysis.................................................................................... 77 
A. Need for, and Objectives of, the Final Rules ................................................................. 77 
B. Significant Issues Raised by Public Comments ............................................................. 78 
C. Small Entities Subject to the Final Rules ....................................................................... 82 
D. Projected Reporting, Recordkeeping and Other Compliance Requirements ................. 83 
E. Agency Action to Minimize Effect on Small Entities ................................................... 84 
VII. Statutory Amendments and Text of Final Rules ................................................................... 86 
  

5 
 
I. Introduction 
On June 27, 2016, the Commission proposed amendments that would increase the 
financial thresholds in the “smaller reporting company” (“SRC”) definition and would have the 
effect of expanding the number of companies that benefit from the scaled disclosure 
accommodations available to SRCs.
13
  In developing final rules, we considered comment letters 
received in response to the Proposing Release,
14
 as well as recommendations made by the 
Securities and Exchange Commission Advisory Committee on Small and Emerging Companies 
(“ACSEC”)
15
 and the SEC Government-Business Forum on Small Business Capital Formation 
(“Small Business Forum”).
16
  The Commission last revised the SRC definition in 2008.
17
  Our 
                                                 
13
  See Amendments to Smaller Reporting Company Definition, Release No. 33-10107 (Jun. 27, 2016) [81 FR 
43130 (Jul. 1, 2016)] (“Proposing Release”).   As the Commission noted in the Proposing Release, raising the 
financial thresholds in the SRC definition would be responsive to the Fixing America’s Surface Transportation 
Act of 2015 (“FAST Act”) because it would reduce the burden on the specified registrants by increasing the 
number of registrants eligible for scaled disclosure.  See Pub. L. No. 114-94, 129 Stat. 1312 (2015). 
14
   The comment letters received in response to the Proposing Release are available at 
https://www.sec.gov/comments/s7-12-16/s71216.htm
. 
15
   In September 2015 and March 2013, the ACSEC recommended revising the SRC definition to include 
registrants with a public float of up to $250 million.  The recommendations made by ACSEC in March 2013 also 
included a recommendation to revise the SRC definition for registrants that are unable to calculate their public 
float to include registrants with less than $100 million in annual revenues.  ACSEC Recommendations about 
Expanding Simplified Disclosure for Smaller Issuers (Sept. 23, 2015), available at 
https://www.sec.gov/info/smallbus/acsec/acsec-recommendations-expanding-simplified-disclosure-for-smaller-
issuers.pdf and ACSEC Recommendations Regarding Disclosure and Other Requirements for Smaller Public 
Companies (Mar. 21, 2013), available at https://www.sec.gov/info/smallbus/acsec/acsec-recommendation-
032113-smaller-public-co-ltr.pdf.  Both of these recommendations also included a recommendation that the 
Commission revise the “accelerated filer” definition to include registrants with a public float of $250 million or 
more, but less than $700 million.  The accelerated filer definition currently includes registrants with a public 
float of $75 million or more, but less than $700 million.  See Exchange Act Rule 12b-2.  See Section 
II.C for a 
discussion of the accelerated filer definition. 
16
   The 2017 Small Business Forum recommended that the SRC definition be revised to include registrants with a 
public float of less than $250 million or registrants with annual revenues of less than $100 million, excluding 
large accelerated filers.  See Final Report of the 2017 SEC Government Business Forum on Small Business 
Capital Formation (Mar. 2018), available at https://www.sec.gov/files/gbfor36.pdf
.  Registrants with a public 
float of $700 million or more generally qualify as large accelerated filers.  See Exchange Act Rule 12b-2.  Prior 
Small Business Forums made the same or similar recommendations.  Final Small Business Forum reports are 
available at 
https://www.sec.gov/info/smallbus/sbforumreps.htm. Information about the Small Business Forum is 
available at http://www.sec.gov/info/smallbus/sbforum.shtml.  These recommendations also included a 
recommendation that the Commission revise the “accelerated filer” definition consistent with the recommended 
changes to the SRC definition.  See Section 
II.C for a discussion of the accelerated filer definition. 

6 
 
amendments reflect the need to solicit input and retrospectively review our rules in order to 
determine whether they are outdated or are not functioning as intended.  Today,  we are amending 
the SRC definition in an effort to promote capital formation and reduce compliance costs for 
specified registrants by expanding the number of registrants that are eligible to provide scaled 
disclosure while maintaining appropriate investor protections. 
We are adopting the amendments generally as proposed with two changes.  As proposed, 
we are amending the SRC definition to include registrants with a public float of less than $250 
million, as well as registrants with annual revenues of less than $100 million for the previous 
year and no public float.  In a change from the proposal, the SRC definition in the final rules also 
includes registrants with annual revenues of less than $100 million for the previous year and a 
public float of less than $700 million.  Specifically, we are amending Securities Act Rule 405, 
Exchange Act Rule 12b-2, and Item 10(f) of Regulation S-K to effect these changes.    In another 
change from the proposal, we are amending Rule 3-05(b)(2)(iv) of Regulation S-X to increase 
the revenue threshold under which certain acquirers may omit the earliest of the three fiscal years 
of audited financial statements of certain targets.   Finally, we are adopting amendments to the 
“accelerated filer” and “large accelerated filer” definitions in Exchange Act Rule 12b-2, as 
proposed, to preserve the application of the current public float thresholds in those definitions.
18
  
The Chairman, however, has directed the staff to formulate recommendations to the Commission 
for possible additional changes to the “accelerated filer” definition that, if adopted, would have 
                                                                                                                                                             
17
  See Smaller Reporting Company Regulatory Relief and Simplification, Release No. 33-8876 (Dec. 19, 2007) [73 
FR 934 (Jan. 4, 2008)] (“SRC Adopting Release”).   
18
   The definitions of accelerated filer and large accelerated filer are based on public float, but currently contain a 
provision excluding registrants that are eligible to use the SRC requirements in Regulation S-K for their annual 
and quarterly reports.  As a result, raising the SRC public float threshold without eliminating that provision 
effectively would raise the accelerated filer public float threshold.  See Section II.C for a discussion of the 
amendments to the accelerated filer and large accelerated filer definitions. 

7 
 
the effect of reducing the number of registrants that qualify as accelerated filers in order to 
promote capital formation by reducing compliance costs for certain registrants, while 
maintaining appropriate investor protections.  As part of the staff’s consideration of possible 
recommended amendments, the Chairman has directed the staff to consider, among other things, 
the historical and current relationship between the SRC and “accelerated filer” definitions.  The 
staff has begun work to prepare these recommendations. 
Consistent with the proposal, we are not amending any of the scaled disclosure 
accommodations available to SRCs in Regulation S-K and Regulation S-X.
19
  SRCs may comply 
with the scaled disclosure requirements available to them on an item-by-item basis.
20
  The following 
table summarizes these scaled disclosure accommodations.
21
 
Regulation S-K 
Item Scaled Disclosure Accommodation 
101 − Description of Business May satisfy disclosure obligations by describing the development of the 
registrant’s business during the last three years rather than five years.  Business 
development description requirements are less detailed than disclosure 
requirements for non-SRCs. 
201 − Market Price of and 
Dividends on the Registrant’s 
Common Equity and Related 
Stock performance graph not required. 
                                                 
19
   Several of these scaled disclosure accommodations, such as the scaled executive compensation disclosures under 
Item 402(l) through (r) of Regulation S-K [17 CFR 229.402(l) through (r)], are similar to the disclosure 
accommodations available to an emerging growth company (“EGC”).  See Securities Act Rule 405 [17 CFR 
230.405] and Exchange Act Rule 12b-2 [17 CFR 240.12b-2].  EGCs also are exempt from the Sarbanes-Oxley Act 
Section 404(b) auditor attestation of internal control over financial reporting.  For a discussion of scaled 
disclosure accommodations available to EGCs, see Business and Financial Disclosure Required by Regulation S-
K, Release No. 33-10064 (Apr. 13, 2016) [81 FR 23915 (April 22, 2016)] (“Regulation S-K Concept Release”).   
20
  See SRC Adopting Release, 73 FR at 940.  Where a disclosure requirement applicable to SRCs is more stringent 
than the corresponding requirement for non-SRCs, however, SRCs must comply with the more stringent 
standard.  The SRC Adopting Release identified Item 404 of Regulation S-K [17 CFR 229.404] as the only 
instance in Regulation S-K in which the disclosure requirements applicable to SRCs could be more stringent. 
21
   In addition to the accommodations itemized in the table, SRCs using Form S-1 may incorporate by reference 
information filed prior and subsequent to the effectiveness of the registration statement if they meet the 
eligibility requirements in General Instruction VII of Form S-1.  See Item 12(b) of Form S-1; see also 
Simplification of Disclosure Requirements for Emerging Growth Companies and Forward Incorporation by 
Reference on Form S-1 for Smaller Reporting Companies, Release No. 33-10003 (Jan. 19, 2016) [81 FR 2743 
(Jan. 19, 2016)]. 

8 
 
Regulation S-K 
Item Scaled Disclosure Accommodation 
Stockholder Matters 
301 – Selected Financial Data Not required. 
302 – Supplementary Financial 
Information 
Not required. 
303 – Management’s Discussion 
and Analysis of Financial 
Condition and Results of 
Operations (“MD&A”) 
Two-year MD&A comparison rather than three-year comparison.  
Two year discussion of impact of inflation and changes in prices rather than 
three years. 
Tabular disclosure of contractual obligations not required. 
305 – Quantitative and 
Qualitative Disclosures About 
Market Risk 
Not required. 
402 – Executive Compensation Three named executive officers rather than five. 
Two years of summary compensation table information rather than three. 
Not required: 
• Compensation discussion and analysis. 
• Grants of plan-based awards table. 
• Option exercises and stock vested table. 
• Pension benefits table. 
• Nonqualified deferred compensation table. 
• Disclosure of compensation policies and practices related to risk 
management. 
• Pay ratio disclosure. 
404 – Transactions With Related 
Persons, Promoters and Certain 
Control Persons
22
 
Description of policies/procedures for the review, approval or ratification of 
related party transactions not required. 
407 – Corporate Governance Audit committee financial expert disclosure not required in first annual report 
Compensation committee interlocks and insider participation disclosure not 
required. 
Compensation committee report not required. 
503 – Prospectus Summary, Risk 
Factors and Ratio of Earnings to 
Fixed Charges 
No ratio of earnings to fixed charges disclosure required. 
No risk factors required in Exchange Act filings. 
601 – Exhibits Statements regarding computation of ratios not required. 
 
                                                 
22
   Item 404 also contains the following expanded disclosure requirements applicable to SRCs:  (1) rather than a flat 
$120,000 disclosure threshold, the threshold is the lesser of $120,000 or 1% of total assets, (2) disclosures are 
required about underwriting discounts and commissions where a related person is a principal underwriter or a 
controlling person or member of a firm that was or is going to be a principal underwriter, (3) disclosures are 
required about the issuer’s parent(s) and their basis of control, and (4) an additional year of Item 404 disclosure 
is required in filings other than registration statements. 

9 
 
Regulation S-X 
Rule Scaled Disclosure 
8-02 – Annual Financial 
Statements 
Two years of income statements rather than three years. 
Two years of cash flow statements rather than three years. 
Two years of changes in stockholders’ equity statements rather than three years. 
8-03 – Interim Financial 
Statements 
Permits certain historical financial data in lieu of separate historical financial 
statements of equity investees. 
8-04 – Financial Statements of 
Businesses Acquired or to Be 
Acquired 
Maximum of two years of acquiree financial statements rather than three years. 
8-05 – Pro forma Financial 
Information 
Fewer circumstances under which pro forma financial statements are required. 
8-06 – Real Estate Operations 
Acquired or to Be Acquired 
Maximum of two years of financial statements for acquisition of properties from 
related parties rather than three years. 
8-08 – Age of Financial 
Statements 
Less stringent age of financial statements requirements. 
 
II. Final Amendments 
A. Amendments to Smaller Reporting Company Definition 
We are adopting amendments to the SRC definition to expand the number of registrants 
that qualify as SRCs and thereby benefit from scaled disclosure requirements.  These 
amendments will enable a registrant to qualify as a SRC based on a public float test or a revenue 
test.
23
   
Under the final rules, SRCs generally
24
 are registrants with: 
• a public float of less than $250 million;
25
 or 
                                                 
23
  See Item 10(f)(1)(i) and (ii) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.   
24
   Consistent with the current definition, the SRC definition in the final rules specifically excludes investment 
companies, asset-backed issuers (as defined in Item 1101 of Regulation AB [17 CFR 229.1101]) and majority-
owned subsidiaries of a parent that is not a SRC.  See Item 10(f)(1) of Regulation S-K; Securities Act Rule 405; 
Exchange Act Rule 12b-2.  Lower public float and revenue thresholds apply to registrants that determined that 
they did not qualify as SRCs in the prior year, but are eligible to transition to SRC status.  See Item 10(f)(2)(iii) 
of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.  See also Section II.A for a discussion of 
the amendments to these thresholds. 
25
   Consistent with the current definition, public float is computed under the final rules by multiplying the aggregate 
worldwide number of shares of a registrant’s voting and non-voting common equity held by non-affiliates by the 
 

10 
 
• annual revenues of less than $100 million
26
 and either no public float
27
 or a public 
float of less than $700 million.
28
   
As proposed, the final rules increase the threshold for determining SRC status based on 
public float from $75 million to $250 million.  A registrant that qualifies as a SRC under the 
public float test would qualify regardless of its revenues.
29
  In a change from the proposal, the 
final rules will expand the SRC definition to include registrants with a public float of less than 
$700 million, if they also have annual revenues of less than $100 million.
30
  The following table 
                                                                                                                                                             
price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in 
the principal market for the common equity.  See Item 10(f)(1)(i) of Regulation S-K; Securities Act Rule 405; 
Exchange Act Rule 12b-2.  The determination of public float is premised on the existence of a public trading 
market for the issuer’s equity securities.  Therefore, an entity with equity securities outstanding but not trading in 
any public trading market would not be able to qualify on the basis of a public float test.  In contrast to public 
float, market capitalization reflects the value of a registrant’s voting and non-voting common equity held by all 
holders, whether affiliates or non-affiliates. 
A reporting registrant calculates its public float as of the last business day of its most recently completed second 
fiscal quarter.  See Item 10(f)(2)(i) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.  A 
registrant filing its initial registration statement under the Securities Act or Exchange Act calculates its public 
float as of a date within 30 days of the date the registration statement is filed by multiplying the aggregate 
worldwide number of shares of its voting and non-voting common equity held by non-affiliates before the 
registration plus, in the case of a Securities Act registration statement, the number of such shares included in the 
registration statement by the estimated public offering price of the shares. See Item 10(f)(2)(ii)(A) of Regulation 
S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.    
26
   Consistent with the current definition, annual revenues are as of the most recently completed fiscal year for 
which audited financial statements are available. Item 10(f)(2)(i)(B) and (f)(2)(ii)(B) of Regulation S-K; 
Securities Act Rule 405; Exchange Act Rule 12b-2.   
27
  See Item 10(f)(1)(ii)(A) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.  A registrant 
may have no public float because it has no public common equity outstanding or no market price for its common 
equity exists.  Based on data compiled by our Division of Economic and Risk Analysis (“DERA”), in calendar 
year 2016, approximately 21.5% of registrants that qualified as SRCs (and 7.7% of all registrants) had no public 
float.  The estimated number of registrants with no public float here and elsewhere in this release may be over-
inclusive due to the difficulty of ascertaining this status based on data extracted from registrants’ filings.  See 
note 137 for a discussion of the methodology used by the staff to obtain this data. 
28
  See Item 10(f)(1)(ii)(B) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.   
29
  See Instruction to Paragraph (f) of Item 10 of Regulation S-K; Instruction to definition of “smaller reporting 
company” in Securities Act Rule 405; Instruction to definition of “smaller reporting company” in Exchange Act 
Rule 12b-2. 
30
  See Item 10(f)(1)(ii)(B) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.   

11 
 
summarizes the amendments to the SRC definition for a registrant making an initial 
determination under the amendments
31
 or a current SRC seeking to continue to qualify.  
Criteria Current Definition Revised Definition 
Public Float Public float of less than $75 
million  
Public float of less than $250 million  
Revenues Less than $50 million of annual 
revenues and no public float 
Less than $100 million of annual revenues and  
• no public float, or  
• public float of less than $700 million  
 
Consistent with the current definition, and as proposed, under the final rules, a registrant 
that determines that it does not qualify as a SRC under the initial qualification thresholds will 
remain unqualified unless and until it determines that it meets one or more lower qualification 
thresholds.  The subsequent qualification thresholds, set forth in the table below, are set at 80% 
of the initial qualification thresholds.
32
 
                                                 
31
   For purposes of the first fiscal year ending after effectiveness of the amendments, a registrant will qualify as a 
SRC if it meets one of the initial qualification thresholds in the revised definition as of the date it is required to 
measure its public float or revenues (the “measurement date”), even if such registrant previously did not qualify 
as a SRC.  See Item 10(f)(2)(i) and (ii) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2 for 
additional information about the measurement date.  For example, a registrant with a September 30 fiscal year 
end that previously was not a SRC and that had a public float of $220 million as of March 30, 2018 (the last 
business day of its most recently completed second quarter) will qualify as a SRC for the fiscal year ending 
September 30, 2018. 
32
  See Item 10(f)(2)(iii) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2. 

12 
 
Criteria
33
 Current Definition Revised Definition 
Public Float Public float of less than $50 
million  
Public float of less than $200 million, if it previously 
had $250 million or more of public float
34
  
Revenues Less than $40 million of annual 
revenues and no public float  
Less than $80 million of annual revenues, if it 
previously had $100 million or more of annual 
revenues; and  
Less than $560 million of public float, if it previously 
had $700 million or more of public float. 
 
1. Public Float Test 
a. Proposed Amendments 
As proposed, a registrant with a public float of less than $250 million would qualify as a 
SRC.
35
  Consistent with the current definition, the Commission proposed that once a registrant 
does not qualify as a SRC,
36
 it would remain unqualified until its public float falls below another, 
lower threshold.  Specifically, the Commission proposed amending the rules to provide that a 
registrant that previously did not qualify as a SRC would qualify as a SRC if it has a  public float 
of less than $200 million as of its most recently completed second fiscal quarter.
37
 
                                                 
33
   A registrant that does not qualify as a SRC may subsequently seek to qualify under either test. 
34
   A registrant that previously was not a SRC that subsequently qualifies based on a public float of less than $200 
million will qualify as a SRC regardless of its revenues.  See Instruction to Paragraph (f) of Item 10 of 
Regulation S-K; Instruction to definition of “smaller reporting company” in Securities Act Rule 405; Instruction 
to definition of “smaller reporting company” in Exchange Act Rule 12b-2. 
35
  See Proposed Item 10(f)(1)(i) and (ii) of Regulation S-K; Proposed Securities Act Rule 405; Proposed Exchange 
Act Rule 12b-2. 
36
   This applies either upon an initial determination in the case of registrants filing an initial registration statement, 
or as of an annual determination in the case of reporting registrants. 
37
   The proposed $200 million subsequent qualification threshold represents 80% of the proposed $250 million 
initial qualification threshold.  Under the current definition, a registrant that previously determined that it   did not 
qualify as a SRC because its public float exceeded the current $75 million threshold may qualify based on a 
subsequent determination if it   has a public float of less than $50 million.  That registrant would then remain a 
SRC until its public float again exceeded $75 million.  Consistent with the current definition, under the proposed 
definition, a registrant that subsequently qualifies under the $200 million public float threshold would remain 
qualified until its public float exceeds $250 million. 

13 
 
b. Comments 
Most commenters addressed the overall costs and benefits of expanding the pool of 
registrants eligible for SRC status.  Many of these commenters expressed general support for the 
proposed amendments to the SRC definition.
38
  Several of these commenters stated that the 
proposed definition appropriately considers the objectives of capital formation and investor 
protection
39
 and promotes capital formation or liquidity for smaller registrants.
40
   
On the other hand, three commenters generally opposed the proposed amendments to the 
SRC definition or generally opposed accommodations based on company size.
41
  One of these 
commenters stated that the accommodations for SRCs exist solely for the expedience of issuers 
and must be balanced against the cost to market participants who have less information from 
which to draw conclusions.
42
  Another of these commenters stated that it was concerned that the 
scaled disclosure regime for SRCs may prevent investors from receiving all of the material 
                                                 
38
  See Letter from Acorda Therapeutics, Inc. et al, August 23, 2016 (“Acorda, et al”); Letter from Advanced 
Medical Technology Association, August 20, 2016 (“AMTA”); Letter from Biotechnology Innovation 
Organization, August 30, 2016 (“BIO”); Letter from BDO USA, LLP, August 29, 2016 (“BDO”); Letter from 
Center for Audit Quality and Counsel of Institutional Investors, August 30, 2016 (“CAQ/CII”); Letter from 
CONNECT, August 4, 2016 (“CONNECT”); Letter from Corporate Governance Coalition for Investor Value, 
August 30, 2016 (“Coalition”); Letter from Independent Community Bankers of America, August 29, 2016 
(“ICBA”); Letter from MidSouth Bancorp, Inc., August 24, 2016 (“MidSouth”); Letter from Nasdaq, August 30, 
2016 (“Nasdaq”); Letter from NYSE Group, July 25, 2016 (“NYSE”); Letter from National Venture Capital 
Association, August 25, 2016 (“NVCA”); Letter from Seneca Foods Corporation, August 2, 2016 (“Seneca”); 
and Letter from The Small Business Financial and Regulatory Affairs Committee of the Institute of Management 
Accountants, August 24, 2016 (“IMA”). 
39
  See AMTA; BDO; BIO; Coalition; ICBA. 
40
  See AMTA; BDO; BIO; Coalition; ICBA; NVCA; and NYSE.  See also CONNECT (supporting the proposal to 
amend the SRC definition to encompass a wider range of emerging businesses for which regulatory costs present 
a significant burden to growth). 
41
  See Letter from Cable Car Capital LLC, June 28, 2016 (“Cable Car”); Letter from CFA Institute, August 30, 
2016 (“CFA Institute”); Letter from Ernst & Young LLP, September 8, 2016 (“EY”). 
42
  See Cable Car. 

14 
 
information needed to conduct a thorough analysis.
43
  This commenter also noted that allowing 
different sized entities to use different disclosure regimes would signal to investors that the 
entities lack comparable quality.
44
  The third commenter recommended that the Commission 
consider adopting disclosure objectives that would mitigate the need to scale disclosure 
requirements based on the size or nature of a reporting entity.
45
   
Two commenters stated that the proposed amendments would potentially provide only 
marginal cost savings.
46
  One of these commenters did not support the proposal and instead 
encouraged the Commission to continue its review of scaled disclosure to determine which 
disclosures are repetitive and should be deleted and which should be retained.
47
  The other 
commenter stated that the proposed change and the resulting reduced disclosure requirements for 
additional registrants would have a minimal effect on its annual compliance costs.
48
 
Many commenters expressed support for the proposed increases in both the public float 
and revenue thresholds.
49
  One commenter supported the amendments and viewed them as an 
acknowledgement that the current public float threshold is overly restrictive.
50
  Another 
                                                 
43
  See CFA Institute (noting that “the pension benefits table and a disclosure of compensation policies and practices 
related to risk management (both of which can be deleted under scaled disclosure) are more vital than certain 
other disclosures”). 
44
  See CFA Institute. 
45
  See EY (noting that it “previously recommended that the Commission consider adopting disclosure objectives 
that would mitigate the need for scaling disclosure requirements based on the size or nature of a reporting entity” 
and citing to its letter dated July 21, 2016 responding to the SEC’s concept release on business and financial 
disclosures required by Regulation S-K (Release No. 33-10064; File No. S7-06-16)). 
46
  See CFA Institute; and Seneca. 
47
  See CFA Institute. 
48
  See Seneca. 
49
  See Acorda et al; AMTA; BDO; BIO; CAQ/CII; CONNECT; Coalition; ICBA; MidSouth; Nasdaq; NVCA; 
NYSE; Seneca; and IMA.   
50
  See Letter from Council of State Bioscience Associations, August 26, 2016 (“CSBA”) (stating that the 
Commission should similarly reform the accelerated filer definition and institute an alternative revenue test for 
both the SRC and accelerated filer definitions). 

15 
 
commenter specifically stated that it supported the proposed approach to adjusting the thresholds 
rather than simply relying on inflation adjustments.
51
   
Two commenters recommended that the Commission review the SRC definition 
periodically to determine whether the thresholds being used remain appropriate.
52
  One of these 
commenters specifically recommended that the Commission revisit the thresholds after three 
years.
53
 
c. Final Amendments 
After considering the comments received,  as well as the recommendations made by the 
ACSEC
54
 and the Small Business Forum,
55
 consistent with the proposal, we are adopting 
amendments to the SRC definition that will permit registrants with a public float of less than 
$250 million to qualify as SRCs.
56
  As is the case with the current definition, once a registrant 
determines that it does not qualify as a SRC under the applicable thresholds,
57
 it will not 
subsequently qualify until its public float falls below another, lower threshold, set at 80% of the 
initial qualification threshold.  While we did not receive any comments on the subsequent 
qualification thresholds, we continue to believe that these thresholds are necessary to avoid 
situations in which registrants frequently enter and exit SRC status due to small fluctuations in 
their public float and that the thresholds do not impose an undue burden on registrants seeking to 
qualify for SRC status.  Accordingly, we are amending the rules to permit a registrant that 
                                                 
51
  See NYSE. 
52
  See CFA Institute; and Letter from Kermit Kubitz, August 31, 2016 (“Kubitz”). 
53
  See Kubitz. 
54
  See note 15. 
55
  See note 16.  
56
  See Item 10(f)(1)(i) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2. 
57
   This applies either upon an initial determination in the case of registrants filing an initial registration statement, 
or as of an annual determination in the case of reporting registrants.  

16 
 
previously did not qualify as a SRC because its public float was $250 million or more to qualify 
as a SRC if it has a public float of less than $200 million, regardless of its revenues.
58
   
We are not revising the method of calculating public float, as suggested by one 
commenter.
59
  The staff is not aware of significant incidence of manipulation or stock price 
volatility affecting qualification under the public float test.  In addition, the method of calculating 
public float is consistent with the existing rules and with the method of determining eligibility to 
use Form S-3 or Form F-3 to register a primary offering.
60
  This consistency will avoid additional 
burdens or confusion for registrants and investors that may result if registrants were required to 
calculate their public float in one manner for determining SRC status and in another manner for 
Form S-3 or Form F-3 eligibility.     
We believe that these amendments will promote capital formation through a modest 
reduction in compliance costs for newly eligible SRCs while maintaining appropriate investor 
protections.
61
  In 2016, approximately 28% of registrants had less than $75 million in public 
float,
62
 compared to approximately 42% of registrants when the SRC definition was established.
63
  
                                                 
58
  See Item 10(f)(2)(iii)(A) and Instruction to Paragraph (f) of Item 10 of Regulation S-K; Securities Act Rule 405 
and Instruction to definition of “smaller reporting company” in Securities Act Rule 405; Exchange Act Rule 
12b-2 and Instruction to definition of “smaller reporting company” in Exchange Act Rule 12b-2.  Consistent 
with the current definition, under the amended definition, a registrant that subsequently qualifies under the $200 
million public float threshold would remain qualified until its public float exceeds $250 million. 
59
  See Letter from Paul W. Zeller, July 18, 2016 (“Zeller”) (suggesting that the Commission, in the calculation of 
public float, adopt a revenue test for thinly traded registrants to address price manipulation and volatility 
concerns).   
60
  See Instructions I.B.1 and I.B.6 of Form S-3; Instructions I.B.1 and I.B.5 of Form F-3.  Certain newly eligible 
SRCs under the new definition will continue to be eligible to rely on Instruction I.B.1 of Form S-3 and Form F-3 
to register primary offerings. 
61
  See Section IV.B. 
62
   Based on public float values disclosed by registrants in their Form 10-K filings, 2,072, or 28.0%, of the 7,395 
registrants that filed a Form 10-K in 2016 reported having a public float of less than $75 million. 
63
   Approximately 4,976, or 41.8%, of the 11,898 registrants that filed Exchange Act annual reports in 2006 had a 
public float of less than $75 million.  See SRC Adopting Release.  The release cites data from the Commission’s 
EDGAR filing system and Thomson Financial (“Datastream”).  The Datastream data included all registered 
 

17 
 
Increasing the public float threshold to $250 million would have resulted in approximately 39% 
of registrants qualifying as SRCs in 2016 based on their public float.
64
   
We believe the existing scaled disclosure accommodations have reduced compliance 
costs for SRCs.
65
  These amendments will extend those benefits to a broader pool of registrants, 
consistent with the intent of the Commission when it adopted the SRC definition in 2007.
66
  
Although the amendments will permit a broader group of registrants to make scaled disclosure to 
their investors, we do not believe that this scaling of disclosure will detract substantially from the 
investor protection objectives of our disclosure regime in light of the other protections available 
under current law and regulations.  First, t  he additional registrants that will qualify for scaled 
disclosure, like all registrants, will remain liable for their disclosures
67
 and, in addition to the 
disclosure expressly required by the rules, will continue to be required to provide such further 
material information, if any, as may be necessary to make any required statements, in the light of 
the circumstances under which they are made, not misleading.
68
  Moreover, their disclosure also 
will continue to be subject to the Division of Corporation Finance’s filing review process.  These 
measures of investor protection will remain unchanged.  
                                                                                                                                                             
public firms trading on the New York Stock Exchange, the American Stock Exchange, the Nasdaq, the Over-the-
Counter Bulletin Board and the Pink Sheets and excluded closed end funds, exchange traded funds, American 
depositary receipts and direct foreign listings. 
64
   Based on public float values disclosed by registrants in their Form 10-K filings, 2,851, or 38.6%, of the 7,395 
registrants that filed a Form 10-K in 2016 reported having a public float of less than $250 million. 
65
  See Section IV.B.3.a. 
66
  See SRC Adopting Release, 73 FR at 934 and 942 (stating that the Commission was “adopting amendments to its 
disclosure and reporting requirements...to expand the number of companies that qualify for its scaled disclosure 
requirements for smaller reporting companies;” and “[w]e believe this standard is appropriately scaled in that it 
reduces costs to smaller companies caused by unnecessary information requirements, consistent with investor 
protection.”). 
67
  See, e.g., Sections 11, 12, and 17 of the Securities Act, Sections 10(b) and 18 of the Exchange Act, and 
Exchange Act Rule 10b-5 [17 CFR 240.10b-5]. 
68
  See Securities Act Rule 408 [17 CFR 230.408] and Exchange Act Rule 12b-20 [17 CFR 240.12b-20]. 

18 
 
2. Revenue Test  
a. Proposed Amendments 
As proposed, a registrant with no public float would qualify as a SRC if it had annual 
revenues of less than $100 million during its most recently completed fiscal year.
69
  Consistent 
with the current definition, the Commission proposed that once a registrant determines that it 
does not qualify as a SRC,
70
 it would not subsequently qualify until its revenues fall below 
another, lower threshold.  Specifically the Commission proposed amending the rules to provide 
that a registrant with no public float that previously determined that it did not qualify as a SRC 
would qualify as a SRC if it had annual revenues of less than $80 million as of the relevant 
measurement date.
71
  The proposed $80 million subsequent qualification threshold would 
maintain the 80% ratio that exists between the $50 million initial qualification threshold and $40 
million subsequent qualification threshold in the current SRC definition. 
The Proposing Release noted that the 2015 Small Business Forum recommended that the 
SRC definition be revised to include, in addition to registrants with a public float of less than 
$250 million, registrants with a public float of less than $700 million and annual revenues of less 
than $100 million.
72
  The Proposing Release also solicited comment on whether the Commission 
should revise the SRC definition to include an alternative revenue test. 
                                                 
69
  See Proposed Item 10(f)(1)(ii)(A) of Regulation S-K; Proposed Securities Act Rule 405; Proposed Exchange Act 
Rule 12b-2. 
70
   This applies either upon an initial determination in the case of registrants filing an initial registration statement, 
or as of an annual determination in the case of reporting registrants. 
71
   Under the current definition, a registrant that previously determined that it   did not qualify as a SRC because it 
had no public float and its revenues exceeded the current $50 million threshold may qualify based on a 
subsequent determination if  it   had annual revenues of less than $40 million.  That registrant would then remain a 
SRC until its revenues exceeded $50 million.  Consistent with the current definition, under the proposed 
definition, a registrant with no public float that subsequently qualifies under the $80 million revenue threshold 
would remain qualified until its revenue exceeds $100 million. 
72
  See Proposing Release at text accompanying note 22.  

19 
 
b. Comments 
Many commenters recommended that the Commission add a revenue test to the SRC 
definition for companies with a public float.
73
  Several commenters stated that businesses below 
$100 million in revenue are viewed by reasonable observers as “small.”
74
  One commenter 
believed that a revenue test would stimulate innovation and drive business growth.
75
  Another 
commenter stated that a revenue test would ensure that pre-revenue companies are not “forced to 
divert investment funds...from science to compliance.”
76
  Another commenter supported an 
alternative revenue test for highly valued pre-revenue companies “to avoid stifling the 
advancement” of these companies with costly compliance.
77
  Two commenters suggested that we 
adopt a revenue test without a limitation on the public float or market capitalization of the 
company.
78
  Another two commenters specifically recommended that the Commission adopt a 
definition based on revenues of less than $100 million and a public float of less than $700 
million, as recommended by the Small Business Forum.
79
   
                                                 
73
  See Acorda, et al (recommending a revenue test, stating that public float is largely a marker of future value but 
paints an inaccurate picture of small businesses in the present); AMTA; BIO (stating that the Commission should 
move away from its reliance on public float as the ultimate arbiter of company size); Letter from Calithera 
Biosciences, August 8, 2016 (“Calithera”); CONNECT; CSBA; Nasdaq (recommending a well-crafted revenue 
only threshold); NYSE (recommending a simple revenue test without a limitation on market capitalization); and 
Zeller (recommending a revenue test for any issuers that are thinly traded).  See also Section II.A.1.b for a 
discussion of comments addressing the overall costs and benefits of expanding the pool of registrants eligible for 
SRC status, including the proposed revision to expand the revenue threshold for registrants with no public float. 
74
  See Acorda, et al; BIO; and Calithera. 
75
   See BIO (stating that pre-revenue small businesses should remain focused on innovation and do not have the 
capital to pay for expensive compliance requirements, and therefore allowing them to qualify as SRCs until they 
generate revenue would stimulate innovation and drive business growth). 
76
  See Acorda, et al. 
77
  See AMTA. 
78
  See NYSE; and Nasdaq. 
79
  See BIO; and Calithera. 

20 
 
c. Final Amendments 
After considering the comments received as well as the recommendations made by the 
ACSEC
80
 and the Small Business Forum,
81
 we are adopting the proposed amendments to the 
revenue test of the SRC definition and expanding the revenue test to include certain registrants 
with a public float.  The definition in the final rules will include, in addition to registrants with a 
public float of less than $250 million, registrants with annual revenues of less than $100 million 
during their most recently completed fiscal year and either no public float (calculated as discussed 
in Section II.A.1) or a public float of less than $700 million.
82
  We are persuaded by commenters’ 
suggestions that it is appropriate to provide a measure by which a registrant with a public float 
but limited revenues may qualify as a SRC.
83
  This amended revenue test expands the proposed 
revenue threshold for companies with no public float to permit registrants with a public float that 
is less than $700 million to qualify based on their revenues.  The $700 million public float 
threshold included in this amended revenue test was recommended by two commenters
84
 and the 
Small Business Forum.
85
  This change from the proposal permits some additional registrants to 
                                                 
80
  See note 15.  
81
  See note 16.  
82
  See Item 10(f)(1)(ii) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.  Under the public 
float test discussed in Section II.A.1., a registrant with public float of less than $250 million will qualify as a 
SRC regardless of its revenues.  See Instruction to Paragraph (f) of Item 10 of Regulation S-K; Instruction to 
definition of “smaller reporting company” in Securities Act Rule 405; Instruction to definition of “smaller 
reporting company” in Exchange Act Rule 12b-2. 
83
  See Acorda, et al; AMTA; BIO; Calithera; CONNECT; and CSBA. 
84
  See BIO and Calithera.   
85
  See note 16.  In 2016 and 2017, the Small Business Forum recommended that the SRC definition be revised to 
include registrants with a public float of less than $250 million or registrants with annual revenues of less than 
$100 million, excluding large accelerated filers.  Registrants with a public float of $700 million or more 
generally qualify as large accelerated filers.  See Exchange Act Rule 12b-2.  In prior years, the Small Business 
Forum recommended that the Commission revise the SRC definition to include registrants with a public float of 
less than $250 million or registrants with a public float of less than $700 million and annual revenues of less than 
$100 million. See, e.g., Final Report of the 2015 SEC Government Business Forum on Small Business Capital 
Formation (Apr. 2016), available at https://www.sec.gov/info/smallbus/gbfor34.pdf
. 

21 
 
qualify as SRCs,
86
 and we believe that these low-revenue registrants would benefit from the cost 
savings of scaled disclosure accommodations and could redirect those savings into growing their 
businesses without significantly detracting from investor protections.  For example, these 
registrants will remain liable for their disclosures, will continue to be required to provide all 
material information necessary to make any required statements not misleading, and will 
continue to be subject to the Division of Corporation Finance’s filing review process. 
The amended revenue test that we are adopting is consistent with the position expressed 
by several commenters
87
 that it is not necessary to subject capital-intensive, low-revenue 
registrants with larger public floats or market capitalizations to the same reporting requirements 
as registrants with larger public floats and more well-established, revenue-generating businesses.  
Although two commenters suggested that we adopt a revenue test without a limitation on the 
public float or market capitalization of the company,
88
 we believe that it is appropriate to include 
a public float limitation because,  as a registrant’s business and public float grows, investors 
should benefit from greater disclosure.  The additional information provided by the registrant in 
these circumstances will assist a growing investor base in making informed investment decisions 
and also should lead to a lower cost of capital for the business as it grows.  In this way, the 
amended revenue test in the final rules will enable some additional capital-intensive, low-
revenue registrants to benefit from the cost-savings of scaled reporting, while continuing to 
require larger registrants to comply with the disclosure requirements applicable to non-SRCs.    
                                                 
86
   Excluding the 2,851 registrants that based on their 2016 data would qualify under the public float test described 
in Section II.A.1 and the 594 registrants that would qualify under the proposed no public float and less than $100 
million in annual revenues test, we estimate that this change would permit an additional 161 registrants to 
qualify as a SRC.   
87
  See Acorda, et al; AMTA; BIO; Calithera; CONNECT; CSBA; NYSE; and Nasdaq. 
88
  See NYSE; and Nasdaq. 

22 
 
In 2016, approximately 7.7% of registrants qualified as SRCs by having no public float 
and less than $50 million in annual revenues.
89
  The number of registrants that would qualify as 
SRCs would have increased by 26, or 0.4%, under the new $100 million annual revenue 
threshold for registrants with no public float.
90
  Expanding the definition further to include 
registrants with annual revenues of less than $100 million and public float of less than $700 
million would have increased the number of eligible registrants by an additional 161, or 2.2%.
91
   
Under the current definition, and as proposed, once a registrant with no public float 
determines that it does not qualify as a SRC,
92
 it cannot subsequently qualify based on revenues 
until its revenues fall below another, lower threshold.  As discussed above with respect to the 
public float test, while we did not receive any comments on the subsequent qualification 
thresholds, we believe that a separate, lower revenue threshold for these registrants helps to 
avoid situations in which registrants enter and exit SRC status due to small fluctuations in their 
revenues and does not impose an undue burden on registrants seeking to qualify for SRC status.  
Therefore, consistent with the proposal, once an issuer with no public float determines that it does 
not qualify for SRC status because its annual revenues exceeded $100 million, it will
 remain 
                                                 
89
   Based on public float values and revenues disclosed by registrants in their Form 10-K filings in 2016, 568, or 
7.7%, of the 7,395 registrants that filed a Form 10-K in 2016 reported having no public float and less than $50 
million in annual revenues. 
90
   Based on public float values and revenues disclosed by registrants in their Form 10-K filings in 2016, 26, or 
0.4%, of the 7,395 registrants that filed a Form 10-K in 2016 had no public float and $50 million or more but less 
than $100 million in annual revenues. 
91
   Based on public float values and revenues disclosed by registrants in their Form 10-K filings in 2016, 161, or 
2.2%, of the 7,395 registrants that filed a Form 10-K in 2016 had $250 million or more but less than $700 
million of public float and less than $100 million in annual revenues. 
92
   This applies either upon an initial determination in the case of registrants filing an initial registration statement, 
or as of an annual determination in the case of reporting registrants. 

23 
 
unqualified unless and until its annual revenues are less than $80 million as of the measurement 
date.
93
  
Consistent with the 80% ratio we are adopting for the other subsequent qualification thresholds, 
under the amended revenue test, once a registrant with public float determines that it does not qualify as 
a SRC because it exceeds either or both of the $100 million annual revenue and $700 million public 
float thresholds, it   will
 remain unqualified unless and until it   meets a lower threshold for the criteria 
on which it previously failed to qualify ($80 million of annual revenue and $560 million of public float) 
and continues to meet any threshold it previously satisfied ($100 million of annual revenue or $700 
million of public float).
94
  By requiring that a registrant satisfy a lower threshold only with respect 
to a threshold it previously exceeded, we are attempting to strike a balance between avoiding 
situations in which registrants frequently enter and exit SRC status due to small fluctuations and 
not imposing an undue burden on registrants seeking to qualify for SRC status.  A registrant that 
exceeded both the public float threshold and the revenue threshold, however, would not qualify unless 
and until it met both lower thresholds in order to avoid situations in which registrants enter and exit 
SRC status due to small fluctuations in either their revenues or public float.   The table below sets 
forth the thresholds for qualification as of the respective measurement date under the amended revenue 
test after one or both thresholds have been exceeded:  
                                                 
93
  See Item 10(f)(2)(iii)(B) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.  Consistent with 
the current definition, under the amended definition, a registrant with no public float that subsequently qualifies 
under the $80 million revenue threshold remains qualified until its revenue exceeds $100 million. 
94
  Id.  Consistent with the current definition, under the amended definition, a registrant that subsequently qualifies 
under the $560 million public float threshold or $80 million revenue threshold remains qualified until its public 
float exceeds $700 million or its revenue exceeds $100 million. 

24 
 
Prior Annual 
Revenues 
Prior Public Float 
None or less than $700 million $700 million or more 
Less than $100 
million 
Neither threshold exceeded. 
Public float 
Less than $560 
million; and 
Revenues 
Less than $100 
million. 
$100 million or 
more 
Public float 
None or less than 
$700 million; and 
Public float 
Less than $560 
million; and 
Revenues 
Less than $80 
million. 
Revenues 
Less than $80 
million.  
 
B. Amendments to Rule 3-05(b)(2)(iv) of Regulation S-X 
In the Proposing Release, the Commission asked whether, if the revenue threshold in the 
SRC definition is increased, the threshold in Rule 3-05 of Regulation S-X also should increase.  
Rule 3-05 of Regulation S-X provides the requirements for financial statements of businesses 
acquired or to be acquired in certain registration statements and current reports.  Current 
paragraph (b)(2)(iv) allows certain registrants to omit such financial statements for the earliest of 
the three fiscal years required if the net revenues of the business to be acquired are less than $50 
million.
95
  The $50 million threshold is based on the revenue threshold in the SRC definition.
96
 
                                                 
95
   Rule 3-05(b)(2) sets forth the requirements for financial statements of an acquired business or to be acquired 
business to be provided other than when registering securities to be offered to the security holders of the business 
to be acquired. 
96
   In 1996, the Commission revised Rule 3-05 to streamline the requirements for financial statements of significant 
business acquisitions in filings made under the Securities Act and the Exchange Act, stating: 
“The threshold at which audited financial statements of an acquired business are required for three years, as 
required for the issuer itself (except for small business issuers), has been raised from 40% to 50% in recognition 
of the significant burden imposed by the lower threshold.  In addition, consistent with the criteria for small 
business issuers, financial statements for periods preceding the most recent two fiscal years would not be 
required for acquired businesses reporting revenues below $25 million.”  See Streamlining Disclosure 
Requirements Relating to Significant Business Acquisitions. Release No. 33-7355 (Oct. 10, 1996) [61 FR 54509 
(Oct. 18, 1996)] (“1996 Rule 3-05 Adopting Release”). 
When the Commission adopted the SRC definition (which replaced the small business issuer definition) in 2007, 
it noted: 
 

25 
 
Two commenters recommended amending Rule 3-05 to increase the revenue threshold in 
paragraph (b)(2)(iv) to $100 million to maintain the alignment between Rule 3-05 and the 
definition of a SRC.
97
  One commenter noted that this alignment should be retained to “maintain 
the objective the Commission expressed when it adopted the 2007 S-X Rule 3-05 relief.”
98
  The 
other commenter noted that this amendment would avoid having the financial statement 
requirements for a SRC-sized target company exceed those of a similarly sized registrant.
99
   
Consistent with these comments, we are amending Rule 3-05 to increase the net revenue 
threshold in Rule 3-05(b)(2)(iv) of Regulation S-X to $100 million.
100
  Given that the current $50 
million revenue threshold in Rule 3-05(b)(2)(iv) was based on the revenue threshold in the SRC 
definition, and in light of our decision to increase the revenue threshold in the SRC definition 
from $50 million to $100 million, we are raising the net revenue threshold in Rule 3-05(b)(2)(iv) 
of Regulation S-X from $50 million to $100 million.   
C. Amendments to Accelerated Filer and Large Accelerated Filer Definitions 
1. Proposed Amendments 
The Commission proposed amending the definitions of “ accelerated filer” and “ large 
accelerated filer” to remove the automatic exclusion from these definitions of any registrant that 
                                                                                                                                                             
“Several comment letters noted that in light of the $50 million in revenues threshold proposed for determining a 
company’s qualification as a SRC if a company is unable to calculate public float, the Commission should 
consider revising [Rule 3-05(b)(2)(iv)] to raise to $50 million the $25 million threshold currently used to limit to 
two the periods required for audited financial statements of an acquired business.  The $25 million threshold was 
based on the $25 million in revenues standard in Regulation S-B that we are rescinding.  We are amending this 
standard to increase the threshold to $50 million in revenues, as suggested by the commenters.”  See SRC 
Adopting Release. 
97
  See EY; and BDO.  No other commenters addressed whether to amend Rule 3-05 of Regulation S-X. 
98
  See EY; see also SRC Adopting Release. 
99
  See BDO. 
100
  See Rule 3-05(b)(2)(iv) of Regulation S-X. 

26 
 
qualifies as an SRC
101
 and solicited comment on a number of questions related to this issue.
102
  
Among other requirements,
103
 being an accelerated filer or a large accelerated filer triggers the 
requirement contained in Section 404(b) of the Sarbanes-Oxley Act
104
 to have the auditor provide 
an attestation report on internal control over financial reporting.  Currently, the accelerated filer 
and large accelerated filer definitions include a provision that specifically excludes registrants 
that are eligible to use the SRC requirements under Regulation S-K for their annual and quarterly 
reports.
105
  As a result, the existing public float threshold in the accelerated filer definition aligns 
with the current public float threshold in the SRC definition.
106
   
Figure 1: Current Definitions of SRC,  
Accelerated Filer, and Large Accelerated Filer  
 
 
                                                 
101
  See Proposing Release, 81 FR at 43136. 
102
  See Proposing Release, 81 FR at 43137.  As discussed in the Proposing Release, the ACSEC and the Small 
Business Forum have recommended increasing the thresholds in both the SRC and the accelerated filer 
definitions.  See notes 15 and 16.   
103
  Accelerated and large accelerated filers are subject to accelerated periodic report filing deadlines.  In addition, 
they must provide their internet address and disclosure regarding the availability of their filings required by 
Items 101(e)(3) and (4) of Regulation S-K [17 CFR 229.101(e)(3) and (4)], as well as disclosure required by 
Item 1B of Form 10-K about unresolved staff comments on their periodic or current reports.   
104
  Pub. L. 107-204, Sec. 404(b) 116 Stat. 745 (2002). 
105
  Paragraphs (1)(iv) of the accelerated filer definition and (2)(iv) of the large accelerated filer definition in 
Exchange Act Rule 12b-2. 
106
  The public float thresholds for exiting SRC status and entering accelerated filer status currently are both $75 
million, and the determinations are both made as of the last business day of a registrant’s most recently 
completed second fiscal quarter for purposes of the following fiscal year.   

27 
 
Increasing the SRC public float threshold to $250 million without eliminating the SRC 
provision from the accelerated filer definition would exclude from the definition of accelerated 
filer those registrants that are newly eligible to use the SRC disclosure requirements, keeping the 
thresholds for both definitions linked as they have been historically. 
The Commission proposed to eliminate the provision in the accelerated filer definition 
that excludes SRCs to maintain the current thresholds at which registrants are subject to the 
accelerated filer disclosure and filing requirements.  As a result, as illustrated in Figure 2, some 
registrants would qualify as both SRCs and accelerated filers. 
Figure 2: Proposed Definitions of SRC,  
Accelerated Filer and Large Accelerated Filer  
 
 
As discussed in the Proposing Release, the public float threshold for entering large 
accelerated filer status currently is $700 million, so newly eligible SRCs under the proposed 
increased public float threshold of $250 million would not include any registrants that currently 
qualify as large accelerated filers.  Nevertheless, the Commission proposed to eliminate this 
provision because it currently does not capture any registrants, would not have captured any 
registrants under the proposed amendments, and could lead to confusion if retained.   
2. Comments 
Some commenters responded to the Commission’s solicitation of comment on this issue 
by supporting the elimination of the provisions in the accelerated filer and large accelerated filer 

28 
 
definitions that specifically exclude registrants that are eligible to use the SRC disclosure 
requirements for their annual or quarterly reports.
107
  One commenter stated that it found no 
compelling argument to support what it sees as a weakening of investor protections, particularly 
in light of the 2011 Staff Section 404(b) Study
108
 finding that accelerated filers subject to Section 
404(b) had a lower restatement rate compared to non-accelerated filers not subject to Section 
404(b).
109
  Another commenter recommended that the Commission undertake a separate 
rulemaking before deciding whether to change the Section 404(b) requirements.
110
  A third 
commenter recommended that the Commission provide more time for registrants with a public 
float of less than $250 million to file their periodic reports.
111
 
In contrast, many commenters responded to the Commission’s solicitation of comment on 
this issue by recommending that the Commission increase the thresholds in the accelerated filer 
definition, consistent with the changes to the SRC definition.
112
  Commenters recommended 
increasing the public float threshold in the accelerated filer definition to reduce compliance 
costs
113
 and to maintain uniformity across our rules.
114
  Many of these commenters stated that 
                                                 
107
  See BDO; CAQ/CII; CFA Institute; Letter from Deloitte, August 23, 2016 (“Deloitte”); and EY. 
108
  Study and Recommendations on Section 404(b) of the Sarbanes-Oxley Act of 2002 For Issuers With Public 
Float Between $75 and $250 Million (Apr. 2011), available at 
https://www.sec.gov/news/studies/2011/404bfloat-study.pdf
. 
109
  See CFA Institute, citing 2011 Staff Section 404(b) Study. 
110
  See EY. 
111
  See BDO. 
112
  See Acorda, et al; AMTA; BIO; Calithera; CONNECT; Coalition; CSBA; ICBA; Letter from The Dixie Group, 
Inc., July 11, 2016 (“Dixie”); MidSouth; Nasdaq; NVCA; NYSE; and Seneca. 
113
  See Acorda, et al; AMTA; BIO; Calithera; CONNECT; Coalition; CSBA; ICBA; Dixie; MidSouth; Nasdaq; 
NVCA; NYSE; and Seneca. 
114
  See BIO (stating that uniformity alone is a sufficiently compelling argument to align the two definitions, that 
avoiding investor confusion is an important responsibility of the SEC, and that issuers and investors alike are 
used to having one standard for small company status); Coalition; Nasdaq; NVCA; and NYSE. 

29 
 
Section 404(b) is particularly costly for SRCs and emerging businesses
115
 and that audit costs 
associated with Section 404(b) divert capital from core business needs.
116
 
Several commenters addressed the costs associated with complying with the requirements 
of Section 404(b).
117
  A few commenters stated that, for many growing biotechnology 
companies, the Section 404(b) audit represents over $1 million of capital diversion.
118
  One 
commenter indicated that Section 404(b) compliance imposes a significant burden on emerging 
biotech companies, citing the 2011 Staff Section 404(b) Study that estimated that companies 
with a public float between $75 million and $250 million spend, on average, $840,276 to comply 
with Section 404(b).
119
  Another commenter estimated that it will spend more than $400,000 
annually on compliance with Section 404(b).
120
  One commenter that stated that its public float 
was more than $75 million but less than $250 million estimated that relief from Section 404(b) 
would result in a 35% reduction in compliance costs whereas there would be no material change 
in such costs from the proposed amendments.
121
  Another commenter noted that, while most 
firms already take an integrated accounting approach to Section 404(b) requirements that 
                                                 
115
  See Acorda, et al; AMTA; BIO; Calithera; Coalition; CONNECT; CSBA; and Seneca.  See also Dixie. 
116
  See Acorda, et al; BIO; CSBA; ICBA; and NVCA.  
117
  See Acorda, et al; BIO; Calithera; CONNECT; CSBA (stating that “accelerated filers spend, on average, more 
than $1 million complying with Section 404(b)”); Dixie; and Seneca. 
118
  See Acorda, et al; and CONNECT.  See also CSBA. 
119
  See BIO. 
120
  See Calithera.  This estimate is generally consistent with the estimate set forth by a presenter at a recent ACSEC 
meeting.  The presenter stated that some biotechnology companies that anticipate losing their status as EGCs in 
the next few years “believe they will incur somewhere between $150,000 to $350,000 in additional audit fees, 
$50,000 to $150,000 in other consulting costs and either $40,000 or as much as $200,000 for internal labor.”  See 
Transcript of Presentation by William Newell at September 13, 2017 ACSEC Meeting available at 
https://www.sec.gov/info/smallbus/acsec/acsec-transcript-091317.pdf
 (pages 49 to 54); see also Newell, William 
J., “Sarbanes-Oxley Section 404(b): Costs of Compliance and Proposed Reforms”, presentation at ACSEC 
meeting on Sept. 13, 2017 available at https://www.sec.gov/info/smallbus/acsec/william-newell-acsec-
091317.pdf. 
121
  See Seneca. 

30 
 
includes a complete internal control review, if smaller companies were exempt from Section 
404(b), they would avoid the added legal liability of the auditor attestation, providing a savings 
opportunity and lowering the cost of being public for those companies.
122
 
A few commenters stated that the market does not value the audit of such internal 
control
123
 or that the costs of Section 404(b) outweigh the benefits.
124
  Another commenter stated 
that expanding relief from Section 404(b) to registrants with a public float of less than $250 
million would encourage capital formation because reduced audit and disclosure requirements 
may encourage companies that have been hesitant to go public to do so.
125
 
A number of commenters recommended that the Commission allow a revenue test for the 
accelerated filer definition, similar to the amended revenue test being adopted by the 
Commission in the SRC definition.
126
 
3. Final Amendments 
As proposed, we are adopting amendments to the “accelerated filer” and “large 
accelerated filer” definitions in Exchange Act Rule 12b-2 to preserve the application of the 
current thresholds contained in those definitions.
127
  Specifically, we are eliminating from the 
definitions of accelerated filer and large accelerated filer the exclusions for registrants that are 
eligible to use the SRC requirements under Regulation S-K for their annual and quarterly reports.  
                                                 
122
  See Dixie. 
123
  See Acorda, et al (stating that the market does not demand a Section 404(b) audit as a prerequisite for investing 
in emerging, innovative companies and that virtually no EGCs are voluntarily forgoing their exemption from 
Section 404(b)).  See also Dixie. 
124
  See MidSouth. 
125
  See ICBA (citing a 2005 ICBA study that estimated that audit fees for publicly held bank holding companies 
would drop dramatically – some by as much as 50% – if they were exempted from Section 404(b)). 
126
  See Acorda, et al; AMTA; BIO; CONNECT; Calithera; CSBA; Nasdaq; and NYSE. 
127
  See “accelerated filer” and “large accelerated filer” definitions in Exchange Act Rule 12b-2. 

31 
 
After the amendments to the SRC definition become effective, some SRCs will exceed the public 
float thresholds for initial or subsequent qualification in the accelerated filer definition, and a few 
of these registrants also may exceed the public float threshold for subsequent qualification in the 
large accelerated filer definition.
128
   
Although we are not raising the accelerated filer public float threshold or modifying the 
Section 404(b) requirements for registrants with a public float between $75 million and 
$250 million in this release, as stated above, the Chairman has directed the staff to formulate 
recommendations to the Commission for possible changes to reduce the number of registrants 
that our rules define as accelerated filers.  Eliminating the SRC provision in the accelerated filer 
and large accelerated filer definitions will maintain the current thresholds at which registrants are 
subject to the accelerated filer and large accelerated filer disclosure and filing requirements.  In 
2007, the Commission noted that aligning the SRC public float threshold based on the levels 
established for non-accelerated filers
129
 was practical and avoided regulatory complexity.
130
  
These amendments will change the current relationship between the SRC and “accelerated filer” 
definitions by allowing a registrant to qualify as both a SRC and an accelerated filer.
131
  We 
acknowledge the regulatory complexity created by this potential overlap between the SRC and 
                                                 
128
  The only registrants that would qualify as both SRCs and large accelerated filers would be those companies (1) 
that previously qualified as large accelerated filers because at one time their public float was $700 million or 
more, (2) whose revenues for the most recent fiscal year were less than $100 million, and (3) whose public float 
as of the end of the most recent second quarter was less than $560 million, such that they now qualify as SRCs, 
but not less than $500 million, such that they are not eligible to exit large accelerated filer status.  
129
  A non-accelerated filer is a filer that is not an “accelerated filer” or a “large accelerated filer.”  See subpart (3) of 
the accelerated filer and large accelerated filer definitions in Exchange Act Rule 12b-2 [17 CFR 240.12b-2]. 
130
  See SRC Adopting Release 73 FR at 942. 
131
  In conjunction with these amendments, we also are adopting technical revisions to Securities Act Forms S-1, S-
3, S-4, S-8, and S-11 and Exchange Act Forms 10, 10-Q and 10-K.  These amendments modify the cover page of 
the specified forms to remove the parenthetical next to the “non-accelerated filer” definition that states “(Do not 
check if a smaller reporting company).”  After these amendments, a registrant should check all applicable boxes 
on the cover page addressing, among other things, non-accelerated, accelerated, and large accelerated filer status, 
SRC status, and emerging growth company status. 

32 
 
“accelerated filer” definitions.
132
  As part of the staff’s consideration of possible recommended 
amendments to the “accelerated filer” definition, the Chairman has directed the staff to consider, 
among other things, the historical and current relationship between the SRC and “accelerated 
filer” definitions. 
III. Other Matters 
If any of the provisions of these amendments, or the application thereof to any person or 
circumstance, is held to be invalid, such invalidity shall not affect other provisions or application 
of such provisions to other persons or circumstances that can be given effect without the invalid 
provision or application. 
IV. Economic Analysis 
As discussed above, we are adopting amendments to the definition of SRC as used in our 
rules and regulations.  The amendments expand the number of registrants that are eligible to 
provide scaled disclosure to their investors and are intended to reduce compliance costs for these 
registrants and promote capital formation, while maintaining appropriate investor protections.  
Registrants with a public float of less than $250 million (an increase from the current $75 million 
threshold) will qualify as SRCs, as will registrants with no public float if their revenues are less 
than $100 million (an increase from the current $50 million threshold).
133
  In addition, registrants 
with a public float of less than $700 million will qualify as SRCs if their revenues are less than 
$100 million.
134
   
                                                 
132
  Several commenters specifically recommended increasing the public float threshold in the accelerated filer 
definition to, among other things, maintain uniformity across our rules. See BIO; Coalition; Nasdaq; NVCA; and 
NYSE. 
133
  See note 25 and related text for a discussion of how and when public float is calculated and when revenues are 
measured. 
134
  The Commission received a number of comments in support of expanding the definition of SRC to include a 
revenue test for registrants with a public float.  See Section II.A.1.b. 

33 
 
We also are making corresponding amendments to other rules in light of the new SRC 
definition.  As proposed, we are adopting amendments to the “accelerated filer” and “large 
accelerated filer” definitions in Exchange Act Rule 12b-2 to preserve the application of the 
public float thresholds in those definitions.  In addition, we are amending Rule 3-05(b)(2)(iv) of 
Regulation S-X to increase the revenue threshold under which certain registrants may omit the 
earliest of the three fiscal years of audited financial statements of an acquired business or 
business to be acquired.   
We are mindful of the costs and benefits of the amendments.  In this economic analysis, 
we examine the existing baseline, which consists of the current regulatory framework and market 
practices, and discuss the potential costs and benefits of the amendments, relative to this 
baseline, and their potential effects on efficiency, competition, and capital formation.
135
  We also 
consider the potential costs and benefits of reasonable alternatives to the amendments.  Where 
practicable, we have attempted to quantify the economic effects of the amendments; however, in 
certain cases, we are unable to do so because either the necessary data are unavailable or the 
economic effects are not quantifiable.  In these cases, we provide a qualitative assessment of the 
likely economic effects.   
A. Baseline  
In calendar year 2016, 7,395 registrants filed a Form 10-K with the Commission.  
Excluding investment companies, business development companies, and ABS issuers, which are 
not eligible for SRC status, 6,739 registrants filed a Form 10-K in calendar year 2016.  Of these 
                                                 
135
  Section 23(a)(2) of the Exchange Act requires us, when adopting rules, to consider the impact that any new rule 
would have on competition.  In addition, Section 2(b) of the Securities Act and Section 3(f) of the Exchange Act 
direct us, when engaging in rulemaking that requires us to consider or determine whether an action is necessary 
or appropriate in the public interest, to consider, in addition to the protection of investors, whether the action will 
promote efficiency, competition, and capital formation. 

34 
 
registrants, 2,592 (35.1% of all registrants) claimed SRC status by checking the box on the cover 
page of their Forms 10-K indicating that the registrant was a SRC.  Under the current definition, 
a registrant with a public float may qualify as a SRC if its public float is less than $75 million or 
a registrant with no public float may qualify as a SRC if its annual revenues are less than $50 
million.  An additional 232 filers in calendar year 2016 reported public float of less than $75 
million or no public float and revenues of less than $50 million, but did not check the box on the 
cover page of their Forms 10-K indicating that they were SRCs.
136
  Of the 2,592 registrants that 
claimed SRC status in 2016, 1,899 registrants (25.7% of all registrants) reported having a public 
float that was less than $75 million and 509 registrants (6.9% of all registrants) reported having 
no public float and revenues of less than $50 million.
137
  Of the 2,592 SRCs, 833 (11.3% of all 
registrants) also indicated in their filings that they were EGCs.
138 
Table 1 summarizes the number and percentage of registrants that claimed SRC status in 
each calendar year over the 2013-2016 period. 
                                                 
136
  There are two potential explanations for why the number of registrants meeting the SRC thresholds exceeds the 
number of reported SRCs.  First, the public float and revenue thresholds establish eligibility for SRC status, but 
do not require eligible registrants to take advantage of the scaled disclosure requirements.  Thus, some 
registrants may be opting out of SRC status if they do not find the reduced compliance costs to be net beneficial.  
Second, some registrants that appear to be eligible may not be if they previously exceeded the SRC threshold and 
were required to meet the lower eligibility threshold (i.e., public float of less than $50 million or revenues of less 
than $40 million) to subsequently qualify as a SRC. 
137
  Based on analysis by DERA of available data.  Staff obtained the SRC status and public float data from 
information extracted from exhibits to corporate financial reports filed with the Commission using eXtensible 
Business Reporting Language (“XBRL”), available at:  
http://www.sec.gov/dera/data/financial-statement-data-
sets.html.  Staff also extracted the SRC status and public float directly from Forms 10-K using a computer 
program.  For robustness, staff compared the SRC status and public float information between the two sources 
and corrected discrepancies using data from Ives Group Audit Analytics.  Staff extracted annual revenue data 
from the Compustat database and XBRL data in Form 10-K 
filings.  
138
  Staff determined whether a registrant claimed EGC status by parsing several types of filings (for example, 
Forms S-1, S-1/A, 10-K, 10-Q, 8-K, 20-F/40-F, and 6-K) filed by that registrant with supplemental data drawn 
from Ives Group Audit Analytics. 

35 
 
Table 1: SRCs in 2013-2016 Period 
Filing 
Year 
Total # of  
Registrants 
# of 
SRCs % of Total 
Qualified based 
on public float 
< $75 million 
(% of Total) 
Qualified 
based on 
no public 
float and 
revenue < 
$50 
million 
(% of 
Total) 
2013 7,624 3,380 44.3% 33.5% 10.8% 
2014 7,642 3,179 41.6% 32.7% 8.9% 
2015 7,557 2,900 38.4% 29.7% 8.7% 
2016 7,395 2,592 35.1% 25.7% 6.9% 
 
Table 2 shows that, while registrants claiming SRC status with available data account for 
a substantial percentage of the total number of registrants in calendar year 2016, they account for 
less than one percent of the entire public float, market value and revenue of all registrants.
139
  
Table 2: Size Proxies for SRCs in 2016 
 
Public Float Market Value Revenue 
    
Mean 
$14.7 million $57.2 million $42.8 million 
Median 
$4.3 million $14.1 million $1.9 million 
Aggregate size  
$40.1 billion $98.7 billion $96.2 billion 
% of the aggregate size of 
all registrants 
0.15% 0.34% 0.66% 
Table 3 shows the distribution of registrants that were eligible for SRC status based on 
available data in calendar year 2016 using the Fama-French 49-industry classification.
140
  The 
“Business Services” industry accounts for 10.6% of all SRCs, followed by “Financial Trading” 
                                                 
139
  Compustat data on market value is obtained for calendar year 2016 filings. Staff obtained revenue data either 
from XBRL data in Form 10-K filings or directly from the filing itself.  The summary statistics presented in 
Table 2 represent those registrants for which information on public float and revenue is concurrently available.  
Market value, as used throughout this Economic Analysis, is equivalent to market capitalization and presented 
for registrants with available data (described in footnote 25).   
140
  The standard Fama-French classification sorts Standard Industry Classification codes into 49 main industrial 
categories; available at:  
http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/det_49_ind_port.html
.  

36 
 
(9.8%), “Pharmaceutical Products” (8.5%), “Banking” (7.1%), “Petroleum and Natural Gas” 
(5.6%), and “Computer Software” (5.2%).
141
  We note that industries with a larger fixed 
component of operating costs, such as shipping, defense, and aircraft, tend to have fewer SRCs.  
Table 3: Industry Distribution of SRCs in 2016 
Industry 
ID Industry 
# of 
SRCs 
% of all 
SRCs 
Industry 
ID Industry 
# of 
SRCs 
% of all 
SRCs 
1 
Agriculture 
26 1.0% 
26 
Defense 
2 0.1% 
2 
Food Products 
35 1.3% 
27 
Precious Metals 
38 1.4% 
3 
Candy & Soda 
3 0.1% 
28 
Non-Metallic 
and Industrial 
Metal Mining 
76 2.9% 
4 
Beer & Liquor 
18 0.7% 
29 
Coal 
3 0.1% 
5 
Tobacco 
Products 
9 0.3% 
30 
Petroleum and 
Natural Gas 
149 5.6% 
6 
Recreation 
23 0.8% 
31 
Utilities 
15 0.6% 
7 
Entertainment 
55 2.0% 
32 
Communication 
45 1.7% 
8 
Printing and 
Publishing 
8 0.3% 
33 
Personal 
Services 
37 1.4% 
9 
Consumer 
Goods 
40 1.6% 
34 
Business 
Services 
281 10.7% 
10 
Apparel 
17 0.6% 
35 
Computers 
22 0.8% 
11 
Healthcare 
37 1.4% 
36 
Computer 
Software 
136 5.2% 
12 
Medical 
Equipment 
116 4.4% 
37 
Electronic 
Equipment 
102 3.9% 
13 
Pharmaceutical 
Products 
225 8.5% 
38 
Measuring and 
Control 
Equipment 
41 1.6% 
14 
Chemicals 
54 2.1% 
39 
Business 
Supplies 
6 0.2% 
15 
Rubber and 
Plastic 
Products 
20 0.8% 
40 
Shipping 
Containers 
2 0.1% 
16 
Textiles 
4 0.2% 
41 
Transportation 
24 0.9% 
17 
Construction 
Materials 
29 1.1% 
42 
Wholesale 
78 3.0% 
                                                 
141
  In 2016, SRCs accounted for 57% of all Form 10-K filers in “Business Services,” 37% in “Financial Trading,” 
20% in “Banking,” 39% in “Pharmaceutical Products,” 50% in “Petroleum and Natural Gas” and 47% in 
“Computer Software,” suggesting that these industries all have a fairly high concentration of small registrants.  

37 
 
Table 3: Industry Distribution of SRCs in 2016 
Industry 
ID Industry 
# of 
SRCs 
% of all 
SRCs 
Industry 
ID Industry 
# of 
SRCs 
% of all 
SRCs 
18 
Construction 
22 0.8% 
43 
Retail 
82 3.1% 
19 
Steel Works 
9 0.3% 
44 
Restaurants, 
Hotels, Motels 
28 1.1% 
20 
Fabricated 
Products 
5 0.2% 
45 
Banking 
187 7.1% 
21 
Machinery 
54 2.0% 
46 
Insurance 
20 0.8% 
22 
Electrical 
Equipment 
39 1.5% 
47 
Real Estate 
96 3.6% 
23 
Automobiles 
and Trucks 
21 0.8% 
48 
Financial 
Trading 
258 9.8% 
24 
Aircraft 
8 0.3% 
 
Other and 
Unknown 
30 1.1% 
25 
Shipbuilding, 
Railroad 
Equipment 
3 0.1% 
 
 
  
 
As discussed above, we are amending Rule 3-05(b)(2)(iv) of Regulation S-X to increase 
the revenue threshold under which certain registrants may omit the earliest of the three fiscal 
years of audited financial statements of an acquired business or business to be acquired.  Rule 3-
05 applies to registrants that are not SRCs.
142
  Rule 3-05(b)(2)(iv) provides that, if the acquired 
business is large enough relative to the registrant (i.e., any of the significant subsidiary tests for 
the acquired business exceed 50%), the registrant must file three years of historical financial 
statements of the acquired business unless the acquired business has revenues of less than $50 
million, in which case only two years of the acquired business’s most recent financial statements 
need to be filed.  Given the difficulty in accurately identifying registrants that have acquisitions 
(1) that meet any of the significant subsidiary tests at the 50% level and (2) where the acquired 
business has revenues of less than $50 million, we are unable to estimate the number of 
                                                 
142
  Rule 8-04 of Regulation S-X [17 CFR 210.8-04] applies to financial statements of business acquired or to be 
acquired by SRCs. 

38 
 
registrants that were affected by the $50 million revenue threshold in Rule 3-05(b)(2)(iv) in 
2016.  We do not believe the disclosure accommodation in Rule 3-05(b)(2)(iv) is frequently used 
because the acquired business not only would need to meet one of the significant subsidiary 
thresholds at the 50% level compared to the non-SRC acquirer, but also would need to have less 
than $50 million of revenues in its most recent fiscal year. 
 
B. Potential Economic Effects 
1. Introduction 
The primary benefit stemming from the amendments is a reduction in compliance costs 
for the registrants that will newly qualify for SRC status.  To the extent that the reduced 
compliance costs have a fixed cost component,
143
 which typically burdens smaller registrants 
disproportionately, the cost savings may be particularly helpful for those registrants. 
As a secondary effect of the amendments, a lower disclosure burden could spur growth in 
the registrants that will newly qualify for SRC status to the extent that the compliance cost 
savings and other resources (e.g., managerial effort) otherwise devoted to disclosure and 
compliance are productively deployed in alternative ways.  It also could encourage capital 
formation because companies that may have been hesitant to go public may choose to do so if 
they face reduced disclosure requirements.    
With respect to costs, we expect that the amendments to the SRC definition will result in 
a modest change in some indicators of the overall quality of the information environment.  
                                                 
143
  See, e.g., William A. Brock & David S. Evans, The Economics of Small Businesses: Their Role and Regulation 
in the U.S. Economy 65 at 70 (1986); C. Steven Bradford, Does Size Matter? An Economic Analysis of Small 
Business Exemptions from Regulation, College of Law, Faculty Publications. 72 (2004).  See also Cindy R. 
Alexander et al., Economic Effects of SOX Section 404 Compliance: A Corporate Insider Perspective, 56 J. 
Account. & Econ. 267-290 at 285 (2013) (noting, among other things, that they found “evidence of fixed costs 
that weigh disproportionately on smaller firms”). 

39 
 
Generally, a decrease in the amount of direct disclosure could increase the information 
asymmetry between investors and company insiders, leading to lower liquidity and higher costs 
of capital for the affected registrants.  For example, one study found that, during the three-month 
period following the establishment of the SRC definition, registrants with public floats of $25 
million or more and less than $75 million that claimed SRC status experienced a significant 
reduction in liquidity relative to comparable registrants.
144
  In addition, one of the sources of 
information asymmetry under the amendments will be that the newly eligible SRCs will not be 
required to provide certain executive compensation disclosures, potentially lowering corporate 
governance transparency of these registrants.
145
  Furthermore, by introducing overlap between 
the SRC and the accelerated filer definitions, the amendments we are adopting w ould increase 
regulatory complexity.
146
 
The number of affected registrants that will make scaled disclosures will ultimately 
depend on the choices of those registrants.  That is, the SRC definition establishes eligibility for, 
but does not mandate reliance on, any of the scaled disclosure accommodations.
147
  We identified 
232 registrants in 2016 that met either the $75 million public float threshold or the $50 million 
revenue threshold for SRC status but did not claim SRC status.  While some of these registrants 
may not have been eligible (for example, a registrant that previously did not qualify as a SRC 
                                                 
144
  See Lin Cheng, Scott Liao, and Haiwen Zhang, Commitment Effect versus Information Effect of Disclosure:  
Evidence from Smaller Reporting Companies, 88 Account. Rev. 1239 (Jul. 2013).   
145
  For a review of the effects of executive compensation disclosures on compensation practices, see Kevin J. 
Murphy, “Executive compensation: Where we are, and how we got there,” Handbook of the Economics of 
Finance, Vol. 2. Elsevier (2013) 211-356.  See also Benjamin E. Hermalin and Michael S. Weisbach, 
Information Disclosure and Corporate Governance, 67 J. Fin. 195 (2012), and Anya Kleymenova and Irem A. 
Tuna, Regulation of Compensation (June 21, 2017), Chicago Booth Research Paper No. 16-07, available at 
SSRN: https://ssrn.com/abstract=2755621. 
146
  See SRC Adopting Release 73 FR at 942. 
147
  If a disclosure requirement applicable to SRCs is more stringent than for non-SRCs, however, SRCs must 
comply with the more stringent standard.  Item 404 is the only Regulation S-K disclosure requirement that could 
be more stringent. 

40 
 
because it exceeded the thresholds and is now subject to a lower threshold), it is possible that 
some elected not to avail themselves of the scaled disclosure requirements.
148
     
Under the amendments, we expect registrants will weigh their own costs and benefits of 
scaled disclosure and decide whether to take advantage of any of the scaled disclosure 
accommodations for which they are newly eligible.  Some registrants may determine that the 
costs of potentially reduced liquidity for their securities and higher cost of capital exceed the 
benefits of the lower compliance costs.  Those registrants may elect not to rely on the scaled 
disclosure accommodations available to them.  On the other hand, expanding SRC eligibility 
could provide opportunities for adverse selection in a greater number of registrants.  For 
example, registrants whose outside investors would have benefited from more disclosure might 
choose the less burdensome disclosure requirement once becoming eligible.  The net benefit or 
cost for each newly eligible registrant and its investors will ultimately depend on the specific 
facts and circumstances.   
Expanding the pool of registrants eligible for SRC status to include registrants with 
revenues of less than $100 million and a public float of $250 million or more and less than $700 
million will increase the cost savings, information asymmetries, and other effects of scaled 
disclosure in proportion to the increase in the number of registrants that become newly eligible at 
those higher thresholds and choose to avail themselves of the scaled disclosure accommodation.  
This number is likely to be small, as indicated by the evidence that 161 (2.2%) of the registrants 
that filed a Form 10-K in 2016 would have met the thresholds in the amended revenue test for 
                                                 
148
  Data from 2008 show that registrants do not always take advantage of scaled disclosure.  In a sample of 283 
registrants that were newly eligible for scaled disclosure in 2008, the evidence from Form 10-K and proxy filings 
by those registrants shows that 109 of the registrants chose to maintain their disclosure level for all ten eligible 
items, while 174 of the registrants reduced the disclosure level for at least one eligible item.  See Lin Cheng, 
Scott Liao, and Haiwen Zhang, Commitment Effect versus Information Effect of Disclosure:  Evidence from 
Smaller Reporting Companies, 88 Account. Rev. 1239 (Jul. 2013) at 1247 

41 
 
registrants with public float.  
The effects of scaled disclosure for registrants with a public float of $250 million or more 
and less than $700 million and revenues of less than $100 million may be different from the 
effects of scaled disclosure for registrants with public float nearer to the current threshold of 
$75 million.  This is because the characteristics of registrants eligible for SRC status under the 
final rules may be different from those of registrants close to the current threshold.  For example, 
differences in the relationships between management and outside investors in registrants with 
higher public float could affect the level of information asymmetries between those registrants 
and investors.  This may cause those registrants to make different decisions about how much 
information they choose to disclose and whether to rely on the scaled disclosure 
accommodations, leading to differences in the observed use of scaled disclosure by different 
registrants of the same size.  The 161 additional registrants had an average public float of $396 
million, while those that qualify under the current definition had an average public float of 
$15 million, and those that would have qualified under the proposed rules had an average public 
float of $55 million.  These differences can affect whether a registrant decides to rely on scaled 
disclosure and how that decision affects the registrant’s investors.  We do not have sufficient 
information about the experiences of registrants at the higher public float levels with lower 
revenues implementing scaled disclosure to estimate the frequency with which these registrants 
will implement scaled disclosure, if available.   
Similarly, increasing the revenue threshold below which registrants are eligible to 
provide two rather than three years of certain acquired businesses’ historical financial statements 
under Rule 3-05(b)(2)(iv) from $50 million to $100 million will increase the cost savings, 
information asymmetries, and other effects of the reduced historical financial statement 

42 
 
disclosure that investors receive at or around the time of the acquisition in proportion to the 
increase in the number of registrants that acquire businesses with revenues below the higher 
threshold and choose to avail themselves of this disclosure accommodation.  
Overall, we expect the effect of raising the revenue threshold in Rule 3-05(b)(2)(iv) of 
Regulation S-X from $50 million to $100 million on information disclosed by registrants and its 
consequences for registrants and investors to be modest.  This reflects our appraisal that few 
registrants are eligible to provide two rather than three years of an acquired business’s historical 
financial statements under Rule 3-05(b)(2)(iv), because the acquired business not only would 
need to meet one of the significant subsidiary thresholds at the 50% level compared to the non-
SRC acquirer, but the acquired business also would need to have less than the $50 million of 
revenues in its most recent fiscal year.
149
  The amendments we are adopting will have two 
potentially countervailing effects on the number of registrants that are eligible for the disclosure 
accommodation in Rule 3-05(b)(2)(iv).  First, they will increase the number of registrants that 
are eligible to provide two rather than three years of an acquired business’s historical financial 
statements under Rule 3-05(b)(2)(iv) by raising the revenue threshold for eligibility.  Second, 
they will reduce the number of registrants that are required to comply with Rule 3-05, because 
Rule 3-05 is only applicable to registrants that are not SRCs, and our final rules are likely to 
increase the number of SRCs.  Thus, the net effect may be to increase the number of registrants 
eligible to provide two rather than three years of an acquired business’s historical financial 
statements under Rule 3-05(b)(2)(iv), but we do not expect the net increase to be significant.   
2. Impact on Eligibility for Smaller Reporting Company Status 
By increasing the public float threshold from $75 million to $250 million, increasing the 
                                                 
149
  See text accompanying note 142. 

43 
 
annual revenue threshold for registrants with no public float from $50 million to $100 million, 
and expanding the revenue test to include registrants with a public float of less than $700 million 
and revenues of less than $100 million in the SRC definition, the amendments will permit more 
registrants to qualify as SRCs.  To estimate the number of additional registrants that are likely to 
be affected by the amendments, we use public float data and revenue data from Form 10-K 
filings.
150
  Our estimate of the number of registrants likely to be eligible in the first year under the 
new definition that would not have qualified under the current definition is the number that 
would have been eligible had the rule been in effect.  We use evidence on the composition of 
those registrants from the 2016 data to estimate the likely composition of the registrants that 
would be eligible in the first year under the new definition.   
We estimate that 966 additional registrants will be eligible for SRC status in the first year 
under the new definition.  These registrants estimated to be eligible in the first year comprise 779 
registrants with a public float of $75 million or more and less than $250 million, 26 registrants 
with no public float and revenues of $50 million or more and less than $100 million, and 161 
registrants with a public float of $250 million or more and less than $700 million and revenues of 
less than $100 million.  
The 966 registrants that we estimate will be newly eligible for SRC status are 
characterized by an average public float of $191 million (median $162 million), an average 
market value of $279 million (median $201 million), and average revenues of $196 million 
(median $68 million).  Of these registrants, 365 currently are EGCs and are eligible for certain 
scaled disclosure under Title I of the JOBS Act, including the scaled executive compensation 
                                                 
150
  Float and revenue values are from data in Form 10-K filings filed in calendar year 2016 and extracted from 
XBRL exhibits. 

44 
 
disclosures available to SRCs under Item 402 of Regulation S-K.  The newly eligible registrants 
with available data in 2016 were concentrated in the following industries:  “Pharmaceutical 
Products” (17.3%), “Banking” (15.2%), “Financial Trading” (11.8%), “Business Services” 
(5.2%), and “Electronic Equipment” (3.7%).  If the distribution of eligible registrants does not 
change over time, and if all of them claim SRC status, the amendments will lead to a noticeable 
increase in the presence of “Pharmaceutical Products” and “Banking” registrants in the pool of 
SRCs.  
Registrants eligible for SRC status with available data using the public float threshold of 
less than $250 million represent approximately 38.6% of all registrants, while only 28.0% of all 
registrants qualify under the existing public float threshold of less than $75 million.  The 38.6% 
of all registrants that will qualify under the public float threshold would be more in line with the 
42% of registrants that qualified under the public float threshold when the Commission first 
established the definition of SRC.
151
  An additional 8.0% of registrants will qualify based on 
having no public float and revenues of less than $100 million, while currently 7.7% of registrants 
reported having no public float and less than $50 million in revenues.
152
  Finally, based on the 
2016 data, 2.2% of registrants had a public float of $250 million or more and less than $700 
million and revenues of less than $100 million.  
                                                 
151
  These percentages reflect the estimated number of registrants that qualify under the respective public float tests 
and do not include any registrants that are estimated to qualify under the respective revenue tests. 
152  
Using 2016 data, we estimate that, of the 7,395 total registrants that filed Forms 10-K with available data, 3,606 
registrants will meet one of the SRC thresholds under the amendments.  In particular, we estimate that 2,851 
registrants reported public float below $250 million and greater than zero in 2016, resulting in a percentage of 
38.6% (2,851/7,395) of registrants potentially qualifying as SRCs under the amended public float threshold, and 
2,072 registrants reported a public float below $75 million in 2016, resulting in a percentage of 28.0% 
(2,072/7,395).  Also, we estimate that 594 registrants reported no public float and annual revenues below $100 
million in 2016, resulting in a percentage of 8.0% (594/7,395) of registrants potentially qualifying as SRCs under 
the amended revenue threshold, and 568 registrants reported no public float and annual revenues below $50 
million in 2016, resulting in a percentage of 7.7% (568/7,395).  Finally, we estimate that 161 registrants reported 
public float of $250 million or more and less than $700 million and annual revenues below $100 million in 2016, 
resulting in an additional 2.2% (161/7,395) of registrants potentially qualifying as SRCs
. 

45 
 
Increasing the percentage of registrants that will qualify under the public float threshold 
to align more closely with the 2007 level is consistent with the rise in market capitalization of 
public companies that has occurred since that time.
153
  We do not have sufficient data to be able 
to compare the percentage of registrants qualifying under the revenue threshold when the 
Commission first established the definition of SRC to the estimated 8.0% that will qualify using 
a revenue threshold of $100 million.  Table 4 summarizes the size of the potential SRCs in terms 
of public float, market value, and annual revenue under the amendments.  
Table 4: Size Proxies for SRCs Eligible 
Under the Amendments 
 
 
Public Float Market Value Revenue 
Mean 
$59.9 million $480.1 million $317.7 million 
Median 
$12.1 million $40.9 million $10.3 million 
Aggregate size  
$202.6 billion $1,220.5 billion $1,074.0 billion 
% of the aggregate 
size of all registrants 
0.9% 4.8% 8.7% 
 
As discussed above, we are amending Rule 3-05(b)(2)(iv) of Regulation S-X to increase 
the revenue threshold under which certain registrants may omit the earliest of the three fiscal 
years of audited financial statements of an acquired business or business to be acquired.  Similar 
to the baseline discussion of Rule 3-05, given the difficulty in accurately identifying registrants 
that have acquisitions (1) that meet any of the significant subsidiary tests at the 50% level and (2) 
where the acquired business has revenues of less than $100 million, we are unable to estimate the 
number of registrants that will be affected by raising the revenue threshold in Rule 3-05(b)(2)(iv) 
from $50 million to $100 million.  The amendments we are adopting today increase the number 
of registrants that qualify as SRCs (which will likely decrease the application of Rule 3-05) but 
                                                 
153
  For example, the S&P 500 index grew by more than 80 percent over the decade ending with the fourth quarter of 
2017. Source: CRSP and St. Louis Fed (https://fred.stlouisfed.org/series/GDPDEF). 

46 
 
also increase the revenue threshold in Rule 3-05(b)(2)(iv) (which may offset the decreased 
number of companies affected by Rule 3-05).  Therefore, we do not expect that the amendments 
will significantly alter the number of registrants that will be eligible to omit the earliest of three 
years of financial statements of an acquired business pursuant to Rule 3-05(b)(2)(iv). 
3. Estimation of Potential Costs and Benefits 
In this section, we estimate the incremental costs and benefits associated with SRC-
related scaled disclosures, using a multivariate empirical analysis.  We cannot isolate the costs 
and benefits associated with scaled disclosures using available data from SRCs, because we 
cannot with the data isolate the effects of scaled disclosures from the effects of some other 
accommodations, such as the exemption from Section 404(b) that is currently available to all 
SRCs through their status as non-accelerated filers.
154
  Under the final rules, some newly eligible 
SRCs will be able to provide scaled disclosures but will continue to be subject to Section 404(b) 
as accelerated filers. 
It is possible, however, to isolate the effects of scaled disclosures on registrants with 
public float slightly below or above the current $75 million public float threshold using 2006-
2009 data.  This is because, as a result of the rules that established the SRC definition in 2007, 
registrants with public float of $25 million or more and less than $75 million experienced no 
change in the Section 404(b) exemption (that is, they remained exempt from the requirement), 
but became eligible for the SRC scaled disclosures.  Our empirical method is a difference-in-
                                                 
154
  Although there is a clear threshold for eligibility, we cannot use the well-known empirical method of Regression 
Discontinuity Design to assess the treatment effect of scaled disclosures for SRCs.  This method requires that the 
assignment of the treatment among registrants be “as good as random” around the threshold.  Under this 
assumption, the registrants that receive the treatment of scaled disclosure (i.e., SRCs) should be comparable to 
those registrants that do not receive the treatment because their public float is just above the $75 million 
threshold.  Given the exemption from Section 404(b) available to current SRCs with public float below $75 
million, this assumption does not hold. 

47 
 
difference estimation between a treatment group and a control group that is the basis for 
comparison.
155
  In particular, the treatment group (“Treatment Group”) consists of registrants 
with public float of $25 million or more and less than $75 million that claimed SRC status in 
2008.  Two natural control groups exist.  The first (“Control Group 1”) consists of registrants 
that did not qualify for SRC status because they had public float at or just above $75 million 
($75 million or more and less than $125 million).
156
  The second (“Control Group 2”) consists of 
registrants with public float and revenues below $25 million that were already eligible for scaled 
disclosures at that time and thus not affected by the Commission’s 2007 rules.
157
   
To analyze the economic effects of eligibility for scaled disclosures resulting from the 
Commission’s 2007 rules by this method, we compare the Treatment Group with Control 
Group 1 and Control Group 2 in the following areas: cost savings, information environment, 
liquidity, and growth.  We then use the analysis to extrapolate the likely effects of the expansion 
of eligibility for SRC status under the final rules.  In extrapolating the likely effects, we place 
particular emphasis on the comparison between the Treatment Group and Control Group 1, 
which represents a closer group in size to the newly eligible SRCs under the final rules. 
We believe that the evidence from analysis of changes in the information environments 
of registrants around the 2007 amendments is a suitable basis for evaluating the effects of the 
                                                 
155
  Difference-in-difference is a technique used to calculate the effect of a variable on a treatment group versus a 
control group.  In particular, in the analysis below, the average change over time in the outcome of a variable for 
the treatment group is compared to the average change over time in the outcome of that variable for the control 
group. 
156
  This would allow for a $50 million bandwidth similar to that used in the Commission’s 2007 rules, which raised 
the threshold for relief from $25 million to $75 million. 
157
  The comparison groups help control for confounding factors that may also independently affect the economic 
effects associated with scaled disclosures.  While we determine Treatment Group and Control Group 1 based on 
public float alone, we use both public float and revenues to determine Control Group 2, because, prior to the 
Commission’s 2007 rules, registrants with public float below $25 million were not eligible for scaled disclosures 
if their revenues exceeded $25 million.     
 

48 
 
current amendments on registrants with public floats at the low end of the range that are newly 
eligible for scaled disclosure.  We included a similar analysis in the Proposing Release and 
solicited comments on this analysis, including ways to better quantify the effects of scaled 
disclosure on SRCs, but did not receive any comments in response.  
While the 2007 amendments resulted in changes that are similar to what we expect will 
occur under the current amendments, our analysis is subject to a number of assumptions and 
limitations.  The evidence from the 2007 amendments may be less suitable as a basis for 
evaluating the effects of the current amendments on registrants with relatively higher levels of 
public float than for evaluating potential effects of the current amendments on registrants with 
public float around the $75 million threshold.
158
  It is thus more challenging to quantify the likely 
effects of the current amendments on newly eligible SRCs with public float levels that are farther 
from the $75 million level, such as those closer to the $250 million and $700 million levels.
159
  
We believe those challenges may be less pronounced for registrants that have other 
characteristics, such as revenue, similar to those of the registrants that were affected by the prior 
rules.   
a. Potential Cost Savings: Estimates Based on Changes in Audit Fees 
The cost savings from scaled disclosures could include savings of resources that are 
likely to be used for the relevant parts of disclosures, for example, managerial and employee 
time, other internal resources, and audit fees related to certain disclosures.  Among these 
                                                 
158
  The 2007 rule amendments affected the reporting practices of registrants with public floats near the $75 million 
threshold (i.e., $25 million or more and less than $75 million) and, accordingly, may indicate the effects of 
increasing the public float threshold on registrants with public float of $75 million or slightly more than $75 
million. 
159 
 One limitation of difference-in-difference and regression discontinuity design studies of the effects of changes in 
regulatory rules is that their results are more applicable in evaluating the effects of the changes on the registrants 
whose characteristics most closely resemble those who were affected by the event under the analysis than in 
evaluating effects on other registrants.  See, e.g., Leuz and Wysocki (2016). 

49 
 
potential savings, changes in audit fees are readily quantifiable.  To the extent that the scaled 
disclosure accommodations affect information that must be audited, scaled disclosures of the 
audited portions of the filings should lead to a reduction in audit expenses.  Because many of the 
scaled disclosures available to SRCs relate to governance and executive compensation 
disclosures that are not subject to audit, a reduction in audit fees is likely a small part of the total 
cost savings associated with scaled disclosures.  However, quantifying the change in audit fees 
can potentially help us estimate the entire cost savings. 
To estimate the cost savings from the amendments, we first examine changes in the audit 
fees of registrants that were newly eligible to use scaled disclosures as a result of the 2007 
amendments relative to those in the control, or comparison, groups between the pre-amendment 
2006-2007 period and the post-amendment 2008-2009 period.  Audit fee data come from the 
Ives Group Audit Analytics database.  We include only registrants that had both pre-amendment 
and post-amendment audit fee data in the analysis.  Table 5 reflects the general results.  
Table 5: Pre- and Post-Commission’s 2007 Amendments Audit Fees for SRCs and Control 
Groups 
Fiscal Year 
Treatment Group 
(SRCs w/ public 
float $25m-
$75m) 
Control Group 1 
(Non-SRCs w/ 
public float $75m-
$125m) 
Control Group 2 
(SRCs w/ public 
float and revenues 
below $25m) 
Avg. 2006-2007 $311,105 $676,194 $113,757 
Avg. 2008-2009 $267,252 $654,463 $101,854 
Number of Observations 1,315 694 962 
 
For SRCs with public floats of $25 million or more and less than $75 million, in 2008-
2009, average audit fees declined by $43,853.  In contrast, both Control Group 1, which just 
missed eligibility for SRC status, and Control Group 2, which already was eligible for scaled 
disclosures, experienced smaller declines in average audit fees after the adoption of the 2007 
amendments: $21,731 and $11,903, respectively.  Thus, the difference-in-difference estimate of 

50 
 
the savings in audit fees associated with scaled disclosures is between $22,122 and $31,950 per 
SRC with public float around the $75 million threshold.  Although two different control groups 
are used to control for other factors that may have caused the changes in audit fees noted in 
Table 5 during the 2006-2009 period,
160
 the effect of the 2008 financial crisis may not be 
completely ruled out and could make the estimated savings in audit fees appear larger than they 
actually were. 
We also estimate the savings in audit fees in terms of a percentage reduction, instead of a 
dollar value.
161
  The audit fees for the Treatment Group declined by 14.1% in the 2008-2009 
period relative to the 2006-2007 period, but only by 3.2% for Control Group 1 and 10.5% for 
Control Group 2.  Thus, the difference-in-difference estimate of the treatment effect in terms of a 
percentage reduction is a 3.6% to 10.9% reduction in the audit fees.  
For the 966 newly eligible registrants that we estimate would be potentially affected by 
the amendments, the average audit fees were $658,735 in fiscal year 2016.  Thus, if we use the 
dollar value estimates of the audit fee savings, the estimated reduction in audit fees would be 
between $28,490 and $41,147 for this group, which are the inflation-adjusted values of the audit 
                                                 
160
  For example, among other factors, we note that the Commission approved Public Company Accounting 
Oversight Board Auditing Standard No. 5 regarding Audits of Internal Control over Financial Reporting (AS 5).  
Among other things, AS 5 was intended to reduce unnecessary costs by making the audit scalable to fit the size 
and complexity of a company.  AS 5 became effective in November 2007, and registrants with fiscal years 
ending between July and November were allowed to avail themselves of the provision earlier.  The adoption and 
implementation of AS 5 in 2007 could have had an impact on the audit fees of all registrants subject to 
Section 404(b).  Given that in our analysis both Treatment Group and Control Group 1 were affected by AS 5, 
however, the difference-in-difference methodology should control for the potential effects of AS 5 on audit fees.  
In addition, based on registrants’ fiscal year end, we have no reason to believe that early adopters were more or 
less concentrated in Treatment Group than Control Group 1.  See also Commission Guidance Regarding 
Management's Report on Internal Control Over Financial Reporting Under Section 13(a) or 15(d) of the 
Securities Exchange Act of 1934, Release No. 33-8810 (Jun. 20, 2007) [72 FR 35324 (Jun. 27, 2007)].  
161
  If there is a fixed (dollar value) component in audit expenses that apply to registrants of all sizes, then the 
estimates under this alternative approach can be viewed as the upper bound of the potential audit fee savings.  

51 
 
fee savings estimates in 2008 and 2009.
162
  This estimate of savings on audit fees for the newly 
eligible registrants is approximately 4.3% ($28,491/$658,735) to 6.2% ($41,148/$658,735) of the 
audit fees.   
We recognize that this analysis of the audit fee data is subject to a number of 
assumptions, some of which may not be fully applicable when estimating the potential change in 
audit expenses as a result of the amendments.
163
  As a result, there are limitations to our ability to 
draw conclusions from the analysis.  For example, we recognize that audit expenses are only one 
component of costs for registrants and that changes in audit fees do not capture the full range of 
potential cost savings stemming from scaled disclosures.  There are cost savings apart from the 
audit, such as cost savings resulting from a SRC not being required to prepare a compensation 
discussion and analysis and from other scaled disclosures in Item 402 of Regulation S-K.  These 
cost savings likely will include both internal cost savings (such as employee and managerial time 
and resources) and external cost savings from fees for other outside professionals such as 
attorneys.  Given the nature of scaled disclosures available to SRCs, we expect these other cost 
savings to be much larger than the cost savings in audit fees.  In the Proposing Release, we 
assumed that 25% of the total cost savings from scaled disclosure comes from savings in audit 
fees and 75% of the savings comes from reduction in other expenses.  We solicited comments on 
this assumption and on whether we should use a different assumption but did not receive any 
                                                 
162
  The inflation adjustment was performed using the CPI calculator of the Bureau of Labor Statistics 
(http://data.bls.gov/cgi-bin/cpicalc.pl
). 
163
  Estimates based on data from 2006 to 2009 may not be directly applicable to the estimation of audit fees for the 
newly eligible registrants under the rule amendments.  On the one hand, because auditors may charge larger 
registrants more for auditing the same disclosure items, our estimate could be viewed as a conservative estimate 
on the potential savings of audit fees for the newly eligible SRCs.  On the other hand, if there were any increased 
competition in the auditing industry since 2009, then it could have led to lower audit expenses for the same 
disclosure items.  Thus, our estimate could be higher or lower than the actual savings on audit fees for SRCs in 
2008 and 2009. 

52 
 
comments in response.  Accordingly, we use the same assumption here.  
Given this assumption, we estimate total annual cost savings per newly eligible registrant 
with a public float around the $75 million threshold to be between $98,439 ($24,610×4) and 
$298,052 ($74,513×4).  The savings to registrants that become newly eligible with public floats 
closer to the $250 million and $700 million thresholds, will vary from this estimate by amounts 
that are difficult to quantify, because these registrants are less comparable to the Control Groups, 
and will depend on the facts and circumstances of the newly eligible registrant.  For example, the 
audit cost for some of these registrants may be higher as a result of greater complexity in their 
business operations, increasing the cost savings associated with SRC status. 
b. Information Environment, Liquidity, and Growth 
A registrant’s information environment can be measured by the amount of useful 
information available to investors and the quality of that information.  To gauge the potential 
effects on the degree of external information production about the registrant that could benefit 
investors, we determine a registrant’s percentage of institutional ownership, total 5% block 
institutional ownership, and analyst coverage (i.e., whether a registrant is covered by at least one 
analyst and the number of analysts). 
To measure disclosure quality, we use four discretionary accrual measures commonly 
used in the accounting literature as proxies for earnings management and the incidence of 
material restatements (based on the first year of financial statements restated and the filing year).  
Scaled disclosure may contribute to lowering the overall quality of the information environment, 
which is proxied in this analysis by the propensity for earnings management and the incidence of 

53 
 
material restatements.
164
  The data on restatements are from the Ives Group Audit Analytics 
database.  A material restatement is defined as a restatement that is reported under Item 4.02 of 
Form 8-K. 
To examine the potential effects on liquidity, we focus on the share turnover ratio, which 
is calculated by dividing the total number of shares traded over a period by the number of shares 
outstanding.  To assess the effects of scaled disclosures on growth, we examine a registrant’s 
capital investment, which is measured by the capital expenditures to assets ratio, as a proxy for 
real growth.  Because there is a high concentration of SRCs in industries for which research and 
development (“R&D”) investment is important (e.g., pharmaceutical products and electronic 
equipment), we also examine a registrant’s investment in R&D.  Finally, we examine asset 
growth, which is the growth rate in book assets, which could capture a registrant’s growth 
through both capital investment and acquisition.   
Table 6 reports the estimated treatment effect.  The number in the Treatment Group vs. 
Control Group 1 column reflects the difference between:  (1) the average change in the metric for 
the Treatment Group, from the 2006-2007 period, when it was not eligible for scaled disclosure, 
to the 2008-2009 period, when it was eligible for scaled disclosure, and (2) the average change in 
the metric between the same periods for Control Group 1, which was never eligible for scaled 
disclosure.  Similarly, the number in the Treatment Group vs. Control Group 2 column reflects 
the difference between:  (1) the average change in the metric for the Treatment Group from the 
2006-2007 period, when it was not eligible for scaled disclosure, to the 2008-2009 period, when 
it was eligible for scaled disclosure and (2) the average change in the metric between the same 
                                                 
164
  In using these proxies, we do not mean to suggest that scaled disclosure would be expected to directly cause an 
increase in earnings management or an increased incidence of material restatements, as there is little direct 
connection between the types of disclosure governed by our scaled disclosure requirements and the disclosure 
affected by a restatement.  

54 
 
periods for Control Group 2, which had been eligible for scaled disclosure for both periods.
165
 
Table 6: Scaled Disclosures and the Information Environment, Liquidity, and Growth
166
 
 
 Treatment Group 
vs. Control  
Group 1 
Treatment Group 
vs. Control  
Group 2 
Information Environment:  
External Information Production 
  
Institutional Ownership -0.052*** -0.022*** 
Institutional Block Ownership -0.016** -0.002 
Number of Analysts -0.179 -0.068 
Analyst Coverage Dummy -0.099*** 0.087*** 
Information Environment:  
Disclosure Quality 
  
Earnings Mgmt. 1 0.025 0.015 
Earnings Mgmt. 2 0.024 0.013 
Earnings Mgmt. 3 0.020 0.024 
Earnings Mgmt. 4 0.018 0.023 
Material Restatement (Filing Year) 0.018 0.015 
Material Restatement (First Year 
Restated) 
0.036** 0.016 
                                                 
165
  Specifically, for each number reported in Table 6, we estimate the following equation: 
y = a + b * SRC + c * After + d * [SRC * After] 
where the single-letter terms “a” to “d” are coefficients to be estimated; “SRC” equals one for the treatment group 
and zero for the comparison group; and “After” equals one for fiscal years 2008 and 2009 and zero for fiscal 
years 2006 and 2007.  The treatment effect is reflected in the coefficient estimate d, which is the differential 
value of the variable y for treated firms following the start of the treatment.  A statistically negative estimate of d 
is consistent with a reduction in the value of the dependent variable y (Institutional Ownership, Institutional 
Block Ownership, etc.) for treated firms. 
166
 This table shows changes in the information environment, liquidity, and growth upon the introduction of scaled 
disclosure for SRCs.  Treatment Group consists of SRCs with public float of $25 million or more and less than 
$75 million in fiscal year 2008.  Control Group 1 consists of non-SRCs with public float of $75 million or more 
and less than $125 million.  Control Group 2 consists of small business issuers with public float and revenues 
below $25 million.  Institutional Ownership is total percentage institutional ownership.  Block Institutional 
Ownership is total block (5%) institutional ownership.  Number of Analysts is the number of analysts following 
a registrant.  Analyst Coverage Dummy is a dummy variable indicating the existence of analyst following.  
Earnings Mgmt. 1-4 are four different discretionary accruals measures.  Earnings Mgmt. 1 follows Kothari, 
Leone, and Wasley (2005), and Earnings Mgmt. 2-4 follows Dechow, Sloan, and Sweeney (1995).
166
  Material 
Restatement (Filing Year) is a dummy variable that equals one if a registrant discloses restatement under Item 
4.02 of Form 8-K in that year, and zero otherwise.  Material Restatement (First Year Restated) is a dummy 
variable that equals one if the material reason for the restatement under Item 4.02 of Form 8-K originated in that 
year, and zero otherwise.  Share Turnover is the ratio of shares traded over shares outstanding.  Capital 
Investment is capital expenditures over book assets.  R&D investment is R&D expenditures over revenue.  Asset 
Growth is the annual growth rate of book assets.  ***, **, and * indicate significance at 1%, 5%, and 10% 
confidence levels, respectively. 

55 
 
 Treatment Group 
vs. Control  
Group 1 
Treatment Group 
vs. Control  
Group 2 
Liquidity   
Share Turnover Ratio -0.063 -0.052 
Growth   
Capital Investment 0.005 -0.005 
R&D Investment -0.035 -0.002 
Asset Growth Rate -0.005 -0.282*** 
 
The results in Table 6 suggest that the scaled disclosures had a negative effect on 
institutional ownership.  The Treatment Group, which became eligible for scaled disclosures, 
experienced a 5.2% greater decrease in average institutional ownership from period to period 
than the registrants in Control Group 1, which remained ineligible for scaled disclosures, and a 
2.2% greater decrease in average institutional ownership from period to period than the 
registrants in Control Group 2, which were eligible for scaled disclosures throughout both 
periods.   
The results reflect a positive effect on material restatements in SRCs based on the first 
year restated, while the effect on analyst coverage is inconclusive.  SRCs tend to lose analyst 
coverage relative to comparable registrants that just missed eligibility, but they gain coverage 
relative to even smaller registrants that already were eligible for scaled disclosures.  There is no 
statistically significant effect on earnings quality as captured by discretionary accruals measures 
or the incidence of material restatement based on when the restatement was filed.  Overall, the 
evidence suggests a modest, but statistically significant, negative effect of scaled disclosure on 
SRCs’ overall information environment. 
The effect of scaled disclosures on share turnover ratio is negative but statistically 

56 
 
insignificant, suggesting no significant effect of scaled disclosures on SRCs’ liquidity.
167
  
Because the newly eligible registrants are larger in market value and have more institutional 
ownership and analyst coverage than the current SRCs, to the extent those registrants rely on the 
accommodations, we do not expect a significant negative impact on their liquidity. 
The results in Table 6 indicate no clear difference between SRCs and registrants in 
Control Group 1 and Control Group 2 in terms of changes in capital investment and R&D 
investment.  The effect on asset growth rate is mixed.  There is no significant difference between 
the Treatment Group and Control Group 1, but compared to Control Group 2, the Treatment 
Group had deterioration in asset growth rate after the 2007 rules.  Overall, our empirical analysis 
suggests that scaled disclosures have only a minimal effect on growth in current SRCs relative to 
the Control Groups.  Thus, we do not expect the use of scaled disclosures to have a significant 
effect on the growth of the newly eligible registrants under the final rules. 
c. Rule 3-05 
Similar to our discussion of the amendments to the SRC definition, we generally expect a 
modest reduction in compliance costs for registrants that are eligible to provide two rather than 
three years of historical financial statements of certain acquired businesses under Rule 
3-  05(b)(2)(iv), with corresponding potential modest increases in information asymmetries.  We 
expect the magnitude of the effects of the change in the revenue threshold in Rule 3-05(b)(2)(iv) 
to be smaller for those registrants that acquire relevant businesses and their investors, as 
                                                 
167
  In contrast, Chang et al. (2013) did find a negative and significant effect of the Commission’s 2007 amendments 
on SRCs’ liquidity.  The difference in the results could stem from the use of a different empirical methodology, 
sample, and sample period. Chang et al. (2013) excluded financial companies.  While the authors examined a 
pre-amendment period of April to June 2007, we included the entire 2006 and 2007 periods.  Also, while the 
authors examined a post-amendment period of February to August 2008, we included the entire 2008 and 2009 
periods.  In addition, the authors focus on a set of illiquidity measures, while we focus on the share turnover 
ratio, a commonly used liquidity measure.  

57 
 
compared to the change in the SRC definition for newly eligible registrants and their 
investors.  The reason for this expectation is that the revenue threshold in Rule 3-05(b)(2)(iv) 
only affects the historical financial statements of the acquired businesses (by limiting them to 
two years rather than three years), whereas a registrant that qualifies as a SRC will be able to 
comply with a number of scaled disclosure accommodations, including providing two years of 
financial statements and scaled executive compensation disclosures.
168
   
d. Conclusion 
Taken together, our empirical analysis suggests that, for most of the newly eligible SRCs 
under the final rules, scaled disclosures may generate a modest, but statistically significant, 
amount of cost savings in terms of the reduction in compliance costs, a modest, but statistically 
significant, deterioration in some of the proxies used to assess the overall quality of information 
environment, and a muted effect on the growth of the registrant’s capital investments, 
investments in R&D, and assets.  We expect the effects on registrants that are newly eligible for 
reduced disclosure under Rule 3-05(b)(2)(iv) to be lesser in magnitude but qualitatively similar.  
4. Affiliated Ownership and Adverse Selection 
In general, holding market value constant, the use of public float to define eligibility 
favors registrants with more affiliated ownership.  If we consider two registrants with the same 
market value but different affiliated ownership, the one with greater affiliated ownership will 
have a lower public float, which is the value of non-affiliated ownership, and thus will be more 
likely to qualify for SRC status based on the public float threshold.  This could be problematic if 
the adverse selection problem creates a conflict of interest between affiliated owners—who are 
often the decision makers—and non-affiliated owners—who are often the uninformed minority 
                                                 
168
  See Section I for a discussion of the scaled disclosure accommodations available to SRCs.     

58 
 
shareholders on whom reduced disclosure may have a greater impact.  We examine whether the 
effects of scaled disclosure on registrants’ information environment, liquidity, and growth 
depend on the percentage of affiliated ownership, which is the market value of affiliated equity 
shares divided by the registrant’s total market value of equity.  The average affiliated ownership 
is 43% for SRCs in the treatment group in years 2008 and 2009 (median 42%).  Specifically, we 
examine whether and to what extent the effects of scaled disclosure on information environment, 
liquidity, and growth differ for SRCs with high, or above-average, affiliated ownership as 
compared to low, or below-average, affiliated ownership. 
The results are reflected in Table 7.  The number in the Treatment Group vs. Control 
Group 1 column reflects the difference between:  (1) the difference between the average metric 
of registrants in the Treatment Group with affiliated ownership that is higher than the group 
median and that of the registrants in the Treatment Group with affiliated ownership that is lower 
than the group median and (2) the difference between the average metric of registrants in Control 
Group 1 with affiliated ownership that is higher than the group median and that of the registrants 
in Control Group 1 with affiliated ownership that is lower than the group median.  Similarly, the 
number in the Treatment Group vs. Control Group 2 column reflects the difference between:  (1) 
the difference between the average metric for the higher-than-median affiliated ownership 
registrants and that of the lower-than-median affiliated ownership registrants in the Treatment 
Group and (2) the difference between the average metrics for the same sectors of Control 
Group 2.
169
 
                                                 
169
  Specifically, for each number reported in Table 7, we estimate the following equation: 
y = a + b * SRC + c * After + d * HighAff + e * [SRC * After] + f  * [SRC * HighAff] + g * [After * HighAff] + h 
* [SRC * HighAff * After] 
 
 

59 
 
Table 7: Affiliated Ownership and Adverse Selection
170
 
 
 Treatment Group vs. 
Control Group 1 
Treatment Group 
vs. Control Group 2 
Information Environment:  
External Information Production 
  
Institutional Ownership -0.127*** -0.110* 
Institutional Block Ownership -0.079** -0.126* 
Number of Analysts -0.742** 1.277** 
Analyst Coverage Dummy -0.052 0.500** 
Information Environment:  
Disclosure Quality 
  
Earnings Mgmt. 1 0.010 0.286 
Material Restatement (Filing Year) 0.038 -0.040 
Material Restatement (Beginning Year) 0.084** 0.001 
Liquidity   
Share Turnover Ratio 0.052 0.059 
Growth   
Capital Investment 0.029** 0.049 
R&D Investment 0.014 -0.756 
Asset Growth Rate 0.136 -1.485 
 
Our analysis suggests that affiliated ownership may exacerbate the potential negative 
effects of scaled disclosure on external information production by professionals such as 
institutional investors.  There is also some evidence that larger affiliated ownership may 
exacerbate the adverse effect of scaled disclosure on material restatements based on when such 
restatement was triggered in SRCs (relative to Control Group 1).  At the same time, scaled 
                                                                                                                                                             
where the single-letter terms “a” to “h” are coefficients to be estimated. “After” and “SRC” are defined in note 165.  
“HighAff” is a dummy variable equal to one if the firm’s affiliated ownership is greater than the sample median 
of 0.42; otherwise, “HighAff” is equal to zero.  The treatment effect of interest is measured by the coefficient h, 
which is the differential value of the variable y for treated firms with high affiliated ownership, following the 
start of the treatment.  See also note 165. 
170
 This table shows the differences in the changes between registrants with high affiliated ownership and those with 
low affiliated ownership upon the introduction of scaled disclosure for SRCs. Affiliated ownership is the 
percentage of a registrant’s market value of equity that is owned by affiliated parties (i.e., corporate insiders and 
10% block owners).  Registrants with high (low) affiliated ownership include registrants with affiliated 
ownership above (below) the sample median.  A negative and significant estimate means that scaled disclosures 
have a more negative effect on SRCs with high affiliated ownership than on those with low affiliated ownership. 
***, **, and * indicate significance at 1%, 5%, and 10% confidence levels, respectively 

60 
 
disclosures tend to have a more positive effect on SRCs’ capital investment when affiliated 
ownership is higher.  Overall, there is inconclusive evidence that affiliated ownership is 
associated with adverse selection in current SRCs. 
5. Effects on Efficiency, Competition and Capital Formation 
The final rules may have competitive effects.  On one hand, the amendments may reduce 
the compliance-related costs of newly eligible registrants relative to current SRCs.  The 
amendments may also increase the competitive advantage of the newly eligible registrants 
relative to non-eligible registrants that compete with them in the product market.  However, 
because there is no clear evidence that scaled disclosures have a significant effect on the growth 
of current SRCs, we expect these potentially positive competitive effects to be modest.  On the 
other hand, setting any eligibility threshold may create a competitive disadvantage for those 
registrants that miss eligibility because their public float or revenue is just above the specified 
threshold, relative to the newly eligible registrants.  However, our economic analysis suggests 
that this potentially negative effect also is likely to be modest. 
As discussed above, our empirical analysis suggests that scaled disclosures are unlikely 
to have a significant negative effect on the overall information environment of SRCs.  Thus, we 
do not expect the amendments to have a significant negative effect on the information efficiency 
of affected parties.  Finally, it is difficult to quantify the effect of scaled disclosures on capital 
formation.  The Commission’s 2007 amendments coincided with the 2008 financial crisis and its 
aftermath, which contributed to extremely thin public capital market activities.  The potential 
cost savings and the potential negative consequences of scaled disclosure for reporting 
companies discussed in Tables 5 and 6 (based on data encompassing the period during the 
financial crisis) are modest.  These figures do not include potential cost savings from newly-

61 
 
eligible companies that may contemplate going public.
171
 
C. Possible Alternatives 
In this section, we present several alternatives to the final rules and discuss their relative 
costs and benefits.   
As a first alternative, we could have used a different registrant size metric in the SRC 
definition.  While public float has the advantage of capturing the value held by non-affiliated 
investors who may be more affected by informational asymmetries, the disadvantage of public 
float is twofold.  First, reported public float numbers are not easily verifiable.  Second, using 
public float to define eligibility may increase adverse selection due to conflicts of interest 
between affiliated and non-affiliated owners.  We considered equity market value as an 
alternative size metric to public float.  Equity market value is in many instances more accessible 
and more easily verifiable than public float.  It does not as effectively differentiate registrants 
based on the degree of informational asymmetry concerns, but it also does not favor registrants 
with more affiliated ownership.  If we define registrants as SRCs when they have (1) less than 
$250 million in equity market value, (2) no equity market value and revenue below $100 million, 
or (3) less than $700 million in equity market value and revenue below $100 million, the number 
of registrants estimated to become eligible for scaled disclosure declines by five percent, relative 
to the number that are estimated to be eligible under the rule amendments with available 2016 
data on public float, revenue and market value.  Thus, this alternative would lead to a slightly 
smaller pool of registrants eligible for SRC status than under the amendments.  
As a second alternative, we could have used different thresholds.  Neither public float nor 
revenue data show a natural breakpoint for different thresholds.  For example, we could take 
                                                 
171
  See Section IV.B.1. 

62 
 
inflation since 2007 into account, raising the public float threshold from $75 million to $86.2 
million and the revenue threshold from $50 million to $57.5 million.  An inflation adjustment of 
the current thresholds would expand the pool of eligible SRCs by 83 registrants, 78 of which 
reported public float of between $75 million and $86.2 million in their 2016 Form 10-Ks, and 
five of which had no public float and revenue of between $50 million and $57.5 million.
172
  
Alternatively, instead of the $250 million public float threshold for all registrants and the 
$700 million public float threshold for registrants with revenue below $100 million, we could 
have allowed the $700 million public float threshold to apply to all registrants, regardless of 
revenue.  A test capturing all registrants with less than $700 million in public float, regardless of 
revenue, would have expanded the pool of eligible SRCs with available data by 1,029 registrants.  
Because the $700 million is the threshold in the “large accelerated filer” definition, the effect of 
this alternative would be to permit all accelerated filers to provide the SRC scaled disclosures.   
For registrants with no public float or public float of less than $700 million, instead of the 
$100 million revenue threshold, we could have used a revenue threshold of $1 billion.  A 
$1 billion revenue threshold would make scaled disclosure accommodations for SRCs and EGCs 
generally more consistent for the subset of SRCs that have no public float or public float of less 
than $700 million.
173
  Using 2016 data, we estimate that if we were to increase the revenue 
threshold from $100 million to $1 billion in addition to the accommodations being adopted, there 
would be 879 newly eligible registrants based on revenues, in addition to the 966 newly eligible 
                                                 
172
  The inflation adjustment was performed using the CPI calculator of the Bureau of Labor Statistics 
(http://data.bls.gov/cgi-bin/cpicalc.pl
). 
173
  An EGC is defined as an issuer that had total annual gross revenues of less than $1.07 million during its most 
recently completed fiscal year.  Pub. L. No. 112-106, Sec. 101, 126 Stat. 306 (2012); 15 U.S.C. 77b(a)(19); 15 
U.S.C. 78c(a)(80).  Inflation Adjustments and Other Technical Amendments under Titles I and II of the JOBS 
Act, Release No. 33-10332 (Mar. 31, 2017) [82 FR 17545 (Apr. 12, 2017)].   
 

63 
 
registrants under the final rules.  Expanding the pool of registrants eligible for SRC status using 
this alternative revenue threshold would further reduce overall compliance costs for registrants 
but also potentially increase the informational asymmetries and other adverse effects associated 
with scaled disclosures.  Relative to the current SRCs or the newly eligible SRCs under the final 
rules, these additional qualifying registrants also may have different characteristics that could 
affect the appropriateness of scaled disclosure.  For example, the 879 additional registrants under 
this alternative are much larger, implying that any cost savings from scaled disclosures would 
generate a much smaller impact on the registrants’ market value, and may not justify the 
potential loss of informational transparency.    
As a third alternative, we could have considered reducing the number of registrants that 
our rules define as accelerated filers, which would expand the number of registrants eligible for 
the Sarbanes-Oxley Act Section 404(b) exemption.  The newly eligible SRCs under the final 
rules will remain accelerated filers and must comply with Section 404(b).  This creates two tiers 
among SRCs.  Registrants with public floats below $75 million are eligible for the scaled 
disclosures and, as non-accelerated filers, are exempt from Section 404(b).  Registrants with 
either (1) public floats of $75 million or more and less than $250 million or (2) public floats of 
$75 million or more and less than $700 million and less than $100 million in revenues will be 
eligible only for the scaled disclosures and, as accelerated filers, must comply with Section 
404(b).  In evaluating the costs and benefits of this alternative, we considered the comments that 
the Commission received in response to the Proposing Release.  In light of these comments, as 
stated above, the Chairman has directed the staff to formulate recommendations to the 
Commission for possible changes to reduce the number of registrants that our rules define as 
accelerated filers. 

64 
 
V. Paperwork Reduction Act 
A. Background 
The final rules will affect existing rules, regulations and forms that contain “collection of 
information” requirements within the meaning of the Paperwork Reduction Act of 1995 
(“PRA”).
174
  We are submitting the proposals to the Office of Management and Budget (“OMB”) 
for review in accordance with the PRA and its implementing regulations.
175
  We also requested 
comment on the changes to these “collection of information” requirements in the Proposing 
Release. 
The titles of the collections of information are:
176
 
(1) “Regulation S-X” (OMB Control No. 3235-0009); 
(2) “Regulation S-K” (OMB Control No. 3235-0071); 
(3) “Regulation C” (OMB Control No. 3235-0074); 
(4) “Regulation 12B” (OMB Control No. 3235-0062); 
(5) “Form 10-K” (OMB Control No. 3235-0063); 
(6) “Form 10-Q” (OMB Control No. 3235-0070); 
(7) “Form 8-K” (OMB Control No. 3235-0060); 
(8) “Regulation 14A and Schedule 14A” (OMB Control No. 3235-0059); 
(9) “Regulation 14C and Schedule 14C” (OMB Control No. 3235-0057); 
(10) “Form 10” (OMB Control No. 3235-0064); 
                                                 
174
  44 U.S.C. 3501 et seq. 
175
  44 U.S.C. 3507(d); 5 CFR 1320.11. 
176
  The paperwork burdens from Regulation S-X, Regulation S-K, Regulation C, and Regulation 12B are imposed 
through the forms that are subject to the requirements in those regulations and are reflected in the analysis of 
those forms.  To avoid a PRA inventory reflecting duplicative burdens and for administrative convenience, we 
assign a one-hour burden to each of Regulation S-X, Regulation S-K, Regulation C, and Regulation 12B. 

65 
 
(11) “Form S-1” (OMB Control No. 3235-0065); 
(12) “Form S-3” (OMB Control No. 3235-0073); 
(13) “Form S-4” (OMB Control No. 3235-0324); and 
(14) “Form S-11” (OMB Control No. 3235-0067). 
We adopted the existing rules, regulations, and forms pursuant to the Securities Act and 
the Exchange Act.  These rules, regulations, and forms set forth the disclosure requirements for 
annual and quarterly reports, proxy and information statements, current reports, and registration 
statements that are prepared by registrants to provide investors information to make informed 
investment and voting decisions. 
The hours and costs associated with preparing disclosure, filing information required by 
forms, and retaining records constitute reporting and cost burdens imposed by collection of 
information requirements.  An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information requirement unless it displays a currently valid control 
number.  Compliance with the information collections listed above is mandatory to the extent 
applicable to each registrant.
177
  Responses to the information collections are not kept 
confidential and there is no mandatory retention period for the information disclosed. 
B. Summary of the Final Amendments  
As described in more detail above, we are adopting final rules to amend the definition of 
SRC to encompass a greater number of registrants and to revise Rule 3-05(b)(2)(iv) of 
Regulation S-X to align the revenue threshold in that rule with the new revenue threshold in the 
definition of SRC.  The final rules make scaled disclosure accommodations available to a larger 
                                                 
177
  As noted above, registrants claiming SRC status have the option to comply with the scaled disclosures available 
to them on an item-by-item basis. 

66 
 
number of registrants.  As a result, the final rules should decrease the disclosure requirements for 
registrants that fall within the expanded thresholds of the SRC definition and should decrease the 
disclosure burden for registrants acquiring other companies by increasing the number of acquired 
companies for which Rule 3-05(b)(2)(iv) of Regulation S-X permits one less year of financial 
information to be disclosed. 
In the Proposing Release, we proposed to amend the SRC definition to include registrants 
with a public float of less than $250 million, as well as registrants with annual revenues of less 
than $100 million for the previous year and no public float.  We are adopting the amendments 
generally as proposed with two changes.  In a change from the proposal, the SRC definition in 
the final rules also will include registrants with annual revenues of less than $100 million for the 
previous year and a public float of less than $700 million.  As detailed below, the burden 
estimates for the respective forms and schedules have been revised to reflect that the SRC scaled 
disclosure accommodations also will be available to the additional registrants that come within 
these revised thresholds. 
In another change from the proposal, we are amending Rule 3-05(b)(2)(iv) of Regulation 
S-X to increase the revenue threshold under which certain registrants may omit from certain 
registration statements or current reports the earliest of the three fiscal years of audited financial 
statements of an acquired business or business to be acquired.
178
  Accordingly, we have added 
two new titles, “Regulation S-X” (OMB Control No. 3235-0009) and “Form 8-K” (OMB 
Control No. 3235-0060), to the collections of information affected by the final rules.  The impact 
of the amendment to Rule 3-05(b)(2)(iv) is reflected in the burden estimates for the applicable 
                                                 
178
 See note 95. 

67 
 
forms.
179
  However, as discussed below, while we estimate that the amendment to Rule 3-05 may 
decrease the existing paperwork burden for some issuers, we do not believe it will change the 
total burden estimates for the relevant registration statements and current reports. 
The final rules do not change the amount of information required to be included in 
Exchange Act reports by any registrant because of its status as an accelerated filer or a large 
accelerated filer. 
C. Summary of Comment Letters 
One commenter addressed the specific PRA-related comment requests in the Proposing 
Release.
180
  This commenter stated that the proposed adjustment to the SRC definition is fair and 
that the details provided as the basis for the cost reduction estimates appear to be thorough and 
specific.
181
  As to the ways to enhance the information collected, the commenter stated that the 
burden of preparing information remained with the respective registrant and that registrants may 
be required to provide additional disclosure if they are entering into capital transactions.
182
  As to 
ways to minimize the burden of the collection of information, the commenter stated that XBRL 
may facilitate the evaluation of data.
183
  Lastly, the commenter stated that the list of collections of 
information appeared to be complete and that it was not aware of any collection of information 
that would be negatively affected.
184
 
                                                 
179
 See note 176. 
180
 See IMA. 
181
  Id. 
182
  Id. 
183
  Id. 
184
  Id. 

68 
 
D. Revisions to Burden and Cost Estimates 
For purposes of the PRA, the final rules decrease the burden hour and costs estimates for 
Form 10-K, Form 10-Q, Schedule 14A, Schedule 14C, Form 10, Form S-1, Form S-3, Form S-4, 
and Form S-11 by approximately 493,016 burden hours and decrease external costs by 
approximately $ 66,242,345.
185
 
Our burden hour and cost estimates below reflect the average burdens for all registrants 
that may benefit from the expanded accommodations.  In deriving our estimates, we recognize 
that the burdens likely will vary among individual registrants based on a number of factors, 
including the size and complexity of their business.  We believe that some registrants will 
experience costs in excess of this average and some registrants will experience less than the 
average costs. 
For quarterly and annual reports and for proxy and information statements, we estimate 
that 75% of the burden of preparation is carried by the registrant internally and that 25% of the 
burden is carried by outside professionals retained by the registrant at an average cost of $400 
per hour.
186
  For registration statements, we estimate that 25% of the burden of preparation is 
carried by the registrant internally and that 75% of the burden is carried by outside professionals 
retained by the registrant at an average cost of $400 per hour.  While we cannot predict with 
                                                 
185
  These estimates reflect the difference between (1) our estimates of the burden hours and costs for each affected 
collection of information under the final rules and (2) the current estimates for each affected collection of 
information prior to effectiveness of the final rules.  The current estimates for some of the affected collections of 
information have changed since the Proposing Release due to changes in our rules that are unrelated to the 
amendments we are adopting.  As a result, our estimated changes in the burden hours and costs for each affected 
collection of information in this release may differ from our estimates for the same collection of information in 
the Proposing Release. 
186
  We recognize that the costs of retaining outside professionals may vary depending on the nature of the 
professional services, but for purposes of this PRA analysis, we estimate that such costs will average $400 per 
hour.  This is the rate we typically estimate for outside legal services used in connection with public company 
reporting.  See Section VI.D below for a discussion of the professional skills needed to comply with the 
amendments. 

69 
 
certainty the number of newly eligible SRCs that will begin to use the scaled disclosure 
provisions, for purposes of our PRA calculations, we estimate that 80% of them will do so.
187
 
For purposes of the PRA, we estimate that over a three-year period,
188
 the annual 
aggregate decreased burden
189
 resulting from the amendments in the final rules will average: 
• 403,250 hours and $53,883,321 of external costs for Form 10-K; 
• 88,864 hours and $11,851,661 of external costs for Form 10-Q; 
• 481 hours and $64,160 of external costs for Schedule 14A; 
• 11 hours and $1,440 of external costs for Schedule 14C; 
• nine hours and $11,163 of external costs for Form 10; 
• 145 hours and $174,000 of external costs for Form S-1;  
• 38 hours and $45,600 of external costs for Form S-3; 
• 203 hours and $243,600 of external costs for Form S-4; and 
• 15 hours and $17,400 of external costs for Form S-11. 
1. Form 10-K 
We estimate that approximately 966 additional registrants will satisfy the revised 
definition of a SRC and become eligible to use scaled disclosure in their annual reports on Form 
                                                 
187
  This estimated realization rate reflects the percentage of registrants eligible to claim SRC status in 2016 that 
claimed such status.  Based on data collected by DERA, 2,408, or approximately 91.2%, of an estimated 2,640 
eligible registrants claimed SRC status.   
In addition, this estimated realization rate is further reduced to reflect that a portion of newly eligible SRCs may 
already qualify as EGCs, which are eligible to rely on certain scaled disclosure requirements for a limited period, 
including some of the scaled requirements available to SRCs.  Based on data collected by DERA, 365, or 
approximately 37.8%, of the 966 registrants in 2016 that would have been newly eligible for scaled disclosure 
under the final rules were EGCs and therefore already benefitting from a portion of these estimated savings. 
188
  We calculated an annual average over a three-year period because OMB approval of PRA submissions covers a 
three-year period. 
189
  Our decreased burden estimates take into account, and are net of, any increased burden that may result from 
SRCs providing expanded disclosures under disclosure requirements that are more stringent for SRCs than for 
non-SRCs, such as Item 404 of Regulation S-K. 

70 
 
10-K.  These registrants could experience burden and cost savings under the final rules.
190
  We 
estimate that, if all of these registrants used all of the scaled disclosure requirements, they would 
save an estimated 504,063 burden hours and an aggregate cost of $67,291,651.
191
 
Based on our assumption that 80% of newly eligible registrants will begin to use scaled 
disclosure, we estimate an aggregate decrease of 403,250 internal burden hours and costs of 
$53,833,321 for Form 10-K.
192
 
2. Form 10-Q 
We assume that the same approximately 966 registrants will become newly eligible to 
use scaled disclosure for purposes of their quarterly reports.  We estimate that if all of these 
registrants used all of the scaled SRC requirements, they would save 111,080 burden hours and 
an aggregate cost of $14,814,576.
193
 
                                                 
190
  We estimate that 966 additional registrants will be eligible under the final rules to use the scaled disclosure 
requirements available to SRCs for their annual and quarterly reports in the first year.  We base this estimate on 
the number of additional registrants that would have been eligible to use scaled disclosure for their annual and 
quarterly reports in 2016, based on data collected by DERA from annual reports on Form 10-K filed in 2016.  
The data show that 779 registrants had a public float of $75 million or more but less than $250 million, 26 
registrants had no public float and annual revenues of $50 million or more but less than $100 million, and 161 
registrants had a public float of $250 million or more but less than $700 million and annual revenues of less than 
$100 million. 
191
  Consistent with our analysis in the SRC Adopting Release and the Proposing Release, we estimate the 
compliance burden for a Form 10-K for a SRC using all scaled disclosure available to be the same as the last 
available PRA inventory for completing a Form 10-KSB, which was 1,272 burden hours and a cost of $169,600 
(424 professional hours x $400/hour) per report. 
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would 
decrease the compliance burden of Form 10-K by up to 504,062.65hours (1,793.80 internal hours per filing using 
standard Regulation S-K and Regulation S-X disclosure minus 1,272.00 internal hours per filing using scaled 
disclosure = 521.80 internal hours saved per filing x 966 filings) and decrease the cost by up to $67,291,651.41 
(598.15 professional hours per filing using standard Regulation S-K and Regulation S-X disclosure minus 
424.00 professional hours per filing using scaled disclosure = 174.15 external hours saved per filing x $400 per 
hour = $69,660.09 external cost savings per filing x 966 filings). 
192
  This estimated decrease in the compliance burden for Form 10-K is based on 80% x 504,062.65 internal hours 
saved = 403,250.12 internal hours saved and 80% x $67,291,651.41 external cost savings = $53,833,312.13 
external cost savings. 
193
  Similar to our approach to estimating the reduced compliance burden for a Form 10-K using scaled disclosure, 
we base our estimates of the reduced compliance burden for SRCs using all scaled disclosure available for 
certain other filings on the last available PRA inventory for completing the most comparable form under 
 

71 
 
Assuming that 80% of newly eligible registrants will begin to use scaled disclosure, we 
estimate an aggregate decrease of 88,864 internal burden hours and costs of $11,851,661 for 
Form 10-Q.
194
 
3. Form 8-K 
We estimate that the amendments to Rule 3-05 may decrease the existing paperwork 
burden for some registrants but not change the total burden estimates for Form 8-K.  This reflects 
our appraisal that few registrants are eligible to rely on the $50 million threshold in Rule 3-
05(b)(2)(iv) and our expectation that the amendments will not significantly change the number of 
registrants that are eligible to rely on Rule 3-05(b)(2)(iv).
195
  This also is consistent with the 
Commission’s estimate of the impact on the compliance burden for Form 8-K when it revised 
Rule 3-05 of Regulation S-X in 2007 to increase the threshold in Rule 3-05(b)(iv) from $25 
million to $50 million.
196
 
                                                                                                                                                             
Regulation SB.  We estimate the compliance burden for a Form 10-Q for a SRC using all scaled disclosure 
available to be the same as the last available PRA inventory for completing a Form 10-QSB, which was 102.24 
burden hours and a cost of $13,362 (34.08 professional hours x $400/hour) per report. 
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would 
decrease the compliance burden of Form 10-Q by up to 111,080.34 hours (140.57 internal hours per filing using 
standard Regulation S-K disclosure minus 102.24 internal hours per filing using scaled disclosure = 38.33 
internal hours saved per filing x 966 registrants x 3 filings per year) and decrease the cost by up to 
$14,814,576.00 (46.86 professional hours per filing using standard Regulation S-K disclosure minus 34.08 
professional hours per filing using scaled disclosure = 12.78 external hours saved per filing x $400 per hour = 
$5,112 external cost savings per filing x 966 registrants x 3 filings per year). 
194
  This estimated decrease in the compliance burden for Form 10-Q is based on 80% x 111,080.34 internal hours 
saved = 88,864.27 internal hours saved and 80% x $14,814,576.00 external cost savings = $11,851,660.80 
external cost savings. 
195
  See Section IV.B.1. 
196
  See SRC Adopting Release. 

72 
 
4. Schedule 14A 
We estimate that registrants newly eligible to use scaled disclosure will file 
approximately 802 definitive proxy statements on Schedule 14A per year.
197
  We estimate that if 
all of these registrants used all of the scaled SRC requirements, they would save 602 burden 
hours and an aggregate cost of $80,200.
198
 
Assuming that 80% of newly eligible registrants will begin to use scaled disclosure, we 
estimate an aggregate decrease of 481 internal burden hours and costs of $64,160 for Schedule 
14A.
199
 
5. Schedule 14C 
We estimate that registrants newly eligible to use scaled disclosure will file 
approximately 18 definitive information statements on Schedule 14C per year.
200
  We estimate 
                                                 
197
  We base this estimate on the number of definitive proxy statements on Schedule 14A filed in 2016 by registrants 
that would have been newly eligible to use scaled disclosure under the final rules.  Based on data collected by 
DERA, registrants with a public float of $75 million or more but less than $250 million filed 652 definitive 
proxy statements on Schedule 14A, registrants with no public float and annual revenues of $50 million or more 
but less than $100 million filed 17 definitive proxy statements on Schedule 14A, and registrants with a public 
float of $250 million or more but less than $700 million and annual revenues of less than $100 million filed 133 
definitive proxy statements on Schedule 14A. 
198
  We base our estimate of the reduced compliance burden for Schedule 14A for a SRC using all scaled disclosure 
available on our estimate of the compliance burden for Item 407(d)(5) and (e)(4) and (5) of Regulation S-K [17 
CFR 229.407(d)(5) and (e)(4) and (5)], with which SRCs are not required to comply.  We estimate this burden to 
be 0.75 burden hours and a cost of $100 (0.25 professional hours x $400/hour) per report. 
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would 
decrease the compliance burden of Schedule 14A by up to 601.57 hours (0.75 internal hours saved per filing x 
802 filings) and decrease the cost by up to $80,200.00 (0.25 professional hours saved per filing x $400 per hour 
= $100 external cost savings per filing x 802 filings). 
199
  This estimated decrease in the compliance burden for Schedule 14A is based on 80% x 601.57 internal hours 
saved = 481.25 internal hours saved and 80% x $80,200.00 external cost savings = $64,160.00 external cost 
savings. 
200
  We base this estimate on the number of definitive information statements on Schedule 14C filed in 2016 by 
registrants that would have been newly eligible to use scaled disclosure under the final rules.  Based on data 
collected by DERA, registrants with a public float of $75 million or more but less than $250 million filed nine 
definitive information statements on Schedule 14C, registrants with no public float and annual revenues of $50 
million or more but less than $100 million filed no definitive information statements on Schedule 14C, and 
registrants with a public float of $250 million or more but less than $700 million and annual revenues of less 
than $100 million filed nine definitive information statements on Schedule 14C. 

73 
 
that if all of these registrants used all of the scaled SRC requirements, they would save 14 burden 
hours and an aggregate cost of $1,800.
201
 
Assuming that 80% of newly eligible registrants will begin to use scaled disclosure, we 
estimate an aggregate decrease in burden of 11 internal burden hours and costs of $1,440 for 
Schedule 14C.
202
 
6. Form 10 
We estimate that registrants newly eligible to use scaled disclosure will file one 
registration statements on Form 10 per year.
203
  Assuming that this registrant uses all of the 
scaled SRC requirements, w e estimate an aggregate decrease of nine internal burden hours and 
cost of $11,163 for Form 10.
204
  Due to the low number of Form 10 filers and rounding 
                                                 
201
  Similar to Schedule 14A, we base our estimate of the decrease in the compliance burden for Schedule 14C for a 
SRC using all scaled disclosure available on our estimate of the compliance burden for Item 407(d)(5) and (e)(4) 
and (5) of Regulation S-K, which is 0.75 burden hours and a cost of $100 (0.25 professional hours x $400/hour) 
per report. 
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would 
decrease the compliance burden of Schedule 14C by up to 13.48 hours (0.75 internal hours saved per filing x 18 
filings) and decrease the cost by up to $1,800.00 (0.25 professional hours saved per filing x $400 per hour = 
$100 external cost savings per filing x 18 filings). 
202
  This estimated decrease in the compliance burden for Schedule 14C is based on 80% x 13.48 internal hours 
saved = 10.79 internal hours saved and 80% x $1,800 external cost savings = $1,440 external cost savings. 
203
  We generally base our estimated number of each type of registration statement filed on the average number of 
that type of registration statement filed in each of the calendar years 2014 through 2016 by registrants that would 
have been newly eligible to use scaled disclosure under the final rules.   
Based on data collected by DERA, registrants that would have been newly eligible to use scaled disclosure under 
the final rules filed an average of less than one registration statement on Form 10 per year during the period 2014 
through 2016.  However, we believe an estimate of one Form 10 is more reasonable because, as reflected in the 
Proposing Release, such registrants have filed more than one Form 10 in prior years. 
204
  We estimate the compliance burden for a Form 10 for a SRC using all scaled disclosure available to be the same 
as the last available PRA inventory for completing a Form 10-SB, which was 44.50 burden hours and a cost of 
$53,400 (133.50 professional hours x $400/hour) per report. 
Accordingly, if all eligible registrants used all available scaled disclosure, we estimate that the final rules will 
decrease the compliance burden of Form 10 by up to 9.30 hours (53.80 internal hours per filing using standard 
Regulation S-K and Regulation S-X disclosure minus 44.50 internal hours per filing using scaled disclosure = 
9.30 internal hours saved per filing x one filing) and decrease the cost by up to $11,163.20 (161.41 professional 
hours per filing using standard Regulation S-K and Regulation S-X disclosure minus 133.50 professional hours 
 

74 
 
considerations, we assume that all newly eligible registrants filing Form 10 will begin to use 
scaled disclosure and therefore realize the full extent of burden and cost savings. 
7. Form S-1 
We estimate that registrants newly eligible to use scaled disclosure will file 
approximately 25 registration statements on Form S-1 per year.
205
  We estimate that if all of these 
registrants use all of the scaled SRC requirements, they would save 181 burden hours and an 
aggregate cost of $217,500.
206
 
Assuming that 80% of these newly eligible registrants will begin to use scaled disclosure, 
we estimate an aggregate decrease of 145 internal burden hours and costs of $174,000 for Form 
S-1.
207
 
8. Form S-3 
We estimate that registrants newly eligible to use scaled disclosure will file 
approximately 190 registration statements on Form S-3 per year.
208
  We estimate that if all of 
                                                                                                                                                             
per filing using scaled disclosure = 27.91 external hours saved per filing x $400 per hour = $11,163.20 external 
cost savings per filing x one filing). 
205
  Based on data collected by DERA, during 2014 through 2016, registrants with a public float of $75 million or 
more but less than $250 million filed an average of approximately 17 registration statements on Form S-1 each 
year, registrants with no public float and annual revenues of $50 million or more but less than $100 million filed 
an average of approximately two registration statements on Form S-1 each year, and registrants with a public 
float of $250 million or more but less than $700 million and annual revenues of less than $100 million filed an 
average of six registration statements on Form S-1 each year. 
206
  We estimate the compliance burden for a Form S-1 for a SRC using all scaled disclosure available to be the same 
as the last available PRA inventory for completing a Form SB-2, which was 159.50 burden hours and a cost of 
$191,400 (478.50 professional hours x $400/hour) per report. 
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would 
decrease the compliance burden of Form S-1 by up to 181.25 hours (166.75 internal hours per filing using 
standard Regulation S-K and Regulation S-X disclosure minus 159.50 internal hours per filing using scaled 
disclosure = 7.25 internal hours saved per filing x 25 filings) and decrease the cost by up to $217,500.00 (500.25 
professional hours per filing using standard Regulation S-K and Regulation S-X disclosure minus 478.50 
professional hours per filing using scaled disclosure = 21.75 external hours saved per filing x $400 per hour = 
$8,700 external cost savings per filing x 25 filings). 
207
  This estimated decrease in the compliance burden for Form S-1 is based on 80% x 181.25 internal hours saved = 
145.00 internal hours saved and 80% x $217,500.00 external cost savings = $174,000.00 external cost savings. 

75 
 
these registrants use all of the scaled SRC requirements, they would save 48 burden hours and an 
aggregate cost of $57,000.
209
 
Assuming that 80% of the newly eligible registrants will begin to use scaled disclosure, 
we estimate an aggregate decrease of 38 internal burden hours and costs of $ 45,600 for Form 
S-3.
210
 
9. Form S-4 
We estimate that registrants newly eligible to use scaled disclosure will file 
approximately 35 registration statements on Form S-4 per year.
211
  We estimate that if all of these 
registrants use all of the scaled SRC requirements, they would save 254 burden hours and an 
aggregate cost of $304,500.
212
 
                                                                                                                                                             
208
  Based on data collected by DERA, during 2014 through 2016, registrants with a public float of $75 million or 
more but less than $250 million filed an average of approximately 148 registration statements on Form S-3 each 
year, registrants with no public float and annual revenues of $50 million or more but less than $100 million filed 
an average of two registration statements on Form S-3 each year, and registrants with a public float of $250 
million or more but less than $700 million and annual revenues of less than $100 million filed an average of 40 
registration statements on Form S-3 each year. 
209
  We base our estimate of the reduced compliance burden for Form S-3 for a SRC using all scaled disclosure 
available on our estimate of the average compliance burden for Items 503(d) and 504 of Regulation S-K [17 
CFR 229.503(d) and 229.504], which requirements are scaled for SRCs.  We estimate the decrease in 
compliance burden for a registration statement on Form S-3 for a SRC using all scaled disclosure available to be 
0.25 burden hours and a cost of $300 (0.75 professional hours x $400/hour) per filing. 
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would 
decrease the compliance burden of Form S-3 by up to 47.50 hours (0.25 internal hours saved per filing x 190 
filings) and decrease the cost by up to $57,000.00 ($300 external cost savings per filing x 190 filings). 
210
  This estimated decrease in the compliance burden for Form S-3 is based on 80% x 47.50 internal hours saved = 
38.00 internal hours saved and 80% x $57,000.00 external cost savings = $45,600.00 external cost savings. 
211
  Based on data collected by DERA, during 2014 through 2016, registrants with a public float of $75 million or 
more but less than $250 million filed an average of approximately 30 registration statements on Form S-4 each 
year, registrants with no public float and revenues of $50 million or more but less than $100 million filed an 
average of approximately one registration statement on Form S-4 each year, and registrants with a public float of 
$250 million or more but less than $700 million and annual revenues of less than $100 million filed an average 
of four registration statements on Form S-4 each year. 
212
  We estimate the reduction in the compliance burden for Form S-4 for a SRC using all scaled disclosure available 
to be the same as the reduction in the compliance burden for a Form S-1 for a SRC using all scaled disclosure 
available as compared to standard Regulation S-K and Regulation S-X disclosure, which was 7.25 burden hours 
and a cost of $8,700 (21.75 professional hours x $400/hour) per report. 
 

76 
 
Assuming that 80% of newly eligible registrants will begin to use scaled disclosure, we 
estimate an aggregate decrease of 203 internal burden hours and costs of $243,600 for Form 
S-4.
213
 
10. Form S-11 
We estimate that registrants newly eligible to use scaled disclosure will file 
approximately two registration statements on Form S-11 per year.
214
  Assuming that both of these 
registrants use all of the scaled SRC requirements, we estimate an aggregate decrease of 15 
burden hours and cost of $17,400 for Form S-11.
215
   
Due to the low number of Form S-11 filers and rounding considerations, we assume that 
both of the newly eligible registrants filing Form S-11 will begin to use scaled disclosure and 
realize the full extent of burden and cost savings. 
                                                                                                                                                             
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules will 
decrease the compliance burden of Form S-4 by up to 253.75 hours (7.25 internal hours saved per filing x 35 
filings) and decrease the annual cost by up to $304,500.00 ($8,700 external cost savings per filing x 35 filings). 
213
  This estimated decrease in the compliance burden for Form S-4 is based on 80% x 253.75 internal hours saved = 
203.00 internal hours saved and 80% x $304,500.00 external cost savings = $243,600.00 external cost savings. 
214
  Based on data collected by DERA, during 2014 through 2016, registrants with a public float of $75 million or 
more but less than $250 million filed an average of approximately one registration statement on Form S-11 each 
year, registrants with no public float and revenues of $50 million or more but less than $100 million filed an 
average of less than one registration statement on Form S-11 each year, and registrants with a public float of 
$250 million or more but less than $700 million and annual revenues of less than $100 million filed an average 
of one registration statement on Form S-11 each year. 
215
  We estimate the reduction in the compliance burden for Form S-11 for a SRC using all scaled disclosure 
available to be the same as reduction in the compliance burden for Form S-1 for a SRC using all scaled 
disclosure available as compared to standard Regulation S-K disclosure and Regulation S-X, which was 7.25 
burden hours and a cost of $8,700 (21.75 professional hours x $400/hour) per report.   
Accordingly, we estimate that, if both eligible registrants used all available scaled disclosure, the final rules will 
decrease the compliance burden of Form S-11 by up to 14.50 hours (7.25 internal hours saved per filing x two 
filings) and decrease the annual cost by up to $17,400.00 ($8,700 external cost savings per filing x two filings). 

77 
 
VI. Final Regulatory Flexibility Analysis 
The Regulatory Flexibility Act (“RFA”)
216
 requires us, in promulgating rules under 
Section 553 of the Administrative Procedure Act,
217
 to consider the impact of those rules on 
small entities.  We have prepared this Final Regulatory Flexibility Analysis (“FRFA”) in 
accordance with Section 604 of the RFA.
218
  This FRFA relates to amendments to the SRC 
definition as used in our rules and Rule 3-05 of Regulation S-X.  An Initial Regulatory 
Flexibility Analysis (“IRFA”) was prepared in accordance with the RFA and was included in the 
Proposing Release.   
A. Need for, and Objectives of, the Final Rules 
The amendments to the SRC definition in the final rules are intended to promote capital 
formation through a modest reduction in compliance costs and disclosure burdens for these 
registrants by expanding the number of registrants that qualify as SRCs and are eligible to 
provide scaled disclosure, while maintaining appropriate investor protections.  These 
amendments will enable a registrant to qualify as a SRC based on a public float test or a revenue 
test that includes registrants both with and without a public float.
219
  We believe that the 
amendments will permit a broader group of registrants to make scaled disclosure to their 
investors without significantly detracting from investor protections. 
The amendments to Rule 3-05(b)(2)(iv) of Regulation S-X will maintain the consistency 
of the revenue thresholds in Rule 3-05 and the definition of a SRC.  The current revenue 
threshold in Rule 3-05(b)(2)(iv) was based on the revenue threshold in the SRC definition, and 
                                                 
216
  5 U.S.C. 601 et seq. 
217
  5 U.S.C. 553. 
218
  5 U.S.C. 604. 
219
  See Item 10(f)(1)(i) and (ii) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.   

78 
 
the final rules maintain this consistency by increasing the revenue threshold in Rule 3-
05(b)(2)(iv) to $100 million.  This amendment will enable more registrants to omit the earliest of 
the three fiscal years of audited financial statements of an acquired business or business to be 
acquired in certain registration statements and current reports. 
The amendments to the accelerated filer and large accelerated filer definitions in 
Exchange Act Rule 12b-2 maintain the current thresholds at which registrants are subject to 
accelerated and large accelerated filer disclosure and filing requirements.  At this time, we are 
not raising the accelerated filer public float threshold or modifying the Section 404(b) 
requirements for registrants.   
The need for, and objectives of, the final rules are discussed in more detail in Sections II 
and IV above. 
B. Significant Issues Raised by Public Comments 
In the Proposing Release, we requested comment on all aspects of the IRFA, including 
the number of small entities that would be affected by the proposed amendments, the existence 
or nature of the potential impact of the proposals on small entities discussed in the analysis, and 
how to quantify the impact of the proposed amendments.  We did not receive any comments 
specifically addressing the IRFA.  We did, however, receive comments from members of the 
public on matters that could potentially impact small entities.  These comments are discussed at 
length by topic in the corresponding subsections of Section II above. 
While many commenters expressed support for the proposed amendments to the SRC 
definition,
220
 commenters also recommended making changes to the proposed rules that would 
                                                 
220
  See Acorda et al; AMTA; BDO; BIO; CAQ/CII; CONNECT; Coalition; ICBA; MidSouth; Nasdaq; NVCA; 
NYSE; Seneca; and IMA. 

79 
 
further expand the number of registrants that would qualify as SRCs and would be eligible to 
rely on the scaled disclosure requirements.  For example, many commenters recommended that 
the Commission allow a revenue test for companies with a public float.
221
  Commenters stated 
that a revenue test would “stimulat[e] innovation and drive business growth,”
222
 “ ensure that pre-
revenue companies are not forced to divert investment funds...from science to compliance,”
223
 
and help “avoid stifling the advancement of [these] companies that face costly compliance 
burdens.”
224
  Two commenters specifically recommended that the Commission adopt a test based 
on revenues of less than $100 million and a public float of less than $700 million, as 
recommended by the Small Business Forum.
225
  In response to commenters
226
 and 
recommendations from the Small Business Forum,
227
 the definition in the final rules will include, 
in addition to registrants with a public float of less than $250 million, registrants with annual 
revenues of less than $100 million during their most recently completed fiscal year and either no 
public float or a public float of less than $700 million.
228
  As described above, we believe that it 
is appropriate to provide a measure by which a registrant with public float but with limited 
revenues may qualify as a SRC.
229
 
                                                 
221
  See Acorda, et al; AMTA; BIO; Calithera; CONNECT; CSBA; Nasdaq; NYSE; and Zeller. 
222
  BIO. 
223
  Acorda, et al. 
224
  AMTA. 
225
  See BIO; and Calithera. 
226
  See Acorda, et al; AMTA; BIO; Calithera; CONNECT; and CSBA. 
227
  See notes 16 and 85 for a discussion of the Small Business Forum recommendations.   
228
  See Item 10(f)(1)(ii) of Regulation S-K; Securities Act Rule 405; Exchange Act Rule 12b-2.   
229
  See Section II.A.2. 

80 
 
We are not, however, adopting a revenue test without a limitation on the public float or 
market capitalization of the company, as specifically suggested by two commenters.
230
  We 
believe the amended revenue test in the final rules is consistent with the position expressed by 
these commenters and others
231
 that it is not necessary to subject capital-intensive, low-revenue 
registrants with larger public floats or market capitalizations to the same reporting requirements 
as registrants with larger public floats and more well-established, revenue-generating businesses.  
The amended revenue test in the final rules will enable these registrants to benefit from the cost-
savings of scaled reporting, while recognizing that as a registrant’s business and public float 
grows, investors should benefit from greater disclosure.  The additional information provided by 
the registrant in these circumstances will assist a growing investor base in making informed 
investment decisions and should also lead to a lower cost of capital for the business as it grows.   
Two commenters recommended amending Rule 3-05 to increase the revenue threshold in 
paragraph (b)(2)(iv) to $100 million to maintain the alignment between Rule 3-05 and the 
definition of a SRC.
232
  Given that the current revenue threshold in Rule 3-05(b)(2)(iv) was based 
on the revenue threshold in the SRC definition
233
 and that the final rules, among other things, 
increase the revenue threshold in the SRC definition from $50 million to $100 million, we 
believe it is appropriate to raise the net revenue threshold in Rule 3-05(b)(2)(iv) of Regulation 
S-X from $50 million to $100 million. 
While some commenters supported eliminating the provision in the accelerated filer and 
large accelerated filer definitions that specifically excludes registrants that are eligible to use the 
                                                 
230
  See NYSE; and Nasdaq. 
231
  See Acorda, et al; AMTA; BIO; Calithera; CONNECT; CSBA; NYSE; and Nasdaq. 
232
  See EY; and BDO. 
233
 See 1996 Rule 3-05 Adopting Release and SRC Adopting Release. 

81 
 
SRC disclosure requirements for their annual or quarterly reports,
234
 many other commenters 
recommended that the Commission increase the thresholds in the accelerated filer definition, 
consistent with the changes to the SRC definition.
235
  Commenters recommended increasing the 
public float threshold in the accelerated filer definition to reduce compliance costs
236
 and to 
maintain consistency in the rules.
237
 
The final rules include amendments to the accelerated filer and large accelerated filer 
definitions in Exchange Act Rule 12b-2 to maintain the current thresholds at which registrants 
are subject to accelerated and large accelerated filer disclosure and filing requirements.  These 
amendments will change the current relationship between the SRC and “accelerated filer” 
definitions by allowing a registrant to qualify as both a SRC and an accelerated filer.
238
  As stated 
above, the Chairman has directed the staff to formulate recommendations to the Commission for 
possible changes to reduce the number of registrants that our rules define as accelerated filers.  
As part of the staff’s consideration of possible recommended amendments, the Chairman has 
directed the staff to consider, among other things, the historical and current relationship between 
the SRC and “accelerated filer” definitions.  
                                                 
234
  See BDO; CAQ/CII; CFA Institute; Deloitte; and EY. 
235
  See Acorda, et al; AMTA; BIO; Calithera; CONNECT; Coalition; CSBA; ICBA; Dixie; MidSouth; Nasdaq; 
NVCA; NYSE; and Seneca. 
236
  See Acorda, et al; AMTA; BIO; Calithera; CONNECT; Coalition; CSBA; ICBA; Dixie; MidSouth; Nasdaq; 
NVCA; NYSE; and Seneca. 
237
  See BIO; Coalition; Nasdaq; NVCA; and NYSE. 
238
  In conjunction with these amendments, we also are adopting technical revisions to Securities Act Forms S-1, S-
3, S-4, S-8, and S-11 and Exchange Act Forms 10, 10-Q and 10-K.  These amendments modify the cover page of 
the specified forms to remove the parenthetical next to the “non-accelerated filer” definition that states “(Do not 
check if a smaller reporting company).”  After these amendments, a registrant should check all applicable boxes 
on the cover page addressing, among other things, non-accelerated, accelerated, and large accelerated filer status, 
SRC status, and emerging growth company status. 

82 
 
We believe that the final rules will reduce disclosure burdens by expanding the number of 
registrants that will qualify as SRCs and that are eligible to provide scaled disclosure, while 
maintaining appropriate investor protections. 
C. Small Entities Subject to the Final Rules 
For purposes of the RFA, under 17 CFR 230.157 (Securities Act Rule 157), an issuer, 
other than an investment company, is a “small business” or “small organization” if it had total 
assets of $5 million or less on the last day of its most recent fiscal year and is engaged or 
proposing to engage in an offering of securities not exceeding $5 million.  Under 17 CFR 240.0-
10(a) (Exchange Act Rule 0-10(a)), an issuer, other than an investment company, is a “small 
business” or “small organization” if it had total assets of $5 million or less on the last day of its 
most recent fiscal year. 
We estimate that there are currently 1,181 entities that qualify as “small” under the 
definitions set forth above.
239
  We believe it is likely that virtually all small businesses or small 
organizations, as defined in our rules described above, are already encompassed within the 
current SRC definition and the current revenue threshold in Rule 3-05(b)(2)(iv) of Regulation S-
X and will continue to be encompassed within the revised thresholds contained in the final rules.  
To the extent any small business or small organization, as defined for RFA purposes, is not 
already encompassed within the current SRC definition and the current revenue threshold in Rule 
3-  05(b)(2)(iv) of Regulation S-X, we believe it is likely that the revised thresholds contained in 
the final rules will capture those entities. 
                                                 
239
  This estimate is based on staff analysis of XBRL data submitted by filers, excluding co-registrants, with EDGAR 
filings of Forms 10-K filed during the calendar year of January 1, 2016 to December 31, 2016. 

83 
 
D. Projected Reporting, Recordkeeping and Other Compliance Requirements 
The amendments to the SRC definition in the final rules increase the number of 
registrants eligible to provide scaled disclosures in response to Regulation S-K and Regulation 
S-X disclosure requirements.  These amendments do not revise the scaled disclosure 
requirements themselves, but could modestly decrease the disclosures required for registrants 
that will qualify as SRCs under the expanded thresholds. 
Consistent with the amendments to the revenue threshold in the SRC definition, the 
amendment to Rule 3-05 of Regulation S-X raises the net revenue threshold in Rule 3-
05(b)(2)(iv) of Regulation S-X from $50 million to $100 million.  Current Rule 3-05(b)(2)(iv) 
allows certain registrants to omit financial statements of businesses acquired or to be acquired in 
certain registration statements and current reports for the earliest of the three fiscal years required 
if the net revenues of the business to be acquired are less than $50 million.  With the amendment, 
those registrants will become eligible to omit the relevant financial statements for acquired 
businesses with net annual revenues of $50 million or more but less than $100 million in the 
most recent fiscal year.  In this way, the amendment to Rule 3-05 could moderately decrease the 
existing disclosure requirements for some registrants; however, we do not expect that the number 
of registrants affected by the amendments will be significant.
 
 
Both (i) the amendments to the SRC definition, which expand the number of registrants 
that qualify for the scaled disclosure based on revenue and public float measures, and (ii) the 
amendment to Rule 3-05 of Regulation S-X, which expands the pool of acquired companies for 
which registrants are required to provide only two years of financials, reduce disclosure already 
required to be prepared under our rules.  Accordingly, there are no particular professional skills 
needed to comply with the amendments themselves.  Consistent with the current rules, however, 

84 
 
a registrant will need to monitor the applicable thresholds for disclosure and to comply with the 
underlying existing disclosure requirements, which may require the use of professional skills, 
including information technology, accounting, and legal skills. 
The amendments are discussed in detail in Section II above.  We discuss the economic 
impact, including the estimated compliance costs and burdens, of the final rules in Section IV 
(Economic Analysis) and Section V (Paperwork Reduction Act) above. 
E. Agency Action to Minimize Effect on Small Entities 
The RFA directs us to consider significant alternatives that would accomplish the stated 
objectives of the amendments, while minimizing any significant adverse impact on small entities.  
Accordingly, we considered the following alternatives: 
• establishing different compliance or reporting requirements or timetables that take into 
account the resources available to small entities; 
• clarifying, consolidating or simplifying compliance and reporting requirements for small 
entities under our rules as revised by the amendments; 
• using performance rather than design standards; and 
• exempting small entities from coverage of all or part of the amendments. 
The amendments generally do not create any new compliance or reporting requirements.  
Instead, the amendments expand the number of companies eligible for the different compliance 
and reporting requirements available to SRCs and increase the revenue threshold to qualify for 
the disclosure accommodation in Rule 3-05(b)(2)(iv) of Regulation S-X.
240
  As a result, we do 
not believe it is necessary or appropriate to exempt small entities in connection with this 
                                                 
240
  As discussed in note 20, Item 404 is the only disclosure item in Regulation S-K that may require more extensive 
information for SRCs than for non-SRCs.  See also note 22. 

85 
 
rulemaking.  The amendments are intended to increase the number of registrants eligible to 
provide scaled disclosures under Regulation S-K and Regulation S-X.  To the extent any small 
entity is not already encompassed within the current SRC definition or the current revenue 
threshold in Rule 3-05(b)(2)(iv) of Regulation S-X, we believe it is likely that the revised 
thresholds contained in the final rules will capture those entities, thereby enabling them to 
provide scaled disclosures.  Therefore, we believe that the amendments will simplify compliance 
and reporting requirements for small entities.  Small entities may avail themselves of the 
amendments upon their effective date.  This timetable will provide newly-eligible small entities 
with the ability to take advantage of the scaled disclosure requirements at the earliest possible 
date.  In this regard, we do not believe that it is necessary to establish a different timetable for 
small entities.  With respect to the use of performance rather than design standards, because the 
amendments are not expected to have any significant adverse effect on small entities (and are, in 
fact, expected to relieve burdens for some such entities), we do not believe it is necessary to use 
performance standards in connection with this rulemaking. 
In Section IV, above, we discuss additional alternatives that we have considered and their 
economic impact.
241
  We note that those alternatives, such as using a different threshold or 
different standard for determining SRC status, would be unlikely to have a significant effect on 
smaller entities because, as noted above, we believe virtually all small entities are already 
eligible for SRC status.  Similarly, with respect to the alternative of not amending the accelerated 
and large accelerated filer definitions, we believe there are very few small entities that will be 
                                                 
241
  See Section IV.C. (alternatives include (i) using a different registrant size metric in the SRC definition, (ii) 
revising the SRC definition using different thresholds, and (iii) reducing the number of registrants that our rules 
define as accelerated filers, which would expand the number of registrants eligible for the Sarbanes-Oxley Act 
Section 404(b) exemption). 

86 
 
considered accelerated filers under the definitions in the final rules, and, therefore, this 
alternative would not significantly affect small entities.
242
 
VII. Statutory Amendments and Text of Final Rules 
The rule amendments described in this release are being adopted pursuant to Sections 7, 
10 and 19 of the Securities Act (15 U.S.C. 77a et seq.), as amended, Sections 3(b), 12, 13, 15(d) 
and 23(a) of the Exchange Act (15 U.S.C. 78a et seq.), as amended, and Section 72002 of the 
FAST Act. 
List of Subjects in 17 CFR Parts 210, 229, 230, 239, 240, and 249 
Reporting and recordkeeping requirements, Securities. 
For the reasons set out in the preamble, the Commission is amending title 17, chapter II 
of the Code of Federal Regulations as follows: 
PART 210 – FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL 
STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934, 
INVESTMENT COMPANY ACT OF 1940, INVESTMENT ADVISERS ACT OF 1940, 
AND ENERGY POLICY AND CONSERVATION ACT OF 1975 
 
1.  The authority citation for part 210 continues to read as follows: 
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 
77nn(25), 77nn(26), 78c, 78j-1, 78l, 78m, 78n, 78o(d), 78q, 78u-5, 78w, 78ll, 78mm, 80a-8, 80a-
20, 80a-29, 80a-30, 80a-31, 80a-37(a), 80b-3, 80b-11, 7202 and 7262, and sec. 102(c), Pub. L. 
112-106, 126 Stat. 310 (2012), unless otherwise noted. 
2. Amend § 210.3-05 by revising paragraph (b)(2)(iv) to read as follows: 
§ 210.3-05 Financial statements of businesses acquired or to be acquired. 
* * * * * 
                                                 
242
  See Section IV.B. 

87 
 
 (b) * * * 
(2) * * * 
(iv) If any of the conditions exceed 50 percent, the full financial statements specified 
in §§ 210.3-01 and 210.3-02 shall be furnished.  However, financial statements for the earliest of 
the three fiscal years required may be omitted if net revenues reported by the acquired business 
in its most recent fiscal year are less than $100 million. 
* * * * * 
 
PART 229—STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES 
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934, AND ENERGY POLICY AND 
CONSERVATION ACT OF 1975—REGULATION S-K 
 
3. The authority citation for part 229 continues to read as follows:
 
 
Authority:  15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 
77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1, 
78o, 78u-5, 78w, 78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c), 80a-37, 80a-38(a), 
80a-39, 80b-11, and 7201 et seq., and 18 U.S.C. 1350; sec. 953(b), Pub. L. 111-203, 124 Stat. 
1904 (2010); and sec. 102(c), Pub. L. 112-106, 126 Stat. 310 (2012). 
* * * * * 
4. Amend § 229.10 by revising paragraphs (f)(1) and (2) to read as follows: 
 
§ 229.10 (Item 10) General. 
 
* * * * * 
(f) * * * * *
 
(1) Definition of smaller reporting company.  As used in this part, the term smaller 
reporting company means an issuer that is not an investment company, an asset-backed issuer (as 

88 
 
defined in § 229.1101), or a majority-owned subsidiary of a parent that is not a smaller reporting 
company and that: 
(i) Had a public float of less than $250 million; or 
(ii) Had annual revenues of less than $100 million and either:  
(A) No public float; or  
(B) A public float of less than $700 million.  
(2) Determination.    Whether an issuer is a smaller reporting company is
 determined 
on an annual basis. 
(i) For issuers that are required to file reports under section 13(a) or 15(d) of the 
Exchange Act: 
(A) Public float is measured as of the last business day of the issuer’s most recently 
completed second fiscal quarter and computed by multiplying the aggregate worldwide number 
of shares of its voting and non-voting common equity held by non-affiliates by the price at which 
the common equity was last sold, or the average of the bid and asked prices of common equity, 
in the principal market for the common equity;  
(B) Annual revenues are as of th
e  most recently completed fiscal year for which 
audited financial statements are available; and  
(C) An issuer must reflect the determination of whether it came within the
 definition 
of smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the 
next year, indicating on the cover page of that filing, and in subsequent filings for that fiscal year, 
whether it   is a smaller reporting company, except that, if a determination based on public float 
indicates that the issuer is newly eligible to be a smaller reporting company, the issuer may choose 

89 
 
to reflect this determination beginning with its first quarterly report on Form 10-Q following the 
determination, rather than waiting until the first fiscal quarter of the next year. 
(ii) For determinations based on an initial registration statement under the Securities 
Act or  Exchange Act for shares of its common equity: 
(A) Public float is measured as of a date within 30 days of the date of the filing of the 
registration statement and computed by multiplying the aggregate worldwide number of shares of 
its voting and non-voting common equity held by non-affiliates before the registration plus, in the 
case of a Securities Act registration statement, the
 number of shares of its voting and non-voting 
common equity included in the registration statement by the estimated public offering price of the 
shares;  
(B) Annual revenues are as of the
 most recently completed fiscal year for which 
audited financial statements are available; and 
(C) The issuer must reflect the determination of whether it came within the
 definition 
of smaller reporting company in the registration statement and must appropriately indicate on the 
cover page of the filing, and subsequent filings for the fiscal
 year in which the filing is made, 
whether it   is a smaller reporting company.  The issuer must re-determine its status at the end of its 
second fiscal quarter and then reflect
 any change in status as provided in paragraph (f)(2)(i)(C) of 
this section.  In the case of a
 determination based on an initial Securities Act registration 
statement, an issuer that was  not determined to be a smaller reporting company has the option to 
re-determine its   status at the conclusion of the offering covered by the registration statement 
based on the actual offering price and number of shares sold. 

90 
 
(iii) Once an issuer determines that it does not qualify for smaller reporting company 
status because it exceeded one or more of the current thresholds,  it   will remain unqualified unless 
when making its annual determination either: 
(A) It determines that its public float was less than $200 million; or  
(B) It determines that its public float and its annual revenues meet the requirements for 
subsequent qualification included in the following chart: 
Prior Annual 
Revenues 
Prior Public Float 
None or less than $700 million $700 million or more 
Less than $100 
million 
Neither threshold exceeded. 
Public float 
Less than $560 
million; and 
Revenues 
Less than $100 
million. 
$100 million or 
more 
Public float 
None or less than 
$700 million; and 
Public float 
Less than $560 
million; and 
Revenues 
Less than $80 
million. 
Revenues 
Less than $80 
million.  
 
Instruction 1 to paragraph (f): A registrant that qualifies as a smaller reporting company under 
the public float thresholds identified in paragraphs (f)(1)(i) and (f)(2)(iii)(A) of this section will 
qualify as a smaller reporting company regardless of its revenues. 
* * * * * 
PART 230—GENERAL RULES AND REGULATIONS, SECURITIES ACT OF
 1933 
5. The authority citation for part 230 continues to read in part as follows: 
Authority:  15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 
78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o-7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 
80a-29, 80a-30, and 80a-37, and Pub. L. 112-106, sec. 201(a), sec. 401, 126 Stat. 313 (2012), 
unless otherwise noted. 

91 
 
* * * * * 
6.   Amend §   230.405 by revising the definition of “smaller reporting company” to 
read as follows: 
§   230.405 Definitions of terms. 
* * * * * 
Smaller reporting company.  As used in this part, the term smaller reporting company 
means an issuer that is not an investment company, an asset-backed issuer (as defined in § 
229.1101 of this chapter), or a majority-owned subsidiary of a parent that is not a smaller 
reporting company and that: 
(1) Had a public float of less than $250 million; or 
(2) Had annual revenues of less than $100 million and either: 
(i) No public float; or 
(ii)   A public float of less than $700 million. 
(3) Whether an issuer is a smaller reporting company is
 determined on an annual 
basis. 
(i) For issuers that are required to file reports under section 13(a) or 15(d) of the
 
Exchange Act: 
(A) Public float is measured as of the last business day of the issuer’s most recently 
completed second fiscal quarter and computed by multiplying the aggregate worldwide number 
of shares of its voting and non-voting common equity held by non-affiliates by the price at which 
the common equity was last sold, or the average of the bid and asked prices of common equity, 
in the principal market for the common equity;  

92 
 
(B) Annual revenues are as of  the most recently completed fiscal year for which 
audited financial statements are available; and 
(C) An issuer must reflect the determination of whether it came within the definition 
of smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the 
next year, indicating on the cover page of that filing, and in subsequent filings for that fiscal year, 
whether it   is a
 smaller reporting company, except that, if a determination based on public float 
indicates that the issuer is newly eligible to be a smaller reporting company, the issuer may 
choose to reflect this determination beginning with its first quarterly report on Form 10-Q 
following the determination, rather than waiting until the first fiscal quarter of the next year. 
(ii) For determinations based on an initial registration statement under the Securities 
Act or  Exchange Act for shares of its common equity: 
(A) Public float is measured as of a date within 30 days of the date of the filing of the 
registration statement and computed by multiplying the aggregate worldwide number of shares of 
its voting and non-voting common equity held by non-affiliates before the registration plus, in the 
case of a Securities Act registration statement, the
 number of shares of its voting and non-voting 
common equity included in the registration statement by the estimated public offering price of the 
shares;  
(B) Annual revenues are as of the most recently completed fiscal year for which 
audited financial statements are available; and 
(C) The issuer must reflect the determination of whether it came within the definition 
of smaller reporting company in the registration statement and must appropriately indicate on  the 
cover page of the filing, and subsequent filings for the fiscal year in which the filing is  made, 
whether it   is a smaller reporting company.  The issuer must re-determine its  status at the end of its 

93 
 
second fiscal quarter and then reflect any change in status as  provided in paragraph (3)(i)(C) of 
this definition.  In the case of a determination based on an initial Securities Act registration 
statement, an issuer that was not determined to be a smaller reporting company has the option to 
re-determine its status at the conclusion of the offering covered by the registration statement 
based on the actual offering price and number of shares sold. 
(iii) Once an issuer determines that it does not qualify for smaller reporting company 
status because it exceeded one or more of the current thresholds,  it   will
 remain unqualified unless 
when making its annual determination either: 
(A) It determines that its   public float was less than $200 million; or  
(B) It determines that its public float and its annual revenues meet the requirements for 
subsequent qualification included in the following chart: 
Prior Annual 
Revenues 
Prior Public Float 
None or less than $700 million $700 million or more 
Less than $100 
million 
Neither threshold exceeded. 
Public float 
Less than $560 
million; and 
Revenues 
Less than $100 
million. 
$100 million or 
more 
Public float 
None or less than 
$700 million; and 
Public float 
Less than $560 
million; and 
Revenues 
Less than $80 
million. 
Revenues 
Less than $80 
million.  
 
Instruction 1 to definition of “smaller reporting company”:  A registrant that qualifies as a 
smaller reporting company under the public float thresholds identified in paragraphs (1) and 
(3)(iii)(A) of this definition will qualify as a smaller reporting company regardless of its 
revenues. 
 
* * * * * 

94 
 
PART 239—FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933 
7.  The authority citation for part 239 continues to read in part as follows: 
Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 78l, 78m, 
78n, 78o(d), 78o-7 note, 78u-5, 78w(a), 78ll, 78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-
13, 80a-24, 80a-26, 80a-29, 80a-30, and 80a-37; and sec. 107, Pub. L. 112-106, 126 Stat. 312, 
unless otherwise noted. 
* * * * * 
8. Amend Form S-1 (referenced in §239.11) by revising the text and check boxes on 
the cover page immediately before the text “If an emerging growth company, indicate by check 
mark if the registrant has elected not to use the extended transition period for complying with 
any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the 
Securities Act.”  The revisions read as follows: 
Note:  The text of Form S-1 does not, and this amendment will not, appear in the 
Code of Federal Regulations. 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
FORM S-1 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 
* * * * * 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 
non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the 

95 
 
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and 
“emerging growth company” in Rule 12b-2 of the Exchange Act. 
 Large accelerated filer   Accelerated filer    
 Non-accelerated filer     Smaller reporting company   
      Emerging growth company   
* * * * * 
9. Amend Form S-3 (referenced in §239.13) by revising the text and check boxes on 
the cover page immediately before the text “If an emerging growth company, indicate by check 
mark if the registrant has elected not to use the extended transition period for complying with 
any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the 
Securities Act.”  The revisions read as follows: 
Note:  The text of Form S-3 does not, and this amendment will not, appear in the 
Code of Federal Regulations. 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
FORM S-3 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 
* * * * * 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 
non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the 
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and 
“emerging growth company” in Rule 12b-2 of the Exchange Act. 

96 
 
 Large accelerated filer   Accelerated filer    
 Non-accelerated filer     Smaller reporting company   
      Emerging growth company   
* * * * * 
10. Amend Form S -8 (referenced in §239.16b) by revising the text and check boxes 
on the cover page immediately before the text “If an emerging growth company, indicate by 
check mark if the registrant has elected not to use the extended transition period for complying 
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) 
of the Securities Act.”  The revisions read as follows: 
Note:  The text of Form S-8 does not, and this amendment will not, appear in the 
Code of Federal Regulations. 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
FORM S-8 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 
* * * * * 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 
non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the 
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and 
“emerging growth company” in Rule 12b-2 of the Exchange Act. 
 Large accelerated filer   Accelerated filer    
 Non-accelerated filer     Smaller reporting company   

97 
 
      Emerging growth company   
* * * * * 
11.  Amend Form S-11 (referenced in §239.18) by revising the text and check boxes 
on the cover page immediately before the text “If an emerging growth company, indicate by 
check mark if the registrant has elected not to use the extended transition period for complying 
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) 
of the Securities Act.”  The revisions read as follows: 
Note:  The text of Form S-11 does not, and this amendment will not, appear in the 
Code of Federal Regulations. 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
FORM S-11 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 
* * * * * 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 
non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the 
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and 
“emerging growth company” in Rule 12b-2 of the Exchange Act. 
 Large accelerated filer   Accelerated filer    
 Non-accelerated filer     Smaller reporting company   
      Emerging growth company   
* * * * * 

98 
 
12. Amend Form S-4 (referenced in §239.25) by revising the text and check boxes on the 
cover page immediately before the text “If an emerging growth company, indicate by check 
mark if the registrant has elected not to use the extended transition period for complying with 
any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the 
Securities Act.”  The revisions read as follows: 
Note:  The text of Form S-4 does not, and this amendment will not, appear in the 
Code of Federal Regulations. 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
FORM S-4 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 
* * * * * 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 
non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the 
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and 
“emerging growth company” in Rule 12b-2 of the Exchange Act. 
 Large accelerated filer   Accelerated filer    
 Non-accelerated filer     Smaller reporting company   
      Emerging growth company   
* * * * * 

99 
 
 
PART 240—GENERAL RULES AND REGULATIONS, SECURITIES  EXCHANGE ACT 
OF 1934 
13.   The authority citation for part 240 continues to read in part as follows: 
Authority:  15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 
77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 
78o-4, 78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 
80b-3, 80b-4, 80b-11, 7201 et seq., and 8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 
1350; and Pub. L. 111-203, 939A, 124 Stat. 1887 (2010); and secs. 503 and 602, Pub. L. 112-106, 
126 Stat. 326 (2012), unless otherwise noted. 
* * * * * 
14. Amend §   240.12b-2   by: 
a. In the definition of “accelerated filer and large accelerated filer”: 
i. Adding the word “and” at the end of paragraph (1)(ii); 
ii. Removing “; and” at the end of paragraph (1)(iii) and in its place adding a period;  
iii . Removing paragraph (1)(iv); 
iv. Adding the word “and” at the end of paragraph (2)(ii); 
v.   Removing “; and” at the end of paragraph (2)(iii) and in its place adding a period; 
and 
vi.  Removing paragraph (2)(iv). 
b. Revising the definition of “smaller reporting company.”   The addition and revision 
reads as follows: 
§ 240.12b-2 Definitions. 
* * * * * 

100 
 
Smaller reporting company.  As used in this part, the term smaller reporting company 
means an issuer that is not an investment company, an asset-backed issuer (as  defined in 
§   229.1101 of this chapter), or a majority-owned subsidiary of a parent that is not a smaller 
reporting company and that: 
(1) Had a public float of less than $250 million; or 
(2) Had annual revenues of less than $100 million and either: 
(i)   No public float; or 
(ii) A public float of less than $700 million. 
(3) Whether an issuer is a smaller reporting company is
 determined on an annual 
basis. 
(i) For issuers that are required to file reports under section 13(a) or 15(d) of the
 
Exchange Act: 
(A) Public float is measured as of the last business day of the issuer’s most recently 
completed second fiscal quarter and computed by multiplying the aggregate worldwide number 
of shares of its voting and non-voting common equity held by non-affiliates by the price at which 
the common equity was last sold, or the average of the bid and asked prices of common equity, 
in the principal market for the common equity;  
(B) Annual revenues are as o
f the most recently completed fiscal year for which 
audited financial statements are available; and 
(C) An issuer must reflect the determination of whether it came within the definition 
of smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the 
next year, indicating on the cover
 page of that filing, and in subsequent filings for that fiscal year, 
whether it   is a smaller reporting company, except that, if a determination based on public float 

101 
 
indicates that the issuer is newly eligible to be a smaller reporting company, the issuer may 
choose to reflect this determination beginning with its first quarterly report on Form 10-Q 
following the determination, rather than waiting until the first fiscal quarter of the next year. 
(ii) For determinations based on an initial registration statement under the Securities 
Act or  Exchange Act for shares of its common equity: 
(A) Public float is measured as of a date within 30 days of the date of the filing of the 
registration statement and computed by multiplying the aggregate worldwide number of shares of 
its voting and non-voting common equity held by non-affiliates before the registration plus, in the 
case of a Securities Act registration statement, the number of shares of its voting and non-voting 
common equity included in the registration statement by the estimated public offering price of the 
shares;  
(B) Annual revenues are as o
f the most recently completed fiscal year for which 
audited financial statements are available; and 
 (C) The issuer must reflect the determination of whether it came within the definition 
of smaller reporting company in the registration statement and must appropriately indicate on the 
cover page of the filing, and subsequent filings for the fiscal year in which the filing is  made, 
whether it   is a smaller reporting company.  The issuer must re-determine its status at the end of its 
second fiscal quarter and then reflect any change in status as  provided in paragraph (3)(i)(C) of 
this definition.  In the case of a determination based on an
 initial Securities Act registration 
statement, an issuer that was not determined to be a smaller reporting company has the option to 
re-determine its status at the conclusion of the offering covered by the registration statement 
based on the actual offering price and number of shares sold. 

102 
 
(iii) Once an issuer determines that it does not qualify for smaller reporting company 
status because it exceeded one or more of the current thresholds,  it   will remain unqualified unless 
when making its annual determination either:  
(A) It determines that its public float was less than $200 million; or  
(B) It determines that its public float and its annual revenues meet the requirements for 
subsequent qualification included in the following chart:  
Prior Annual 
Revenues 
Prior Public Float 
None or less than $700 million $700 million or more 
Less than $100 
million 
Neither threshold exceeded. 
Public float 
Less than $560 
million; and 
Revenues 
Less than $100 
million. 
$100 million or 
more 
Public float 
None or less than 
$700 million; and 
Public float 
Less than $560 
million; and 
Revenues 
Less than $80 
million. 
Revenues 
Less than $80 
million.  
 
Instruction 1 to definition of “smaller reporting company”:  A registrant that qualifies as a 
smaller reporting company under the public float thresholds identified in paragraphs (1) and 
(3)(iii)(A) of this definition will qualify as a smaller reporting company regardless of its 
revenues. 
* * * * * 
PART 249—FORMS, SECURITIES EXCHANGE ACT OF 1934  
 15.  The authority citation for part 249 continues to read in part as follows: 
Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C. 5461 et seq.; 18 U.S.C. 
1350; Sec. 953(b), Pub. L. 111-203, 124 Stat. 1904; Sec. 102(a)(3), Pub. L. 112-106, 126 Stat. 

103 
 
309 (2012); Sec. 107, Pub. L. 112-106, 126 Stat. 313 (2012), and Sec. 72001, Pub. L. 114-94, 
129 Stat. 1312 (2015), unless otherwise noted. 
* * * * * 
16. Amend Form 10 (referenced in §249.210) by revising the text and check boxes on 
the cover page immediately before the text “If an emerging growth company, indicate by check 
mark if the registrant has elected not to use the extended transition period for complying with 
any new or revised financial accounting standards provided pursuant to Section 13(a) of the 
Exchange Act.” The revisions read as follows: 
Note:  The text of Form 10 does not, and this amendment will not, appear in the 
Code of Federal Regulations. 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
FORM 10 
GENERAL FORM FOR REGISTRATION OF SECURITIES  
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934 
* * * * * 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated 
filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See 
the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and 
“emerging growth company” in Rule 12b-2 of the Exchange Act. 
 Large accelerated filer   Accelerated filer    
 Non-accelerated filer     Smaller reporting company   

104 
 
      Emerging growth company   
* * * * * 
17. Amend Form 10-Q (referenced in §249.308a) by revising the text and check 
boxes on the cover page immediately before the text “If an emerging growth company, indicate 
by check mark if the registrant has elected not to use the extended transition period for 
complying with any new or revised financial accounting standards provided pursuant to Section 
13(a) of the Exchange Act.”  The revisions read as follows: 
Note:  The text of Form 10-Q does not, and this amendment will not, appear in the 
Code of Federal Regulations. 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
FORM 10-Q 
* * * * * 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 
non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the 
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and 
“emerging growth company” in Rule 12b-2 of the Exchange Act. 
 Large accelerated filer   Accelerated filer    
 Non-accelerated filer     Smaller reporting company   
      Emerging growth company   
* * * * * 

105 
 
18. Amend Form 10-K (referenced in §249.310) by revising the text and check boxes 
on the cover page immediately before the text “If an emerging growth company, indicate by 
check mark if the registrant has elected not to use the extended transition period for complying 
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the 
Exchange Act.” The revisions read as follows: 
Note:  The text of Form 10-K does not, and this amendment will not, appear in the 
Code of Federal Regulations. 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
FORM 10-K 
* * * * * 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 
non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the 
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and 
“emerging growth company” in Rule 12b-2 of the Exchange Act. 
 Large accelerated filer   Accelerated filer    
 Non-accelerated filer    Smaller reporting company   
      Emerging growth company   
* * * * * 
By the Commission. 
Dated:  June 28, 2018. 
 Brent J. Fields, 
 Secretary.