What Are Accelerated Filers?
Accelerated filers are a classification of public company subject to specific, faster reporting requirements by the Securities and Exchange Commission (SEC). This designation falls under the broader category of securities regulation and corporate finance. Companies meeting the criteria for accelerated filers face shorter deadlines for submitting their periodic financial disclosures, such as annual and quarterly reports, compared to other classifications of filers. The aim of these accelerated deadlines is to provide investors with more timely access to crucial financial information.
History and Origin
The concept of accelerated filers was introduced by the SEC to enhance the timeliness of corporate disclosures. The most significant shift occurred with the adoption of amendments to the Securities Exchange Act of 1934 in September 2002. These amendments, formalized in SEC Release No. 33-8128, aimed to accelerate the filing dates for annual report and quarterly report submissions for a specific group of companies. The SEC cited the advent of modern technology and market demand for timelier information as key reasons for the change9. The new rules were phased in over three years, gradually reducing the deadlines for affected companies8.
Key Takeaways
- Accelerated filers are U.S. public companies that meet specific public float and reporting history criteria.
- They are subject to stricter and faster deadlines for filing their annual and quarterly reports with the SEC.
- The status also impacts certain requirements under the Sarbanes-Oxley Act, particularly auditor attestation over internal controls.
- The SEC has periodically adjusted the thresholds for accelerated filer status to balance investor protection with compliance burden for smaller entities.
- Companies must reassess their filer status annually based on their public float and other criteria.
Formula and Calculation
The determination of accelerated filer status primarily relies on a company's public float. Public float is the aggregate worldwide market capitalization of the voting and non-voting common equity held by non-affiliates of the issuer.
A company generally qualifies as an accelerated filer if, as of the last business day of its most recently completed second fiscal quarter, it meets the following conditions7:
- Its public float is $75 million or more but less than $700 million.
- It has been subject to the requirements of Section 13(a) or 15(d) of the Exchange Act for at least 12 calendar months.
- It has filed at least one annual report pursuant to Section 13(a) or 15(d) of the Exchange Act.
- It is not eligible to use the requirements for smaller reporting companies under the revenue test (generally, annual revenues of $100 million or more).
The calculation of public float is typically:
A company determines its filer status at the end of its fiscal year, based on its public float as of the last business day of its most recently completed second fiscal quarter. This determination governs the filing deadlines for the subsequent fiscal year.
Interpreting Accelerated Filer Status
Accelerated filer status directly dictates the timeline for a company's financial disclosures. Specifically, accelerated filers are required to file their Form 10-K within 75 days after the fiscal year-end and their Form 10-Q within 40 days after the end of the first three fiscal quarters6. In contrast, non-accelerated filers generally have 90 days for Form 10-K and 45 days for Form 10-Q.
Beyond filing deadlines, being an accelerated filer also carries significant implications regarding internal controls. These companies are typically subject to Section 404(b) of the Sarbanes-Oxley Act, which requires an independent auditor to attest to, and report on, management's assessment of the effectiveness of the company's internal controls over financial reporting. This auditor attestation is a key distinction from non-accelerated filers and can involve substantial compliance costs.
Hypothetical Example
Consider "Tech Innovations Inc.," a publicly traded company. As of its fiscal year-end on December 31, 2024, its management is assessing its SEC filing status. On June 30, 2024 (the last business day of its most recently completed second fiscal quarter), Tech Innovations Inc. had a public float of $150 million. The company has been filing periodic reports for over 12 months and has previously submitted an annual report. Its annual revenues for the most recent fiscal year exceeded $100 million.
Based on these facts, Tech Innovations Inc. would be classified as an accelerated filer for its fiscal year ending December 31, 2024. This means its audited financial statements and associated disclosures on Form 10-K for 2024 would be due within 75 days of December 31, 2024 (by March 16, 2025). Similarly, its quarterly reports on Form 10-Q for 2025 would be due within 40 days after the end of each of the first three quarters.
Practical Applications
Accelerated filer status is a critical determinant of a company's regulatory obligations and operational practices. For example, the status influences resource allocation within a company, particularly in the accounting and finance departments, due to the compressed filing timelines. Companies classified as accelerated filers must maintain robust financial reporting systems and internal controls to meet the demands of faster reporting cycles and the associated auditor attestation requirements under Sarbanes-Oxley Section 404(b)5.
Recent amendments to the definition of accelerated filers, particularly in 2020, have aimed to reduce the burden on certain smaller companies, especially those eligible as smaller reporting companies, by exempting them from the Section 404(b) auditor attestation requirement if their annual revenues are below $100 million4. This adjustment allows some companies to reallocate resources from compliance costs towards growth initiatives, while still maintaining the integrity of their financial statements through internal assessments3.
Limitations and Criticisms
While the intention behind accelerated filer status is to provide investors with timely information, it has faced some criticisms, particularly regarding the compliance burden for companies. The costs associated with meeting the expedited deadlines and the rigorous Sarbanes-Oxley Act Section 404(b) auditor attestation requirement can be substantial, especially for companies at the lower end of the public float threshold2. Some argue that these costs may disproportionately affect smaller public companies, potentially hindering capital formation and growth.
Critics suggest that the benefits of slightly earlier filings may not always outweigh the significant expenses incurred by companies to comply, especially when much of the information may already be publicly available or quickly disseminated through other channels. The SEC has periodically reviewed and amended these definitions, as seen in the 2020 changes that provided some relief to smaller reporting companies, acknowledging the need to balance investor protection with reducing unnecessary compliance costs1.
Accelerated Filers vs. Non-Accelerated Filers
The primary distinction between accelerated filers and non-accelerated filers lies in their size (as measured by public float) and the resulting SEC reporting requirements and associated compliance burdens. Non-accelerated filers are generally companies that do not meet the public float thresholds of an accelerated filer or large accelerated filers.
| Feature | Accelerated Filers | Non-Accelerated Filers |
|---|---|---|
| Public Float | $75 million to $699 million | Less than $75 million (or meets smaller reporting company revenue test) |
| Form 10-K Deadline | 75 days after fiscal year-end | 90 days after fiscal year-end |
| Form 10-Q Deadline | 40 days after fiscal quarter-end | 45 days after fiscal quarter-end |
| SOX 404(b) Auditor Attestation | Generally required (unless exempted by revenue test for smaller reporting companies) | Generally not required |
The confusion between these categories often arises from the specific public float cut-offs and the additional conditions, such as the minimum reporting history and the recent revenue-based exemptions for smaller reporting companies.
FAQs
What determines a company's accelerated filer status?
A company's accelerated filer status is primarily determined by its public float, which is the total market value of its publicly traded shares held by non-affiliates. Other factors include its reporting history with the SEC and its annual revenues if it is a smaller reporting company.
How often does a company's filer status change?
A company must determine its filer status annually at the end of its fiscal year, based on its public float as of the last business day of its most recently completed second fiscal quarter. This determination then applies to all Form 10-K and Form 10-Q filings for the subsequent fiscal year.
What is the difference between an accelerated filer and a large accelerated filer?
Both accelerated filers and large accelerated filers have expedited reporting deadlines and are subject to auditor attestation of internal controls. The key difference is the size of their market capitalization. Accelerated filers have a public float between $75 million and $699 million, while large accelerated filers have a public float of $700 million or more.
Does accelerated filer status affect a company's stock price?
The status itself does not directly affect a company's stock price, as it is a regulatory classification. However, a company's ability to meet its accelerated filing deadlines and maintain strong internal controls (as evidenced by auditor attestations) can contribute to investor confidence and perception of transparency, which can indirectly influence market sentiment.