Smaller reporting company is a class of reporting company which has relaxed Regulation S-K and Regulation S-X disclosure requirements.
Securities and Exchange Commission (SEC) Rule 12b-2 establishes the requirements for a smaller reporting company. To qualify, a company must not be an investment company or a subsidiary of a parent that is not a smaller reporting company, and:
- have a public float of less than $250 million; or
- have less than $100 million in annual revenues and no public float or public float of less than $700 million.
Once a company qualifies as a smaller reporting company, many of Regulation S-K’s disclosure requirements are relaxed. Under item 402, Executive Compensation, a smaller reporting company must only name three executive officers, as opposed to five for regular reporting companies, and only needs to provide two years of summary compensation, as opposed to three. Under item 303, Management Discussion and Analysis (MD&A), only two years of comparison is required, as opposed to three.
Under Regulation S-X, a smaller reporting company only needs to provide two years of income statements and cash flow statements, rather than three years.
[Last updated in February of 2022 by the Wex Definitions Team]