The SEC just proposed its most sweeping overhaul of registered offering rules in over twenty years. The goal: make it dramatically easier for companies to go public and raise capital once they get there.

The proposed amendments, set forth on May 19, would extend benefits previously reserved for so-called “well-known seasoned issuers” (WKSIs) to approximately 74-75% of exchange-listed issuers. That’s up from roughly 36%.

What’s actually changing

First, the $75 million public float requirement for unrestricted shelf offerings gets eliminated. Shelf registrations are essentially pre-approved fundraising mechanisms that let companies sell securities quickly when market conditions are favorable.

Second, newly public companies would be able to use shelf registrations immediately after their IPO. Right now, there’s roughly a one-year waiting period.

Third, the threshold for “large accelerated filer” status would jump from $700 million to $2 billion in public float. Large accelerated filers face stricter reporting requirements, so raising this bar means more companies stay in the lighter regulatory tier for longer.

There’s also a new two-consecutive-year requirement before companies trigger the stricter rules associated with larger filer status. In practice, this protects newly public companies from elevated compliance burdens for at least five years after their IPO.

Why crypto companies stand to benefit

The crypto industry has seen a wave of companies pursuing public listings recently. Circle filed to list under the ticker CRCL. BitGo is pursuing a listing as BTGO. Bullish is targeting public markets under BLSH.

Under the current framework, these companies face a particularly rough path. The SEC has long enforced regulations that curtail issuer communications through the IPO process, encompassing a pre-filing quiet period, a mandatory waiting period post-filing, and the post-effective phase. Despite the existence of certain safe harbors, like the testing-the-waters provision (Rule 163B) and Rule 163A (30 days pre-filing communication), many emerging growth companies found these restrictions too limiting.

The proposed rules change that calculus. A crypto company going public would be able to communicate more freely with potential investors during its offering, access shelf registrations immediately after listing, and enjoy lighter reporting requirements for years rather than potentially being pushed into the large accelerated filer category prematurely.

What this means for investors

The number of firms listed on US exchanges has roughly halved since the late 1990s. The SEC’s proposal is a direct attempt to reverse that trend by making public markets more accessible for smaller and mid-cap issuers.

The public comment period remains open for 60 days from the May 19 announcement.