# Plain Language Summary of H.R. 2603

This bill asks the Securities and Exchange Commission (the agency that oversees stock markets and public companies) to raise the financial thresholds that determine which companies are classified as "smaller reporting companies," "accelerated filers," or "large accelerated filers." These classifications matter because they determine how much financial information companies have to disclose to the public and how often they have to file reports.

Right now, a company is considered "smaller" if it has less than $250 million in public market value or less than $100 million in annual revenue. This bill would raise those limits to $500 million and $250 million respectively, meaning more companies would qualify as "smaller" and face fewer reporting requirements. The bill also raises the thresholds for "large accelerated filers" from $700 million to $750 million. Additionally, it changes how revenue is measured—instead of looking at just one year's revenue, companies could use an average of the last three years, which might make it easier for companies with fluctuating earnings to qualify for the smaller company category.

The practical effect is that companies just below these new thresholds would have to provide less detailed financial information to investors and the public, and they'd have more flexibility in how often they file reports. Supporters argue this reduces expensive compliance burdens on growing companies, while critics worry it could mean less transparency for investors trying to make informed decisions about where to put their money. For everyday people with retirement accounts or investment portfolios, this could mean slightly less detailed information available about some of the companies they own stock in through mutual funds or index funds.

To require the Securities and Exchange Commission to revise certain thresholds related to smaller reporting companies, accelerated filers, and large accelerated filers, and for other purposes.

Luetkemeyer, Blaine

 <p class="MsoNormal" style="line-height: normal;">This bill requires the Securities and Exchange Commission (SEC) to increase threshold amounts that qualify companies as smaller reporting companies, accelerated filers, and large accelerated filers for purposes of SEC reporting requirements. The bill (1) increases the revenue and public float amounts under which a company qualifies as a smaller reporting company, (2) changes threshold requirements for smaller reporting companies from annual revenues to three-year rolling average revenues, (3) increases the aggregate worldwide market value of equity for a company to qualify as a large accelerated filer, (4) increases the market values below which a company exits accelerated filer or large accelerated filer status, and (5) excludes smaller reporting companies from status as accelerated filers or large accelerated filers.&nbsp; </p>