The SEC’s 45th Annual Small Business Forum Report: A Deregulatory Roadmap Already In Motion

Key Takeaways

• The 45th Forum’s 16 recommendations read less like a wish list than a working roadmap: the Commission’s responses map, recommendation by recommendation, to proposed rules already open for comment, staff initiatives underway, and legislation that has passed the House.
• Accredited investor reform has moved from concept to design: Chairman Atkins has directed Corp Fin staff to begin discussions with FINRA about an accredited investor examination, which could materially expand the pool of eligible private-market investors beyond the current income and net worth thresholds.
• Two May 19, 2026 proposals — Registered Offering Reform (Release 33-11418) and Enhancement of EGC Accommodations (Release 33-11419) — would eliminate Form S-3’s public float threshold, streamline filer statuses into two primary categories, and extend scaled disclosure to approximately 81% of all public companies, in what commentators have called the most significant offering reform since 2005.
• Congress is moving in parallel: the INVEST Act (H.R. 3383), which passed the House 302-123 on December 11, 2025, would expand qualifying venture capital funds from $10 million/250 investors to $50 million/500 investors, codify professional-licensure and exam-based pathways to accredited investor status, and permit demo-day presentations without triggering general solicitation.
• For founders, emerging fund managers, and smaller public companies, the practical question is no longer whether the SEC will act, but how quickly — and whether stakeholders will engage the comment process (including the September 21, 2026 Regulation E-Delivery deadline) before the rules are finalized.

On July 27, 2026, the Office of the Advocate for Small Business Capital Formation delivered to Congress its report on the 45th Annual SEC Government-Business Forum on Small Business Capital Formation. The report contains 16 prioritized recommendations developed by Forum participants across three lifecycle segments (early-stage capital raising, growth-stage companies and smaller funds, and small-cap companies in the public markets), together with the Commission’s responses to each.

The Forum itself is not new. Congress created it in the Small Business Investment Incentive Act of 1980, and the SEC has convened it annually for 45 years. Two features, however, distinguish this year’s report from its predecessors:

• First, the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 now requires the Commission to respond to each Forum recommendation, so the report can no longer simply be filed and set aside.
• Second, the Commission’s responses no longer consist of generic “we will consider” language. They map, recommendation by recommendation, to a live, already-public rulemaking agenda: proposed rules are open for comment, staff initiatives are underway, and legislation has passed the House. The feedback loop between the Forum and actual rulemaking has rarely been tighter.

These features make this year’s report less an aspirational wish list than a working roadmap to rules that are already in motion.

About the Forum and Why the Report Matters

The SEC Government-Business Forum on Small Business Capital Formation operates under the Small Business Investment Incentive Act of 1980 (Pub. L. No. 96-477, § 503, codified at 15 U.S.C. § 80c-1). The Forum is led by the Office of the Advocate for Small Business Capital Formation (OASB), which Congress created through the bipartisan SEC Small Business Advocate Act of 2016.

The 45th Forum was held on March 9, 2026, at SEC headquarters. More than 125 attendees from 39 states participated in person, with over 700 webcast viewers from 10 countries. Twelve speakers and three lifecycle-stage panels developed the recommendations through facilitated discussion and participant voting.

The numbers underscore why the Forum matters:

• The United States has 36.2 million small businesses. In 2024, 94% of them experienced financial challenges.
• Small businesses created nearly 9 of every 10 net new jobs in 2023–2024.
• Angel investors deployed $18 billion across 55,000 businesses in 2024.
• While small-company IPOs accounted for 44% of all IPOs in 2024, they raised only 3% of the capital. These figures suggest that the existing capital formation infrastructure is not reaching the businesses that drive employment.

Forum recommendations are participant-developed and do not represent the views of the SEC or its staff. The 2018 statutory amendment requiring Commission responses, however, gives them practical weight, transforming what were once suggestions into an accountability mechanism.

The 16 Recommendations at a Glance

Before turning to the detail, the following summary maps each Forum recommendation to the Commission’s response and its current status.

Early-stage: (1) Accredited investor sophistication measures — Corp Fin directed to begin exam discussions with FINRA; exempt-offering updates on the 2026 Regulatory Agenda. (2) Crypto asset modernization — March 17, 2026 interpretive release, tokenized securities taxonomy, and planned rule proposals under Project Crypto. (3) Federal friends-and-family exemption — awaits Commission or Congressional action. (4) Non-dilutive capital resources — the SEC points to its existing Resources for Small Businesses hub and Funding Roadmap. (5) Regulation Crowdfunding cap increase to $20 million — awaits Commission rulemaking.

Growth-stage: (1) Community-based private fund exemption — concept stage. (2) Blue sky preemption for secondary trading — prior touchpoints in the 2019 concept release and March 2020 harmonization proposal. (3) Rule 144 resale reform — on the 2026 Regulatory Agenda. (4) Emerging fund manager relief — January 7, 2026 small entity definitions proposal (Release IA-6935). (5) Advance the INVEST Act — passed the House December 11, 2025; awaits Senate action. (6) Section 3(c)(1) investor limit — requires Congress; addressed by the INVEST Act’s ICAN Act component.

Small-cap: (1) OTC market disclosure — Form SHO short position reporting (compliance date January 2, 2028), beneficial ownership modernization, and a transfer agent agenda item. (2) ATM offerings for small companies — substantially addressed by the Registered Offering Reform proposal. (3) Form S-3 eligibility regardless of public float — Registered Offering Reform proposal (Release 33-11418). (4) Regulation A reporting simplification — awaits Commission action. (5) Reducing the cost of being a smaller public company — Filer Status proposal (Release 33-11419), the semiannual reporting proposal, and Regulation E-Delivery.

Early-Stage Capital Raising: The Five Prioritized Recommendations

The five early-stage recommendations share a common theme: the legal and compliance cost of a company’s first outside capital remains disproportionate to the size of the raise.

1. Expand the Accredited Investor Definition to Include Sophistication Measures

The Forum’s top early-stage recommendation calls for expanding the accredited investor definition beyond income and net worth thresholds to include measures of investor sophistication, including an investor examination and demonstrable investment experience.

The Commission’s response is concrete: the 2026 Regulatory Agenda includes exempt-offering updates, and Chairman Atkins has directed Corp Fin staff to begin discussions with FINRA about creating an accredited investor examination. In other words, the concept has moved beyond aspiration; the staff has been tasked with designing the mechanism.

2. Modernize Regulation of Crypto Assets That Are Securities

The Forum called for modernized rules governing the offer, sale, and secondary trading of crypto assets that qualify as securities.

The Commission pointed to its March 17, 2026 interpretive release (Release No. 33-11412, issued jointly with the CFTC) clarifying the application of the securities laws to crypto assets, the January 28, 2026 joint staff statement establishing a taxonomy for tokenized securities, and the “Project Crypto” initiative. Planned rule proposals will address the offer and sale of crypto assets with new exemptions and safe harbors, ATS and exchange trading amendments, and Chairman Atkins’s “innovation exemption” vision for tokenized securities trading on novel platforms, including automated market makers.

3. Create a New Federal Friends-and-Family Exemption

Forum participants recommended a new federal exemption for friends-and-family capital raises that would preempt state blue sky laws. The duplicative federal-state regime (a recurring Forum theme) imposes disproportionate compliance costs on the earliest, smallest raises. This recommendation awaits Commission or Congressional action.

4. Expand Federal and State Non-Dilutive Capital Resources

The Forum recommended a centralized portal for grants, loans, and other non-dilutive funding. The SEC pointed to its existing Resources for Small Businesses hub and Funding Roadmap.

5. Raise the Regulation Crowdfunding Cap from $5 Million to $20 Million

Regulation Crowdfunding’s current $5 million annual cap limits its utility for companies that need to raise meaningful early-stage capital. A $20 million cap would position crowdfunding as a viable alternative to small private placements. Raising the cap would require Commission rulemaking.

Growth-Stage Companies and Smaller Funds: Six Prioritized Recommendations

The growth-stage discussion shifts the focus from founders to the funds and structures that finance them. The panel produced six prioritized recommendations, reflecting a tie for the fifth position.

1. Community-Based Private Fund Exemption

Forum participants recommended a new private fund exemption designed for small, regional, community-based funds that invest locally. The premise is that the existing fund regulatory framework (designed for institutional managers operating at scale) imposes costs that foreclose the model for managers focused on community-level investment. The concept remains at an early, pre-proposal stage.

2. Blue Sky Preemption for Secondary Trading

The second recommendation calls for preempting state blue sky laws for off-exchange secondary trading in companies that provide robust, publicly accessible, timely disclosure (analogous to Regulation A Tier 2 information). The recommendation references the Commission’s 2019 concept release and March 2020 harmonization proposal as prior touchpoints.

Secondary liquidity for privately held securities remains one of the most persistent structural gaps in U.S. capital markets. Without preemption, secondary transfers trigger state-by-state analysis that effectively forecloses organized resale markets for smaller issuers.

3. Rule 144 Restricted Share Resale Reform

The Forum recommended streamlining the private-to-public pathway through Rule 144. The Commission’s response confirms that the 2026 Regulatory Agenda includes Rule 144 updates.

4. Emerging Fund Manager Relief

Forum participants called for eased compliance obligations for emerging fund managers with less than $100 million in assets under management. On January 7, 2026, the SEC proposed amending small entity definitions under the Investment Company Act and Investment Advisers Act (Release IA-6935; IC-35864), raising Regulatory Flexibility Act thresholds to $1 billion AUM for registered investment advisers and $10 billion for registered investment companies.

5. Advance the INVEST Act

The INVEST Act (H.R. 3383) is a legislative package of more than 20 bills that would modernize the accredited investor definition, expand qualifying venture capital funds, and address other capital formation barriers. It passed the House on December 11, 2025, by a bipartisan vote of 302-123 and awaits Senate action; its principal provisions are detailed under Developments Since the Forum below.

6. Increase the Section 3(c)(1) Investor Limit

Section 3(c)(1) of the Investment Company Act currently limits non-reporting funds to 100 beneficial owners. The Forum recommended raising that limit. This requires Congressional action; the INVEST Act’s ICAN Act component (discussed below) would raise the ceiling for qualifying VC funds to 500 investors and $50 million.

Small-Cap Companies and the Public Markets: Five Prioritized Recommendations

The small-cap recommendations turn to the public markets, where the report’s own data frame the problem: small-company IPOs accounted for 44% of all IPOs in 2024 but only 3% of the capital raised.

1. Improve OTC Market Disclosure

The Forum called for greater transparency in OTC trading, specifically around short selling, institutional and insider holdings, paid stock promotion, and transfer agent information.

The Commission cited its October 13, 2023 short position reporting rule (Rule 13f-2/Form SHO), with a compliance date extended to January 2, 2028 by a December 8, 2025 exemptive order; the October 2023 beneficial ownership modernization amendments; the 2015 transfer agent advance notice of proposed rulemaking; and a 2026 Regulatory Agenda item for transfer agent regime updates.

2. Allow At-the-Market Offerings for Small Public Companies and Reg A Tier 2 Issuers

ATM offerings provide efficient, low-cost access to public equity capital, but current Form S-3 eligibility requirements shut out most smaller reporting companies. The Forum recommended extending ATM eligibility to all small public companies and Regulation A Tier 2 companies current in their filings. The Registered Offering Reform proposal’s elimination of the Form S-3 public float threshold (discussed below) would substantially deliver this result for listed companies.

3. Expand Form S-3 Eligibility Regardless of Public Float

The May 19, 2026 Registered Offering Reform proposal (Release 33-11418; File No. S7-2026-17) is directly responsive. It would eliminate Form S-3’s 12-month seasoning requirement and $75 million public float threshold, replacing the domestic WKSI framework with new “eligible listed issuer” (ELI) and “seasoned eligible listed issuer” (SELI) categories.

4. Revise Regulation A to Simplify Reporting

Forum participants noted that Regulation A’s ongoing reporting requirements, while lighter than Exchange Act reporting, still impose costs that discourage use. Simplification, particularly around the semi-annual and annual report forms, would increase uptake. This recommendation awaits Commission action.

5. Reduce the Cost and Liability of Being a Smaller Public Company

The Commission pointed to the May 19, 2026 Enhancement of EGC Accommodations and Simplification of Filer Status proposal (Release 33-11419; File No. S7-2026-18), which would streamline filer statuses into two primary categories, raise the large accelerated filer threshold from $700 million to $2 billion, and extend scaled disclosure to approximately 81% of all public companies. In practical terms, most companies that are currently accelerated filers would shed the ICFR auditor attestation and gain the reduced disclosure accommodations now reserved for smaller reporting companies and EGCs.

The Commissioners’ Remarks and What They Signal

Each set of remarks rewards close reading, because each signals where the Commission’s rulemaking attention is likely to turn next.

Chairman Atkins: The Exempt Offering Framework Needs a Full Review

Chairman Atkins opened the Forum with a statement of regulatory philosophy: “Those who write the rules have an obligation to hear from those who operate under them.” He noted that the last comprehensive review of the exempt offering framework was in 2020 and framed the Forum’s work as input for the next one.

The data he cited illustrate the problem: 84% of early-stage businesses struggled to secure capital in the past year. In the first seven months of 2025, approximately 40% of all venture capital dollars flowed to just ten companies. The share of VC deals below $5 million fell to a decade low of 49%. Thirty firms accounted for roughly 75% of total venture dollars raised in 2024.

The implication of these figures is that the exempt offering framework is not serving the broad base of small businesses; venture capital is concentrating among a small number of companies and firms rather than dispersing across the market.

On the public markets side, Atkins framed the third panel around the theme “Make IPOs Great Again,” a signal that the Commission views IPO accessibility as a policy priority. He proposed building on the JOBS Act IPO on-ramp: companies should be able to remain on the on-ramp for a minimum number of years, and IPOs should serve as a capital-raising mechanism for the company rather than merely a liquidity event for insiders.

Commissioner Peirce: Micro-Offerings, Finders, and Reporting Cadence

Commissioner Peirce described founders as navigating “regulatory landmines” and floated several forward-looking ideas:

• A micro-offering exemption: sell below a set dollar amount with no conditions other than fraud avoidance.
• A regulatory structure for finders, currently under consideration by the Small Business Capital Formation Advisory Committee.
• The INVEST Act’s proposal to amend Section 3(c)(1) to expand the investor and size limits for qualifying VC funds (see Developments Since the Forum below).
• Moving away from mandatory quarterly reporting for smaller companies.
• Regulation S-K streamlining and reducing executive compensation disclosure bloat.

Commissioner Uyeda: Federal-State Duplication and the Preemption Question

Commissioner Uyeda focused on the structural problem of duplicative federal-state regulation. Small businesses employ nearly half the U.S. workforce and account for 43.5% of GDP. Duplicative federal-state qualification (where an offering that is exempt under federal law still requires state-by-state registration or qualification) is, in his view, a core barrier to capital formation.

He noted that the National Securities Markets Improvement Act of 1996 (NSMIA) preempted state blue sky registration for exchange-listed and Rule 506(b) offerings, but left significant gaps. His proposal: move beyond a binary approach to preemption (full preemption or none) toward intermediate models: for example, home-state review plus notice filings elsewhere.

It is a nuanced position. Full preemption raises legitimate investor-protection concerns at the state level, but a regime in which a $500,000 friends-and-family round triggers multi-state blue sky analysis arguably does little to protect investors while imposing meaningful barriers to capital formation.

Developments Since the Forum

The Forum was held on March 9, 2026. In the four and a half months since, the regulatory landscape has moved substantially. The following developments, current as of July 29, 2026, add context to the Commission’s responses and signal the pace of implementation:

May 5, 2026: Semiannual Reporting Proposal (Release 33-11414)

The Commission proposed optional semiannual reporting on new Form 10-S in lieu of quarterly Form 10-Q for all reporting companies regardless of filer status. The comment period closed July 6, 2026. If adopted, the proposal would directly address Commissioner Peirce’s remarks about mandatory quarterly reporting cadence and the Forum’s recommendation to reduce the cost of being a smaller public company.

May 19, 2026: Registered Offering Reform (Release 33-11418)

Approved unanimously, this proposal would eliminate Form S-3’s 12-month seasoning requirement and $75 million public float threshold; replace the domestic WKSI framework with new “eligible listed issuer” (ELI) and “seasoned eligible listed issuer” (SELI) categories; modernize Form S-1 incorporation by reference; extend the framework to BDCs and closed-end funds on Form N-2; and preempt state blue sky registration for all registered offerings by redefining “qualified purchaser” under Securities Act Section 18(b)(3). Law firm commentary (Skadden, Cleary Gottlieb, Morrison Foerster, Venable, Bass Berry & Sims) has called it the most significant offering reform since the 2005 Securities Offering Reform. The comment period closed July 27, 2026. Some commentators expect final rules in the first half of 2027.

May 19, 2026: Filer Status and EGC Accommodations (Release 33-11419)

The companion proposal would streamline filer statuses into two primary categories (large accelerated filers and non-accelerated filers), raise the large accelerated filer threshold from $700 million to $2 billion, extend scaled disclosure accommodations to approximately 81% of all public companies, exempt all non-accelerated filers from the ICFR auditor attestation, create a “small non-accelerated filer” subcategory (total assets ≤$35 million), and give new public companies a minimum five-year on-ramp, directly echoing Chairman Atkins’s Forum remarks about building on the JOBS Act EGC on-ramp. The SBA Office of Advocacy filed a supportive comment letter on July 23, 2026.

June 9, 2026: Corp Fin Director Jim Moloney’s Remarks

Speaking at the U.S. Chamber Capital Markets Summit, Director Moloney characterized the filer status and registered offering proposals as essential to reversing the approximately 40% decline in U.S. exchange-listed companies since the mid-1990s.

July 16, 2026: Regulation E-Delivery (Release 33-11430)

The Commission proposed default electronic delivery of required regulatory information, with estimated aggregate annual savings of $463 million, disproportionately benefiting smaller issuers. Comments are due September 21, 2026. I covered this proposal in detail in a prior article, but it belongs in this narrative as another piece of the cost-reduction agenda the Forum recommended.

The INVEST Act (H.R. 3383)

Passed the House December 11, 2025, by 302-123. The package includes more than 20 bills that would direct the SEC to modernize the accredited investor definition (professional licensure, education, and experience pathways; a FINRA-administered exam; inflation-indexed income and net worth thresholds), expand qualifying VC funds from $10 million/250 investors to $50 million/500 investors (ICAN Act), allow VC fund-of-funds and secondary investments as qualifying investments (DEAL Act), and permit demo-day presentations without triggering general solicitation. It awaits Senate action. The Senate Banking Committee is expected to reintroduce the Empowering Main Street in America Act (EMSAA), which includes an exam-based accredited investor pathway and a finders safe harbor.

Crypto Asset Developments

Beyond the March 17, 2026 interpretive release and January 28 joint staff statement, the Commission has approved Nasdaq (March 2026) and NYSE (April 2026) rule changes for tokenized trading through existing market infrastructure. DTCC received a December 11, 2025 no-action letter for a three-year tokenization pilot targeted to launch in H2 2026, involving more than 50 institutions including BlackRock, JPMorgan, and Goldman Sachs. Chairman Atkins’s “innovation exemption” for tokenized securities trading (expected as early as mid-May 2026) was delayed amid pushback from Nasdaq, CME, and the World Federation of Exchanges, but remains on the agenda.

Practical Implications for Founders, Emerging Fund Managers, and Smaller Public Companies

The report’s practical significance depends on where a company or fund sits in the capital-raising lifecycle.

For Founders and Early-Stage Companies

• Monitor the accredited investor examination development. If FINRA and Corp Fin reach agreement on an exam framework, the pool of eligible investors in private placements expands materially, particularly for issuers whose natural investor base includes professionals, entrepreneurs, and experienced individuals who do not meet the income or net worth thresholds.
• If you operate in the crypto or digital asset space, the planned rule proposals for tokenized securities offerings, including new exemptions and safe harbors, represent the first purpose-built regulatory framework for digital-native capital formation. Track the rulemaking calendar.
• Friends-and-family raises remain subject to state blue sky requirements. A federal exemption would eliminate multi-state compliance costs for the smallest raises. Until then, structure early rounds under Rule 504 or the applicable intrastate exemption where available.

For Emerging Fund Managers

• The January 7, 2026 small entity definition proposal (Release IA-6935) would raise the Regulatory Flexibility Act threshold for “small” registered investment advisers to $1 billion AUM. The benefit to managers is indirect but real: RFA thresholds govern how the SEC must analyze the impact of its own rules on small entities, so future rulemakings would have to account for the burdens they impose on advisers below the $1 billion mark.
• Watch the INVEST Act’s Senate path. Its ICAN Act component would raise the qualifying VC fund ceiling to $50 million and 500 investors. For managers raising Fund I or Fund II in the sub-$100 million range, that expansion directly affects fund structure and investor-count planning.
• The community-based private fund exemption, if developed, would create a new regulatory pathway for managers focused on local and regional investment. The concept is still early, but it signals Commission attention to the structural barriers that foreclose small-fund formation.

For Smaller Public Companies

• The Registered Offering Reform proposal (Release 33-11418) could be transformative. If adopted, the elimination of Form S-3’s public float threshold means that smaller reporting companies, currently locked into Form S-1 for primary offerings, would gain access to shelf registration and at-the-market offerings, and issuers should begin factoring that possibility into their capital-raising plans.
• The Filer Status proposal (Release 33-11419) would extend scaled disclosure accommodations (currently available only to SRCs and EGCs) to all non-accelerated filers. If your company has a public float below $2 billion, you would qualify as a non-accelerated filer under the proposed thresholds, and gain access to ICFR auditor attestation exemptions and streamlined executive compensation disclosure.
• The semiannual reporting proposal is live. If your company bears significant quarterly reporting costs and your investor base would accept a semiannual cadence, file a comment letter supporting adoption.
• Regulation E-Delivery’s estimated $463 million in aggregate annual savings would disproportionately benefit smaller issuers with larger retail shareholder bases and higher per-unit printing and mailing costs. Comments are due September 21, 2026.

What Comes Next

The 45th Forum report is best understood not as an endpoint but as a progress marker in a larger regulatory project.

The Commission’s responses show an agency that is not merely considering recommendations but actively implementing them. Proposed rules are open for comment, staff discussions are underway, and legislation is moving through Congress at a pace faster than at any point since the JOBS Act era.

For practitioners, that pace creates both opportunity and urgency. Comment periods are closing, the accredited investor examination is being designed, the registered offering framework is being restructured, and the filer status regime is being simplified. The window to shape these outcomes through the notice-and-comment process is open now, but it will not remain open indefinitely.

The deregulatory direction will not go unchallenged. State securities regulators have long resisted blue sky preemption on investor-protection grounds, and investor advocates can be expected to raise similar concerns about expanding the accredited investor pool and relaxing reporting cadence — the same tension Commissioner Uyeda acknowledged in his remarks. Exchange operators have already slowed the innovation exemption’s timetable. Final rules may therefore differ meaningfully from the proposals as published, which is one more reason comment-stage engagement matters.

The question, then, is not whether the regulatory framework will change, but how much it will change, and whether stakeholders will engage before the rules are final.

Practitioners and issuers alike would be well served to file comment letters where periods remain open, to advise clients on planning assumptions, and to monitor the adoption process closely. The regulatory infrastructure for small business capital formation is being rebuilt in real time, and those who participate in the process will have a hand in shaping the result.