SEC Proposes Most Significant Registered Offering Reforms in Over 20 Years

On May 19, 2026, the SEC proposed two additional rulemakings commonly referred to as the Registered Offering Reform Proposal and the Filer Status Proposal. These proposals would amend Securities Act and Exchange Act rules and forms to enhance companies' ability to conduct registered offerings, simplify filer-status categories and extend scaled disclosure and reporting requirements to additional issuers, with a particular focus on smaller and mid-sized public companies. In public statements, SEC leadership has framed this rulemaking package as part of a broader effort to promote capital formation and reduce unnecessary regulatory burdens in U.S. public markets.

SEC Formally Proposes Optional Semiannual Reporting — Comment Deadline July 6, 2026

On May 5, 2026, the SEC proposed amendments that would permit Exchange Act registrants to elect semiannual reporting on new Form 10-S instead of filing three quarterly reports on Form 10-Q, with comments due July 6, 2026. The election would be optional and made annually, and companies that do not elect it would continue to file quarterly reports under the current framework.

For OTC-traded SEC registrants, this may ultimately reduce reporting cadence without changing core disclosure content. OTCQB and OTCQX eligibility criteria focus on issuers being current and timely in required disclosure, and their frameworks already contemplate semiannual reporting for some issuers. Final impacts for Exchange Act registrants that elect semiannual reporting will depend on the adopted SEC rule text and how OTC Markets updates and interprets its eligibility criteria.

CLARITY Act Clears Senate Banking Committee in Historic 15-9 Vote

On May 14, 2026, the Senate Banking Committee advanced the Digital Asset Market Clarity Act in a 15-9 bipartisan vote, sending it to the full Senate floor. All 13 Republican members voted in favor, joined by Democrats Ruben Gallego of Arizona and Angela Alsobrooks of Maryland.

For OTC-traded companies with digital asset exposure or dual-asset structures, the bill is intended to provide a clearer allocation of responsibilities between the SEC and the CFTC, including the treatment of certain digital commodities. Even if the legislation is enacted in 2026, the most consequential requirements for issuers and intermediaries are unlikely to become effective before 2027, given the extensive agency rulemaking and coordination that would follow.

The CLARITY Act & Tokenization: How America Is Redrawing the Map for Digital Finance

The CLARITY Act. The Digital Asset Market Clarity Act (H.R. 3633) passed the House in July 2025 with a bipartisan 294-134 vote. On May 14, 2026, the Senate Banking Committee advanced the bill in a 15-9 vote, sending it to the full Senate floor. In the Senate, the bill will generally need 60 votes to overcome a filibuster, and its final form and timing remain uncertain. A related measure addressing the CFTC's role advanced through the Senate Agriculture Committee earlier this year, and those approaches are expected to be reconciled before any final vote. Market commentators currently view the probability of some CLARITY-style legislation passing in 2026 as elevated but by no means assured.

Tokenization is already happening. While Congress debates the framework, large financial institutions and market utilities are moving ahead with tokenized products and infrastructure. Public estimates place tokenized Treasury and money-market products on public blockchains in at least the mid-single-digit billions of dollars as of 2025, up from well under $1 billion two years earlier. J.P. Morgan has arranged notable tokenized debt transactions, including U.S. commercial paper for Galaxy Digital on the Solana public blockchain with settlement in USDC. In December 2025, SEC staff granted a No-Action Letter to The Depository Trust Company (DTC), a DTCC subsidiary, permitting it to operate a platform for tokenizing certain real-world assets held in custody, and DTCC has since outlined plans to connect this infrastructure to the Stellar public blockchain over the next several years. Senior executives at major asset managers, including BlackRock's Larry Fink, have publicly compared the long-term potential of tokenization to the early days of the internet.

What it means for capital markets. Tokenization turns illiquid assets private equity stakes, real estate, corporate bonds into programmable, tradeable instruments. For smaller issuers, this is a potential new capital formation pathway: fractional ownership, 24/7 markets, and global investor access without the friction of traditional exchange listing.

The 15c2-11 Cliff: How Companies Lose Their Public Market

For many OTC companies, maintaining an active public market is something that is simply expected. Management focuses on growing the business, raising capital, pursuing acquisitions, and building shareholder value, often assuming the public market will always be there when they need it.

Unfortunately, that is not always the case. Every year, companies find themselves approaching what many in the industry refer to as the "15c2-11 Cliff" — the point at which quotation eligibility may be lost due to missed disclosures, delinquent reporting, corporate inactivity, or other compliance issues. Without an active quotation, shareholder liquidity may be impacted, raising capital can become more difficult, acquisition opportunities may be limited, and the overall value of the public company vehicle can be affected.

Prevention is usually easier than restoration. One of the most common mistakes management teams make is assuming they can address compliance concerns later. In reality, waiting until quotation eligibility is lost can often increase both the time and cost required to regain compliance. A proactive review of a company's status can help identify potential issues before they become obstacles to future growth plans.

For many issuers, Rule 15c2-11 is more than just a regulatory requirement. It is a key component of maintaining an active public market and preserving future strategic opportunities. Understanding where your company stands today may help prevent a much larger challenge tomorrow.

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