Authored by CM Law Partner Mike Piazza, this client alert examines the sweeping disclosure reforms outlined by Paul Atkins and supported by Commissioner Mark Uyeda, highlighting how the SEC’s renewed focus on materiality, simplification, and capital formation could reshape regulatory obligations and reinvigorate the U.S. IPO market in 2026.
On February 17, 2026, SEC Chairman Paul Atkins delivered remarks at the Texas A&M School of Law Corporate Law Symposium outlining specific disclosure reforms the Commission intends to pursue. These remarks build on Chairman Atkins’s December 2025 strategy to revitalize capital markets to “make IPOs great again,” and Commissioner Mark Uyeda’s January 2026 comments on rebalancing regulatory burdens. This alert summarizes the key initiatives and their potential implications for public companies.
Historical Context and Legislative Mandate
In December 2025, Chairman Atkins noted that accumulated regulations have made going public costlier and more burdensome, contributing to a roughly 40 percent decline in listed firms since the mid-1990s. The current Commission aims to ensure that access to equity markets is not limited to mega-cap “unicorns.” Commissioner Uyeda has reinforced this theme, emphasizing that the National Securities Markets Improvement Act of 1996 (NSMIA) requires the SEC to weigh regulatory burdens against benefits-a balance the Commission believes recent aggressive rulemaking on non-financial disclosures has disrupted. Current SEC leadership intends to refocus disclosure requirements on material financial fundamentals.
Chairman Atkins’s February 17 Remarks: Specific Disclosure Reforms
Three Guiding Principles: Rationalizing, Simplifying, and Modernizing
Chairman Atkins framed the Commission’s disclosure reform agenda around three core principles: rationalizing, simplifying, and modernizing.
Rationalizing Disclosure Requirements
Chairman Atkins emphasized that materiality should be the “north star” for SEC rules. He noted that current rules require detailed compensation disclosure for up to seven executives annually-a scope many commenters have questioned. One commenter observed that “with the exception of the CEO, the volume of detailed information about the remaining executives is often immaterial to investors and, if anything, tends to obscure the information that they genuinely seek.” The Chairman agreed the SEC should reconsider the number of executives covered to better calibrate disclosure costs with investor benefit.
Simplifying Complex Requirements
Chairman Atkins highlighted the pay-versus-performance (PvP) rule as an example of excessive complexity. One panelist described it as “a very complex calculation” that is difficult to produce and interpret-“sort of disclosure written by economists for economists.” Another noted the rule has “necessitated further explanatory disclosure to address any confusion created for investors.” The Chairman agreed the SEC should simplify PvP disclosure to make it easier for companies to prepare and more useful for investors.
Modernizing Outdated Rules
Chairman Atkins cited executive security as an area needing modernization. Under 2006 guidance, security provided at an executive’s residence or during personal travel is treated as a perk, while security at the office or during business travel is not. The Commission reasoned at the time that personal security was not “integrally and directly related” to job performance. Commenters have argued this distinction is outdated, noting that “comprehensive 24/7 protection is increasingly a necessity, not a luxury” and that “executive security is critical to the ability of many executives to perform their duties.” The Chairman agreed the Commission should update perks disclosure to reflect current security realities.
Ending “Regulation by Shaming”
Chairman Atkins criticized “comply or explain” disclosure requirements that function as indirect governance mandates. Examples include requirements that companies without nominating or compensation committees, shareholder-recommended director candidate policies, or formal shareholder communication processes must explain their reasons. The Chairman observed that companies may adopt these structures simply to avoid appearing deficient, regardless of whether they suit their circumstances. He stated that absent congressional directive, “it is not the SEC’s role to enforce evolving notions of ‘best practice’ governance standards” through what he called “regulation by shaming.”
Addressing Impractical Requirements
Chairman Atkins highlighted impractical disclosure requirements. For example, if a CEO departed in 2025, the company must still report his or her stock ownership in a 2026 proxy statement, potentially requiring the company to track down a former executive who left more than a year earlier. Similarly, related-party transaction disclosure extends to all “immediate family members,” including all in-laws, without regard to the closeness of the relationship. The Chairman suggested a more workable standard might be whether the executive has “shared a Thanksgiving meal” with the family member in the past year.
Reforming Risk Factors Disclosure
Chairman Atkins devoted significant attention to risk factors disclosure. When Item 1A was adopted in 2005, he anticipated companies would provide a concise two-to-three-page discussion of “what keeps management up at night.” Today, risk factors are often among the longest sections of Form 10-K filings-“disclosure written by lawyers for lawyers.” Despite Item 105’s requirement to disclose only material risks and a 2020 amendment requiring summaries for sections exceeding fifteen pages, many companies’ risk factor disclosures have continued to grow.
The Chairman posed a fundamental question: should risk factors be disclosed “written by management for investors” conveying material concerns, or are they primarily a litigation defense tool for the “bespeaks caution” doctrine and the statutory safe harbor for forward-looking statements?
Chairman Atkins proposed tailored solutions depending on the answer: if risk factors primarily serve investor communication, companies could incorporate standardized generic risks by reference; if they primarily serve as litigation defense, a safe harbor for undisclosed generic risks could eliminate the need to catalogue every conceivable contingency.
State Law Developments: Texas as a Delaware Alternative
Chairman Atkins addressed Texas’s efforts to compete with Delaware as a destination for corporate domiciles. He emphasized the important role states play in reforms, particularly regarding litigation and shareholder proposals. The Chairman noted that Texas is building a framework designed to attract companies “with shareholders who are eager to get back to basics, with less politicization, abusive litigation, and overall drama,” stating: “if Texas builds it, the companies will come.”
During its 2025 legislative session, Texas enacted Senate Bill 29 (SB 29), which includes several provisions designed to protect Texas companies from abusive litigation. Notably, litigants can no longer recover fees from a company in actions that result solely in “additional or amended disclosures, regardless of materiality.” This amendment aims to deter disclosure-only lawsuits frequently filed after proxy materials are released for mergers or equity compensation plans-suits that may be motivated more by quick settlements than genuine disclosure concerns.
SB 29 also gave Texas companies more control over the venue and method of adjudicating lawsuits. For actions involving internal affairs claims, companies can now designate Texas courts as the exclusive forum for hearing those claims. They may also waive jury trials for these actions.
Chairman Atkins also highlighted the SEC’s recent policy change regarding mandatory arbitration provisions. The situation changed last September when the Commission reviewed the law as enunciated by the courts, and concluded that, based on the Supreme Court’s decisions, mandatory arbitration provisions are not inconsistent with the federal securities laws. The Commission voted three-to-one to direct its staff and clarify to the public that the prior unwritten, ad hoc practice would no longer govern SEC policy. The SEC has now done its part by making clear that it will not stand in the way of such provisions.
The Path Forward
Chairman Atkins emphasized that he is eager to hear ideas from the legal and business communities and encouraged stakeholders to be bold and creative. The SEC is currently accepting written comments on these topics, and he encouraged stakeholders to submit comments as soon as possible.
Outlook for 2026 IPOs
The current consensus among investment banks, private equity firms, accounting firms, and numerous market analysts is that 2026 should be a breakout year for U.S. IPOs. While massive offerings from market unicorns like SpaceX appear likely to move forward this year, there is also a strong pipeline of small to midrange companies preparing to go public, indicating a distinct change and improvement from recent years.
Conclusion
The new Commission is focused on lowering barriers to capital formation, and the regulatory reforms announced by Chairman Atkins and Commissioner Uyeda will further energize the return of a vibrant public offering market in the U.S. One of the three cornerstones of the SEC’s mission since its inception in 1934 is to facilitate capital formation. This Commission is focused on achieving this result using new, bold, and creative approaches to rule-making and regulation.
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The foregoing content is for informational purposes only and should not be relied upon as legal advice. Federal, state, and local laws can change rapidly and, therefore, this content may become obsolete or outdated. Please consult with an attorney of your choice to ensure you obtain the most current and accurate counsel about your particular situation.
