6/5/2026 9:32:17 AM | 3 minute read

Appendix A

Female Business Leader Utilizing CRM Software To Enhance Customer Support.

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Appendix A

Summary of Current Filer Status Categories – Principal Terms

Current Category	Requirements
Large Accelerated Filer	Public float $700 million or more (calculated as of the last business day of the second fiscal quarter) Seasoning period of at least 12 calendar months and filing of least one annual report Not an SRC under the revenue test (described below)
Accelerated Filer	Public float of at least $75 million but less than $700 million (calculated as of the last business day of the second fiscal quarter) Seasoning period of at least 12 calendar months and filing of least one annual report Not an SRC under the revenue test (described below
Non-Accelerated Filer	Companies not meeting public float or seasoning requirements
Smaller Reporting Company	(i) Public float of less than $250 million or (ii) annual revenues less than $100 million and either no public float or public float of less than $700 million (calculated as of the last business day of the second fiscal quarter, or within 30 days of the filing date of an initial registration statement)
Emerging Growth Company	Gross revenues of less than $1.235 billion during the most recently completed fiscal year Termination events: Fiscal year following fifth anniversary of IPO Exceeding revenue threshold Issuing more than $1 billion of non-convertible debt over three years Becoming a large accelerated filer

Summary of Proposed Filer Status Categories – Principal Terms

Proposed Category⁶	Requirements
Large Accelerated Filer	Public float of $2 billion or more (tested using a 10-trading day average as of the last business day of the second fiscal quarter) for two consecutive fiscal years Seasoning period of 60 consecutive calendar months
Non-Accelerated Filer	All issuers not categorized as Large Accelerated Filers
Subcategory: Small Non-Accelerated Filer	Total assets of $35 million or less for each of its two most recent second fiscal quarters

The below chart summarizes the key exceptions registrants would be entitled to under the SEC’s proposals if they are reclassified from LAFs to NAFs.

Category	Exception
Non-Financial Disclosures	Less detailed business description
	Two years of MD&A instead of three
	May omit: risk factor disclosure from periodic reports, quantitative and qualitative market risk disclosures, a stock performance graph, supplementary financial information and resource extraction payment disclosures
Financial Statements and Disclosures	Apply the more permissive Article 8 of Regulation S-X (previously reserved for SRCs), which requires fewer years of audited financial statements
	File two years of audited financial statements instead of three
	Use condensed interim financial statement formats
	Apply a 20% threshold (instead of 10%) for separate financial statements of equity investees (Reg. S-X Rule 3-09)
Executive Compensation & Governance	Exempt from: CD&A, pay versus performance disclosure, pay ratio disclosure, compensation committee reports and compensation committee interlocks disclosure
	Elect not to hold say-on-pay / say-on-pay-frequency / say-on-golden-parachute advisory votes
	Related-party transaction disclosure threshold standardized at $120,000 for all filers (replacing the more complex current SRC threshold)
ICFR Auditor Attestation	SOX 404(b) auditor attestation on internal controls eliminated for all NAFs
	Would exempt approximately 60% of companies currently subject to the requirement
Deferred Accounting Standards	NAFs could defer compliance with new or revised financial accounting standards for up to five years from initial registration (currently available only to EGCs)

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Good and poor practices

The report highlights examples of “good” and “poor” practice by firms, and highlights specific areas for improvement based on evidence of reported breaches.

Whilst the FCA identified 11 themes, the most common root causes of reported sanctions breaches were weaknesses in due diligence, alert management, transaction and name screening, management of frozen assets and compliance with specific and general licenses.

THEME	EXAMPLES OF GOOD PRACTICE	EXAMPLES OF POOR PRACTICE
Due diligence and ongoing monitoring	Regular updates to client due diligence (CDD) policies Sanctions-specific information requests, ensuring relevant questions on trade and financial sanctions are included. Consider sanctions risks in deciding the frequency of assessing specific customers.	Use of third parties to carry out aspects of CDD without adequate oversight, governance, assurance and testing arrangements in place over the third-party controls.
Alert management	Clear internal documentation and standard team practices. Periodic testing and quality assurance of alert investigations to ensure policies are effective and embedded.	Reliance on external or intermediary screening solutions without sufficient internal oversight.
Transaction and name screening	Periodic calibrations to enable obfuscated and variant names to be detected. Validation or periodic testing of screening solutions, including after material list or system changes.	A limited understanding of how vendor screening logic or configurations operate in practice – i.e. simply relying on the automated system without effective human oversight.
Management of frozen assets and license compliance	Maintaining clear, documented processes to quickly identify, implement and maintain requirements set out in sanctions licenses and comply with asset freezing.	Inadequate procedural documentation. A lack of appropriate account restrictions during investigation into potential matches. An absence of clearly defined service-level agreements for account freezing and transaction blocking.
Governance and management oversight	Keeping management policies up to date. Collecting and monitoring data on customer exposure to high-risk jurisdictions.	Reliance on group entities to provide sanctions risk compliance services, with limited oversight and insufficient management information on overseas branches and offices to check their compliance with UK sanctions.
Risk assessment	Using risk assessments that consider both financial and trade sanctions as well as proliferation financing risks.	Quantifying sanctions exposure or risk without documented and supporting rationale.
Screening infrastructure: policies and list management	Maintenance of clear and up-to-date sanctions screening policies that define screening scope, frequency, escalation thresholds and governance arrangements. In relation to list management, firms should ensure they have clear contractual and operational arrangements with vendors.	Reliance on historic vendor settings without appropriate oversight. Insufficient controls to ensure updates to screening systems lists are complete and effective.
Proactive detection and investigation	Providing staff training which clearly outlines sanctions red flags and how to spot and escalate suspicious behaviour.	Excluding key sanctions evasion typologies in the firms’ risk assessments, policies and procedures, or controls design.