SEC Deregulation in 2026: What Deal Makers and Business Owners Should Know

The Securities and Exchange Commission under Chairman Paul Atkins has moved quickly to reshape the regulatory environment for corporate transactions and capital formation. For business owners, investors, and advisors involved in M&A activity, these changes carry practical implications for deal structuring, compliance costs, and reporting obligations. Here is what has changed and what it means.

Higher HSR Filing Thresholds

The Federal Trade Commission announced in January 2026 that the Hart-Scott-Rodino (HSR) Act filing thresholds would increase for the year. Under the updated thresholds, an HSR filing may be required when an acquirer will hold voting securities, noncorporate interests, or assets valued in excess of $133.9 million, up from the 2025 threshold of $126.4 million. The size-of-person test now requires one party to have at least $267.8 million in annual net sales or total assets and the other party to have at least $26.8 million, up from $252.9 million and $25.3 million respectively.

For middle-market transactions, the practical effect is that a slightly larger set of deals will fall below the mandatory filing threshold. This means faster closing timelines and lower compliance costs for transactions in the $100 million to $134 million range. Business owners and their advisors should review the updated thresholds when structuring deals to determine whether a filing is required and, if so, how the revised size-of-person test applies.

The FTC also adjusted the jurisdictional thresholds for interlocking directorates under Section 8 of the Clayton Act. The revised thresholds are $54.4 million for Section 8(a)(1) and $5.4 million for Section 8(a)(2)(A). Companies with board members who serve on multiple boards should review these thresholds to ensure compliance.

The Semiannual Reporting Proposal

Perhaps the most discussed regulatory development is Chairman Atkins's support for moving public companies from quarterly to semiannual financial reporting. The proposal, which aligns with a longstanding preference expressed by President Trump, is being "fast-tracked" for rulemaking at the SEC.

The rationale is that quarterly reporting encourages short-term thinking, creates compliance costs for public companies, and does not meaningfully improve investor decision-making compared to semiannual disclosures. Critics argue that less frequent reporting would reduce transparency, create longer information gaps for investors, and potentially increase insider trading risk.

For business owners considering an IPO or public listing as a liquidity event, a shift to semiannual reporting would reduce one of the compliance burdens associated with being a public company. For private company owners involved in take-private transactions, the reduced reporting frequency could make the public-to-private transition less attractive for PE buyers who rely on detailed quarterly data to evaluate acquisition targets.

The proposal is still in the rulemaking phase and may face legal challenges, but the direction of travel is clear. Business owners and investors should factor the possibility of reduced public company reporting requirements into their long-term planning.

Lighter ESG and Climate Disclosure Requirements

The SEC has also signaled a retreat from the expanded environmental, social, and governance disclosure requirements that were proposed under the prior administration. The climate disclosure rule, which would have required public companies to report greenhouse gas emissions and climate-related financial risks, has been effectively shelved. The broader ESG disclosure framework is being reconsidered with an emphasis on materiality rather than comprehensive reporting.

For business owners preparing for a sale to a public company or a PE-backed acquirer, this shift means that the ESG compliance burden associated with integration into a public company framework is likely to be lighter than previously anticipated. However, it is worth noting that many institutional investors and large PE firms have adopted their own ESG assessment frameworks independent of SEC requirements. The regulatory retreat does not eliminate ESG as a factor in deal evaluation; it simply reduces the mandatory reporting component.

Capital Formation as the New Priority

The overarching theme of the SEC's 2026 agenda is a shift from enforcement-heavy regulation to facilitative capital formation. This includes streamlining the registration process for securities offerings, reducing compliance costs for smaller public companies, and creating more flexible frameworks for private placements and exempt offerings.

For privately held businesses, the capital formation agenda could expand the range of financing options available for growth, recapitalization, or pre-sale preparation. Easier access to exempt offerings and simplified registration could make it more practical for mid-sized companies to raise capital from institutional investors without the full burden of public company compliance.

For deal advisors and investment bankers, the lighter regulatory environment reduces friction in the transaction process. Faster regulatory reviews, lower filing costs, and reduced compliance complexity all contribute to shorter deal timelines and lower transaction expenses.