In New Guidance, SEC Staff Grants Transition Relief to ATM Issuers Transitioning to Baby Shelfs

On March 19, 2026, staff of the SEC Division of Corporation Finance issued new guidance (now known as Corporation Finance Interpretations (CFI)) granting transition relief to issuers of at-the-market offerings (ATMs) that will be transitioning to limited-capacity Form S-3 (shelf) registration statements under General Instruction I.B.6. of Form S-3 (commonly referred to as “baby shelfs”) due to their failure to meet General Instruction I.B.1.’s $75 million public float requirement at any time during the 60-day period prior to the next filing of their Annual Report on Form 10-K. Although the new guidance was given in the context of a Form S-3, the guidance should apply equally to issuers using Form F-3 registration statements as the same requirements apply to Form F-3s.

For primary offerings of straight common equity and common equity ATMs for cash, Form S-3 (and Form F-3) issuers may only rely on General Instruction I.B.1, which imposes a $75 million public float requirement and allows eligible issuers to offer an unlimited number of those securities, or General Instruction I.B.2, which is available to certain issuers that don’t meet the public float requirement but caps the aggregate market value of offerings sold in reliance on the instruction during a 12-month period to one-third of an issuer’s public float.  

The new CFI, which is reproduced below, will provide such ATM issuers with greater offering capacity by allowing them to continue to offer and sell the full amount of the securities covered by the ATM prospectus supplement they filed while they met the $75 million public float requirement, even if that amount of securities would exceed General Instruction I.B.6’s offering limit. Before the new CFI, the existing ATM program of an issuer that no longer met the $75 million public float requirement at the time of filing its Annual Report on Form 10-K (or Form 20-F, as applicable) would be immediately subject to the offering limit and the issuer would need to file a new ATM prospectus supplement.

In addition to this new flexibility, such ATM issuers will be able to continue to take advantage of the relief provided in Form S-3 that terminates—with respect to new sales—the applicability of the baby shelf offering limit if the issuer meets the public float requirement at any time after the filing of its Form 10-K.

Question 116.26

Question: A company entered into a sales agreement with a named selling agent for an at-the-market offering of an amount of securities that the company reasonably expected to offer and sell. The company had an effective Form S-3 registration statement, was eligible to offer and sell securities in reliance on General Instruction I.B.1, and filed a prospectus supplement for the offering. At the time of its next Section 10(a)(3) update, the company does not meet the $75 million public float requirement of Instruction I.B.1 but remains eligible to use Form S-3 in reliance on General Instruction I.B.6 (the “baby shelf”). Will the staff object if the company continues to offer and sell the full amount of securities covered by the prospectus supplement even if that amount would exceed the offering limits of General Instruction I.B.6?

Answer: Under these circumstances, the staff will not object if the company continues offering and selling the full amount of securities covered by the prospectus supplement that was filed prior to the Section 10(a)(3) update.