Client Alert: SEC Proposes Rule Change to Permit Optional Semiannual Reporting by Public Companies

May 13, 2026  

On May 5, 2026, the U.S. Securities and Exchange Commission (the “SEC”) proposed a significant change to the periodic reporting framework that would permit reporting companies to elect semiannual reporting in lieu of the current quarterly reporting regime. If adopted, the proposal would represent the most substantial change to SEC periodic reporting requirements since quarterly reporting became mandatory in the early 1970s.

The proposal has generated considerable debate among issuers, investors, exchanges, analysts, and governance professionals because it implicates the longstanding tension between market transparency and concerns regarding short-term earnings pressure on public companies.

Overview of the Proposal

Under the current reporting regime, domestic reporting companies generally must file an annual report on Form 10-K and three quarterly reports on Form 10-Q. The SEC’s proposal would allow companies to instead file an annual report on Form 10-K and one semiannual report on a new proposed Form 10-S.

The proposed Form 10-S would contain substantially similar disclosure requirements to current Form 10-Q filings, except that the information would cover a six-month period rather than a single fiscal quarter. The semiannual report would be due within 40 days after the end of the applicable six-month period for large accelerated and accelerated filers, and within 45 days for non-accelerated filers, mirroring the current Form 10-Q deadlines.

Notably, the proposal would not eliminate current Form 8-K reporting obligations. Companies would still be required to promptly disclose material events under existing current reporting rules. In addition, companies could voluntarily continue to provide quarterly earnings releases, investor presentations, or conference calls even if they elect semiannual SEC reporting.

The election would generally be made annually through a checkbox on the cover page of the company’s Form 10-K. Once elected, the company would generally be required to maintain that reporting frequency for the applicable fiscal year.

The SEC’s Stated Rationale

SEC Chairman Paul Atkins stated that the proposal is intended to provide issuers with increased regulatory flexibility and reduce unnecessary burdens associated with the quarterly reporting cycle. Chairman Atkins also suggested that excessive emphasis on quarterly performance may discourage companies from accessing the public markets and may incentivize short-term decision making at the expense of long-term value creation.

Arguments in Favor of the Proposal

Proponents of the proposal argue that quarterly reporting has contributed to “short-termism” in the public markets — that management teams often focus on meeting quarterly earnings expectations rather than investing in long-term growth initiatives, research and development, workforce development, or strategic acquisitions. Supporters also argue that reducing reporting frequency could lower compliance costs, particularly for smaller reporting companies and emerging growth companies.

The proposal may be particularly attractive to smaller issuers with limited finance and legal personnel. Preparing Forms 10-Q requires significant involvement from accounting personnel, auditors, internal legal teams, outside counsel, investor relations professionals, and management. Semiannual reporting could reduce those recurring burdens and potentially make public company status more attractive to private companies considering an IPO.

The proposal would also bring U.S. periodic reporting closer to the practice of foreign private issuers and many non-U.S. jurisdictions, including the United Kingdom and the European Union, which generally require semiannual interim reporting. Foreign private issuers registered with the SEC already file annual reports on Form 20-F and report interim information through Form 6-K rather than on a quarterly Form 10-Q schedule.

Arguments Against the Proposal

The proposal has generated substantial criticism from investor advocates and market participants concerned about reduced transparency. Opponents argue that less frequent reporting could increase information asymmetry between issuers and investors and increase market volatility around the longer intervals between formal disclosures.

Critics also note that quarterly reporting is deeply embedded in U.S. market practices, including analyst coverage models, earnings guidance expectations, debt covenant compliance monitoring, and institutional investment processes. Some commentators have suggested that companies electing semiannual reporting may face reduced analyst coverage or negative market perception, on the theory that the election will be read as an attempt to reduce transparency.

Semiannual reporting could also complicate securities offerings, insider trading compliance, and share repurchase programs. Because material information may remain undisclosed for longer periods, companies may be more cautious in opening trading windows or conducting capital markets transactions absent supplemental interim disclosures. Companies relying on Form S-3 shelf registration should also consider whether the timing and content of a Form 10-S, together with any voluntary interim disclosures, will satisfy the current information requirements applicable to S-3 eligibility and prospectus updating.

The proposal also raises comparability concerns. If some companies continue quarterly reporting while others elect semiannual reporting, investors may face a fragmented disclosure environment with differing reporting calendars and varying amounts of publicly available financial information.

Summary of Potential Advantages and Disadvantages

The principal advantages and disadvantages of the proposal are summarized below.

Potential Advantages of Semiannual Reporting

• Reduced compliance and administrative costs.
• Less management distraction from short-term quarterly cycles.
• Greater focus on long-term strategic planning.
• A potentially more attractive environment for IPO candidates.
• Reduced pressure to manage earnings on a quarterly basis.
• Fewer repetitive disclosure exercises for legal and finance teams.
• Possible reduction in short-term market volatility tied to quarterly earnings expectations.
• Greater alignment with the periodic reporting practice of foreign private issuers and many non-U.S. jurisdictions.

Potential Disadvantages of Semiannual Reporting

• Reduced transparency for investors and analysts.
• Longer periods between formal financial disclosures.
• Potential increase in information asymmetry and insider trading concerns.
• Possible reduction in analyst coverage and institutional investor interest.
• Complications for capital raising and securities offerings, including potential Form S-3 shelf eligibility considerations.
• Potential narrowing of open trading windows for insiders and repurchase programs.
• Less comparability among public companies if reporting practices diverge.
• Increased reliance on selective voluntary disclosures and Form 8-Ks.

Outlook

The SEC’s proposal is subject to a 60-day public comment period following publication in the Federal Register. Although the proposal has strong support from some issuers and market participants, it is likely to face meaningful opposition from institutional investors, governance advocates, and transparency proponents. Even if adopted, many large public companies may elect to continue quarterly reporting because of investor expectations, analyst coverage, and ongoing access to the capital markets.

While we believe there is sufficient political appetite for the rule to be adopted, the practical effect on any particular company will depend on its mix of investors, analyst following, capital markets profile, and tolerance for being viewed as an early adopter. The deeply embedded market practice of quarterly reporting — and the dependence of analysts, lenders, and other market participants on the regular flow of quarterly information — means that even adopters of the new framework should expect to maintain some form of voluntary interim disclosure.

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