SEC Proposes Optional Semiannual Reporting Regime for U.S. Public Companies

On May 5, 2026, the Securities and Exchange Commission proposed one of the most consequential changes to the U.S. public company disclosure regime in decades: an optional framework that would permit Exchange Act reporting companies to file semiannual reports instead of quarterly reports.

If adopted, the proposal would fundamentally alter a reporting structure that has remained largely intact since 1970, when the SEC formally transitioned from semiannual reporting to mandatory quarterly reporting through Form 10-Q.

The proposal would permit issuers subject to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 to elect to file one semiannual report on proposed Form 10-S and one annual report on Form 10-K, rather than three quarterly reports and one annual report each fiscal year.

Although framed as a disclosure modernization initiative, the proposal implicates substantially broader questions regarding market structure, capital formation, insider trading controls, securities litigation exposure, analyst coverage, and the continuing role of periodic reporting in the modern public markets.

Background and Regulatory Context

Quarterly reporting has been a defining feature of the U.S. securities regulatory framework for more than half a century. The SEC adopted mandatory quarterly reporting in 1970 after concluding that more frequent standardized disclosure would provide investors with more timely and comparable financial information.

The SEC’s current proposal reflects a significant philosophical shift under Chairman Paul Atkins, whose broader agenda has emphasized reducing regulatory burdens associated with public company status and encouraging additional participation in the U.S. public markets.

The proposing release repeatedly links the proposal to concerns that the current reporting regime contributes to declining numbers of public companies and incentivizes excessive managerial focus on short-term performance metrics.

The proposal also follows several years of renewed debate surrounding “quarterly capitalism,” including public support for semiannual reporting from President Trump, the Long-Term Stock Exchange, and certain large-company executives and institutional participants.

At the same time, investor advocates, analysts, and market participants have raised concerns that reducing mandatory reporting frequency could impair transparency, increase information asymmetries, and weaken market discipline.

Optional Election Regime

Under the proposal, issuers would annually elect either quarterly or semiannual reporting by checking a box on the cover page of Form 10-K.

An issuer electing semiannual reporting would:

• file one Form 10-S covering the first six months of the fiscal year;

• continue filing Form 10-K annual reports; and

• cease filing Forms 10-Q for that fiscal year.

The election would generally remain fixed for the applicable fiscal year. The SEC specifically rejected midyear switching between quarterly and semiannual regimes because of concerns regarding investor confusion and inconsistent disclosure timing.

Proposed Form 10-S

Proposed Form 10-S would largely mirror existing Form 10-Q disclosure requirements, but for a six-month reporting period instead of a quarterly period.

The form would require, among other items:

• interim financial statements;

• MD&A disclosure;

• legal proceedings disclosure;

• risk factor updates;

• disclosure controls and procedures disclosure;

• internal control updates;

• officer and director trading plan disclosure under Item 408; and

• required Sarbanes-Oxley certifications.

Importantly, the SEC is not proposing to reduce the substantive content of interim reporting. Instead, the proposal primarily reduces reporting frequency.

Filing Deadlines

The filing deadlines for Form 10-S would remain aligned with current Form 10-Q timing requirements:

• 40 days after period end for large accelerated and accelerated filers; and

• 45 days after period end for other issuers.

Accordingly, the proposal does not materially extend the preparation period for interim disclosures. Rather, it eliminates two reporting cycles annually.

Reduction of Compliance Costs

The SEC states that semiannual reporting could reduce legal, accounting, audit review, and management costs associated with preparing quarterly reports.

The Commission expressly notes that issuers could redirect saved resources toward business operations, strategic initiatives, research and development, or long-term investments.

This rationale appears particularly directed toward smaller reporting companies, emerging growth companies, and issuers considering whether to remain public.

Mitigation of “Short-Termism”

The proposal repeatedly references concerns that quarterly reporting contributes to managerial overemphasis on short-term earnings performance at the expense of long-term value creation.

This theme has become increasingly prominent in policy discussions over the last decade and has frequently been cited by proponents of reduced reporting frequency in both the United States and Europe.

Encouraging Companies to Go Public

Chairman Atkins has explicitly linked the proposal to broader efforts to reverse long-term declines in U.S. public company participation.

The SEC suggests that reducing ongoing reporting burdens may make public markets more attractive to private issuers considering IPOs and may reduce incentives for already-public companies to remain private or deregister.

Whether reporting burdens meaningfully drive IPO activity remains highly contested. Critics of the proposal argue that the decline in public companies is more directly attributable to the growth of private capital markets and venture financing rather than disclosure costs alone.

Continued Reliance on Form 8-K and Regulation FD

One of the SEC’s most important analytical premises is that today’s disclosure ecosystem differs substantially from the disclosure environment that existed when quarterly reporting was adopted in 1970.

The Commission specifically points to the evolution of:

• expanded Form 8-K disclosure obligations;

• accelerated Form 8-K filing deadlines;

• Regulation FD; and

• widespread quarterly earnings releases and earnings calls.

The SEC appears to believe these mechanisms already provide investors with substantial real-time information independent of Form 10-Q filings.

This distinction is central to the proposal.

The Commission is not asserting that investors need less information. Rather, it appears to be asserting that information now reaches the market through multiple disclosure channels outside traditional periodic reporting.

The proposal therefore reflects a shift away from viewing the Form 10-Q as the market’s principal source of interim disclosure.

Significant Unresolved Issues

Although the proposal would reduce formal filing frequency, it creates substantial unresolved governance and compliance questions.

Insider Trading and Trading Window Concerns

Perhaps the most consequential issue identified in the proposing release involves insider trading controls and information asymmetry.

The SEC expressly asks whether semiannual reporting could increase insider trading risk by extending the period during which insiders possess material nonpublic information.

This issue is likely to become central during the comment process.

Most public companies structure trading windows around quarterly earnings cycles. A transition to semiannual reporting raises difficult questions regarding:

• when quarterly internal financial information becomes material;

• whether issuers will continue preparing quarterly internal financial packages;

• how broadly such information will circulate internally;

• whether blackout periods will lengthen;

• whether issuers will increasingly rely on Rule 10b5-1 plans; and

• whether voluntary quarterly earnings releases will become necessary simply to cleanse the market and reopen trading windows.

The proposing release acknowledges these concerns directly and repeatedly references the possibility that companies may need to adjust insider trading policies and controls if they elect semiannual reporting.

Continued Quarterly Earnings Releases

A critical practical question is whether companies electing semiannual reporting would nevertheless continue issuing quarterly earnings releases.

The SEC expressly recognizes this possibility.

In practice, many issuers may conclude that market expectations, analyst demands, credit arrangements, and investor relations considerations effectively require continued quarterly disclosure notwithstanding reduced SEC filing obligations.

If so, the proposal may not materially reduce disclosure cadence in practice. Instead, it may shift disclosure away from reviewed Form 10-Q filings toward less formal earnings releases and investor presentations.

That distinction could prove highly significant.

Unlike Form 10-Q financial statements:

• earnings releases are not required to be reviewed by auditors;

• they are not required to comply with Regulation S-X interim financial statement requirements;

• they are generally “furnished” rather than “filed”; and

• they are not ordinarily subject to the same Section 18 liability framework.

The SEC specifically requests comment on whether earnings releases by semiannual filers should instead be treated as “filed” disclosures.

That issue could materially affect future securities litigation exposure.

Impact on Securities Offerings and Auditor Comfort Procedures

The proposal also raises complex transactional questions.

Quarterly reviewed financial statements frequently support:

• comfort letters in registered offerings;

• negative assurance procedures;

• underwriter due diligence defenses; and

• market expectations in shelf takedowns and accelerated offerings.

The SEC specifically requests comment regarding whether issuers and underwriters would continue obtaining quarterly review procedures even if formal quarterly reporting obligations disappear.

If quarterly reviews remain necessary for capital markets transactions, the proposal’s projected cost savings may prove substantially smaller than anticipated for many seasoned issuers.

Comparability Concerns

The proposal may also reduce comparability across issuers.

Investors and analysts could face situations where:

• one issuer reports quarterly;

• another reports semiannually;

• peer companies disclose materially different levels of interim detail; and

• quarter-to-quarter performance comparisons become more difficult.

The SEC expressly requests comment regarding whether investors can effectively compare quarterly and semiannual filers within the same industry or market segment.

International Comparisons

The proposal also reflects increasing SEC focus on foreign disclosure frameworks.

The proposing release notes that several major jurisdictions, including the European Union and the United Kingdom, moved away from mandatory quarterly reporting years ago.

Proponents frequently cite these regimes as evidence that semiannual reporting can coexist with sophisticated public markets.

Critics, however, note important structural differences between U.S. and foreign markets, including differences involving:

• shareholder litigation exposure;

• analyst coverage;

• activist investor environments;

• retail investor participation; and

• market expectations surrounding earnings guidance.

Whether the U.S. market could transition smoothly toward semiannual reporting remains uncertain.

Practical Implications for Public Companies

If adopted substantially as proposed, the rule would likely force boards, audit committees, disclosure committees, investor relations teams, and outside advisers to reconsider several core governance practices.

Key considerations would likely include:

• whether to elect semiannual reporting at all;

• whether to continue quarterly earnings releases;

• whether to maintain quarterly close and review procedures internally;

• whether to revise insider trading policies and blackout periods;

• whether to modify disclosure controls and procedures;

• implications for securities offerings and shelf eligibility;

• analyst and investor expectations; and

• litigation and enforcement risk.

The proposal also may create divergent market practices across industries.

For example, biotechnology issuers, development-stage issuers, and certain growth companies may view semiannual reporting as attractive because investor focus often centers more heavily on operational milestones and regulatory developments than on quarterly revenue metrics.

By contrast, financial institutions and mature large-cap issuers may face significant market pressure to maintain quarterly disclosure practices regardless of formal SEC requirements.

Conclusion

The SEC’s proposal represents far more than a procedural change to periodic reporting forms.

It reflects a broader reconsideration of how public company disclosure should function in modern capital markets and whether the traditional quarterly reporting model continues to justify its regulatory and economic costs.

The proposal also reveals a notable shift in the SEC’s institutional posture. Rather than mandating a single disclosure cadence for all issuers, the Commission is proposing a market-driven framework that permits companies and investors to determine which reporting frequency best serves their needs.

Whether that flexibility ultimately produces greater efficiency or instead introduces new transparency, governance, and enforcement concerns will likely define the next phase of the rulemaking process.

The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register.