As Chairman Atkins noted in his statement released in connection with the proposed amendments, the proposed rule is part of a broader effort to reduce the obligations and associated costs of being a public company and is part of the SEC’s “Make IPOs Great Again agenda that is aimed at incentivizing companies to go and stay public.”
Background
Since 1970, public companies have been subject to the SEC’s quarterly reporting requirements that have required them to file three quarterly reports on Form 10-Q, in addition to the annual report on Form 10-K.
The optimal cadence of periodic reporting has been debated for years. The SEC issued a Regulation S-K Concept Release in 2016, a Request for Comment on Quarterly Earnings and Reporting in 2018, and convened a Periodic Reporting Roundtable in 2019, each generating significant public feedback and reflecting a range of views from companies, investors and market participants. More recently, the concept of semiannual reporting was discussed at the SEC’s Investor Advisory Committee, the 45th Annual Small Business Forum, and the 2025 Small Cap Policy Roundtable. The potential shift toward semiannual reporting gained renewed prominence following social media statements from President Trump encouraging changes to reporting frequency, which the SEC subsequently acknowledged as part of the broader policy dialogue leading up to the proposed amendments.
The proposal is part of a broader effort by the SEC to encourage more companies to go and remain public by reducing the regulatory costs and burdens associated with being a public company.
Summary of the proposed rule
Electing to report semiannually and the new Form 10-S
Under the proposed rule, reporting companies currently subject to the reporting requirements on Form 10-Q could instead elect to file a semiannual report on new Form 10-S—covering the first six months of the fiscal year—and one annual report on Form 10-K, replacing the currently required three Form 10-Q filings and one Form 10-K. Companies that do not make the election would continue quarterly reporting with no change. Foreign private issuers (that do not voluntarily file on domestic forms) would not be affected by the proposed rule and would continue to be required to report on an interim basis in compliance with home country and stock exchange requirements.
The election would be made annually by marking a checkbox on the cover page of Form 10-K. The election is locked for the fiscal year in which it is made—mid-year changes are not permitted—and must be affirmatively renewed each year. For first-time registrants (through IPO or otherwise), the initial election would be made on the cover page of the applicable registration statement (Forms S-1, S-3, S-4, S-11, or Form 10). The election can be revised until the registration statement becomes effective. For IPO companies that are electing semiannual reporting, the first Form 10-S would be due the later of 45 days after effectiveness of the registration statement or the date the Form 10-S would otherwise have been due.
Companies that fail to check the box on Form 10-K would automatically default to quarterly reporting. Companies may amend Form 10-K to correct an inadvertent checkbox error, but the amendment must be filed as soon as practicable after discovery and no later than the due date for the company’s first Form 10-Q for the fiscal year.
Disclosure and financial statement requirements
As proposed, the new Form 10-S would require materially the same content as current Form 10-Q, including narrative disclosures and financial information, but would cover a six-month period rather than a fiscal quarter. This would also include interim financial statements for the semiannual period prepared in accordance with U.S. GAAP and reviewed (but not audited) by an independent public accountant. CEO and CFO certifications and disclosures regarding changes in internal controls over financial reporting would continue to apply. Financial statements would be tagged in Inline XBRL. Scaled disclosure would remain available to smaller reporting companies on Form 10-S, as with Form 10-Q. Filing deadlines for Form 10-S would be the same as for Form 10-Q: 40 days (for large accelerated filers and accelerated filers) or 45 days (for all other filers) after the end of the first semiannual period.
Proposed amendments to Regulation S-X
The proposed rule also amends Regulation S-X, including to address financial statement staleness considerations for companies electing to report semiannually, such that semiannual filers would only need to include semiannual interim financial statements, rather than quarterly financial statements, in their registration statements, proxy statements and other filings. The amendments would consolidate the requirements of Rule 3-12 of Regulation S-X regarding the age of financial statements in a registration statement or proxy statement into Rule 3-01 and eliminate Rule 3-12. No substantive changes are proposed to existing requirements for annual financial statements.
Under the proposed rule, a registrant would no longer be required to count back 130 or 135 days to calculate financial statement staleness to determine if interim financial statements are required. Instead, a registrant would simply be required to include the interim financial statements as of the end of the most recently completed fiscal quarter (for quarterly filers) or semiannual period (for semiannual filers) that have been filed, or are required to be filed, on or before the filing date, in a Form 10-Q or Form 10-S. This approach is intended to align the financial statement age requirements with the applicable periodic report filing deadlines.
Key considerations and takeaways
The proposed rule is a notable step in the SEC’s agenda to provide flexibility that encourages companies to go and remain public. While the optional nature of the proposed rule avoids imposing a one-size-fits-all change, the practical utility of semiannual reporting will vary significantly across companies and industries. We expect the demands from investors for continuing the quarterly reporting cadence will not result in many companies adopting true semiannual reporting, and any companies that elect to report semiannually on Form 10-S will continue to disclose earnings information on a quarterly basis.
We anticipate that a number of practical considerations influenced by investor expectations and market practice for capital markets transactions, as well as company-specific considerations, will determine the extent to which companies elect to adopt semiannual reporting, including:
- Investor expectations and market dynamics. We anticipate that investor expectations together with reporting practices specific to a company’s peer group and industry will significantly influence the extent to which a company elects to report semiannually. The SEC’s economic analysis, citing academic literature and prior comment letters, suggest that less frequent periodic disclosures may increase information asymmetry between informed and uninformed investors, increase volatility around less-frequent reporting dates, reduce stock market liquidity, and increase the cost of capital.1 Semiannual reporting also may be associated with greater information asymmetry in the second half of each semiannual period, as some investors are better equipped than others to access or process alternative data sources.2 As such, we expect that many companies that elect to adopt semiannual reporting will continue to disclose quarterly financial information in an earnings release. The proposed rule would not impose new requirements for earnings release information that a company voluntarily chooses to release on a quarterly basis if it elects to file semiannually on Form 10-S. The SEC, however, has asked in its request for comment whether Form 8-K requirements should be amended so that Item 2.02 Form 8-Ks are “filed” rather than “furnished” for companies adopting semiannual reporting, such that earnings releases are subject to additional liability provisions given the potential for greater reliance on such releases.
- Regulation FD compliance and managing material non-public information. For a company that chooses to only report on a semiannual basis and does not maintain a quarterly earnings report cadence, the longer interval between periodic reporting increases the Regulation FD risk. Longer gaps between periodic reports will result in an accumulation of material non-public information. Companies adopting a true semiannual reporting cadence will accordingly need heightened disclosure discipline, robust internal controls over the flow of material non-public information, and a careful review of their Regulation FD policies. Companies that maintain a quarterly earnings release cycle, but opt for semiannual reporting on Form 10-S, will need to assess whether the earnings release, without the accompanying Form 10-Q, contains the material information that should be disclosed to investors. Areas where supplemental earnings release disclosure may be required include updates on litigation and regulatory matters.
- Comfort letters and capital-raising access. One of the most significant practical constraints on semiannual reporting involves the interaction with underwriter comfort letter practices. Under PCAOB Auditing Standard 6101, an auditor may only express negative assurance on financial information as of a date that is less than 135 days from the end of the most recent audited or reviewed financial statements conducted under PCAOB Auditing Standard 4105. For semiannual filers that do not continue quarterly auditor reviews, there may be extended periods during the fiscal year when underwriters cannot obtain the negative assurance they typically require to support a registered offering and establish their due diligence defense under Section 11 of the Securities Act. As a result, semiannual filers with active shelf registration statements, at-the-market programs or other ongoing capital markets access needs may continue having their independent auditors complete quarterly interim reviews despite electing semiannual reporting for SEC filing purposes—potentially limiting an anticipated benefit of the proposed rule. The SEC has acknowledged this tension and has solicited comment on whether changes to PCAOB Auditing Standards should be considered to align with semiannual reporting.
- Blackout periods and insider trading policies. A shift to semiannual reporting may have meaningful implications for company insider trading policies, which typically prohibit trading by directors, officers and other insiders in advance of the close of a fiscal quarter until after earnings for that quarter or year are released. Companies that elect to report semiannually and also choose not to continue to make quarterly earnings announcements will need to consider whether their insider trading policies require revision.
- Contractual reporting obligations. Companies considering a shift to semiannual reporting will need to review their reporting obligations under credit agreements and bond indentures to determine whether they contain covenants that explicitly require quarterly reporting or the delivery of quarterly financial statements. A reporting covenant that only requires that the company make timely SEC filings should permit a shift to semiannual reporting, while a covenant that expressly mandates quarterly financial statement delivery would likely require an amendment or waiver before the election could be made.
- Conforming regulatory changes. In addition to the PCAOB’s review of its auditing standards governing interim reviews and comfort letters, a move toward semiannual reporting would also require conforming action by a range of other regulators and standard setters whose rules are not amended by the rule proposal. NYSE and Nasdaq listing standards continue to reference quarterly reports on Form 10-Q—both for shareholder availability of interim reports and for late-filing delinquency procedures—and the stock exchanges would need to file conforming rule changes before companies switch. The Financial Accounting Standards Board would also need to revisit U.S. GAAP guidance built around a quarterly framework to ensure those standards continue to function coherently for semiannual filers.
As companies evaluate the SEC’s proposed semiannual reporting framework, many may conclude that continuing to file quarterly reports on Form 10-Q is unnecessary if they can deliver substantially the same information that investors use or demand through a quarterly earnings release that is partly filed and partly furnished on Form 8-K. Many investors already rely on the earnings release and accompanying earnings call—rather than the subsequently filed Form 10-Q—for their investment decisions, making the incremental disclosures in the Form 10-Q of more limited utility relative to the cost of preparing them. This approach would sidestep the specific line-item requirements of Form 10-Q, certain of which are viewed as unnecessary, lower a company’s liability profile by avoiding mandatory filing treatment, eliminate the need for the CEO and CFO certifications for two quarterly filings and avoid the risk of a missed filing deadline. A widespread shift away from Form 10-Q, however, would inevitably reduce the comparability of quarterly disclosures across companies, which has been a concern of investors. An alternative raised by SEC Commissioner Hester M. Peirce, and that we raised in our submission in response to SEC Chairman Atkins’s request for perspectives on how to amend Regulation S-K, would be to acknowledge that companies are, for the most part, going to continue to report on a quarterly cadence and propose a streamlining of the existing Form 10-Q disclosure requirements to eliminate unnecessary disclosure, which would then provide investors with comparable, decision-useful information.3
Global perspective
If adopted, the United States would not be the first major market to permit semiannual reporting. The proposed rule notes that several foreign jurisdictions already mandate only semiannual (not quarterly) reporting of financial information, including the United Kingdom (since 2014), certain European Union member states, Japan (since 2024) and Hong Kong.4 The United Kingdom’s 2014 elimination of mandatory quarterly reporting led to less than 10% of companies ceasing to issue quarterly earnings releases according to a 2017 CFA Research Institute study, suggesting strong market forces in favor of continued quarterly information flow. Acknowledging that the difference between the United States and other markets limits the ability to draw direct comparisons with jurisdictions that have implemented such changes in reporting frequency, the proposed rule cited to evidence suggesting that companies moving to semiannual reporting without supplementing with voluntary quarterly information experienced a reduction in analyst coverage and a weaker overall information environment.5
Next steps
The comment period for the proposed rule is 60 days, which starts following the date of publication of the proposed rule in the Federal Register. We expect the comment period will run until early July 2026. This rule appears to be a priority for Chairman Atkins, and it clearly has the support of the two other SEC Commissioners, so we expect we could see a final rule before the end of 2026. Whether semiannual reporting is available in 2027 for calendar year companies will likely depend on whether the other conforming regulatory changes are in place.
Footnotes
1. See SEC, Semiannual Reporting, Release No. 33-11414 at 72–74 (May 5, 2026), available at https://www.sec.gov/files/rules/proposed/2026/33-11414.pdf (“Proposed Rule on Semiannual Reporting”).
2. See Id.
3. See Commissioner Peirce’s statement (Quarterly Questions: Statement on the Proposed Amendments to Allow Semiannual Reporting (May 5, 2026), available at https://www.sec.gov/newsroom/speeches-statements/peirce-statement-proposing-semiannual-reporting-050526) and our submission related to the Regulation S-K reform and our specific recommendations to streamline the Form 10-Q requirements (Allen Overy Shearman Sterling US LLP, Letter Re: Statement on Reforming Regulation S-K at 12 (April 15, 2026), available at https://www.sec.gov/comments/CLL-15/cll15-755247-2324094.pdf).
4. See Proposed Rule on Semiannual Reporting at 14.
5. See Proposed Rule on Semiannual Reporting at 98–102.
