SEC Proposes Optional Semiannual Reporting

On May 5, 2026, the U.S. Securities and Exchange Commission (SEC) proposed amendments to its interim reporting framework for public companies.

BACKGROUND

Under the current regime, companies must file quarterly financial reports on Form 10-Q. The proposed rule would allow issuers to opt into semiannual reporting, replacing three quarterly filings with a single interim report (new Form 10-S) alongside the existing annual report on Form 10-K.

At the prompting of President Trump, Chairman Paul Atkins made this amendment a priority for the Commission’s fast-track rulemaking agenda. The initiative aims to encourage companies to go public and remain public by lightening their financial compliance burdens. Supporters argue reduced reporting could lead to more efficient resource allocation, cost savings and a shift from short-termism to a focus on long-term value creation. Others fear a decrease in transparency and corresponding increases in information asymmetries and investor uncertainty, resulting in higher costs of capital.

THE CASE FOR REFORM: POTENTIAL BENEFITS

Operational relief, particularly for smaller issuers

The efforts and costs of meeting compliance obligations often disincentivize firms from going public. Semiannual reporting would meaningfully reduce audit costs, internal preparation costs, legal fees and Sarbanes-Oxley disclosure burdens. Larger companies are widely expected to continue voluntary quarterly reporting given investor demand and observed international market practice, meaning the change would primarily benefit smaller and recently listed companies.

Flexible compliance path

First and foremost, the proposal gives companies a choice to elect a reporting frequency that works best for them, allowing them to base this decision on their size, development stage, industry standards and investor demand. If investor transparency is the priority, firms can voluntarily opt into publishing quarterly interim reports. Additionally, companies with semiannual filings may still voluntarily provide earnings releases and other material information on Form 8-K.

Alignment with global practice

Semiannual reporting is the dominant mandatory standard internationally. The EU moved from mandatory quarterly to semiannual reporting in 2013, explicitly to reduce the burden on SMEs, to discourage “short-term performance” and encourage long-term investments. The UK followed suit in 2014. SIX Swiss Exchange requires only a half-year financial statement alongside the annual report, with quarterly reports remaining voluntary. Japan abolished mandatory quarterly reporting in 2024.

Potential reduction in short-termism

A common view is that quarterly reporting focuses management’s attention on short-term stock performance. This can encourage companies to prioritize short-term goals in order to present favorable results to the market. By changing to semi-annual reporting, short-term strategies and resources devoted to meeting quarterly targets could instead be redirected toward meeting longer-term goals.

POINTS OF CAUTION: RISKS AND LIMITATIONS

Reduced market transparency and information asymmetries

Regular reporting decreases information asymmetries between investors and issuers, and helps prevent fraud and market manipulation. Less frequent mandatory disclosure may delay disclosure of material information, impairing cross-company comparability and hampering investors’ ability to make informed decisions, possibly reducing trading activity. Additionally, higher information asymmetries generally translate into greater risk for investors, who will, in turn, demand greater compensation for their investment, leading to higher costs of capital for issuers.

Trading windows

Without quarterly financial reports, the disclosure of some material non-public information would be structurally delayed for the first and third quarters. Firms may therefore be forced to reduce the number of trading windows for insiders under their insider trading policies. However, it is unclear how a change in the reporting regime would ultimately affect the length and frequency of blackout periods. Semiannual filers may have to adjust their insider trading policies based on their investor base, their internal information flows and any voluntary earnings releases.

Limits of voluntary disclosures as a substitute

Form 8-K may be used to disclose financial information on a voluntary basis, such as earnings releases. However, these disclosures are not subject to the rigorous disclosure standards applicable to Forms 10-Q and 10-K. This lack of standardized disclosures may lead to inconsistent and ultimately confusing and/or insufficient information being provided to the market.

The international evidence suggests large companies are indifferent to semiannual versus quarterly reporting requirements

UK firms that switched back to semiannual reporting in 2014 experienced no detectable increases in their levels of corporate investments as compared to the period during which they reported quarterly. Moreover, many large European and UK companies continue to voluntarily report financial information on a quarterly basis. Notably, Germany’s Frankfurt Stock Exchange Prime Standard, home to most major DAX companies, still mandates quarterly reporting, suggesting that sophisticated markets demand a higher level of transparency.

IMPLICATIONS FOR ISSUERS AND OUTLOOK

While optionality is the key feature of the reform, the practical implications would depend heavily on market response and the volume of issuers changing their reporting frequency. If investors price in a transparency risk premium for semiannual filers, the benefits of reduced compliance costs may be partially or fully offset. Entities with U.S. reporting obligations should assess whether opting into semiannual reporting would affect their U.S. investor base and whether those effects could be balanced against a decrease in compliance costs. It bears noting that the proposed amendments would not currently change the compliance obligations of Foreign Private Issuers (FPI).

The proposed amendments are open to public comment until July 6, 2026.

For further information please contact:

Jake Brown : jake.brown@wg-law.com; (212) 509-4741

Travis L. Gering : travis.gering@wg-law.com; (212) 509-4723

Claudio A. Guler : claudio.guler@wg-law.com; (212) 509-1416

Janet R. Murtha : janet.murtha@wg-law.com; (212) 509-6314

Marco E. Palmese: marco.palmese@wg-law.com; (212) 509-6310

Daniel A. Wuersch : daniel.wuersch@wg-law.com; (212) 509-4722

This summary has been prepared for general informational purposes only and does not constitute legal advice. This article may be construed as attorney advertising.