Key Takeaways
- On May 5, 2026, the Securities and Exchange Commission (SEC or the Commission) announced a proposed rule that would give public companies the option of filing semiannual reports rather than traditional quarterly reports.
- If adopted, the proposed rule and form amendments would mark a notable change to interim reporting obligations under the federal securities laws, as the Commission has mandated quarterly reports (10-Qs) for more than 50 years.
- The proposed change would allow firms to choose whether to continue issuing earnings releases and performance outlooks every three months or adopt a semiannual reporting cadence consistent with their SEC filings.
- If the rule is ultimately adopted, public companies will have to weigh efficiency factors against the ongoing need for transparency in determining their reporting frequency.
- Public comments to the proposed rule are due by July 6, 2026.
Proposed Rule
Public companies are currently required to file quarterly reports on Form 10-Q. The Commission’s proposed amendments, if adopted, would allow public companies to elect to file semiannual reports on a new Form 10-S. If a company elects to file semiannual reports, it would file one semiannual report and one annual report for each fiscal year rather than three quarterly reports and one annual report.[1] The goal is to reduce the regulatory burden and allow public issuers to determine the frequency of reporting that makes sense for their business.
SEC Chair Paul Atkins stated that the proposed rule is intended to inject flexibility into a rigid system that “has prevented companies and their investors from determining for themselves the interim reporting frequency that best serves their business needs and investors. Today’s proposed amendments, if ultimately adopted, would provide companies with increased regulatory flexibility in this regard.”[2]
Touting the flexibility of the proposed amendments, Chair Atkins identified several factors a company may consider when evaluating reporting cadence: costs and management time of preparing quarterly reports versus semiannual reports, potential effects on its cost of capital, stage of its business development, the nature of the business model, other avenues of disclosure including earnings calls and current reports on Form 8-K, and prospects of increased research.[3]
There are likely more rule amendments on the horizon, as Atkins described this proposal as an initial step in effectuating a more “comprehensive effort to review and reshape the current SEC rules governing public companies with respect to their ongoing reporting obligations and their ability to raise capital in the public markets.”[4]
Key Features of the Proposal
While the proposed shift in reporting cadence is significant, the Commission has emphasized that the proposal is intended to preserve core investor protections. To that end, Form 10‑S would generally require substantially the same categories of disclosure currently included in Form 10‑Q, but on a six‑month basis rather than a quarterly basis.
As proposed, companies electing semiannual reporting would be required to include interim financial statements prepared in accordance with U.S. GAAP. These financial statements would continue to be subject to auditor review, although not a full audit. Narrative disclosures – most notably Management’s Discussion and Analysis – would also remain required but would address performance and trends over a semiannual period. If the rule were adopted, semiannual reports on Form 10-S would be due within 40 or 45 days after the end of the first semiannual period of the fiscal year, depending on the company’s filer status.
The proposal would also amend Regulation S-X, which governs the financial statement requirements for periodic reports, registration statements, and proxy statements, to reflect the new semiannual reporting option and simplify the existing financial statements.[5]
Continued Real-Time Disclosure Obligations
Although the proposal would reduce the number of required periodic reports, it would not diminish companies’ obligations to disclose material information on a timely basis. Companies would remain subject to Form 8‑K reporting requirements and Regulation FD, which require prompt disclosure of specified material events and prohibit selective disclosure. Annual reporting on Form 10‑K would also remain unchanged, preserving the comprehensive annual disclosure framework. As a practical matter, this means that the reduction in periodic reporting frequency would coexist with an ongoing obligation to provide event-driven disclosures.
Considerations for Public Companies
If adopted, the amendments could reduce the time and money publicly traded companies spend on filing their quarterly reports, allowing companies to focus on long-term, strategic goals. On the other hand, companies may determine that keeping a quarterly reporting cadence remains beneficial for meeting investor expectations, supporting market transparency, and facilitating regular engagement with analysts and shareholders.
From a regulatory perspective, the proposal raises several considerations relating to disclosure timing, completeness, and potential risk exposure. With fewer mandated periodic filings, regulators and plaintiffs may increasingly focus on whether companies have met their obligations to disclose material developments in real time, particularly through Form 8‑K filings and other communications.
The shift in cadence may also have implications for insider trading controls, as longer gaps between formal disclosures could affect the timing of trading windows and blackout periods. Accordingly, while the proposal may reduce the administrative burden associated with quarterly filings, it does not necessarily reduce enforcement risk and may, in some respects, reallocate that risk to interim disclosures and disclosure controls.
In addition, debt instruments and loan agreements often contain contractual covenants that require borrowers to provide quarterly financial statements to lenders. Companies that elect semiannual reporting would need to seek consents from lenders for amendments to these instruments or continue providing quarterly financial statements.
Conclusion
The SEC’s proposal would represent a significant shift in the interim reporting framework that has governed public companies for decades. Although optional semiannual reporting could reduce quarterly compliance burdens for some issuers, companies would still need to maintain robust disclosure controls to ensure timely, accurate event-driven reporting and continued compliance with Regulation FD and Form 8‑K obligations. Public companies should begin evaluating how a change in cadence could affect investor relations practices, financial reporting processes, and insider trading compliance. Given the legal, operational, and investor-relations considerations involved, companies should also consider consulting experienced outside counsel when evaluating these options and determining an appropriate path forward.
Please feel free to contact any of our experienced professionals if you have questions about this alert or would like to discuss the proposed rule and its possible impact.
BakerHostetler’s Capital Markets and Securities team is composed of attorneys with extensive experience in SEC rules and regulations, public disclosure requirements, and a wide range of capital markets transactions. The team advises public and private companies on financing growth and acquisitions and managing balance sheets through tailored equity and debt offerings aligned with their business needs.
BakerHostetler’s White Collar, Investigations and Securities Enforcement and Litigation team is composed of dozens of experienced individuals, including attorneys who have served in the U.S. Department of Justice and at the SEC. Our attorneys include four former U.S. Attorneys, former Assistant U.S. Attorneys and unit chiefs, and partners who have served in the SEC’s Division of Enforcement. Our team has extensive experience in defending regulatory investigations and litigation and in providing compliance counseling.
[1] Press Release 2026-42, SEC Proposes Amendments to Permit Optional Semiannual Reporting by Public Companies (May 5, 2026), https://www.sec.gov/newsroom/press-releases/2026-42-sec-proposes-amendments-permit-optional-semiannual-reporting-public-companies; Semiannual Reporting, Securities Act Release No. 33‑11414, Exchange Act Release No. 34‑105368, Investment Company Act Release No. IC‑36140, File No. S7‑2026‑15, 88 Fed. Reg. ___ (proposed May 5, 2026); U.S. Sec. & Exch. Comm’n, Fact Sheet: Proposal to Allow Optional Semiannual Reporting (May 5, 2026), https://www.sec.gov/files/33-11414-fact-sheet.pdf.
[2] Paul S. Atkins, Statement on Proposing Release for Semiannual Reporting (May 5, 2026), https://www.sec.gov/newsroom/speeches-statements/atkins-statement-proposing-release-semiannual-reporting-050526.
[3] Id.
[4] Id.
[5] Press Release 2026-42, SEC Proposes Amendments to Permit Optional Semiannual Reporting by Public Companies (May 5, 2026).
