SEC Proposes Optional Semiannual Reporting for Public Companies

On May 5, the SEC proposed rule and form amendments (File No. S7-2026-15) that would give all Exchange Act reporting companies the option of filing interim reports on a semiannual basis rather than the currently required quarterly basis. Under the proposal, companies electing semiannual reporting would file a new Form 10-S, covering a six-month period, in place of the three quarterly reports on Form 10-Q they are currently required to file each fiscal year. SEC Chairman Paul S. Atkins stated that the proposed amendments “would provide companies with increased regulatory flexibility” and enable companies and their investors to determine for themselves the interim reporting frequency that best serves their business needs.

Under the current framework, companies subject to Section 13(a) or 15(d) of the Exchange Act must file quarterly reports on Form 10-Q, with the fourth quarter subsumed within the annual report on Form 10-K. This quarterly reporting requirement has been in place in various forms since the 1970s. Over the years, the Commission has periodically reassessed the periodic reporting system and explored alternatives, including semiannual reporting. The current proposal reflects a broader Commission effort to encourage more companies to go and remain public by reducing the costs and burdens of Exchange Act reporting.

Key Provisions

Election Mechanism

Under the proposed amendments, a reporting company would elect semiannual reporting by checking a box on the cover page of its annual report on Form 10-K. The election would apply for the fiscal year in which the Form 10-K is filed. Companies that do not check the box would continue filing quarterly reports under the existing framework. Companies that have not yet filed Exchange Act reports, such as those conducting initial public offerings, would make their initial election on the cover page of their registration statement (Forms S-1, S-3, S-4, S-11, or Form 10).

The election must remain in effect for the entire fiscal year; mid-year changes in reporting frequency would not be permitted. Semiannual filers that wish to continue filing on a semiannual basis must renew their election annually on Form 10-K. The proposal also includes a mechanism to correct inadvertent errors in the election box, provided the correction is made no later than the due date for the company’s first Form 10-Q or Form 10-S, as applicable.

New Form 10-S

Proposed Form 10-S would require substantially the same disclosures as currently required by Form 10-Q, including:

• Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A).

• Financial statements for the covered six-month period, prepared in accordance with US GAAP and reviewed (but not audited) by an independent accountant.

• Legal proceedings, material changes in risk factors, and unregistered sales of equity securities.

• Disclosure controls and procedures and internal control over financial reporting certifications.

• Inline eXtensible Business Reporting Language (XBRL) data tagging.

Filing Deadlines

The filing deadline for Form 10-S would be 40 days after the end of the first semiannual period for large accelerated filers and accelerated filers, and 45 days for all other filers. These deadlines mirror the current Form 10-Q filing deadlines. The second semiannual period would be subsumed within the annual report on Form 10-K, consistent with how the fourth fiscal quarter is currently treated.

Amendments to Regulation S-X

The proposal also includes amendments to Regulation S-X that would:

• Incorporate provisions applicable to semiannual filers into the financial statement requirements for periodic reports, registration statements, and proxy statements.

• Simplify and consolidate the existing age of financial statement requirements into a single rule.

• Ensure that financial statements of semiannual filers in registration statements are not considered “stale” under existing rules built around a quarterly framework.

Affected Parties

The proposed amendments would apply to all Exchange Act reporting companies subject to Section 13(a) or 15(d) that currently file quarterly reports on Form 10-Q. The proposal would not substantively affect most registered investment companies, except for business development companies and face-amount certificate companies. Foreign private issuers, which already effectively report on a semiannual basis, and asset-backed issuers would not be affected.

Implications for Public Companies

Companies considering semiannual reporting should evaluate several factors.

• Cost Savings: Companies electing semiannual reporting would incur interim reporting compliance costs only once per fiscal year rather than three times, potentially resulting in meaningful reductions in legal, accounting, and administrative expenses.

• Business Flexibility: The SEC has noted potential benefits including less distraction from day-to-day operations, reallocation of resources to business growth, and reduced pressure associated with quarterly earnings cycles.

• Investor Expectations: Companies should consider whether their investor base expects quarterly financial data, as the election to report semiannually would reduce the frequency of mandatory interim disclosures. Companies would remain free to supplement their filings with voluntary quarterly disclosures, such as earnings releases, if they choose.

• Contractual and Regulatory Considerations: Certain loan covenants, listing standard requirements, and other regulatory frameworks reference Form 10-Q filings. Public company governance structures that align with quarterly reporting, such as insider trading windows and Rule 10b5-1 cooling-off periods, would need to be reconsidered. Companies should review their existing contractual and regulatory obligations to assess compatibility with semiannual reporting.

• Exchange Listing Standards: If the proposed amendments are adopted, changes to stock exchange listing rules may be necessary to accommodate semiannual reporting. The SEC has indicated that Commission staff would coordinate with exchanges and standard-setters on any such changes.

• Form 8-K Obligations Continue: Companies that elect semiannual reporting would still be required to file current reports on Form 8-K for material events between interim filings.

Comment Period and Next Steps

The full text of the proposing release is available on the SEC’s website and will be published in the Federal Register. The public comment period will remain open until 60 days after the date of publication in the Federal Register. Comments may be submitted electronically through the SEC’s Internet comment form or by email to rule-comments@sec.gov, referencing File Number S7-2026-15.

ArentFox Schiff attorneys are available to answer your questions and assist with evaluating whether semiannual reporting may be appropriate for your company. We will continue to monitor developments related to this proposed rulemaking, including any comments received and further Commission action. Please contact the authors of this article or your AFS attorney contact for more information.