From the Freshfields SEC Desk: SEC Proposes to Let Companies Report Twice a Year — What Public Companies Need to Know

On May 5, 2026, the SEC proposed a rule that would permit (but not require) public companies to report their financial results twice a year instead of on a quarterly basis. In addition to the existing requirement to file an annual report on Form 10-K, this proposed rule would allow companies to replace three Form 10-Q quarterly filings with a single new “Form 10-S” semiannual report. 

In his statement accompanying the proposing release for these new rules, SEC Chairman Paul Atkins argued that current SEC rules prevent companies and investors from determining the interim reporting frequency that best serves their needs. During a recent Berkeley M&A forum fireside chat moderated by Freshfields partner Sarah Solum, James Moloney, Director of the SEC’s Division of Corporation Finance, took a similar tone, noting that there is very little change from quarter to quarter in many companies’ Form 10-Q disclosure, suggesting that a voluntary semiannual reporting regime could make sense for some companies and that the option could make it easier for companies to go and to remain public. 

The proposal is now open for public comment until July 6, 2026. Any final rule may take at least a year to become effective, giving public companies—and companies considering an IPO—a time frame to consider whether to opt in to a potential semiannual reporting regime. As we note below, opting in to semiannual reporting may help companies save on the costs and management burden of preparing quarterly financial disclosures, but companies should also consider the expectations of their investor bases, implications for trading windows, other potential sources of reporting requirements (such as debt covenants) and other considerations.

What the Proposal Does: What Would Semiannual Reporting Look Like?

Under existing SEC rules, reporting companies file three Form 10-Qs per year, with the fourth quarter absorbed into the annual Form 10-K. The proposed rule would create an optional alternative: instead of filing three Form 10-Qs, companies would elect to file one Form 10-S—a new semiannual report covering the first six months of the fiscal year—with the second half covered by the Form 10-K.

Under the proposed rule, the election would be made annually by checking a box on the Form 10-K cover page (or on Forms S-1, S-3, S-4, S-11, or Form 10 for newly public companies). A company in registration may change its checkbox answer until the registration statement becomes effective. For companies that are already public, however, the election would be irrevocable for the fiscal year in which it is made—in other words, companies would not be allowed to switch between quarterly and semiannual reporting midway through a year, subject to a narrow error-correction window permitting the company to amend the Form 10-K checkbox as soon as practicable (but no later than the due date for its first Form 10-Q of the relevant fiscal year). Companies reporting semiannually would also be required to re-elect their reporting cadence each year, and failure to re-elect would return the company back to a default position of quarterly reporting. The semiannual reporting election would be unavailable to registered investment companies (other than business development companies and face-amount certificate companies) and asset-backed issuers. Foreign private issuers, which are not subject to quarterly reporting obligations under SEC rules but instead must furnish reports on Form 6-K as required by home country rules and listing standards, would not be affected by the proposal.

Form 10-S would carry the same core disclosure requirements as Form 10-Q, including auditor-reviewed financial statements, a full MD&A, Sarbanes-Oxley certifications, internal controls disclosures and Inline XBRL tagging, just applied over a six-month reporting period. The filing deadline for Form 10-S would be the same as for Form 10-Q—40 days after the end of the semiannual period for large accelerated filers and accelerated filers, and 45 days for all other registrants. 

The SEC’s proposing release estimates net annual direct compliance cost savings of nearly $200,000 per electing company and projects that roughly 20% of the nearly 6,000 current Form 10-Q filers will elect semiannual reporting. The SEC acknowledged, however, that these savings may be attenuated for companies that continue to prepare quarterly financial information to satisfy debt covenants, underwriting demands, or voluntary earnings release practices.

Who Should Consider Semiannual Reporting and How to Think Through the Tradeoffs

The election to report semiannually may make sense for some public companies and not others. Chairman Atkins identified relevant factors companies might weigh: compliance costs and management time, investor expectations, cost of capital effects, stage of business development, nature of the business model and the availability of other avenues for disclosure to the market, including earnings calls and current reports on Form 8-K. In his fireside chat with Sarah Solum, Director Moloney expressed a similar view and suggested that pre-revenue life sciences companies, smaller regional banks and IP royalty-based businesses might be particularly well suited for semiannual reporting (though companies subject to independent quarterly bank regulatory reporting obligations, such as call reports, may find that the practical savings are limited). In addition, smaller reporting companies might particularly benefit from compliance cost savings.

Public companies should also consider tradeoffs with switching to semiannual reporting, including the following:

• Meeting and shaping investor expectations: One thing the proposal explicitly does not seek to change is the frequency of earnings calls and earnings releases, which Chairman Atkins noted is determined solely by companies. Public companies might conclude that more frequent reporting better informs the marketplace and that a less frequent reporting cadence makes it more likely that investors and research analysts may make incorrect estimates regarding financial results. Voluntary reporting could help to address these concerns, but investors may express skepticism if voluntary reporting appears selective or insufficiently rigorous. Public companies should consider how the cadence and rigor of reporting might affect investor confidence, market perception and stock price volatility. 

• Trading windows: Switching from quarterly to semiannual reporting might have the downside of reducing the number of trading windows over a given year for public company insiders from four to two. At the Berkeley M&A Forum, Director Moloney noted that voluntary reporting—for example, via quarterly “flash numbers” reported on a voluntary basis on Form 8-K—might provide an avenue for public companies to disclose material nonpublic information and open additional trading windows. However, these voluntary reports may involve additional auditor costs, and public companies would need to take care that these or any other Form 10-Q substitutes, such as relying solely on an earnings release, adequately cleanse material nonpublic information and clear the way for insiders to trade. As companies start to calibrate the level of disclosure that makes sense for their facts and circumstances and satisfies them that material nonpublic information has been cleansed, voluntary quarterly reporting could begin to resemble the look and feel of the Form 10-Q reporting it was meant to replace. 

  Companies will also need to review their Rule 10b5-1 plan structures, equity award vesting and exercise policies and trading window communications before electing semiannual status. Extended trading blackout windows could carry a compensation cost in terms of additional illiquidity for company insiders. 

• Debt covenants: Many public companies are subject to debt covenants that require quarterly financial reporting (and in some cases submission of SEC filings to lenders), as the SEC’s own economic analysis observes. Companies considering an election to report semiannually should review their debt covenants and other material agreements in order to understand any contractual reporting obligations and whether those covenants would be implicated. Although it may be difficult or costly to renegotiate debt covenants to a semi-annual financial reporting cadence, we expect that many companies would be able to comply with their quarterly reporting covenants with a lighter-touch form of voluntary quarterly disclosure.

Considerations for Capital Markets Participants: Staleness, Registration Statements and Comfort Letters

The SEC’s proposal would restructure Regulation S-X’s financial statement “staleness” rules, which are currently built around a quarterly cycle, to accommodate semiannual filers. Key structural changes include consolidation of Rules 3-01 and 3-12 into a single unified rule governing financial statement age for registration statements and proxy statements and replacement of the existing 130/135-day staleness window with a simpler standard tying financial statement currency to the most recently completed and reportable fiscal period end. The proposal would also update Rules 10-01 and 8-03 to address interim financial statement content for semiannual filers, including an option for semiannual filers to supplement their required six-month financial statements with cumulative trailing-twelve-month income and cash flow statements and corresponding prior-period comparatives.

For companies that regularly access the equity or debt capital markets, these changes could have several practical consequences that are at least as significant as the potential cost savings from reduced reporting frequency:

• Longer periods of “current” financial statements, but with older information: Under the proposed framework, a semiannual filer’s registration statement financial statements would be considered current so long as they include the interim financial statements from the most recently filed (or required to be filed) Form 10-S. As a result, a semiannual filer with a December 31 fiscal year-end that files its Form 10-K in late February or early March and its Form 10-S in mid-August would have substantially longer stretches in the spring and early summer—from February/March through mid-August and from mid-August until the next Form 10-K due date—where no interim update to a registration statement is required. For frequent shelf issuers, this could significantly simplify offering logistics and increase their flexibility to tap the markets when conditions are attractive. But it also means investors in offerings during those windows will be relying on older financial information than they would receive from a quarterly filer conducting an offering at the same time, and the proposing release acknowledges that “an investor in a registrant that is a semiannual filer may not receive interim financial statements that are as current as would be required today.” Semiannual reporters—as well as their underwriters and counsel—would need to be comfortable that the absence of more recent financial information did not constitute a material omission from their offering disclosure.
• Complications from voluntary quarterly financial disclosures: The potential adoption of voluntary quarterly disclosure practices raises additional questions. Those disclosures may take a lighter touch than the full Regulation S-X-compliant financial statements that auditors would ordinarily review for Form 10-Q filings. Including this “flash” quarterly financial information in offering disclosures therefore raises questions about whether and to what extent a company’s auditors would be able to review and provide comfort on those figures (or whether, as is often the case when a company includes preliminary financial results in an offering document, underwriters would be willing to accept a CFO certificate or other management comfort in lieu of comfort letter coverage). Conversely, if a company that releases “flash” quarterly disclosures does not include that information in its offering documents, that omission may itself raise questions about the adequacy of the disclosure given to investors in the offering.
• Comfort letter coverage gaps: For frequent capital markets issuers, the interaction between semiannual reporting and PCAOB auditing standards presents another significant practical issue. Under PCAOB Auditing Standard 6101, an auditor can provide “negative assurance” comfort on subsequent changes only for a period less than 135 days from the end of the most recent period for which the auditor has performed an audit or an interim review. For a semiannual filer with a December 31 fiscal year-end, the most recent reviewed period following the annual audit would be December 31 itself; negative assurance comfort would therefore expire around mid-May. After that date, under current PCAOB standards, the auditor cannot provide negative assurance comfort until the semiannual financial statements are reviewed—likely not until late July or early August—unless the company voluntarily engages the auditor to perform a quarterly review. This creates potential “blackout” windows of roughly two and a half to three months (from mid-May until the Form 10-S is filed in late July or early August) and three and a half to four months (from mid-November, when negative comfort from the Form 10-S financial statements review would expire, until the Form 10-K is filed in late February or early March) during which underwriters may be unable to obtain customary negative assurance comfort in a securities offering. The SEC’s proposing release acknowledges this issue and requests comment on whether changes to PCAOB standards should be made to address it, but no such changes are proposed as part of this rulemaking. Until PCAOB AS 6101 is modified, semiannual filers that want to maintain “at-the-ready” shelf access for opportunistic offerings will likely need to retain their auditors to perform quarterly reviews of full interim financial statements and footnotes anyway.
• Registration statement financial statements for newly public companies: Companies in registration that elect semiannual reporting may benefit from reduced financial statement preparation burdens in connection with an S-1 filing. For example, the SEC notes that a non-reporting registrant with a calendar fiscal year that elects semiannual reporting and files a registration statement as late as August 13 would not be required to include any interim financial statements, whereas a quarterly filer would need to include first-quarter financials. However, underwriters and investors may demand more current financials regardless of the minimum regulatory requirement, particularly in the IPO context.

Looking Ahead

A broader market-wide shift to semiannual reporting may affect the timing of securities offerings (particularly the availability of auditor comfort) and diligence in the financing, capital markets and M&A contexts. Companies considering a semiannual reporting election should also be aware that the SEC’s economic analysis cites international evidence suggesting that reduced reporting frequency is associated with reduced analyst following, which may be a particular consideration for smaller-cap issuers already contending with limited coverage. In addition, although we expect that the New York Stock Exchange and Nasdaq would amend their listing standards if semiannual reporting rules are adopted, current exchange rules in some cases explicitly reference Form 10-Q filings. Until the exchanges amend their listing standards through SEC-approved rule filings, there may also be a practical compliance gap that companies should monitor.

The proposal to permit semiannual reporting represents an opening move in potentially the most comprehensive overhaul of public company disclosure obligations in a generation. In his statement, Chairman Atkins noted that this proposal is “just the first step of the larger, 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” and that this proposal, along with other forthcoming rulemakings, will together “redefine what it means to be a public company“ and “make being public attractive again.”

Director Moloney provided some color on some of these ambitious projects at the recent Berkeley M&A forum fireside chat, including a potential overhaul of Regulation S-K to significantly cut back companies’ annual and quarterly (or semiannual!) reporting and proxy statement executive compensation disclosure obligations, as well as possibly a totally new “company registration” framework akin to a one-time drivers’ license. A company registration framework would upend the current deal-by-deal framework for capital markets transactions and could potentially enable faster, simpler access to the equity and debt capital markets. 

Clients seeking to comment on this proposal or seeking advice on how the proposed rule may affect them should contact any of the authors or their usual Freshfields capital markets contacts.

This post was prepared with the assistance of Joshua Orange.