Key Takeaways:

• On May 5, 2026, the SEC proposed amendments that would allow all public companies—regardless of filer status, revenues, or market capitalization—to voluntarily elect semiannual reporting on a new Form 10-S in lieu of filing quarterly reports on Form 10-Q, via a check-the-box election on Form 10-K.
• Companies electing semiannual reporting may benefit from reduced compliance costs and less management distraction but should carefully evaluate the impact on insider trading policies, securities analyst coverage, contractual obligations, and capital raising activities before making an election.
• The public comment period closes on July 6, 2026, the rule could be adopted as early as the first half of 2027, and calendar-year companies could begin to elect to report on a semiannual basis as early as 2028.

The Securities and Exchange Commission (SEC) proposed rule and form amendments under the Securities Exchange Act of 1934, as amended (Exchange Act), that would allow public companies to elect to file semiannual reports on a new Form 10-S in lieu of filing interim quarterly reports on Form 10-Q. In a statement accompanying the proposal, SEC Chairman Paul Atkins noted that “the rigidity of the SEC’s rules has prevented companies and their investors from determining for themselves the interim reporting frequency that best serves their business needs and investors.” According to Chairman Atkins, the proposal represents the first step of a “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.”

What Is the SEC’s Proposed Semiannual Reporting Rule?

The SEC’s proposal would amend Exchange Act Rules 13a-13 and 15d-13 to allow all public companies to elect to file one semiannual report and one annual report for each fiscal year, rather than filing three quarterly reports and one annual report for each fiscal year. Companies electing to file semiannually would file one interim report on a new Form 10-S, which would require the same narrative disclosures and financial information currently required by Form 10-Q but would cover a fiscal six-month period rather than a fiscal three-month period. Consistent with the current requirements for Form 10-Q filings, financial statements included in Form 10-S would be required to be: (1) prepared in accordance with U.S. GAAP; and (2) reviewed, not audited, by an independent auditor. Additionally, semiannual filers could still voluntarily include quarterly financial information within Form 10-S, and if they do so within the financial statements, that quarterly information would be subject to auditor review as well.

Notably, the SEC’s proposal would permit all Exchange Act reporting companies to elect to file semiannual reports on Form 10-S, regardless of filer status, revenues, market capitalization, or any other criteria. Depending on each company’s filer status, the Form 10-S would be due 40 days (for large accelerated filers and accelerated filers) or 45 days (for all other filers) after the end of the first semiannual period of the fiscal year (i.e., the same reporting deadlines currently applicable to quarterly reports on Form 10-Q). Companies that do not select semiannual reporting (quarterly filers) would continue to file quarterly reports on Form 10-Q under existing requirements.

What Are the Benefits and Risks of Semiannual Reporting for Public Companies?

The SEC noted in the proposing release that companies electing to report on a semiannual basis may expect to benefit in several ways. One potential benefit highlighted by the SEC is that companies may have a reduction in compliance costs, as they would incur interim reporting costs only once per fiscal year instead of three times per fiscal year. The proposing release also noted that companies choosing the semiannual reporting option may experience reduced distraction from running day-to-day business operations and may have the ability to engage in opportunities that might not be possible when management is focused on preparing interim reports. The SEC also expects that the potential reduction in compliance costs may contribute to more companies deciding to become and remain public companies.

In terms of the profile of public companies that may consider adopting the semiannual reporting disclosure approach, emerging growth companies and smaller reporting companies may value having the flexibility to select the most appropriate interim reporting requirement under the circumstances. Additionally, the anticipated flexibility from the semiannual reporting approach may appeal to companies in certain industries where investors may focus more on certain business, product, or regulatory developments than on interim financial results. For example, a pre-revenue biotechnology company may find that a semiannual reporting cadence better serves the company and its investors’ focus on progress in product development and applicable regulatory approvals.

Conversely, public companies may elect to continue to file periodic reports on a quarterly basis for several reasons. Certain companies may determine that a quarterly reporting frequency better aligns with expectations of investors and securities analysts, disclosure practices in a particular industry, contractual obligations (such as the requirement to file periodic reports on a quarterly basis included in credit agreements and/or indentures of many public companies), or other regulatory requirements. Additionally, companies that are engaged in regular capital markets activities may determine that it is advisable to continue to provide periodic reports on a quarterly basis to ensure that the market has access to material information about the company on a more frequent basis than would be the case if they only filed periodic reports on a semiannual basis.

For similar reasons, some companies may view semiannual reporting as increasing the length of time that the company’s directors or employees possess material nonpublic information that may be subject to the company’s closed trading windows. Under many insider trading policies, fixed blackout periods prohibit trading around the close of a fiscal quarter until after earnings are released. If the interim reporting period is extended from a quarterly to a semiannual cycle, these blackout periods may lengthen significantly, potentially resulting in fewer open trading windows. Companies may also be concerned about the potential for reduced frequency of reporting to result in lower securities analyst coverage, greater divergences between analyst consensus and ongoing performance, and a negative impact on investors’ ability to compare peer company financial performance during the longer periods between semiannual reporting cycles.

How Does the SEC’s Semiannual Reporting Proposal Affect Earnings Releases and Guidance?

The proposal does not contemplate any general changes to the current regulatory requirements governing earnings releases or earnings guidance practices. In the proposing release, the SEC noted that “federal securities laws do not impose general duties upon Exchange Act reporting companies to announce or publish earnings, conduct earnings calls, or issue earnings guidance.” A company that elects semiannual reporting will need to determine, based on its circumstances, whether to continue issuing quarterly earnings releases or announcements, or whether to switch to semiannual earnings releases consistent with a semiannual periodic reporting approach. Even among companies that elect to implement semiannual periodic reporting, there may be some that opt to maintain their quarterly earnings release cadence due to investor expectations, market perception, capital raising considerations, and insider open trading window considerations.

How Do Public Companies Elect Semiannual Reporting Under the SEC Proposal?

If adopted as proposed, a reporting company may opt into semiannual filing for the following fiscal year by marking a check box on the cover page of its annual report on Form 10-K for the prior fiscal year. The corresponding check box would also be added to registration statements on Forms S-1, S-3, S-4, and S-11, and Exchange Act registration statements on Form 10. Under the proposing release, private companies seeking to conduct initial public offerings would make an initial election by checking the box on the cover page of the relevant registration statement. Under the proposing release, the determination to report semiannually or quarterly would be made on an annual basis and may not be changed until the next annual report on Form 10-K is filed. Once a company elects an interim reporting frequency for the fiscal year, it would be committed to the elected frequency for the remainder of the fiscal year.

What Changes to Regulation S-X Are Proposed for Semiannual Reporting?

The SEC is also proposing amendments to various rules in Regulation S-X that would incorporate the option of semiannual reporting and simplify the rules with respect to the age of financial statements. Specifically, the proposed amendments would simplify and reorganize Rules 3-01 and 8-08 of Regulation S-X by consolidating the requirements of Rule 3-12 of Regulation S-X regarding the age of financial statements in a registration or proxy statement into the balance sheet requirements of Rule 3-01 of Regulation S-X. The amendments would also revise the age of financial statements requirements to incorporate semiannual reporting through a revised model for determining the age of interim financial statements, ensuring that financial statements included in registration statements filed by semiannual filers would not be considered “stale” under existing rules that were originally designed for a quarterly reporting framework.

What Should Public Companies Consider Before Electing Semiannual Reporting?

While foreign private issuers are currently subject to a semiannual reporting regime, the SEC’s optional semiannual reporting proposal represents a significant potential shift in the periodic reporting landscape for U.S. reporting companies. If adopted, the proposal would provide meaningful flexibility for companies to choose the most appropriate interim reporting frequency under the circumstances. However, companies considering the election will need to carefully weigh potential benefits such as reduced compliance costs and less management distraction against other considerations, including investor expectations, effects on the cost of capital, securities analyst coverage, insider trading policy implications, and the ability to engage in capital raising activities. It is also possible that U.S. reporting companies will follow a pattern similar to that in the United Kingdom when quarterly reporting was dropped in 2014 for a semiannual reporting requirement. In the year following the change, approximately 90% of companies chose to continue with quarterly updates. Now, over a decade later, most UK reporting companies operate on a semiannual reporting regime.

When Will the SEC’s Semiannual Reporting Rule Take Effect?

While it is difficult to predict the timeline of the rulemaking process, it is reasonable to expect that the proposal will be adopted in the first half of 2027. If the proposal is adopted within this timeframe, it is also reasonable to expect that the final rules would become effective for calendar-year public companies in 2028. On this timeline, calendar-year companies may have an initial opportunity to elect whether to implement semiannual reporting in 2028 by making a check-the-box election on the Form 10-K for the fiscal year ended December 31, 2027.

The current SEC commissioners appear to be broadly supportive of the proposal’s objectives, including Chairman Atkins’ stated goal of reducing barriers for companies seeking to go and stay public. However, the proposal may face scrutiny during the public comment period from investor advocacy groups, institutional investors, and others who may support maintaining quarterly reporting requirements. The ultimate form of any final rule will likely be shaped by the feedback received during the comment period.

The proposing release includes numerous specific questions requesting public comment on the range of issues raised by the proposal. Comments on the proposal are due by July 6, 2026.

This is the first in a series of posts covering the SEC’s expected proposals to reform the public company reporting framework, consistent with its broader focus on reducing regulatory burdens for public companies. We will publish subsequent posts with details as additional proposals are announced by the SEC.

If you have any questions about the proposed rule or need assistance submitting comments, please contact the authors or your relationship partner at Bass, Berry & Sims.