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On May 5, 2026, the Securities and Exchange Commission (SEC) proposed amendments that would permit public companies to elect to file semiannual interim reports on a new Form 10-S instead of quarterly reports on Form 10-Q. The proposal is optional: companies that do not elect semiannual reporting would continue filing quarterly reports under the existing framework. The comment period will remain open for 60 days following publication of the proposing release in the Federal Register.
Summary of the Proposed Rules
Eligibility. The proposal would be available to Exchange Act reporting companies currently required to file three quarterly reports on Form 10-Q each fiscal year, regardless of size or filer status.
How to Make the Election. Companies would elect semiannual reporting by checking a box on the cover page of their annual report on Form 10-K, or on Securities Act registration statements (Forms S-1, S-3, S-4, S-11) or Exchange Act registration statements on Form 10, as applicable. The election on Form 10-K would be made on an annual basis and would commit the company to that reporting frequency for the remainder of the fiscal year. A company that elects semiannual reporting one year may revert to quarterly reporting the following year simply by leaving the box unchecked on its next Form 10-K. A company that inadvertently checks or fails to check the box may file a corrective amendment, provided it does so no later than the due date for the first Form 10-Q of the relevant fiscal year. Companies that have yet to file Exchange Act reports could elect semiannual reporting at the registration statement stage by checking a box on the cover page of their Securities Act or Exchange Act registration statements—which would determine what financial statements are required in the registration statement and is a consideration relevant to initial public offering (IPO) planning.
New Form 10-S. Semiannual filers would file their interim reports on the new Form 10-S. This form would require the same narrative disclosures and financial information as the current Form 10-Q but would cover a fiscal six-month period rather than a fiscal quarter. Form 10-S would be due 40 or 45 days (depending on filer status) after the end of the first semiannual period of the fiscal year—the same deadline that currently applies to Form 10-Q for the corresponding fiscal quarter. The second semiannual period would be subsumed within the annual report on Form 10-K, the filing deadline for which would not change.
Regulation S-X Amendments. The proposal would amend the financial statement “staleness” rules to ensure that semiannual filers’ financial statements in registration statements and proxy statements are not considered stale under existing rules designed for a quarterly reporting framework. The SEC is also proposing to simplify and consolidate the age-of-financial-statements requirements into a single rule.
Practical Considerations
While the SEC’s proposal provides flexibility, several market and regulatory realities may limit early adoption and complicate implementation.
Negative Signaling Risk. Companies considering a switch should be aware of the potential for adverse market reaction. The SEC acknowledges that if investors demand more frequent interim reporting and issuers fail to meet that demand, those issuers “could experience negative market effects such as higher cost of capital or lower liquidity.” Conversely, companies that continue quarterly reporting may benefit by signaling a commitment to transparency, “which could be valued by investors.” This creates a potential first-mover disadvantage for early adopters before market norms adjust. There is also a selection bias risk: adoption is likely to skew toward cash-rich, low-leverage companies that face fewer contractual constraints, effectively making the semiannual election a signal of balance sheet strength. Meanwhile, leveraged or sponsor-backed companies will remain locked into quarterly reporting by their debt documents—creating a bifurcation in the market that reinforces rather than alleviates the signaling problem.
Stock Exchange Listing Standards. Current Nasdaq and NYSE listing standards explicitly reference quarterly financial reporting—for example, NYSE listing rules subject companies to delinquency procedures for late filing of Form 10-Q, and Nasdaq rules require companies to make quarterly reports available to shareholders. The SEC estimates that more than 1,750 (29%) of calendar year 2024 Exchange Act reporting companies had securities listed on the NYSE, and states that some of these companies may decide not to switch to semiannual reporting until the NYSE makes conforming changes to its listing standards. Notably, the NYSE has previously indicated that if the SEC adopted less frequent reporting requirements, the NYSE believes it “could comply with our regulatory duties by adapting our rules and practices accordingly”—suggesting that exchange-level impediments may be resolved relatively quickly if the final rule is adopted.
Debt Covenants and Loan Agreements. Companies issuing notes, bonds or other debt frequently face contractual requirements for quarterly financial information during the life of the instrument. The SEC notes that syndicated loans almost invariably include covenants based on financial information and may require firms to submit SEC filings to their lenders, potentially creating a contractual demand for quarterly reporting. Many indentures require quarterly financial reporting as a contractual matter, even for issuers not subject to SEC periodic reporting. Companies subject to quarterly reporting requirements that elect semiannual reporting would need to seek consents from lenders or bondholders for amendments or continue providing quarterly financial statements.
Capital Markets Access and Comfort Letters. Under current Public Company Accounting Oversight Board (PCAOB) standards, independent public accountants can only provide negative assurance in comfort letters on interim financial information that is within 135 days of the most recent period audited or reviewed. Companies that access the capital markets frequently may therefore need to continue obtaining voluntary quarterly auditor reviews to meet underwriting process demands, even if they elect semiannual reporting with the SEC.
Insider Trading and Blackout Period Implications. The SEC discusses how semiannual reporting would affect insider trading policies and trading windows. Information asymmetry between insiders and outside investors would persist for longer periods between mandatory disclosures, and companies may need to extend or adjust blackout periods accordingly. The SEC also notes that some companies may actually prefer to retain quarterly reporting because it provides more frequent open trading windows for directors and employees.
The Information Vacuum and Social Media Risk. With less frequent formal reporting, informal channels such as social media platforms may fill the information vacuum. When companies report less frequently, market participants seek alternative signals about performance. This dynamic increases the risk of Regulation FD violations (whether through selective disclosure to fill the gap or through inadvertent leaks that include material information not yet disclosed) and raises questions about insider trading enforcement. The risk cuts in two directions: information may leak into unregulated public channels, but it may also consolidate into private bilateral channels—bank group calls, underwriter due diligence sessions and large-investor meetings—that are accessible only to sophisticated market participants. Either way, retail and smaller institutional investors bear the cost.
KPI Discretion and Comparability. Without the quarterly Form 10-Q cadence, companies electing semiannual reporting may gain greater freedom to change key performance indicators (KPIs), reduce segment-level detail or adjust non-Generally Accepted Accounting Principles (GAAP) financial measure presentations between reporting periods. This expanded discretion could erode period-over-period comparability for investors and analysts—a concern that warrants attention from audit committees and investor relations teams.
The SEC’s Information Gap Argument. The SEC argues that Form 8-K requirements—particularly Item 2.02 (earnings releases)—and Regulation FD would fill much of the information gap between semiannual filings, and contemplates that some companies may go “hybrid” by electing semiannual filing while continuing voluntary quarterly earnings releases and conference calls. However, the proposal does not impose a mandatory quarterly earnings release, and voluntary disclosures that are merely furnished (rather than filed) would not carry the same liability protections as Form 10-Q—a distinction that some commenters had previously suggested “could affect their credibility and informational value.”
Public M&A. The SEC’s proposed amendments would likely make public mergers & acquisitions (M&A) more diligence-intensive, bespoke and sensitive to timing. Prospective buyers may be less willing or able to rely on recent filed financials and instead depend more heavily on internal company data and expanded diligence processes. Valuation could become harder to anchor, which could drive more frequent use of pricing protections such as collars, earnouts and contingent value rights. Merger agreements may include greater emphasis on interim operating covenants, KPI reporting and tighter representations, with expanded schedules, rather than periodic disclosure. Deal timing could likely become less predictable given fewer natural windows tied to earnings releases. At the same time, financing and investor processes could become more complex due to misalignment with lender expectations and market practices. Overall, the SEC’s proposed changes may inadvertently push public M&A toward a more private equity–style model of risk allocation, which, in turn, could constrain a public company board’s ability to maximize shareholder value by forcing it to accept greater conditionality, pricing adjustments and execution risk that dilute deal certainty and headline value.
The U.K. Experience
The proposal comes against the backdrop of international precedent. Both the European Union and the United Kingdom (U.K.) transitioned from mandatory quarterly to semiannual reporting in the 2010s. However, the U.K. experience suggests that regulatory permission does not necessarily translate into widespread behavioral change. A 2017 CFA Research Institute study found that when the U.K. eliminated mandatory quarterly reporting in 2014, less than 10% of companies stopped issuing quarterly reports voluntarily as of the end of 2015. The SEC acknowledges that the U.K.’s “Interim Management Statements”—the quarterly reports that were eliminated—were substantially less detailed than U.S. Form 10-Q filings, limiting direct comparisons. Academic studies leveraging the U.K. experience have found that reduced reporting frequency was associated with decreased analyst coverage for companies that did not supplement with voluntary quarterly reports.
What Should Companies and Investors Do Now?
Public company clients should evaluate whether semiannual reporting aligns with their investor base, capital markets activity and existing contractual obligations—particularly any debt covenants requiring quarterly financial deliverables. Companies considering adoption should review their credit agreements, indentures and listing requirements for any impediments. Creditors and investors should assess how reduced reporting frequency could affect covenant monitoring, credit analysis and investment decision making. All interested parties should consider submitting comments during the 60-day comment period. We will continue to monitor developments as the rulemaking progresses. Please contact any member of our Capital Markets and Public Company group with questions about the proposed rules or their potential impact.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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