The U.S. Securities and Exchange Commission has proposed halving interim financial filings, letting public companies replace four quarterly 10-Qs with two semiannual reports, using a new form 10-S. SEC Chairman Paul Atkins advanced the idea, saying it would give firms and investors more flexibility, and the rule has been opened for a 60-day public comment period. The proposal has drawn backing from the White House, where President Donald Trump wrote that ending mandatory quarterly reporting "will save money, and allow managers to focus on properly running their companies," while market groups such as Nasdaq Inc. Have also supported the concept. The immediate next step is the SEC comment period, after which the agency could revise the proposal and eventually schedule a commission vote.

The Securities and Exchange Commission wants to let companies cut the number of required interim filings in half, moving from a four-times-a-year 10-Q cycle to semiannual 10-S reports. The proposal, advanced by SEC Chairman Paul Atkins, would create a new form 10-S for semiannual reporting and replace the current mandatory quarterly 10-Q cycle for companies that elect the option.

What the proposal would change

Under the SEC plan, the full annual report would remain in place, but companies could choose to file one semiannual report and one annual report per fiscal year instead of the current rhythm of three quarterly reports plus an annual, a change the SEC says increases regulatory flexibility. The agency emphasises that nothing in the rule would bar companies from continuing to issue quarterly earnings releases, guidance or other investor communications on a voluntary basis.

Atkins framed the move as a response to what the agency describes as overly prescriptive timing requirements. "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," he said, arguing the change would let markets and issuers decide the cadence of disclosure.

The proposal has been formally published and opened to a 60-day public comment period under SEC procedures. Any final change would require a majority vote by the commission. Industry observers note that full rulemaking can take about 18 months to two years from proposal to final rule, and the SEC could revise the text after the comment period before scheduling a vote.

Supporters, critics and the trade-offs

The idea has clear political backing. President Donald Trump has repeatedly urged ending mandatory quarterly reporting as a way to reduce short-termism, writing on Truth Social that "This will save money, and allow managers to focus on properly running their companies." Market infrastructure firms such as Nasdaq Inc.

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Have publicly supported the concept, and proponents argue less frequent mandatory filings could lower compliance costs and encourage longer-term decision-making.

Defenders of the proposal say it would cut compliance burdens and give managers more space to plan. Supporters also point out that not every company would opt in, and that larger issuers and institutional players might continue to provide quarterly earnings calls and guidance voluntarily, making the actual change in market information flow more gradual.

But critics warn the trade-offs are serious. Market participants and legal advisers quoted in coverage have expressed concern that reduced filing frequency could weaken transparency for retail investors, create windows where companies could "bury" bad news between semiannual filings, and heighten insider-trading risk by changing the cadence of disclosure and trading windows. Commentators also highlight operational implications, such as how executive trading windows and other compliance mechanisms that are tied to a quarterly cycle might need to be adjusted if firms opt into semiannual reporting.

The Investment Company Institute has emphasised that the quality of information matters more than frequency in preserving investor confidence, suggesting reforms should focus on ensuring interim reports remain useful rather than only cutting their number. Legal and capital-markets advisers say the change may be most attractive initially to small- and mid-cap companies, with many larger issuers likely to carry on with current disclosure habits for market and investor-relations reasons.

The SEC points to history as it weighs the change. Quarterly reporting has been required for more than half a century, and shifting that long-standing baseline raises both practical and cultural questions inside corporate finance teams, audit functions and among investors who rely on regular updates. The agency has tried to make clear that voluntary disclosure would continue to be allowed, but whether that voluntary flow would replace mandated cadence is an open question.

Some of the more concrete benefits promised by backers, such as precise cost savings for companies, aren't detailed in the proposal. Reporting to date doesn't include specific dollar or percentage estimates from the SEC, and the pieces reviewed note that potential savings would vary by company size and disclosure practice.

For investors and compliance officers, the coming months could be busy. Firms will need to weigh whether opting into semiannual reporting fits their investor base and market positioning, and they may need to redesign internal controls, disclosure committees and insider-trading policies if the rule changes.

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The SEC has opened a 60-day public comment period on the proposal. After comments, the agency could revise the text and then schedule a commission vote, with full rulemaking historically taking about 18 months to two years from proposal to final rule.

This article was created with AI assistance.