For decades, the rhythm of public company life has been set by the quarterly clock. Every 90 days, finance and accounting teams race through the close, prepare financial statements, draft MD&A, coordinate with auditors, file with the SEC, and field investor questions—then almost immediately start the cycle over again. It's relentless, and the question of whether it should be has never fully gone away.
In May 2026, the SEC moved that question from the theoretical to the regulatory. The Commission voted to propose amendments that would allow domestic public companies to voluntarily switch from quarterly to semi-annual reporting—a change that, if finalized, would represent the most significant structural shift in public company reporting obligations in generations.
The rule is currently in a public comment period, so nothing is final yet. But the direction of travel is clear enough that finance leaders, controllers, and companies considering the public markets should be paying close attention now.
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Why quarterly reporting has always been a source of friction
The U.S. quarterly reporting system has its roots in Depression-era legislation. The Securities Exchange Act of 1934 established ongoing disclosure requirements for public companies, and the SEC's rules evolved over decades to codify the familiar 10-K and 10-Q regime most practitioners know today.
The argument in favor of quarterly reporting has always been straightforward: investors deserve timely, frequent information to make informed decisions. The counterargument has been equally persistent: the pressure to perform every 90 days distorts management behavior, crowds out long-term thinking, and generates substantial compliance costs with questionable marginal value to sophisticated investors who can already access company information through a dozen other channels.
This debate got a high-profile airing in 2018 when President Trump floated the idea of moving to semi-annual reporting, prompting the SEC to solicit public comment. That comment process revealed meaningful disagreement among market participants, and the idea went quiet. But the underlying concerns—compliance burden, short-termism, competitive pressure—didn't disappear.
The current proposal reflects a more deregulatory posture at the Commission under Chair Paul Atkins, combined with a broader policy agenda around reducing friction for public companies and making U.S. capital markets more attractive relative to international exchanges. Those themes have given the idea renewed energy and a concrete rulemaking vehicle
What the SEC is actually proposing
The proposed amendments, released under Release No. 33-11414, are structured as an optional framework rather than a mandate. The SEC is not proposing to eliminate quarterly reporting—it's proposing to give companies a choice. Here's what the rule would do in practice.
Who would be eligible |
Unlike some earlier iterations of this debate that focused relief on smaller companies, the proposal makes the semi-annual option available to all domestic SEC reporting companies, regardless of filer status, revenues, or market capitalization. Large accelerated filers, accelerated filers, smaller reporting companies, and non-accelerated filers alike would all be able to opt in if the rule is finalized as proposed. That's a broader population than many observers expected. |
How the election works |
Companies would make the election on an annual basis—not mid-year. The mechanism is straightforward: a new checkbox on the cover page of the Form 10-K. Checking the box opts the company into semi-annual reporting for that fiscal year; leaving it unchecked means the company continues on the quarterly schedule. A similar checkbox would be added to Securities Act registration statements (Forms S-1, S-3, S-4, and S-11) and Exchange Act registration statements on Form 10, so that companies going public can make their initial election at the time of registration. Once made, the election cannot be changed during the remaining fiscal year. |
The new Form 10-S |
Companies electing semi-annual reporting would file one new Form 10-S and one annual Form 10-K per fiscal year, replacing the current three 10-Qs and one 10-K structure. Form 10-S would require the same narrative disclosures and financial information as the existing Form 10-Q, but covering a six-month period rather than a fiscal quarter. Critically, the financial statements included in Form 10-S would be reviewed—not audited—by an independent public accountant, consistent with the standard that applies to current 10-Q filings. Scaled disclosure would remain available to smaller reporting companies on Form 10-S, just as it is on Form 10-Q today. Filing deadlines for Form 10-S mirror those already in place for Form 10-Q: 40 days after the end of the first semi-annual period for large accelerated and accelerated filers, and 45 days for all other filers. |
What stays the same |
Form 8-K obligations remain unchanged. Companies would still be required to disclose material events—earnings releases, significant transactions, officer departures, and similar items—on the same accelerated basis as today. The proposal also does not change current requirements governing earnings releases or earnings guidance practices more broadly. The SEC noted, however, that it is requesting comment on whether Item 2.02 Form 8-K earnings releases should be treated as "filed" rather than "furnished" for semi-annual filers, which would carry additional liability implications worth monitoring. |
The stock exchange question |
One notable gap in the proposal: it does not address stock exchange listing requirements. Nasdaq Rule 5250(d)(3), for example, currently requires listed companies to distribute quarterly financial information to shareholders. The SEC acknowledged this and indicated that affected exchanges would likely need to consider conforming changes to their listing standards. Companies shouldn't assume exchange requirements will automatically align with any final SEC rule—that's a separate process to track. |
Implications for current SEC registrants
The proposed rule raises a set of questions that any public company — regardless of size—should be thinking through with its finance team and advisors, even before the rule is finalized.
The opt-in calculus
Electing semi-annual reporting isn't purely a compliance scheduling decision. It touches investor relations, lender covenants, analyst coverage, insider trading policies, and internal planning cadences. The SEC's own proposing release acknowledged that when the UK eliminated mandatory quarterly reporting in 2014, fewer than 10% of companies actually stopped issuing quarterly reports. That data point matters: market practice and investor expectations have a way of filling whatever space formal regulation creates.
Investor and analyst communication
For companies with active sell-side coverage, moving to semi-annual reporting creates a 6-month gap in formal financial disclosure that analysts and investors will try to fill through other means—management commentary, industry proxies, and informal outreach. Some companies may find that reduced formal disclosure actually increases investor relations workload between filings. This is particularly relevant for companies in sectors where quarterly business momentum is closely tracked by market participants. Companies weighing the opt-in should take stock of their investor base's appetite for reduced frequency before assuming the change will be well-received.
Insider trading policy adjustments
Semi-annual reporting would extend the periods during which insiders hold non-public information, which has direct implications for trading window policies and blackout periods. Companies considering the opt-in should evaluate how their insider trading compliance programs would need to be updated, and whether longer blackout windows create operational friction for directors and employees.
Covenant and contractual review
Credit agreements, indentures, and other financing documents often reference quarterly financial statements or contain representations tied to quarterly reporting obligations. The analysis matters here: a covenant that explicitly requires quarterly reporting would need to be amended or waived before a company switches cadence. A covenant that only requires timely SEC filings may provide more flexibility. Companies with meaningful debt facilities should have legal and finance teams review existing agreements carefully before making any election.
Impact on securities offerings
The proposal introduces some complexity for companies that elect semi-annual reporting and subsequently pursue registered securities offerings. Underwriters may be less comfortable going to market with interim financial statements more than 135 days old, even if SEC rules would technically permit it. Companies on a semi-annual schedule that anticipate capital markets activity may still find themselves producing quarterly financial information to support those transactions. This is an area where market practice will evolve, and companies should discuss with their advisors how offering activity interacts with a semi-annual reporting election.
Internal planning alignment
Many public companies organize their internal management reporting, board cadences, and operational reviews around the quarterly close. Finance teams that have built their calendars, headcount, and systems around four reporting cycles per year would face real change management if they opt into a two-cycle model. The efficiency gain assumes those resources can be meaningfully redeployed, which requires thoughtful planning, not just a checkbox election.
What it means for companies exploring the public markets
If your company is considering an IPO, a SPAC transaction, or some other path to becoming an SEC reporting company, this proposal is worth factoring into your readiness planning, even in its proposed form.
The possibility of semi-annual reporting changes the conversation around one of the most consistently cited friction points in going public: the ongoing cost and operational burden of quarterly close and reporting. For companies that have been on the fence about a public market transaction, the prospect of a lighter periodic reporting schedule could be a meaningful consideration. But the broader picture deserves a clear-eyed look. The 8-K obligations, exchange listing requirements, investor expectations, and the infrastructure demands of SEC-grade financial reporting don't go away with a semi-annual election. Going public still means going public.
For pre-IPO companies beginning to build their finance function, the most important near-term takeaway is to invest in the underlying systems, controls, and close processes that support rigorous reporting regardless of frequency. Whether you file twice or four times a year, the data quality and control environment need to be SEC-ready. That's the foundation worth building now.
Companies that become SEC reporting companies through means other than a listed equity—registered debt, Regulation A offerings, or other disclosure obligations—should also monitor the proposal's progress, as the opt-in would be available to reporting companies broadly.
Where things stand: Comment period and next steps
The proposed rule is in the public comment period that opened following the May 5, 2026 Commission vote. Comments are due 60 days after publication in the Federal Register. Following the close of the comment period, the SEC will review submissions and determine whether to move forward with a final rule, with or without modifications.
The SEC itself has signaled strong interest in moving efficiently toward finalization, and the current Commission's deregulatory priorities suggest this proposal will receive serious attention. That said, the comment process is substantive, and feedback from investors, auditors, exchanges, and companies could shape the final design in meaningful ways, particularly around the stock exchange listing requirement gap, earnings release liability questions, and the interaction with securities offering practices.
This is the right time to form a view on how the proposal would affect your organization and to consider whether you have a perspective worth putting into the record. The SEC reads comment letters, and input from finance and accounting practitioners has shaped final rules before.
What to watch
A few specific areas to track as the rule moves forward:
How stock exchanges respond will be a critical parallel track. If Nasdaq and NYSE don't align their listing standards with the SEC's framework, the practical utility of the opt-in for listed companies could be significantly limited. Watch for exchange rulemaking proposals in the months ahead.
The earnings release liability question is worth monitoring closely. The SEC's request for comment on whether Item 2.02 Form 8-K disclosures should be "filed" rather than "furnished" for semi-annual filers has real implications for how companies communicate financial results between annual filings. A shift to "filed" status would increase litigation exposure and change the risk calculus for earnings communications.
Market practice around securities offerings will develop over time, but companies with active capital markets programs should engage their underwriters and advisors early to understand how a semi-annual election would interact with registration statements, prospectus supplements, and comfort letter requirements.
Investor sentiment will shape uptake even more than the rule itself. If the institutional investor community broadly signals opposition to reduced reporting frequency, many companies will elect to stay on the quarterly schedule regardless of what the final rule permits — just as the UK experience suggests.
A thoughtful shift worth monitoring
The SEC's semi-annual reporting proposal reflects a genuine and long-standing tension in public company regulation: the trade-off between disclosure frequency and compliance cost. The proposal is notably broad in its eligibility, open in its optionality, and preserves the real-time event-driven disclosure framework through Form 8-K. But it also leaves meaningful questions open—around exchange listing requirements, securities offering practices, and how investor expectations will shape actual adoption.
For finance and accounting leaders, the question isn't whether to act now. The rule isn't final, and the comment period is the appropriate moment for input, not operational decisions. But it is the right time to understand the proposal accurately, assess how it would affect your specific situation, and make sure your advisors are keeping you current as the rulemaking process unfolds.
At Embark, we work closely with public companies and companies navigating the path to the public markets. If you have questions about how this proposed rule could affect your reporting strategy or readiness planning, we're glad to talk through it.
