Adelyn Schmidt
Associate Editor
Loyola University Chicago School of Law, JD 2027
The U.S. Securities and Exchange Commission (SEC) is preparing to propose a major shift in how public companies disclose financial results. Under a new rule expected in 2026, issuers could move from the traditional quarterly Form 10-Q filings to a semiannual reporting schedule. SEC Chair Paul Atkins (Atkins) stated that this proposal will allow companies to choose between the two kinds of reporting. The initiative echoes recent calls from the Trump administration, which argues that quarterly disclosure pressures companies to prioritize short-term earnings at the expense of long-term value creation. If adopted, the rule would represent one of the most significant changes to U.S. securities disclosure requirements in over 50 years and could fundamentally reshape how businesses plan, raise capital, and communicate with investors.
Why the SEC is considering a change
Quarterly reporting has been the norm in U.S. securities regulation since the 1970s. Every three months, public companies must file a detailed Form 10-Q disclosing their financial performance, risk factors, and management discussion and analysis (MD&A). The system was designed to promote transparency and protect investors, but critics argue that it has fostered an obsession with short-term earnings. Executives often feel pressure to “hit the numbers” each quarter, even if that means cutting R&D budgets, delaying long-term projects, or avoiding bold decisions that might take time to pay off.
In 2018, then-Chair Jay Clayton explored this issue by asking for public feedback on quarterly reporting. Although the SEC declined proposing a rule at the time, the policy debate persisted. Global investors and company leaders alike have argued that mandatory quarterly disclosure promotes short-termism. The Long-Term Stock Exchange (LTSE) recently reignited the issue by petitioning the SEC to allow semi-annual reporting. Atkins has now confirmed the SEC’s intent to move forward with a formal proposal.
What would change
If adopted, the rule would give companies a choice: continue filing Form 10-Qs every quarter, or switch to a semiannual cadence. Companies would still be required to file an annual Form 10-K and disclose major developments promptly through Form 8-K filings. This approach would align U.S. practice with Europe and the United Kingdom, where regulators abandoned mandatory quarterly reporting several years ago. Many issuers in those markets still provide interim updates on a voluntary basis, but without adherence to a fixed regulatory timeline.
It remains unclear whether the SEC has the authority to implement this change without Congress. The Exchange Act requires companies to file annual and quarterly reports “as the Commission may prescribe,” suggesting that the SEC retains some discretion. However, legal challenges remain likely.
Why fewer reports could be a good thing
Offering the option of semiannual reporting is a smart move. Running a public company is expensive and complex. Preparing Form 10-Qs every few months takes significant time and resources, especially for smaller issuers that have limited staff. Extending the reporting interval could allow management to focus on long-term strategy instead of short-term stock movements. Without the recurring pressure of 90-day performance cycles, companies may feel more willing to invest in new technologies, enter new markets, or withstand temporary downturns without panicking about the next earnings call.
From a comparative perspective, the United States is an outlier. The United Kingdom and European Union operate under semiannual and annual reporting regimes, yet their capital markets remain robust and investors receive timely disclosure though other mechanisms.
The risks
Of course, less frequent reporting comes with tradeoffs. Investors could have less up-to-date data, making it harder to spot early warning signs or track performance between filings. Some analysts worry this might lead to lower market transparency and less liquidity, especially for smaller firms. Extended reporting intervals would also increase the duration during which insiders possess material nonpublic information (MNPI). This may require new insider-trading policies, extend blackout windows, and more frequent voluntary updates through press releases or 8-Ks. Still, these challenges are manageable. Many issuers already provide interim updates between filings to keep investors informed.
Looking ahead
Atkins has stated that the proposal will proceed through the standard rulemaking process, which includes a public comment period under the Administrative Procedure Act. Even if the rule is finalized, full implementation could take several years. Yet the policy debate has clearly shifted: quarterly reporting is no longer untouchable. The SEC’s proposal does not eliminate transparency; it introduces flexibility within the disclosure framework. Issuers that benefit from frequent market communication may retain quarterly reporting, while those seeking breathing room could opt for a semiannual schedule.
In a market increasingly focused on long-term innovation and sustainable growth, such flexibility aligns with broader capital formation goals. If extended reporting intervals enable to build more resilient and profitable businesses, it warrants serious regulatory consideration.