For more than half a century, the quarterly earnings report has been the heartbeat of the American stock market. Since 1970, public companies have operated on a relentless 90-day cycle, filing three Form 10-Q reports and one annual 10-K. It is a cadence that defines the lives of CEOs, the strategies of hedge funds, and the volatility of trading days.
But the Securities and Exchange Commission (SEC) is now proposing to break that cycle. In a new set of amendments, the agency is suggesting that companies be allowed to opt into semiannual reporting, effectively cutting the frequency of mandatory formal filings in half. The move is part of a broader, explicitly stated effort to “Make IPOs Great Again” by lowering the regulatory costs and administrative burdens that often discourage private companies from going public or tempt public companies to go private.
The proposal represents a significant philosophical shift. For decades, the SEC has prioritized the rapid flow of information to prevent “information asymmetry”—the gap between what company insiders know and what the general public knows. By allowing a six-month window between formal reports, the agency is betting that the cost savings for companies will outweigh the potential risks to market transparency.
The Mechanics of Form 10-S
Under the proposed rule, companies would not be forced into this new rhythm. it is entirely optional. Those who wish to shift would do so by marking a simple checkbox on the cover page of their annual Form 10-K. Once that box is checked, the company is locked into semiannual reporting for the remainder of the fiscal year.
To facilitate this, the SEC is introducing a new filing: Form 10-S. This report would cover the first six months of the fiscal year, replacing the first two quarterly 10-Qs. The requirements for Form 10-S are largely the same as the current quarterly reports—including narrative disclosures and financial statements prepared under U.S. GAAP—but they would cover a longer duration. Crucially, these statements must still be reviewed by an independent public accountant, though they do not require a full audit.
The SEC is also cleaning up the “staleness” rules in Regulation S-X. Currently, companies must often navigate a complex “count back” of 130 or 135 days to determine if their financial statements are too old for a registration statement. The proposal simplifies this: filers would simply include the most recently completed fiscal quarter or semiannual period that has been filed, aligning the age of the data with the filing deadlines.
| Requirement | Current Quarterly System | Proposed Semiannual Option |
|---|---|---|
| Mandatory Filings | 3 Form 10-Qs + 1 Form 10-K | 1 Form 10-S + 1 Form 10-K |
| Review Cycle | Every 3 months | Every 6 months |
| Certifications | CEO/CFO sign 4 times/year | CEO/CFO sign 2 times/year |
| Audit Status | Reviewed (not audited) | Reviewed (not audited) |
The Investor Dilemma: Transparency vs. Efficiency
While the “Make IPOs Great Again” agenda appeals to corporate boards, it creates a tension for investors. The SEC’s own economic analysis acknowledges that less frequent reporting could lead to higher volatility around filing dates and a potential increase in the cost of capital. There is a legitimate fear that “informed” investors—those with access to alternative data or closer ties to management—will have a significant advantage over retail investors during the long gaps between reports.
However, the reality of modern markets is that many companies already bypass the 10-Q for their primary communication. Most investors rely on the quarterly earnings release and the accompanying conference call to make decisions, treating the subsequent 10-Q filing as a formal compliance exercise rather than a source of news. This has led some, including SEC Commissioner Hester M. Peirce, to suggest that instead of changing the frequency, the agency should simply streamline the 10-Q to remove redundant disclosures.
There are also several practical “tripwires” that may prevent companies from actually adopting the semiannual option:
- The Comfort Letter Gap: Under PCAOB standards, auditors can only provide “negative assurance” on financials that are less than 135 days old. Companies that need frequent access to capital markets through shelf registrations may find that without quarterly reviews, they cannot get the “comfort letters” underwriters require for new offerings.
- Credit Covenants: Many corporate loan agreements and bond indentures explicitly require the delivery of quarterly financial statements. A company cannot simply check a box at the SEC; it may first need to renegotiate contracts with its lenders.
- Regulation FD: Longer gaps between reports increase the risk of accumulating “material non-public information,” which could lead to accidental leaks or insider trading risks if internal controls aren’t tightened.
A Global Trend Toward Flexibility
The United States is not the first to experiment with this. The UK eliminated mandatory quarterly reporting in 2014, and Japan followed suit in 2024. Other jurisdictions in the European Union and Hong Kong also permit semiannual reporting.
The results from these markets are mixed. In the UK, a study by the CFA Research Institute found that fewer than 10% of companies actually stopped issuing quarterly earnings releases after the rule change. This suggests that “market forces”—the demand from analysts and shareholders—often override regulatory permission. Companies may be allowed to report twice a year, but the market may still demand a pulse check every three months.
Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice.
The path forward now moves to the public. The SEC has opened a 60-day comment period, which is expected to run through early July 2026. Given the support of the current Commission, a final rule is anticipated by the end of 2026. Whether the first companies begin filing Form 10-S in 2027 will depend largely on whether the NYSE, Nasdaq, and the FASB can coordinate their own rule changes to match the SEC’s new framework.
Do you think less frequent reporting helps companies grow, or does it leave investors in the dark? Share your thoughts in the comments or join the conversation on our social channels.
