Semiannual Reporting: Key Themes of Public Comments

On May 5, 2026, the Securities and Exchange Commission (SEC) proposed amendments that would permit companies subject to the reporting requirements of the Securities Exchange Act of 1934 to satisfy their interim reporting obligations through semiannual reports on a new Form 10-S in lieu of filing quarterly reports on Form 10-Q.

By the July 6, 2026, deadline for public comments, the proposal had solicited one of the largest comment responses in SEC history, with more than 63,000 individually filed letters and over 66,000 additional signatories to organized form-letter campaigns. While the resulting comment record reflects a wide range of views on the proposal, the overwhelming majority of commenters oppose the proposal. The sheer scope of these comments, together with the arguments advanced throughout the comment process, provides a useful window into the issues the SEC is likely to confront as it decides whether, and in what form, to proceed with this rulemaking.

This alert summarizes the key themes emerging from the comments submitted to the SEC, the perspectives advanced by different categories of commenters, and the issues likely to shape the commission’s evaluation of the proposal.

Overview of the Proposal

As discussed in our prior client alert, “SEC Proposes Optional Semiannual Reporting for Public Companies,” the SEC has proposed amendments that would permit reporting companies to elect to satisfy their interim reporting obligations by filing one semiannual report on a new Form 10-S, rather than filing three quarterly reports on Form 10-Q. Companies that elect the proposed semiannual reporting framework would continue to file an annual report on Form 10-K. Companies that do not elect the proposed semiannual reporting framework would remain subject to the existing quarterly reporting regime. The proposal would also amend Regulation S-X and make conforming amendments to numerous other SEC rules and forms.

According to the SEC, the proposal is intended to provide reporting companies with greater flexibility while reducing the costs associated with quarterly reporting. At the same time, the SEC acknowledges that less-frequent reporting could affect investor protection, market transparency, market efficiency, and the availability of information in the marketplace. For a more detailed discussion of the proposal’s mechanics, please see our earlier client alert.

Comments on the Proposal

The SEC’s semiannual reporting proposal has elicited a significant amount of public interest. Our observations on the public comments include the following:

• Approximately 99% of the individually filed comment letters oppose the semiannual reporting proposal, reflecting an unusually one-sided comment record by SEC rulemaking standards.
• Opposition to the SEC’s semiannual reporting proposal is broad-based, as reflected in the diverse identities of commenters. Individual investors account for a majority of comment letters opposing the proposal, but opposition to the proposal was also expressed by trade and advocacy organizations, current and former public companies, investment professionals, and academic researchers.
• A substantial portion of the comment letters reflect form-letter templates that express a position on the rulemaking without offering suggestions or analysis of the proposal, while comment letters from trade associations, academic commenters, legal and accounting practitioners, and other similar persons or groups address the substance of the proposal and the SEC’s economic analysis.

The comment letters submitted to the SEC include some formal requests, including a request from Better Markets to reopen and extend the comment period on the grounds that the Federal Register notice listed an incorrect comment email address and that the complexity of the proposal warranted additional time for public comment.

Investor Protection, Transparency, and Information Asymmetry

The most frequently stated concern in comment letters submitted to the SEC is that reduced reporting frequency will undermine investor protection by limiting the timely information available to the market. The proposing release acknowledges that less-frequent reporting could reduce the information available to investors and may disproportionately affect retail and other less-resourced investors who rely heavily on periodic reports. It therefore requests comment on whether those potential costs are outweighed by the proposal’s anticipated benefits.

A closely related concern expressed by commenters is information asymmetry. Some commenters argue that extending the interval between mandatory periodic reports could lengthen the period during which insiders possess material nonpublic information before it becomes available to the market. Although the proposing release notes that Form 8-K and Regulation FD would continue to apply, many commenters contend that those disclosure regimes serve different purposes, addressing specified events and selective disclosure, respectively, rather than providing for comprehensive periodic reporting. Commenters also note that the proposal would not require companies to continue providing voluntary quarterly disclosures, and, as a result, investors could face materially different disclosure practices among issuers that elect the semiannual reporting framework.

The proposing release also acknowledges that a longer reporting interval could increase both the incidence and the perception of trading while in possession of such information. Some commenters note that many companies structure their insider trading policies and blackout windows around the existing quarterly reporting cycle. As a result, a transition to semiannual reporting would require corresponding adjustments to those policies and procedures.

Financial Reporting Integrity and Auditor Oversight

Concerns regarding financial reporting integrity and auditor oversight are nearly as prevalent in the public comments as concerns relating to investor protection.

The proposing release acknowledges that less-frequent interim reporting could delay the identification of misstatements or control deficiencies, particularly for smaller reporting companies with more limited accounting resources. While proposed Form 10-S would retain the requirement that semiannual financial statements be reviewed by an independent auditor, it would eliminate two of the three interim review engagements currently performed each year. Many commenters, including accounting professionals and audit practitioners, argue that these interim reviews serve an important function beyond supporting the preparation of Form 10-Q. In their view, these reviews help identify accounting issues and internal control deficiencies earlier in the reporting cycle, allowing companies to address those matters before completing the annual audit.

Market Efficiency, Price Discovery, and Cost of Capital

In the proposing release, the SEC notes that more-frequent disclosure promotes the timely incorporation of information into market prices and that less-frequent reporting could cause prices to deviate from fundamental value for longer periods, increase “jump” volatility, impair liquidity, and raise the cost of capital for some issuers. It also recognizes that information disclosed by one issuer often informs the market’s assessment of its peers, suppliers, and customers. As a result, reduced reporting by companies that elect to report on a semiannual basis could diminish informational efficiency, even for companies that continue to report quarterly.

Some commenters emphasize the potential effects of a semiannual reporting system on analyst coverage and financial modeling. They argue that less-frequent reporting could make it more difficult for analysts to update financial models on a timely basis, potentially widening the dispersion of earnings estimates and reducing analyst coverage, particularly for smaller issuers. The proposing release notes, however, that evidence from the United Kingdom and Singapore suggests that reduced reporting frequency has little effect on firms’ investment decisions. Many commenters interpret that evidence differently, citing reduced trading volumes and diminished market transparency in those jurisdictions as reasons for caution rather than reassurance.

Practical Implementation Issues

In a separate vein, some commenters question whether the proposal would achieve its stated objective of reducing costs, largely because much of the underlying work involved in preparing quarterly financial information would continue regardless of the SEC’s filing requirements. Companies routinely prepare quarterly financial information for internal management reporting, board oversight, and forecasting, independent of the requirement to file a Form 10-Q. In addition, many companies are contractually obligated to provide quarterly, or even more frequent, financial information to lenders under credit agreements and other financing arrangements. Some commenters therefore argue that, for many issuers, the proposal would eliminate only the public filing of quarterly reports, rather than the underlying accounting and financial-reporting work.

Some commenters also point to certain entrenched market expectations and reliance interests that an optional reporting framework may not alter in practice. Analysts, index providers, rating agencies, and other market participants have developed processes around a quarterly reporting cadence, and issuers pursuing capital markets transactions may continue to prepare quarterly financial information for due diligence and marketing purposes, regardless of the frequency of their SEC reports. Some commenters also observe that a mixed reporting environment — in which some issuers file semiannual reports on Form 10-S while others continue filing quarterly reports on Form 10-Q — could reduce comparability among peer companies within the same industry.

Support for Optional Semiannual Reporting

A smaller group of commenters, including some public companies, business organizations, and other market participants, expressed support for the proposal or otherwise favored giving issuers greater flexibility in determining their interim reporting cadence. Those commenters generally advanced three principal arguments in support of semiannual reporting.

The first argument is cost. The SEC estimates that an issuer electing the new reporting framework would incur direct annual compliance costs of approximately $132,000 to file a single Form 10-S, compared with approximately $330,000 to file three Forms 10-Q. Some commenters argue that those savings would allow management to redirect time and resources toward strategic priorities, particularly at smaller companies with more limited internal resources.

The second argument is the potential to encourage longer-term decision-making. The proposing release acknowledges that frequent reporting can create pressure to manage toward near-term results, and supporters argue that reducing the frequency of mandatory reporting could lessen that pressure, particularly for research-intensive and emerging growth companies whose value creation is not readily reflected in quarterly results.

The third argument is that the proposal provides issuers with greater choice. Because quarterly reporting would remain available as an option, some commenters argue that market discipline, rather than regulatory mandate, would determine the appropriate reporting cadence. Companies whose investors value quarterly reporting would have every incentive to continue providing it, whether voluntarily or pursuant to existing requirements. At the same time, the broader disclosure framework, including Form 8-K, Regulation FD, the antifraud provisions of the federal securities laws, and annual reporting on Form 10-K, would remain in place, regardless of a company’s election.

What’s Next?

The comments submitted to the SEC on the semiannual reporting proposal reflect an unusually one-sided divide over the appropriate balance between reducing the regulatory burden of being a public company and preserving the reporting cadence that has underpinned the US disclosure framework since 1970. Many commenters view quarterly reporting as an integral component of financial reporting discipline, corporate governance, and capital markets infrastructure. Accordingly, they question whether those functions can be fully replicated through voluntary market practices and existing disclosure requirements alone. Whether market discipline and the current disclosure framework can adequately substitute for mandatory quarterly reporting is likely to remain the central empirical and policy question that the SEC must resolve as it proceeds with this rulemaking. In evaluating the public comments record, the SEC is likely to focus on several key issues, including:

• Whether the anticipated compliance savings justify a reduction in mandatory disclosure, particularly in light of commenters’ skepticism that those savings will materialize once contractual and market-driven reporting obligations are taken into account
• Whether other aspects of the securities laws, such as Form 8-K and Regulation FD, can provide sufficient assurance that material information will be timely communicated to the market in the absence of mandatory quarterly reporting
• Whether the proposal should apply uniformly to all issuers or instead be limited to particular categories of issuers, such as emerging growth companies or smaller reporting companies
• Whether targeted alternatives, including streamlining Form 10-Q, extending filing deadlines, or relying more heavily on Form 8-K, could achieve similar objectives while preserving the existing periodic reporting cadence

Public companies, boards of directors, and their advisers should continue to monitor this rulemaking. Any changes to the SEC’s interim period reporting requirements could have significant implications for public companies and markets.