By Alex Frutos

On May 5, 2026, the Securities and Exchange Commission (the “Commission”) published a proposed rule (Release Nos. 33-11414; 34-105368; File No. S7-2026-15) that would allow Exchange Act reporting companies to elect to file semiannual interim reports on a newly created Form 10-S in lieu of quarterly reports on Form 10-Q. This is part of the SEC’s stated rulemaking effort to modernize existing rules, reduce disclosure burdens, and improve the efficiency of the capital markets. If adopted, the proposal would represent a fundamental shift in the U.S. periodic reporting framework, offering companies the flexibility to determine the frequency of interim reporting that best suits their particular circumstances, including their ability to bear the costs of preparing quarterly reports, the stage of their business development, and the expectations of their investors.

Overview of the Proposed Rule

The proposed amendments to Exchange Act Rules 13a-13 and 15d-13 would permit Exchange Act reporting companies to elect, on an annual basis, to file one semiannual report on Form 10-S and one annual report on Form 10-K per fiscal year, rather than filing three quarterly reports on Form 10-Q and one Form 10-K. The new Form 10-S would require the same narrative disclosures and financial information as currently required in a Form 10-Q but would cover a six-month period rather than a fiscal quarter. The filing deadline for Form 10-S would be 40 or 45 days after the end of the first semiannual period, depending on the company’s filer status, which mirrors the current Form 10-Q filing deadlines.

Companies would indicate their election by checking a box on the cover page of their annual report on Form 10-K, and this election would be made on an annual basis and may not be changed until the next Form 10-K is filed. A similar check box would be added to the cover pages of Securities Act registration statements on Forms S-1, S-3, S-4, and S-11, and Exchange Act registration statements on Form 10, allowing companies conducting initial public offerings to make their election at that stage. Companies that do not check the semiannual box would default to quarterly reporting and continue filing Form 10-Qs under the current system.

The Commission is also proposing amendments to Regulation S-X to revise the rules governing financial statement requirements in periodic reports, registration statements, and proxy statements to reflect the new optional semiannual reporting regime. This includes changes to the requirements governing the age of financial statements to ensure that financial statements in registration statements filed by semiannual filers would not be considered “stale” under existing rules, which were built along a quarterly reporting framework.

Potential Benefits of the Proposed Rule

• Compliance Cost Savings. The SEC estimates net annual savings of roughly $198,000 per issuer. Assuming 20 percent of affected issuers switch, aggregate annual savings could reach approximately $394 million, with a ten-year present value of $2.9 billion to $3.4 billion.
• Reduced Managerial Distraction and Short-Termism. Less frequent reporting could allow management to focus on long-term strategy rather than quarterly earnings cycles. Survey evidence indicates a majority of executives would sacrifice some long-term value to smooth earnings.
• Disproportionate Benefits for Smaller Issuers. Cost savings may be proportionally greater for emerging growth companies and smaller reporting companies, for whom fixed reporting costs represent a larger share of revenue. Companies in certain industries, such as pre-revenue biotechnology firms, may also benefit where investors focus on development milestones rather than quarterly financials.
• Encouraging Public Market Participation. Reduced reporting burdens could encourage more companies to go or remain public, supporting broader access to capital markets.
• Protection of Proprietary Information. Less frequent reporting may reduce or delay disclosure of competitively sensitive information by aggregating financials over six-month periods.
• Alignment with International Practices. Several foreign jurisdictions and foreign private issuers filing with the SEC already report semiannually, as do certain domestic issuers such as Tier 2 Regulation A filers.

Potential Risks and Concerns

• Increased Information Asymmetry. Longer intervals between reports may delay dissemination of material information, disproportionately affecting less sophisticated investors who rely on periodic filings.
• Higher Cost of Capital and Reduced Liquidity. Greater information asymmetry has been linked to lower liquidity, higher transaction costs, and a higher cost of capital, potentially allowing prices to deviate from fundamental value for longer periods.
• Loss of Granularity and Reduced Comparability. Semiannual statements would eliminate quarter-over-quarter trend data valuable for seasonal businesses and make cross-company comparisons more difficult, potentially reducing analyst following and forecast accuracy.
• Insider Trading Risks. Delayed disclosure extends the period during which insiders possess material nonpublic information, heightening insider trading risks and potentially requiring longer blackout periods.
• Weakened Audit Oversight. Reducing interim auditor reviews from three to one per year could delay identification of accounting issues and internal control deficiencies, particularly for smaller companies, increasing the risk of reporting errors or fraud.
• Reduced Analyst Coverage. International evidence links higher reporting frequency to greater analyst coverage; a shift to semiannual reporting could reduce analyst following and widen information gaps, which may deter many companies from switching.
• Contractual and Regulatory Constraints. Debt agreements frequently require quarterly or monthly financials regardless of SEC obligations, meaning some issuers would still need to prepare quarterly data internally and may need to renegotiate covenants and compensation arrangements tied to quarterly metrics.
• Impact on Exchange Listing Standards. Nasdaq and NYSE listing standards reference quarterly reporting, and conforming rule changes may be necessary. Approximately 29% of affected companies are NYSE-listed, and 56% are Nasdaq-listed, which may delay switching until these changes are made.

Key Takeaways for Companies

This proposal is not without precedent. The EU removed quarterly financial reporting requirements in 2013, with member state implementation occurring through 2015, and Canada is piloting semiannual reporting for smaller issuers. After the UK lifted their quarterly reporting mandate in 2014, fewer than 10% of UK firms actually stopped quarterly reporting by the end of 2015. Both cadence and content play a meaningful role in transparency and maintaining investor confidence. The proposed rule offers meaningful flexibility, but the decision to change reporting cadence should be carefully evaluated.

Companies should consider reporting costs, management time, their investor base composition and expectations, impact on analyst coverage, contractual obligations (including debt covenants and executive compensation arrangements), peer group and industry norms, potential impacts on costs of capital, and the degree to which their securities trade on quarterly financial results versus other business developments. Companies may also wish to consider a “hybrid” approach—electing semiannual mandatory reporting while continuing to provide voluntary quarterly disclosures through earnings releases and conference calls—to balance cost savings with investor expectations.

Action Items for Public Companies

• Assess cost-benefit tradeoffs. Quantify current quarterly reporting costs against the potential time and cost savings of filing a single Form 10-S.
• Review existing contractual obligations. Audit debt agreements and executive compensation contracts for quarterly reporting or performance requirements that may need renegotiation.
• Evaluate exchange listing requirements. Monitor for conforming rule changes by the NYSE and Nasdaq before electing semiannual reporting.
• Gauge investor and analyst expectations. Engage with key stakeholders to assess appetite for reduced disclosure frequency.
• Reassess insider trading policies. Evaluate whether trading windows should be altered and blackout periods require extension under a semiannual cadence.
• Consider a hybrid disclosure strategy. Weigh voluntary quarterly earnings releases alongside semiannual filings to maintain market confidence.

The proposed rule is subject to a 60-day public comment period following publication in the Federal Register. The final rule’s content, effective date, and any phase-in provisions remain uncertain and could differ materially from the proposal based on comments received. We will continue to monitor developments and are available to assist clients in evaluating the impact of this proposed rule on their reporting obligations and strategic planning. Jackson Walker’s Capital Markets Practice Group is available to assist public companies in addressing how these changes affect your specific transactions or disclosure practices.

This alert is for informational purposes only, does not constitute legal advice, and does not establish an attorney-client relationship. For specific guidance, please contact a member of Jackson Walker’s Capital Markets Practice Group.

Meet Alex

Alex Frutos focuses his practice on capital markets, corporate finance and securities, venture capital, private equity, mergers and acquisitions, joint ventures, corporate governance, and general transactional matters. He represents buyers, sellers, boards of directors, issuers, underwriters, and investors in public and private M&A transactions and debt and equity offerings, and advises public and private companies across industries including infrastructure, manufacturing, energy, technology, and healthcare. He also represents startups and emerging companies throughout their life cycle, as well as angel investors, funds, and family offices in investment transactions. Having passed the CPA exam, Alex brings a strong accounting and business background to his transactional practice.