The SEC's Move to Make Quarterly Reporting Optional

On May 5, the Securities and Exchange Commission proposed letting public companies file financial reports twice a year instead of four times. The change would not abolish quarterly disclosure; it would make it optional. For business owners and investors, the proposal is worth understanding less for what it does to the largest companies than for what it signals about the cost of being public and the rhythm of financial information that everyone, public or private, relies on.

What the Proposal Actually Does

Public companies today file three quarterly reports on Form 10-Q and one annual report on Form 10-K each year. The SEC's proposal would let a company elect to file a single semiannual report, on a new Form 10-S, in place of two of those quarterly filings. A company that opts in would produce one interim report and one annual report per year rather than three quarterly reports and an annual one.

The election would not be permanent. A company would have to choose semiannual reporting again each year in its annual report, which means investors would know in advance how often a given company plans to update them. Under the proposal, Form 10-S would be due 40 or 45 days after the close of the first half of the fiscal year, depending on the company's filer status (larger, faster-reporting companies get the shorter window). The proposal also adjusts Regulation S-X, the rulebook that governs the financial statements inside these filings, to fit the new cadence and to simplify some existing requirements.

One point matters above the mechanics: this is a proposal, not a rule. The public comment period remains open until July 6, after which the SEC will review the responses before deciding whether to adopt, revise, or shelve it.

Why the Idea Is Surfacing Now

SEC Chairman Paul Atkins framed the proposal as a matter of flexibility rather than deregulation for its own sake. He noted that public companies have an obligation under the federal securities laws to provide information that is material to investors, but argued that the rigidity of the SEC's existing rules has prevented companies and their investors from determining for themselves the interim reporting frequency that best serves their needs.

The proposal sits inside a broader agenda focused on capital formation, the process by which companies raise money in public markets, and on making public listings more appealing to companies that have stayed private. President Trump publicly recommended ending mandatory quarterly reporting in September 2025, and the concept itself is not new; it circulated during his first term in 2018 without becoming a rule.

The international context is worth noting. Quarterly reporting has been the American norm for roughly 75 years, but the United Kingdom and much of the European Union dropped mandatory quarterly reporting more than a decade ago and settled on semiannual interim reporting. Viewed against that backdrop, the SEC is proposing to align with established practice abroad rather than inventing a new model.

The Case on Each Side

The argument in favor centers on cost and focus. Preparing a quarterly report consumes finance, legal, and audit resources, and for smaller companies the burden is proportionally heavier. Cutting from three interim reports to one would lower compliance costs and, supporters argue, free management to run the business on a longer horizon. That last point speaks to short-termism, the tendency to manage toward the next earnings announcement rather than toward durable, multi-year value. Proponents also see lighter reporting as one way to make public markets more attractive to smaller companies that have chosen to stay private partly to avoid the reporting load.

The argument against centers on information. Investors and analysts use quarterly data to value companies and to spot trouble early, and twice-a-year reporting widens the gap between disclosures. Gaps are where surprises tend to hide. Large institutional investors and several governance advocates have historically resisted reducing reporting frequency, arguing that transparency protects ordinary shareholders who lack other windows into a company's performance. There is also a practical wrinkle: even if reporting becomes optional, many of the largest companies are likely to keep reporting quarterly because their investors expect it. The companies most likely to switch are smaller ones, which is also where the information gap may matter most.

The Read-Through for Private Companies

Most readers do not run public companies, but the proposal still reaches private businesses in three ways.

The first is the cost of going public. The reporting burden is one reason fewer companies pursue initial public offerings and more stay private or sell to private equity. If interim reporting becomes lighter, a public listing becomes marginally more attractive, which over time can shape the exit options and valuations available to private companies that might one day take that path.

The second is the value of disclosure discipline regardless of cadence. Buyers and lenders reward companies that produce timely, reliable financial statements. Whether a public company reports twice or four times a year, the underlying lesson for a private owner preparing for a sale or a capital raise is unchanged: clean, frequent internal reporting builds credibility and speeds due diligence, the buyer's review of a company's books before a deal closes.

The third is the rhythm of market information itself. Mergers, financings, and valuations all key off public data. Private-company owners and their advisors rely on comparable-company analysis, which estimates a business's value by looking at what the public market pays for similar companies. If a meaningful share of public companies reports less often, that comparable data may arrive less frequently and grow staler between updates, making current, well-sourced figures more valuable than ever.

What Comes Next

The comment period closes on July 6, and any adoption would follow months of review. Three things are worth watching. The first is whether large investors and the stock exchanges push back, since their reaction will shape the final rule if one emerges. The second is how many companies signal that they would actually elect semiannual reporting. The third is the gap between the headline and the practice: international experience suggests many companies keep reporting quarterly even when not required, which would make the real-world effect smaller than the proposal's reach implies.