SEC Proposes Allowing Public Companies to Report Semi-Annually Instead of Quarterly
The U.S. Securities and Exchange Commission has proposed amendments allowing issuers to switch to semi-annual reporting, which could significantly reduce the administrative burden on companies and alter established information disclosure cycles in the stock market.
What the SEC presents as a fight against short-termism and bureaucracy is actually a fundamental dismantling of the transparency mechanism that has worked for the past 55 years. Behind the fine words about "reducing the burden on business" lies the most extensive revision of minority shareholder rights since the Sarbanes-Oxley Act.
The Essence: What's Really Happening
This is not deregulation for efficiency. It is the institutionalization of information asymmetry. The SEC's proposal of May 5, 2026 allows companies to replace three quarterly reports on Form 10-Q with one semi-annual report on a new Form 10-S. Formally, companies are given a choice, but in practice, this triggers a mechanism where management gets a six-month window during which external shareholders lack a complete financial picture.
The core conflict is simple: insiders always know more than the market. Quarterly reporting was the only mechanism that forcibly reduced this window to 45 days. Now that window expands to 180 days. During this period, anything can be done: dilute minority stakes, siphon assets through related-party transactions, change accounting policies. And the market will learn about it only after the fact.
Timeline and Context
The initiative has been brewing for a long time but gained institutional weight with Donald Trump's return. As early as 2018, Jamie Dimon (CEO of JPMorgan Chase) and Warren Buffett issued a joint statement that quarterly reporting "contributes to the decline in the number of public companies in America." Their argument: management spends too much time preparing reports instead of focusing on long-term management.
In 2019, Nasdaq surveyed 180 companies: three-quarters favored semi-annual reporting. However, at that time, the SEC under Jay Clayton did not move beyond discussions.
Real momentum came when Trump returned to power and in early 2025 directly called on social media to end mandatory quarterly reporting, stating that American companies "should no longer be forced" to do it. Subsequently, Paul Atkins, appointed SEC chair, called the idea "a good way forward" in a CNBC interview and promised to accelerate the process.
On January 27, 2026, the project was approved in a closed meeting. And on May 5, 2026, as planned, the proposal was officially published, opening a 60-day public comment period.
Who Wins and Who Loses
Winners:
- Large corporations and banks (JPMorgan, Goldman Sachs, Citi): They gain unprecedented control over information flow. Now they can conduct massive restructuring or write off $15 billion in problem assets mid-cycle, and the market won't see the consequences for another three months. JPMorgan Chase has lobbied for this for years.
- CEOs with compensation tied to annual performance: The quarterly market check on their performance disappears. A bad quarter can be "hidden" within a half-year, waiting for improvement in the second quarter, and then presenting a neutral overall result. This reduces stock volatility and personal risk for top management.
- Family trusts and majority shareholders: Long periods without disclosure allow planning exits through complex derivative structures without the risk of being accused of insider trading.
Losers:
- Minority shareholders and retail investors: They no longer have a quarterly mechanism to verify the real state of affairs. Cowen analysts predict that earnings and revenue surprises will become more frequent and more severe.
- Small and mid-cap companies: Research by Professor Shiva Rajgopal and colleagues shows that semi-annual reporting leads to reduced analyst coverage. Less analyst attention means higher cost of capital and wider bid-ask spreads.
- Independent research firms and financial data providers: Reducing reporting from 4 to 2 times a year cuts the volume of data for analysis by 50%. Less data means less demand for deep analytics, hitting the revenues of companies like FactSet and Refinitiv.
- Hedge funds that trade on earnings: Quarterly announcements were major volatility catalysts. Now these events will be halved, shrinking opportunities for event-driven strategies.
What the Media Isn't Saying
The first critical nuance that is barely discussed: banks will remain under quarterly supervision. Even if the SEC approves the reform, bank holding companies will still be required to file quarterly Call Reports with the Federal Reserve and the OCC. This means the banking sector, which lobbied hardest for the reform, actually won't get "relief." But industrial companies, retailers, and commodity giants will. Banks lobbied not for their own exemption, but to weaken control over the entire market to expand their own advisory margins.
The second hidden fact: Form 8-K will not replace the quarterly report. The SEC claims that disclosure of material events via 8-K will remain mandatory and protect investors. This is misleading. An 8-K reports a fact—"lost largest client," "filed a $500 million lawsuit." But an 8-K does not contain an income statement or balance sheet impact. Without a quarterly report, an investor may learn of an event in April but its financial consequences only in August. For half a year, the market trades blindly regarding the company's debt, margin, and cash flow.
The third point: the myth of "reviving IPOs." Atkins called this reform the flagship of the "Make IPOs Great Again" agenda, claiming that reducing the burden would attract new listings. The British experiment proved the opposite. When the UK abolished quarterly reporting in 2014, the London Stock Exchange saw neither an increase in IPOs nor an improvement in company valuations. Moreover, companies that switched to semi-annual reporting faced reduced analyst attention and higher cost of capital. The IPO problem is not about reporting, but about the availability of private capital and compliance costs unrelated to disclosure frequency.
Forecast: Next 30 Days and 90 Days
30 days (by June 6, 2026):
A flood of comments from institutional investors will begin. Vanguard, BlackRock, and State Street will officially oppose, arguing that reduced reporting frequency increases risks for funds holding trillions of dollars in assets. The Investment Company Institute has already stated that "a balance between reducing burden and maintaining disclosure quality is important." Behind the scenes, managers will discuss how to rewrite risk management systems for a reality where data is halved.
90 days (by August 6, 2026):
The comment period will close. TD Cowen predicts finalization of the rule by the end of 2026. However, a problem the SEC is currently ignoring will surface: S&P 500 and other index providers historically require quarterly reporting from companies in their indices. The question will arise: will companies that switch to semi-annual reporting be excluded from indices? This will become the main lever of pressure on issuers. Large companies, fearing delisting from trillion-dollar ETFs, will publicly state that they "will maintain quarterly reporting for now."
When the dust settles, it will turn out that only a few companies will switch to semi-annual reporting—those very small-cap companies that are already starved of attention. Large corporations will simply gain a lever of pressure on regulators: "Don't like our disclosure practices? We'll switch to semi-annual reporting." The SEC did not create flexibility for the market—it created a blackmail tool for corporate lawyers that will be used for decades.
— Editorial Team
