SEC weighs move to semiannual reporting for public companies

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SEC plans update to reporting system rules

Highlights

SEC may allow companies to shift from quarterly to semiannual reporting.
The proposal could mark one of the biggest changes to U.S. reporting rules in decades.
Less frequent disclosures may reduce transparency and increase market volatility.

According to The Wall Street Journal, the proposal could be introduced in the coming weeks before entering a public consultation phase. If approved, it could become one of the most significant reporting reforms in U.S. capital markets in decades.

How the reporting system could change

The SEC has already discussed the initiative with major stock exchanges to assess how the changes might affect listing requirements. Quarterly reporting would not be eliminated entirely — companies would still be free to publish results every three months on a voluntary basis.

The requirement to disclose financial results quarterly has been in place since 1970, when Form 10-Q was introduced. Since then, regular disclosure has become a cornerstone of transparency in U.S. financial markets.

Supporters of the reform argue that the current system places excessive pressure on businesses. In their view, frequent reporting pushes management to focus on short-term performance at the expense of long-term strategy. In addition, preparing such disclosures requires substantial resources, costing companies billions of dollars each year.

Debate over transparency

The proposal has already sparked debate among investors and analysts. Critics warn that reducing the frequency of disclosures could weaken transparency and delay access to critical financial information.

Quarterly reports remain a key tool for evaluating corporate performance. They help investors track revenue, profitability, and debt levels, as well as identify potential risks.

Experts also note that less frequent reporting may increase uncertainty and lead to higher market volatility, particularly during periods of economic instability.

Potential market impact

The proposal will go through a public comment period, typically lasting at least 30 days, before the SEC makes a final decision. It remains unclear whether the changes will ultimately be adopted.

If implemented, the U.S. would move closer to European practices. The European Union eliminated mandatory quarterly reporting in 2013, and the UK followed with similar changes, although many companies still report quarterly on a voluntary basis.

Reduced transparency in equity markets could influence capital allocation. In such conditions, some investors may increasingly turn to alternative assets, including digital assets.

Earlier reports also indicated that the SEC is reviewing broader disclosure requirements and its approach to regulating tokenized securities. SEC Commissioner Hester Peirce has emphasized that regulators should avoid overburdening markets with excessive rules. According to her, too much regulation can slow innovation. The agency is also exploring an “innovation exemption” framework that could open the door to limited trading of certain tokenized assets.

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