Full Breakdown
SEC Proposes Optional Semiannual Earnings Reporting for U.S. Public Companies
5/6/2026, 11:19:08 AM
SEC Proposal to Allow Semiannual Earnings Reports
On May 5, 2026 the U.S. Securities and Exchange Commission (SEC) released a formal rule change that would make quarterly earnings reports voluntary. Companies could elect to file a new Form 10-S with semiannual results while still submitting an annual report and retaining the ability to issue quarterly press releases or conference calls. The proposal opens a 60-day public comment period and, if adopted, could become effective as early as early 2027.
Background & Context
Quarterly reporting has been mandatory for U.S. listed firms for roughly 55 years, replacing a semiannual regime that existed from 1955 until the early 1970s. President Donald Trump has repeatedly advocated eliminating the quarterly requirement, arguing it encourages short-term decision-making. The Long-Term Stock Exchange (LTSE) filed a petition in September 2025 that prompted the SEC’s reconsideration. Several exchanges and corporations, including JPMorgan Chase, have argued that the current cadence imposes a costly compliance burden.
Key Figures & Groups
- Paul Atkins – SEC Chairman, author of the proposal’s statement.
- Donald Trump – Former president, long-time proponent of semiannual reporting.
- Bryan Corbett – President and CEO of the Managed Funds Association (MFA), voiced investor-centric concerns.
- John Berlau – Director of finance policy at the Committee for Economic Development (CEI).
- Eric Ries – Founder of the LTSE, highlighted long-term value creation.
- Mike Reynolds – Vice president, investment strategy, Glenmede, noted potential IPO effects.
Data & Statistics
The SEC estimates that issuers opting for semiannual filing could reduce direct compliance costs by roughly $198,000 per fiscal year. Nasdaq’s 100 index does not require quarterly reporting, whereas the S&P 500 mandates it. JPMorgan Chase and other large firms have publicly supported the change, citing resource allocation concerns.
Why It Matters / Impact
Proponents argue that less frequent reporting could curb short-termism, lower barriers for private firms seeking IPOs, and align U.S. practices with most European and Asian markets. Critics warn that reduced filing frequency may increase information asymmetry, elevate insider-trading risk, and raise costs of capital by limiting timely data for investors, especially retail participants. Index providers may need to adjust methodologies to accommodate divergent reporting cadences.
Official Statements & Responses
SEC Chair Paul Atkins emphasized that the existing rules “prevent companies and their investors from determining … the interim reporting frequency that best serves their business needs.” The MFA’s Bryan Corbett urged the agency to balance regulatory relief with investors’ reliance on timely information. Nasdaq noted that its own constituents already operate without mandatory quarterly filings, while the S&P 500’s rules would require review if the change proceeds.
Criticism & Opposition
Several CFO-focused groups expressed reservations. Jack McCullough of the CFO Leadership Council said many executives “actually kind of liked quarterly reporting” for its communication discipline. Nick Araco Jr., CEO of the CFO Alliance, warned that fewer formal reports could create a “false sense of breathing room.” Francine McKenna highlighted the risk of increased reliance on non-GAAP metrics, and Neil Bass cautioned that reduced scrutiny could heighten the chance of accounting scandals akin to Enron.
Conflicting Reports & Gaps
The SEC’s cost-saving projection contrasts with concerns that semiannual reporting could diminish market transparency and liquidity. No empirical data yet exists on how the shift would affect insider-trading incidence or long-term investment flows, leaving a substantive evidence gap.
Verbatim Quotes
- “The rigidity of the SEC’s rules has prevented companies and their investors from determining for themselves the interim reporting frequency that best serves their business needs and investors,” — Paul Atkins, SEC Chair
- “The SEC has made the right call in proposing to end mandatory quarterly reporting by publicly traded U.S. companies and giving them the option to report semi-annually instead,” — John Berlau, CEI Director of Finance Policy
- “It would be an interesting case study if this move could be shown to encourage IPO activity" among smaller companies, said Mike Reynolds, vice president, investment strategy, at Glenmede.” — Mike Reynolds, Vice President, Investment Strategy, Glenmede
- “I think most of them actually kind of liked quarterly reporting, it was just a great way to communicate important information to your investors,” — Jack McCullough, Founder and President, CFO Leadership Council
- “There’s also a real concern that reducing formal reporting could create a false sense of breathing room,” — Nick Araco Jr., CEO, CFO Alliance
What’s Next
The SEC will review comments received by early July 2026, then decide whether to adopt the rule. If approved, companies could begin electing semiannual reporting for fiscal year 2027, potentially reshaping disclosure practices across U.S. capital markets.
