Overview
On May 5, 2026, the Securities and Exchange Commission (“SEC”) issued a rulemaking proposal that, if adopted, would allow reporting companies the option to elect to report financial results semi-annually rather than quarterly.
Companies electing to report semi-annually would file one semi-annual interim report per year on a new Form 10-S (and an annual report on Form 10-K) instead of filing three quarterly interim reports per year on Form 10-Q (along with the annual report on Form 10-K).
The proposal also includes amendments to Regulation S-X to simplify the rules regarding the age of financial statements in SEC filings.
The SEC is seeking comments on the proposed rules by July 6, 2026.
Semi-Annual Reporting Eligibility and Election
- Available to reporting companies regardless of filer status, size, or market capitalization.[1]
- Companies may elect semi-annual reporting annually by checking a box on the cover page of Form 10-K.
- A similar checkbox would be added to registration statements on Forms S-1, S-3, S-4, S-11 (Securities Act registration statements), and Form 10 (Exchange Act registration statement).
- Inadvertent elections may be corrected by filing a Form 10-K amendment as soon as practicable, but no later than the due date of the company’s first Form 10-Q for that fiscal year.
- Timely Exchange Act filings would continue to apply as a condition to Form S-3 eligibility, with Form 10‑S counting as a periodic report for those purposes.
New Semi-Annual Reports on Form 10-S
Form 10-S Filing Deadlines
- 40 days (large accelerated filers and accelerated filers).
- 45 days (all other filers).
- Similar timing to existing Form 10-Q deadlines.
- First Form 10-S is due after the first completed semi-annual period following election.
Form 10-S Structure and Content
- Modeled closely on Form 10-Q, including the same narrative disclosures and financial information as the existing Form 10-Q, but covering six-month periods.
- Financial statements generally must be prepared using U.S. GAAP and reviewed (not audited) by an independent public accountant in accordance with PCAOB standards.
- Scaled disclosure would remain available for smaller reporting companies.
Operational Mechanics and Exhibits
- No mid-year switching would be permitted between quarterly and semi-annual reporting.
- Inline XBRL tagging requirements would still be required.
- CEO/CFO certifications (SOX 302/906) would still be required.
- Exhibit filing requirements would be substantially consistent with existing Form 10-Q requirements.
Proposed Amendments to Financial Statement Staleness Rules
The proposal streamlines the financial statement staleness rules in Regulation S-X by shifting the focus from calendar-day tests to a reporting cadence-based standard and consolidating existing rules.
Replacement of Existing Staleness Tests
- The proposed rules replace the current 130/135-day tests for financial statement staleness.
- Removes the need to calculate elapsed days between balance sheet dates and filing/effectiveness dates for registration statements (or proxy statement mailing dates).
- Under the proposed amendments, the current 130/135-day staleness tests would be replaced with a reporting cadence-based standard. Registrants would include the latest interim financial statements already filed (Form 10-Q or 10-S, as applicable), or those required to be filed on or before a registration statement’s filing/effective date. Financial statements for semi-annual filers would not be deemed stale due to the quarterly reporting framework.
Content of Interim Financial Statements
- The proposed rules maintain substantially similar requirements regarding the content of interim financial statements (except that such content requirements would apply for semi-annual periods for companies that elect to report semi-annually).
Key Takeaways and Potential Implications
- The proposal is expected to generate significant commentary during the public comment period (ending July 6, 2026), including pushback from institutional and retail investors who may prefer the existing quarterly reporting framework, as well as from proxy advisory firms and shareholder advocates.
- If the rules are adopted as proposed, reporting companies would need to consider a variety of issues, including:
- Investor/Analyst Expectations: Companies that elect semi-annual reporting may nonetheless continue to issue quarterly earnings releases and conference calls based on investor or analyst expectations.
- Earnings Guidance: Companies may need to reassess earnings guidance practices, including whether to give quarterly, semi-annual, annual, or no guidance.
- Financial Reporting Covenants: Reporting covenants in credit facilities and other debt agreements, as well as other contractual arrangements may require quarterly financial information regardless of SEC reporting elections. Companies considering electing semi-annual reporting would need to assess the potential impact of such obligations and the potential need (and feasibility) to amend existing agreements.
- Regulation FD: Companies may need to reassess their Regulation FD compliance policies, as longer intervals between periodic reports may increase the volume of material nonpublic information and heighten risks of selective disclosure.
- Form 8-K Filing Frequency: Semi-annual reporting could result in an increase in Form 8-K filings to disclose material updates between reports.
- Stock Exchange Listing Requirements: The rules as proposed would not change stock exchange listing requirements. Listed companies should monitor whether exchanges adopt conforming amendments (and the timing thereof), as certain existing exchange rules (such as Nasdaq Rule 5250(d)(3)) reference quarterly financial reports.
- Trading Blackout Periods: Insider trading blackout periods may need to be longer due to longer gaps between disclosures.
- Rule 10b5-1 Trading Plans: The proposed amendments would modify Rule 10b5-1 to align with semi-annual reporting, which could result in longer cooling-off periods for directors and officers adopting trading plans during the first or third quarters. For such trading plans, the cooling-off periods would be more likely to reach the 120-day maximum.
- Comfort Letter Issues for Securities Offerings: Companies electing semi-annual reporting may face challenges with auditor comfort letters given to underwriters in securities offerings, as PCAOB AS 6101 permits accountants to provide negative assurance only as of a date that is less than 135 days (i.e., up to 134 days) after the end of the most recent period for which the accountant has performed an audit or review. Depending on offering timing, semi-annual filers could fall outside this window. The SEC has requested feedback on whether changes to PCAOB AS 6101 may be necessary.
The 279-page SEC release for the proposed rules can be found here.
If you have any questions regarding this client alert, please call or e-mail your SRFC attorney.
DISCLAIMER: This communication, which we believe may be of interest to our clients and friends of the firm, is for general information only. It is not a full analysis of the matters presented and should not be relied upon as legal advice. This may be considered attorney advertising in some jurisdictions.
[1] The proposal would not substantively affect foreign private issuers (except to the extent that such issuers voluntarily file on domestic forms), registered investment companies (other than business development companies and face-amount certificate companies) or asset-backed issuers.