SEC Proposes Semi-Annual Reporting

On May 5, 2026, the SEC issued its much-anticipated proposed rule providing domestic public companies with the option to transition from a quarterly to a semi-annual reporting framework.  Foreign Private Issuers are not impacted by the proposed rule change.  This proposal is not merely a technical adjustment but a fundamental re-imagining of the periodic reporting obligations that have governed the American capital markets for over half a century.

Background

The current quarterly reporting regime, primarily executed through Form 10-Q, has its roots in the post-World War II industrial recovery period. At that time, the markets were dominated by manufacturing concerns with linear business models that aligned reasonably well with a 90-day reporting cycle. However, in 2026, the diversity of the public issuer base—ranging from trillion-dollar technology giants to pre-revenue biotechnology firms—demands a more nuanced approach. The proposal reflects a “deal maker” philosophy, moving away from the “one-size-fits-all” mandate toward a flexible, election-based model that allows issuers to align their disclosure cadence with their specific business rhythms.

Technical Foundations: The Creation of Form 10-S

The primary mechanism for this transition is the creation of a new filing vehicle: Form 10-S. Under the proposed amendments to the Exchange Act, specifically Rules 13a-13 and 15d-13, companies subject to Section 13(a) or 15(d) reporting obligations would be permitted to satisfy their interim reporting requirements by filing one semiannual report on Form 10-S in lieu of three quarterly reports on Form 10-Q.

Filing Deadlines and Filer Status

The proposal ensures that the “acceleration” of information flow is maintained for larger, more systemically important issuers by mirroring existing periodic report deadlines.

These deadlines are “bright-line rules” that require strict compliance to maintain “current and timely” status for purposes of S-3 registration statement eligibility. For more on S-3 eligibility, see HERE.

Detailed Analysis of Technical Amendments

The heart of the proposal lies in the item-by-item amendments to Regulation S-K and Regulation S-X, which redefine the “interim period” as a six-month window.

Amendments to Regulation S-K (Non-Financial Disclosures)

The SEC is proposing to adapt the standard Regulation S-K items to fit the semiannual cadence of Form 10-S.

Part I: Financial Information

• Item 1: Financial Statements: Registrants must provide condensed financial statements for the most recent six-month period, compared to the corresponding six-month period of the prior year.
• Item 2: Management’s Discussion and Analysis (Item 303): This is the most substantive change. Management must discuss results of operations for the completed six-month period compared to the same period in the prior fiscal year. The SEC is proposing that while companies may still provide quarterly comparisons, it is no longer mandatory, focusing instead on year-to-date (YTD) results to mitigate “short-termism”.
• Item 3: Quantitative and Qualitative Disclosures About Market Risk (Item 305): Issuers must provide an updated analysis of market risks (interest rates, foreign currency) as of the end of the six-month period. This is critical for global enterprises where a six-month gap could hide significant shifts in risk profile.
• Item 4: Controls and Procedures: Management must evaluate the effectiveness of disclosure controls and procedures (DCP) and internal control over financial reporting (ICFR) every six months instead of every quarter.

Part II: Other Information

• Item 1: Legal Proceedings (Item 103): Companies must disclose any material developments in legal proceedings that occurred during the six-month interim period.
• Item 1A: Risk Factors (Item 105): The proposal requires a comprehensive update of all material risks that have emerged since the last annual report. The SEC emphasizes that the “dark period” created by semiannual reporting places a higher premium on using Form 8-K to disclose material shifts in risk in real-time.
• Item 2: Unregistered Sales of Equity Securities and Use of Proceeds: Tabular disclosure of all unregistered sales of equity securities made during the six-month period is required.
• Item 3: Defaults Upon Senior Securities: Disclosure of any material defaults in payment or other material defaults not cured within 30 days is required for the semiannual period.
• Item 6: Exhibits (Item 601): The proposal adapts the exhibit requirements of Item 601, including the required Section 302 and 906 certifications by the CEO and CFO, to reflect the six-month period covered by the Form 10-S.

Amendments to Regulation S-X (Financial Backbone)

Regulation S-X governs the form and content of financial statements. The Commission is proposing modifications to Rules 10-01 and 8-03 to streamline the presentation of condensed semiannual statements.

• Rule 10-01(c)(2): The proposed amendment makes the inclusion of individual quarterly periods optional. The focus shifts to the six-month YTD period, which provides substantial simplification relief for accounting departments.
• Auditor Review Requirements: The proposal maintains the requirement that an independent registered public accounting firm must review the interim financials in Form 10-S in accordance with PCAOB standards. While the frequency drops to one review per year (plus the year-end audit), the rigor of the review remains unchanged.
• Rule 3-12 (Staleness): To maintain symmetry between the Securities Act and Exchange Act, Rule 3-12 may be amended to adjust the “age” of financial statements required in registration statements.

Strategic Implications for Capital Markets and Deal Execution

For a senior deal lawyer, the shift to semiannual reporting introduces new variables related to transaction timing and “staleness” of information.

Managing the 135-Day Rule in Underwritten Offerings

Under SAS 72 / AU 634, auditors can only provide “negative assurance” in a comfort letter if interim results are no more than 135 days old. In a semiannual regime, a company will frequently find itself in a “blackout period” where its last reviewed financials are older than 135 days. To maintain deal readiness, issuers may need to reset the clock via voluntary quarterly reviews disclosed on Form 8-K or time shelf takedowns more precisely.

Shelf Registration and Eligibility

The proposal ensures that filing Form 10-S on time satisfies the requirement to be “current” for Form S-3/F-3 eligibility. However, the longer gap between mandated reports means that “forward incorporation by reference” of Form 8-Ks becomes the primary mechanism to keep a shelf prospectus updated with material developments.

Corporate Governance and Insider Trading Compliance

A six-month gap creates a longer “dark period” during which material non-public information (MNPI) can accumulate. Boards must recalibrate insider trading policies and trading windows, which are traditionally tied to quarterly earnings releases. Furthermore, Audit Committees may need to amend their charters to reflect the new semiannual oversight and meeting cadence.

Impact on National Exchange Listing Standards

The shift to semiannual reporting requires a careful synchronization between SEC mandates and the listing standards of the Nasdaq and NYSE. Historically, both exchanges have mandated quarterly reporting as a cornerstone of continued listing eligibility. The proposal aims to harmonize these rules, allowing the “standard” U.S. domestic reporting cadence to align with the flexibility already afforded to Foreign Private Issuers (FPIs).

Harmonization of Periodic Filing Requirements

Currently, Nasdaq Rule 5250(c)(1) and NYSE Section 203.01 require listed companies to timely file all “required periodic financial reports” with the Commission. If Form 10-Q becomes optional at the SEC level, the exchanges must update their internal rules to accept Form 10-S as satisfying the “interim reporting” requirement.

This harmonization process is expected to follow the existing FPI blueprint. For instance, Nasdaq Rule 5250(c)(2) already permits FPIs to submit semiannual unaudited financial information via Form 6-K in lieu of quarterly reports. Similarly, the NYSE amended its manual in 2016 to require FPIs to furnish semiannual financial information, acknowledging that annual-only reporting was too infrequent for modern markets. The rule proposal essentially extends this “international standard” to the domestic issuer base, provided the exchanges formalize Form 10-S as a compliant vehicle.

The Decision-Maker’s Checklist: Evaluating the Transition

For a board of directors, the decision to elect semiannual reporting should be based on:

1. Capital Raising Plans: The 135-day rule essentially mandates quarterly reviews for continuous “shelf readiness”.
2. Stakeholder Expectations: If the market “signals” an expectation for quarterly data, moving to semiannual reporting could lead to a loss of liquidity.
3. Operational Maturity: Does the company have the internal controls to maintain accuracy without the “deadline discipline” of a 10-Q?
4. M&A Readiness: A buyer will want to see current, reviewed financials; “going dark” for five months can protract due diligence.

Conclusion: Clean Execution in a Flexible Environment

The shift toward semiannual reporting is a landmark moment that offers companies the ability to focus on long-term strategy while reducing administrative costs. However, the “deal maker” understands that this flexibility requires even more rigorous planning and real-time disclosure via Form 8-K to maintain market confidence and deal velocity.

The Author

Laura Anthony, Esq.

Founding Partner

Anthony, Linder & Cacomanolis

A Corporate and Securities Law Firm

LAnthony@ALClaw.com

Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size private companies, public companies as well as private companies going public on the Nasdaq, NYSE American or over-the-counter market, such as the OTCQB and OTCQX. For more than two decades Anthony, Linder & Cacomanolis, PLLC has served clients providing fast, personalized, cutting-edge legal service.  The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker-dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions, securities token offerings and initial coin offerings, Regulation A/A+ offerings, as well as registration statements on Forms S-1, S-3, S-8 and merger registrations on Form S-4; compliance with the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers; applications to and compliance with the corporate governance requirements of securities exchanges including Nasdaq and NYSE American; general corporate; and general contract and business transactions. Ms. Anthony and her firm represent both target and acquiring companies in merger and acquisition transactions, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The ALC legal team assists Pubcos in complying with the requirements of federal and state securities laws and SROs such as FINRA for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the small-cap and middle market’s top source for industry news, and the producer and host of LawCast.com, Corporate Finance in Focus. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.

Ms. Anthony is a member of various professional organizations including the Crowdfunding Professional Association (CfPA), Palm Beach County Bar Association, the Florida Bar Association, the American Bar Association and the ABA committees on Federal Securities Regulations and Private Equity and Venture Capital. She is a supporter of several community charities including the American Red Cross for Palm Beach and Martin Counties, Susan Komen Foundation, Opportunity, Inc., New Hope Charities, the Society of the Four Arts, the Norton Museum of Art, Palm Beach County Zoo Society, the Kravis Center for the Performing Arts and several others.

Ms. Anthony is an honors graduate from Florida State University College of Law and has been practicing law since 1993.

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