The US SEC is considering semiannual reporting, raising questions about the balance between regulatory burden and market transparency. Here’s what could change, what’s at stake, and how companies can prepare.
Key takeaways
- The SEC may allow public companies to report every six months instead of quarterly.
- Less frequent reporting could ease compliance burdens but reduce transparency.
- Companies should tighten internal controls and carefully monitor the SEC's rule changes.
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The US Securities and Exchange Commission (SEC) may change its rules so public companies can report semiannually.
It follows calls from President Donald Trump in September 2025 to scrap mandatory quarterly reporting.
The SEC is expected to propose a rule change by April 2026 that would allow companies to continue reporting quarterly or switch to semiannual reporting.
Reduced reporting could ease compliance burdens and free up resources, but there are concerns about diminished transparency, investor confidence and market oversight.
Lexology PRO unpacks the possible implications for businesses.
What’s at stake for public companies?
Quarterly reporting plays a key role in corporate accountability and transparency, offering investors and stakeholders a snapshot of a company’s operations and financial health. It also helps businesses monitor their own performance to inform strategic decisions and investments.
Less frequent reporting could undermine transparency, harming investor and shareholder confidence. Critically, it may also increase the possibility of insider trading or fraud. With fewer mandated disclosures, executives may feel less pressure to maintain ethical standards, and material information could be selectively withheld.
The danger is that reduced reporting could “make investing in public companies less trustworthy, and that less reporting can more easily hide the types of misdeeds that led to scandals such as Enron and Worldcom,” says US-based David Feldman, managing partner at Feldman Legal Advisors.
Weighing the benefits of reduced reporting
Despite this, two potential advantages of reduced reporting stand out for companies.
Reduced compliance burden
Quarterly reporting is a document and time intensive process that places a significant compliance burden on companies. The weight of frequent reporting is cited as a factor in the decline of the number of US public companies in recent years.
Shifting away from this model could reduce costs and ease administrative strain, allowing companies to divert resources to other business needs.
The time and resource demands of quarterly reporting have prompted certain jurisdictions to drop this requirement. The European Commission amended the EU Transparency Directive in 2013 to remove mandatory quarterly reporting, citing the associated administrative burden of frequent reporting.
Greater long-term focus
The time and effort tied to quarterly reporting can hinder long-term thinking. Some companies feel constrained by market pressures, such as quarterly earnings expectations, and regulatory deadlines, which may stand in the way of forward-looking planning.
Reduced reporting may help how companies approach strategic thinking, freeing up resources for long-term projects and innovation.
“The argument for moving to six-month reporting is to seek to address one of the larger criticisms of becoming a public company, namely, that there is tremendous pressure every quarter to meet or beat short term Wall Street expectations. Proponents of less reporting say that this reduces the focus on long-term planning and willingness to undertake capital expenditures where the benefits are down the road,” Feldman tells Lexology PRO.
However, switching from three months to six months may not suffice to realistically encourage greater long-term thinking. Data from the UK – which abolished mandatory quarterly reporting in 2024 – also indicates that shifting to semiannual reporting did not significantly boost long-term investment or research spending.
Next steps for public companies
Trump made a similar call to ditch quarterly reporting in 2018, but the change never materialised. However, his latest push carries more weight. With a Republican majority at the SEC and stronger legislative support for his agenda, the proposal is more likely to gain traction.
The SEC is yet to issue a formal rule change, but companies can take proactive steps to prepare.
“Responsible management may start preparing for tighter insider trading policies, and greater disclosure of events between reporting,” according to Feldman.
Companies should closely monitor the SEC’s rulemaking process, prepare for potential transition periods, and ensure that robust internal controls remain in place to stay compliant – even with less frequent reporting.