From Quarterly to Semiannual: Assessing the Implications of the SEC’s Proposed Reporting Shift

By: Sam Lockwood, Class of 2028

Overview

Quarterly earnings reports have long been the standard for U.S. corporate transparency. Since 1970, the Securities and Exchange Commission (SEC) has required publicly traded companies to release their financial statements quarterly on Form 10-Q.[1] However, the longstanding practice could soon change and have lasting impacts on investor sentiment and corporate governance.

Chairman of the SEC Paul Atkins recently stated that the agency is fast-tracking President Trump’s plan to scrap mandatory quarterly earnings reporting in favor of bi-annual disclosures.[2] The agency stated that a proposal could come later this year or early 2026.[3]

History and Reasoning

The Securities Exchange Act of 1934 authorized the SEC to require periodic reporting from publicly traded companies, but it did not initially establish a formal reporting schedule.[4] In 1955, the SEC started requiring semi-annual reporting and later expanded the mandate to quarterly reporting in 1970, which remains the requirement today.[5]

The purpose of the quarterly reporting requirements was to increase transparency and foster investor confidence.[6] Since 1970, the SEC has enhanced reporting requirements to further increase transparency for investors.[7] Following the fallout from Enron's accounting fraud scandal, the agency passed the Sarbanes-Oxley Act in 2002, requiring a company’s CEO and CFO to sign off on quarterly reports and other major disclosures.[8]

Although the goal of quarterly reporting requirements is to promote transparency and increase investor confidence, critics have questioned their overall value and have argued that companies devote excessive time and capital preparing the reports.[9]

Potential Benefits

President Trump has argued that preparing quarterly reports involves extensive resources and that reducing the frequency will help public companies cut unnecessary legal and accounting costs.[10] Reducing regulatory requirements could allow companies to devote more resources to other strategic business needs.[11] Early data suggests that companies could save significantly from shifting from quarterly to semiannual reporting.[12] The Tel-Aviv Stock Exchange allowed small-cap firms to shift to semiannual reporting in 2017, and the firms experienced a 19.8 percent reduction in external auditing hours and 16 percent decrease in annual external audit fees.[13]

Additionally, supporters have stated that removing the quarterly reporting requirements may allow companies to focus more on long-term strategy.[14] There is concern that quarterly reporting requirements force companies to focus only on short-term decisions dedicated to improving that quarter’s earnings rather than serious business needs.[15]

The shift to semiannual reporting would also align the U.S. to foreign jurisdictions, as the European Union, United Kingdom, and Australia only require semiannual earnings reports.[16] Shifting requirements closer to those of other developed markets could potentially help U.S. companies compete better abroad, as they won’t have the disadvantage of allocating more resources to reporting than their foreign counterparts.[17]

Transparency and Governance Concerns

Despite the potential benefits, some worry that the shift will enhance market volatility and encourage companies to postpone bad news.[18] Investors have argued that one reason U.S. equities trade at a premium is due to its stricter reporting requirements.[19]

Quarterly reporting information helps prevent fraud and market manipulation, and there are concerns that shifting to a semiannual structure may decrease investor confidence.[20] Trading activity may be limited unless companies voluntarily provide regular financial updates.[21]

Additionally, corporate governance quality is directly linked to the frequency of reporting.[22] According to research, there is a positive correlation between firms continuing quarterly reporting and high governance standards.[23] The firms who shifted to semiannual reporting displayed less diversity and financial expertise among board members, highlighting the importance of regular reporting for upholding governance quality.[24] Quarterly reports serve as regular checkpoints for corporate directors to assess a manager’s performance, and semiannual reports could make it easier for underperforming executives to avoid scrutiny.[25]

Looking Ahead

As the SEC continues to move forward with a formal proposal, the coming months will likely feature significant debate between corporations and investors. The shift would require boards to rethink their internal reporting practices to ensure that directors continue receiving timely financial information to properly assess the company’s performance. Additionally, many boards will have to consider continuing quarterly reporting to ease investors’ concerns.

[1] Matthew Kaplan, Paul Rodel and Steven Slutzky, The End of Quarterly Reporting in the United States?, (Oct. 5, 2025), https://corpgov.law.harvard.edu/2025/10/05/the-end-of-quarterly-reporting-in-the-united-states/

[2] Douglas Gillison and Manya Saini, US SEC chair fast-tracks Trump push to end quarterly earnings reports, (Sept. 29, 2025), https://www.reuters.com/business/us-sec-chairman-atkins-vows-fast-track-scrapping-quarterly-corporate-reports-ft-2025-09-29/

[3] Id.

[4] Michael P. Canty, Investor Alert: The Ongoing Debate Over Quarterly Reporting Requirements, (Dec. 16, 2020), https://www.labaton.com/news-insights/investor-alert-the-ongoing-debate-over-quarterly-reporting-requirements

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Gillison, supra note 2.

[11] Kaplan, supra note 1.

[12] Keren Bar-Hava, How Shifting to Semi-Annual Financial Reporting Affects Market Dynamics and Governance, (July 18, 2024), https://clsbluesky.law.columbia.edu/2024/07/18/how-shifting-to-semi-annual-financial-reporting-affects-market-dynamics-and-governance/

[13] Id.

[14] Gillison, supra note 2.

[15] Id.

[16] Kaplan, supra note 1.

[17] Id.

[18] Gillison, supra note 2.

[19] Id.

[20] Kaplan, supra note 1.

[21] Id.

[22] Bar-Hava, supra note 12.

[23] Id.

[24] Id.

[25] Id.