SEC semiannual filing option could save $200 million in compliance costs

The SEC's proposal to let public companies file semiannual reports on new Form 10-S could cut compliance costs by more than $200 million annually, though most firms would still announce earnings quarterly, a KPMG survey shows.

"While filing fewer periodic reports could reduce certain compliance and reporting costs, many public companies still need timely financial information to run their business, support board oversight, meet investor expectations and satisfy contractual obligations such as lending arrangements," said Michelle Wroan, Los Angeles managing partner at KPMG.

The SEC proposed the optional regime on May 5, with comments due 60 days after publication in the Federal Register. More than 5,000 comments were submitted during the comment period. Form 10-S would carry the same disclosure requirements as Form 10-Q — management discussion and analysis, legal proceedings, material risk factor updates, and unregistered sales of securities — with filing deadlines of 40 or 45 days after the first semiannual period, matching current Form 10-Q timelines. The SEC also proposed consolidating Regulation S-X Rule 3-12 into Rule 3-01 to simplify "age of financial statements" rules.

The shift would mark the first major change to periodic reporting frequency since the SEC moved from semiannual to quarterly filings in 1970. The U.K. removed its quarterly requirement in 2014, and most of Europe, Hong Kong, and Australia already operate on semiannual cycles. If adopted, companies would elect annually by checking a box on their Form 10-K cover page, with the choice continuing until the next 10-K filing.

The proposal, first floated by SEC Chairman Paul Atkins in September 2025, reflects the agency's view that the regulatory environment has evolved enough to support greater flexibility. The SEC estimates the change could save public companies more than $200 million in aggregate compliance costs annually. The agency notes that semiannual reporting could reduce distraction from day-to-day business, allow management to focus on strategy, and enable transactions that might not be possible when management is preparing interim reports. The proposal is particularly aimed at emerging growth companies and smaller reporting companies, which face a disproportionate compliance burden relative to their size.

Investor Relations vs. Compliance Tradeoff

Wayne Pinnell, managing partner at Irvine-based accounting firm Haskell & White, said investors may need to increase monitoring of Form 8-K filings and press releases to offset the reduction in periodic reporting for the first and third quarters. "In the worst-case scenario, public companies could demand their auditors only do work concurrent with the preparation of a semi-annual report versus work that is spread quarter-by-quarter under the current filing system," Pinnell said. "This would obviously create 'bunching' of staffing requirements as all interim review work over a six-month period would need to be completed in the 40-45 days after period-end to meet the deadline."

The SEC introduced semiannual reporting in 1955 and moved to quarterly in 1970. Academic studies of markets that operate without mandatory quarterly reports — including the U.K., which removed its requirement in 2014 — found no major differences in financial performance among companies that elected semiannual reporting. However, many British companies continue to report quarterly because investors want more frequent information.

What Companies Need to Consider

Companies weighing the switch will need to assess investor expectations, analyst coverage, peer practices, exchange listing requirements, and contractual obligations such as lending covenants. Even if a company elects semiannual filing, it may still release material financial information quarterly as a matter of investor relations, to help open trading windows and ensure timely access to capital markets.

The SEC is also proposing amendments to Regulation S-X that would replace the day-counting approach for determining when interim financial statements are required in registration or proxy statements with a simplified framework based on the most recently completed fiscal quarter or semiannual period that has been filed.

The SEC is currently reviewing the more than 5,000 comments submitted during the public comment period, which could influence the final rules proposal. If adopted, the new regime would be optional — companies could continue filing quarterly reports on Form 10-Q without any change. The agency has not yet set a timeline for final adoption.

This article is for informational purposes only and does not constitute investment advice.