US SEC proposes allowing public companies to opt out of quarterly earnings reports in favour of semi-annual reporting, in a significant shift to US disclosure obligations

The US Securities and Exchange Commission (SEC) has proposed a rule change that would allow public companies to opt out of mandatory quarterly earnings reporting and shift to semi-annual (twice-yearly) disclosure instead. The proposal represents one of the most significant potential changes to US public company disclosure architecture in decades. The current framework — under which listed companies file quarterly reports on Form 10-Q — has been criticised by some executives and policymakers as incentivising short-term decision-making at the expense of longer-term value creation. The SEC's proposal, if adopted, would make quarterly reporting optional rather than mandatory for qualifying companies, allowing boards that prefer a longer reporting horizon to reduce their compliance burden and refocus management attention. For capital markets lawyers and their clients, the implications are material on several fronts. Companies that opt into semi-annual reporting would face heightened scrutiny around their continuous disclosure obligations in the interim periods between reports — investors and regulators would expect robust ad hoc disclosure of material developments to compensate for the absence of quarterly filings. The interaction with the SEC's Regulation FD (Fair Disclosure), which prohibits selective disclosure of material non-public information, would become more complex if some companies disclose quarterly while others disclose semi-annually. For UK and European practitioners, the proposal is worth tracking as a potential policy signal: the FCA has already streamlined some reporting requirements under its listing reforms, and a US deregulatory move at this scale could accelerate pressure on the FCA and (European Securities and Markets Authority) to reconsider the frequency and granularity of their own periodic reporting regimes.