SEC proposes semiannual Form 10-S for public companies

The Securities and Exchange Commission on Tuesday proposed rules that would let public companies elect to file semiannual reports on a new Form 10-S in place of quarterly Form 10-Q filings. The proposal sets a filing window of 40 to 45 days after the first half closes, with the exact deadline depending on a company’s filer status. The SEC opened a 60-day public comment period that will begin once the proposal appears in the Federal Register.

The SEC noted that smaller issuers and companies with large digital-asset treasuries face substantial audit and review costs each quarter. A petition from the Long-Term Stock Exchange cited in the proposal estimated quarterly report preparation can exceed 1,000 hours and $100,000 per quarter. Academic research referenced in the petition found that mandatory quarterly reporting reduced small-firm value by roughly 5 percent.

The agency described the proposed change this way: “Public companies, subject to Exchange Act Section 13(a) or 15(d), are currently required to file quarterly reports on Form 10-Q. The proposed amendments, if adopted, would allow these public companies to elect to file semiannual reports on new Form 10-S instead of quarterly reports on Form 10-Q.”

Investor advocates and some market analysts raised concerns about a transparency gap if companies reduce mandatory interim reporting. Commenters pointed to Europe, where a shift to semiannual reporting coincided with reduced analyst coverage of some mid-cap firms, wider bid-ask spreads and an increase in insider trading convictions, according to materials cited in the SEC release.

Analysts said a persistent information gap could lead to lower trading volumes and a liquidity discount, and that a higher implied risk premium would increase the cost of capital for some companies. Market participants also noted that management teams could face less external scrutiny between reporting periods.

SEC Chair Paul Atkins framed the proposal as expanding options for issuers and investors in the agency announcement and said the agency expects voluntary updates, including Form 8-K filings, to provide interim information for markets.

The public comment period is expected to include input from investors, analysts and issuers debating whether voluntary disclosures and event-driven filings can substitute for quarterly reports. The SEC will review comments before deciding whether to adopt the proposed amendments.