SEC Corporation Finance Division Director to Propose Semiannual Reporting

The SEC's Division of Corporation Finance is preparing a proposal to let public companies report financial results twice a year rather than quarterly.

In an episode of the SEC's "Material Matters" podcast, Division Director Jim Moloney told SEC Chair Paul Atkins that a semiannual reporting option would let a company file one quarterly report covering its first two quarters plus an annual report, in place of the current three quarterly reports and one annual report.

Mr. Moloney said the option would be voluntary and reversible: a company could opt in by checking a box on its report cover and could switch back to quarterly reporting after a full year. He said large companies would likely keep quarterly reporting, while newer and smaller companies, and companies with predictable financials such as smaller regional banks and royalty-stream businesses, might prefer the reduced cadence. Companies opting in would likely continue to issue financial updates through current reports on Form 8-K and to hold earnings calls. Mr. Moloney said the question drew attention after President Trump sent a message about semiannual versus quarterly reporting, and noted that semiannual reporting is used in Europe and was the practice in the United States in earlier decades.

Mr. Moloney described the SEC's preference for market-driven solutions, voluntary frameworks, and rules calibrated to what investors actually need rather than what accumulated rulemaking has mandated over decades. He said the Division is undertaking a comprehensive review of Regulation S-K, the body of line-item disclosure requirements that applies to registration statements, proxy statements, and periodic reports. He said the requirements have grown from a single volume decades ago to a five-volume set, and that the division intends to identify line-item requirements that can be cut back, rooting disclosure in materiality. He cited executive compensation disclosure, which he said has grown from about five pages to 15 to 30 pages with multiple tables, and risk factor disclosure, which he said now often runs 30 to 40 pages or more.

Mr. Moloney said the Division has more than 22 rulemaking actions on its Regulatory Flexibility Agenda. He said the Division has also resumed issuing no-action letters, exemptive orders, and interpretive guidance, that staff had previously been instructed not to issue, and has renamed its Compliance and Disclosure Interpretations as Corporation Finance Interpretations. Mr. Moloney said he ended a prior practice under which staff reviewed filings to confirm that important disclosures appeared three times.