WASHINGTON, D.C. — The U.S. Securities and Exchange Commission (SEC) proposed in May 2026 to allow publicly traded companies to choose semiannual financial reporting instead of quarterly reporting. The public comment period for this proposal concluded on July 6, 2026.

The SEC indicated that the proposal could deter short-termism among corporate leaders and potentially reduce accounting and compliance costs for companies. However, the commission also acknowledged that the change might result in some investors being less informed, erode perceptions of fairness, and weaken the monitoring of corporate conduct. The SEC has not commented on a timeline for next steps regarding the proposal.

JPMorgan and Nasdaq expressed support for the SEC's proposal. Both organizations stated that allowing companies to adopt a longer-term perspective on performance would bolster capital markets.

Conversely, the Investment Company Institute, which represents mutual and exchange-traded funds, submitted a comment letter to the SEC on July 6, 2026, revealing that a survey of 14 of its members indicated that a majority considered quarterly reports important. Approximately 62% of the surveyed members, collectively representing $6.1 trillion in assets, viewed quarterly reports as highly important, while 29% considered them moderately important.

The Managed Funds Association, an organization representing hedge funds and other asset managers, called for the semiannual reporting proposal to be scrapped. Bryan Corbett, President of the Managed Funds Association, stated, "Timely, material information was essential to investors." The California Public Employees' Retirement System also submitted comments opposing the SEC proposal.

The American Accounting Association opposed the proposal, stating, "Semiannual rather than quarterly reporting could allow accounting problems to go undetected for longer, potentially increasing the costs to remediate when eventually discovered." The United States has required quarterly reports from publicly traded companies since 1970, while other countries permit publicly traded companies to disclose financial results twice a year.

Why It Matters

The SEC's proposal to shift from mandatory quarterly financial reporting to optional semiannual reporting represents a potential change in U.S. corporate disclosure requirements established in 1970. This change aims to reduce company costs and encourage long-term strategic views but introduces concerns about investor information access and corporate oversight. The diverse reactions from financial institutions and professional organizations, ranging from support by JPMorgan and Nasdaq to opposition from groups like the Investment Company Institute, the Managed Funds Association, and the American Accounting Association, indicate differing priorities within the financial industry regarding regulatory burden versus transparency.