Comment Letter on the SEC’s Proposal to Replace Quarterly Reporting with Semiannual Reporting

We welcome the opportunity to comment on the Securities and Exchange Commission’s proposed amendments that would allow Exchange Act reporting companies to elect semiannual reporting on a new Form 10-S in lieu of quarterly reports on Form 10-Q (“the proposal”). We write as academics with extensive experience conducting research that examines SEC periodic reports, earnings announcements, information intermediaries, and the dissemination and processing of public company disclosures. We appreciate the proposal’s careful economic analysis of the potential costs and benefits of the proposed rule change. Drawing on our experience as active researchers in this field, we aim to clarify relevant findings from the academic literature and to highlight important operational considerations that may arise in implementing the proposed rule change.

Broadly speaking, we support the Commission’s general approach of making semiannual reporting optional rather than mandatory. In our view, the evidence does not support a one-size-fits-all conclusion that quarterly Form 10-Q filings are equally valuable for all issuers and all investor bases. At the same time, the research also suggests that standardized SEC filings, auditor involvement, Form 8-K reporting, Regulation FD, and information intermediaries remain important components of the capital market information infrastructure. There is a delicate balance to preserve: allowing for firm-level flexibility, while maintaining across-firm comparability. The most appropriate policy response is therefore not to eliminate quarterly reporting, but, as proposed by the SEC, to permit firms to elect the reporting frequency that best fits their circumstances, subject to market discipline and continued safeguards that preserve timely, broad, and non-exclusionary dissemination of material information.

I. Summary of Our Views

We agree with many of the proposal’s key insights that the Commission has drawn from its analysis of the relevant academic research. No theory specifies an optimal frequency of financial reporting that applies to all firms. Given that firms are heterogeneous across multiple dimensions, such as size, industry, age, complexity, and investor base, the optimal reporting frequency is likely to vary across firms. Firm management is also well positioned to evaluate the costs and benefits of reporting more or less frequently.[1] Our overall view is that the proposal is best understood as a move from a mandatory uniform quarterly reporting regime to a regulated choice regime, not as a retreat from public-company disclosure.

There are several findings from our academic research that are directly relevant to the Commission’s proposal that we would like to draw attention to:

• First, evidence from Li and Ramesh (2009) suggests that, for many firms, Form 10-Q is not the primary vehicle through which earnings news first reaches the market. Earnings announcements frequently precede periodic report filings, and the incremental market reaction to many 10-Q filings is limited once concurrent earnings announcements are taken into account. This evidence supports the Commission’s decision to allow firms and investors to determine whether mandatory quarterly Form 10-Q reporting is necessary in a particular setting.
• Second, consistent with the evidence in Li and Ramesh (2009), research on sell-side analysts as capital-market information intermediaries has documented that analyst forecast revisions cluster around earnings announcements rather than around firms’ 10-Q or 10-K filing dates (e.g., See Barron, Byard, and Kim 2002).
• Third, evidence from D’Souza, Ramesh, and Shen (2010b) indicates that voluntary quarterly earnings announcements often contain GAAP line-item information and that firms’ choices of which line items to disclose are not random. Rather, the specific line items disclosed tend to reflect the firm’s economic environment and investors’ valuation demands. For example, EBITDA-related disclosures are more common for capital-intensive and highly leveraged firms, while balance-sheet disclosures are more common when asset information is especially relevant. At the same time, the study shows that these voluntary disclosures are shaped by managerial reporting incentives, with managers who appear to intervene more regularly in the earnings reporting process providing fewer supplemental GAAP line-item disclosures. This evidence supports the Commission’s optional approach. Voluntary quarterly earnings releases can convey economically relevant information, but standardized SEC reporting, whether quarterly on Form 10-Q or semiannually on proposed Form 10-S, continues to provide an important baseline of comparability, completeness, and discipline.
• Fourth, Barron, Byard, and Yu (2017) provides additional evidence on why earnings announcements can preempt some of the informational role of subsequent Form 10-Q filings. The study finds that balance-sheet and segment disclosures within earnings announcements help analysts form more informed expectations about near-term quarterly earnings. Together with D’Souza, Ramesh, and Shen (2010b), this evidence suggests that voluntary earnings announcements contain financial-statement details that help investors and information intermediaries assess firms’ future performance before the related Form 10-Q is filed.
• Fifth, examining a historical SEC-sanctioned dissemination practice under which certain sophisticated market participants received earlier access to public earnings releases, Dong, Li, Ramesh, and Shen (2015) shows that unequal access to earnings-release information can affect price discovery, trading advantages, and information risk. This evidence is relevant because voluntary first- and third-quarter disclosures may become more important for firms that elect semiannual reporting. The appropriate policy response is not to assume that retail investors are helpless without mandatory quarterly Form 10-Q filings; retail investors benefit from price discovery, market liquidity, trading signals, and information intermediaries. Rather, the key concern is to ensure that material voluntary disclosures are disseminated broadly and fairly so that price discovery occurs without avoidable information-risk costs from selective access. The evidence therefore supports strong Regulation FD enforcement and broad, non-exclusionary dissemination of material voluntary disclosures. Mandatory quarterly filing is not, in itself, a complete safeguard against selective private disclosure if fair-disclosure obligations are not robustly enforced.
• Sixth, Bronson, Hogan, Johnson, and Ramesh (2011) provides related evidence on the relevance–reliability tradeoff in voluntary earnings releases. In the annual reporting setting, the study shows that when audit completion was delayed, many firms maintained their preliminary earnings release timing, and releases issued before audit completion were more likely to be revised later. This evidence is relevant to one specific issue: under the proposal, semiannual filers’ Form 10-S financial statements would be reviewed, while voluntary first- or third-quarter earnings releases would not be accompanied by a corresponding reviewed Form 10-Q. We do not believe this warrants a requirement that all such voluntary quarterly releases be reviewed. A more proportionate approach would be to require clear disclosure of whether the financial information in any voluntary first- or third-quarter earnings release has been reviewed by an independent public accountant.
• Seventh, evidence from Li, Ramesh, and Shen (2011), D’Souza, Ramesh, and Shen (2010a), and Li (2013) bears directly on the need to preserve the disclosure infrastructure that would remain under optional semiannual reporting. Li, Ramesh, and Shen (2011) and D’Souza, Ramesh, and Shen (2010a) show that information intermediaries, including newswires and data aggregators, play an important role in identifying and disseminating information from periodic SEC filings. Li (2013) makes a related but distinct point: in the context of material contract filings, Form 8-K current reporting can serve as an important channel for timely disclosure of material, future-relevant developments between periodic reports. These studies do not imply that information intermediaries or Form 8-K current reports are substitutes for standardized interim financial statements. Rather, they show that standardized periodic reports, current reports, and information intermediaries are complementary parts of the disclosure system. Accordingly, if the Commission adopts optional semiannual reporting, it should preserve the quality and usability of the standardized filings that remain, including the proposed requirement that Form 10-S contain the same narrative and financial information as Form 10-Q for the covered period, retain Inline XBRL tagging, and maintain a robust Form 8-K system for material developments between periodic reports.

These findings should also be understood against a broader economic rationale for mandatory disclosure. One traditional justification for mandatory public-company disclosure, including disclosure frequency, is that firm disclosures can generate positive information externalities for the broader capital markets. A firm’s earnings announcement, management forecast, or periodic report may help investors update beliefs not only about the disclosing firm, but also about peer firms, industry conditions, and macroeconomic risks.[2] Consistent with this view, Brown, Byard, Darrough, Suh, and Wang (2026) provide evidence that mandatory reporting regulations that increase reporting comparability can generate positive information externalities through information network effects. In their setting, the 2005 mandatory adoption of IFRS outside the United States increased the reporting network available to analysts following U.S. firms; however, the documented benefits were concentrated among U.S. firms with relatively few domestic industry peers, rather than extending uniformly to all U.S. firms. Because firm management may rationally consider only the costs and benefits borne by the firm, it may not fully capture the capital-market benefits that its disclosures confer on other firms, investors, and information intermediaries; as a result, private disclosure incentives may diverge from the socially desirable level of disclosure. At the same time, the existence of such externalities does not imply that a single reporting frequency is optimal for all firms, much less that such frequency should be mandated uniformly; the relevant policy question is whether the incremental information benefits of a particular reporting frequency justify its preparation, verification, proprietary, litigation, and real effects costs.[3]

Finally, the central investor-protection issue is not whether retail investors require mandatory Form 10-Q filings in every quarter, but whether material information voluntarily disclosed outside Form 10-Q is disseminated publicly, fairly, and on equal terms, consistent with Regulation FD. Taken together, the evidence supports an optional semiannual reporting framework, provided that the Commission preserves the integrity of Form 8-K, Regulation FD, auditor-reviewed Form 10-S financial statements, Inline XBRL tagging, and clear disclosure about the assurance status of any voluntary first- or third-quarter earnings releases.

II. Historical Background: Quarterly Reporting Evolved from Voluntary and Exchange-Based Practices[4]

As Leftwich, Watts, and Zimmerman (1981) document, interim reporting developed gradually through voluntary corporate practice, stock-exchange initiatives, investor demand, and later SEC rulemaking. Some firms voluntarily provided interim reports well before mandatory requirements existed, while other firms resisted efforts by exchanges and regulators to require more frequent reporting. The NYSE encouraged interim earnings reporting as early as the 1920s, but its ability to impose uniform requirements was limited by issuer resistance, concerns about competitive costs, and competition from other trading venues.

The SEC’s own path was also incremental. Leftwich, Watts, and Zimmerman (1981) note that the SEC had authority to require quarterly reports when it was established in 1934, but early efforts to require interim reporting encountered substantial opposition. The SEC first imposed limited quarterly reporting requirements in 1945 in connection with wartime-contract disclosures. In 1946, the Commission proposed quarterly income reports, but withdrew that proposal after adverse comments and instead required quarterly sales or gross revenues on Form 8-K. In 1952, the SEC again proposed expanding quarterly reporting to cover the full income statement but again faced strong opposition; after reviewing comments, it dropped the proposal and abandoned the quarterly sales-reporting requirement.

The Commission later adopted semiannual reporting on Form 9-K in 1955, requiring a filing once per year after the first half of the fiscal year. After the 1964 amendments extended SEC reporting authority to many over-the-counter companies, and following the Wheat Report, the SEC rescinded semiannual Form 9-K in 1970 and introduced detailed quarterly income reporting on Form 10-Q.

This history is relevant to the present proposal in two respects. First, it shows that interim reporting frequency has long reflected a balance among investor demand, issuer costs, exchange competition, and regulatory judgment. Second, it shows that voluntary disclosure and mandatory reporting have historically coexisted. The fact that some firms voluntarily provided interim information before SEC mandates suggests that market demand can induce more frequent reporting where it is valuable. At the same time, the historical evolution also explains why standardized SEC reporting became important: voluntary and exchange-based practices were uneven. The Commission’s proposed optional semiannual framework can be understood in this historical context, not as abandoning periodic disclosure, but as permitting reporting frequency to better reflect firm-specific costs, investor demand, and the continued availability of other disclosure mechanisms, including Form 8-K and voluntary quarterly earnings releases.

III. The Incremental Market Reaction to Many Form 10-Q Filings Appears Limited Once Earnings Announcements Are Considered

The most directly relevant evidence is Li and Ramesh (2009), which reexamines market reactions surrounding periodic SEC filings in the EDGAR era. The study analyzes more than 240,000 periodic SEC filings over 1996-2006 and focuses on an important empirical issue: many firms release earnings information through a press release before filing the related Form 10-Q or Form 10-K. Because earnings announcements are known to be important market events, tests of the information content of periodic filings can overstate the market reaction to SEC filings if they do not separately account for concurrent or prior earnings announcements.

The main implication for the Commission’s proposal is straightforward but important. For quarterly reports, Li and Ramesh (2009) finds that when 10-Q filings follow earnings announcements, they are associated with consistently muted price reactions during the event window. The study reports that these filings account for roughly 80 percent of 10-Q filings in the sample and that the surrounding days are among the least price-reactive days examined in the study.[5] The study also reports that inferences based on abnormal trading volume are generally similar to those based on price reactions.

This evidence does not imply that Form 10-Q lacks value. Rather, it suggests that the value of Form 10-Q often lies less in being the first public release of information about quarterly financial performance and more in providing a standardized, reviewed, legally structured, and searchable disclosure record. That distinction is central to the current proposal. If earnings and related financial-performance information are commonly disseminated through earnings releases before the formal filing of the quarterly report, then allowing issuers to elect semiannual reporting is unlikely, by itself, to eliminate the principal channel through which investors first receive such information for many firms. That conclusion is especially plausible for issuers that continue voluntarily to release quarterly earnings information because investors, analysts, lenders, or other market participants demand it.

At the same time, Li and Ramesh (2009) also provides a reason for caution. The muted market reaction to many 10-Q filings should not be interpreted as evidence that standardized SEC filings are unimportant.

The market reaction test captures one dimension of information content: immediate price and volume response. It does not fully capture the value of 10-Q filings for comparability, data aggregation, contractual monitoring, litigation discipline, audit committee oversight, or later-stage research and analysis. The Commission’s optional approach appropriately recognizes this nuance. Firms for which investors value quarterly Form 10-Q filings can continue to file quarterly reports; firms for which the incremental benefit of quarterly Form 10-Q filings is lower can elect semiannual reporting.

IV. Voluntary Earnings Releases and Standardized SEC Filings Play Complementary Roles

Voluntary earnings releases are an important part of the modern disclosure environment and should be considered in evaluating the Commission’s proposal. Evidence from D’Souza, Ramesh, and Shen (2010b) indicates that quarterly earnings announcements often include GAAP line-item information and that firms’ choices of which line items to disclose are not random. Rather, the specific line items disclosed tend to reflect the firm’s economic environment and investors’ valuation demands. For example, EBITDA-related disclosures are more common for capital-intensive and highly leveraged firms, while balance-sheet disclosures are more common when asset information is particularly relevant to valuation.

This evidence suggests that voluntary earnings releases can play a useful market-responsive role. Firms often appear to provide the types of line-item information that investors are likely to find most relevant given the firm’s business model, financing structure, and operating environment. Accordingly, the possibility that many semiannual filers may continue to issue voluntary first- and third-quarter earnings releases is an important reason why optional semiannual reporting need not materially impair capital market functioning.

At the same time, D’Souza, Ramesh, and Shen (2010b) also shows that voluntary earnings-release disclosures are shaped by managerial reporting incentives. Managers who appear to intervene more regularly in the earnings reporting process provide fewer supplemental GAAP line-item disclosures. This finding cautions against treating voluntary earnings releases as complete substitutes for standardized SEC filings. Voluntary disclosures can be informative and responsive to investor demand, but they are also selective, vary across firms, and may be influenced by incentives to direct investor attention.

Barron, Byard, and Yu (2017) extends this evidence by examining which specific types of disclosures within earnings announcements account for the informational impact that often precedes a corresponding Form 10-Q. The study distinguishes between disclosures of balance-sheet data, segment information, and management earnings forecasts and finds that balance-sheet and segment disclosures included in earnings announcements are associated with an increase in the degree to which analysts’ forecasts of near-term quarterly earnings reflect private information, consistent with analysts processing those disclosures into new private insights about upcoming quarterly performance. Management earnings forecasts, by contrast, improve the common component of analyst information rather than the private component. This distinction is directly relevant to the Commission’s proposal: it suggests that what is disclosed in earnings announcements, not merely the timing of those announcements relative to Form 10-Q filings, shapes the incremental information content that market participants would otherwise seek from a quarterly SEC filing. When earnings announcements include balance-sheet and segment disclosures of the line items that D’Souza, Ramesh, and Shen (2010b) documents are tailored to firms’ economic environments and investor demand, a substantial portion of the informational function of a Form 10-Q may already have been discharged at the time of the announcement.

The appropriate implication, in our view, is a balanced one. The Commission should recognize the substantial role that voluntary earnings releases already play in the information environment and should not assume that eliminating mandatory first- and third-quarter Form 10-Q filings will necessarily leave investors without meaningful quarterly information. But standardized periodic reports continue to provide a baseline of comparability, completeness, review, and discipline that voluntary earnings releases do not fully replicate. This supports the Commission’s optional approach: firms whose investors demand quarterly standardized reporting can continue to provide it, while firms for which semiannual reporting is sufficient can reduce mandatory filing frequency without eliminating the ability to communicate quarterly information voluntarily.

V. Voluntary Quarterly Disclosure Requires Robust Fair-Disclosure Safeguards

Dong, Li, Ramesh, and Shen (2015) examines a historical SEC-sanctioned practice under which certain sophisticated market participants received earnings press releases 15 minutes before broader public dissemination. The study finds that this priority dissemination accounted for a nontrivial portion of price discovery before earnings announcements during regular trading hours and for actively traded extended-hours announcements. It also finds evidence that transient institutions benefited from priority dissemination, especially for good-news earnings announcements, and that bid-ask spreads were higher when priority dissemination created information risk.

This evidence is relevant to the Commission’s proposal because, under optional semiannual reporting, firms that elect not to file Form 10-Q may choose to provide voluntary first- and third-quarter earnings releases or other interim updates. If those voluntary disclosures become a more important source of interim information, then the manner in which they are disseminated becomes especially important.

Sophisticated investors and information intermediaries play a valuable role in incorporating information into prices, and retail investors benefit from that price-discovery process. Market signals such as prices, bid-ask spreads, liquidity, and trading conditions can also convey information about the quality of a firm’s disclosure environment. Retail investors should not be presumed unable to draw reasonable inferences from these signals, especially in today’s low-cost digital trading environment.

At the same time, these market mechanisms work best when material information is disseminated broadly, promptly, and fairly. Regulation FD and Item 2.02 of Form 8-K already provide an important foundation for that objective. If voluntary first- and third-quarter disclosures become more important for semiannual filers, the Commission should make clear that selective private disclosure of material quarterly information remains impermissible and should continue to enforce Regulation FD where registrants provide favored access to analysts, institutional investors, or other covered market participants.

The SEC’s own investor-education materials reflect a similar understanding of retail-investor protection. Investor.gov emphasizes practical tools and investor safeguards, including financial tools and calculators, investor alerts and bulletins, common scams, and understanding investment fees. The site provides calculators for topics such as compound interest and savings goals, warnings about phishing and other frauds, and explanations of how fees and expenses reduce portfolio returns. This orientation is sensible: investor protection does not require assuming that retail investors will personally read and analyze every periodic filing or pick individual stocks based on detailed accounting disclosures. Rather, it recognizes that retail investors benefit from fair market-wide price formation, transparent costs, fraud prevention, accessible tools, and effective intermediaries. That perspective is consistent with optional semiannual reporting, provided that material voluntary disclosures are disseminated broadly and fairly and that the Commission continues to enforce Regulation FD.

Accordingly, the relevant policy question is not whether all interim information must be disclosed quarterly through Form 10-Q, but whether material information voluntarily disclosed by registrants is disseminated broadly and non-exclusively. Mandatory quarterly filings are not, by themselves, a complete safeguard against selective private disclosure if Regulation FD is not effectively enforced. Market discipline can reinforce this objective, but it is not a substitute for effective SEC enforcement of fair-disclosure obligations.

VI. The Timeliness-Reliability Tradeoff in Earnings Releases Supports Clear Disclosure, Not Overregulation

Bronson, Hogan, Johnson, and Ramesh (2011) examines the effect of PCAOB Auditing Standards Nos. 2 and 3 on the reliability of preliminary annual earnings releases. The study focuses on the annual reporting context, and we adapt its core insights to the interim setting. The study finds that the implementation of these standards increased audit report lags, but that many firms maintained their historical preliminary earnings release dates even when the audit was not complete. As a result, more firms released preliminary earnings before the audit report date. The study finds that preliminary earnings announcement revisions became more likely when earnings were released before the audit report date and estimates that revisions to preliminary announcements in 2005 would have been 35 percent lower if the historical frequency of issuing earnings releases after the audit report date had not changed.

The relevance for the present proposal is not that quarterly earnings releases should always be reviewed or audited before being released. Rather, the evidence highlights the basic tradeoff between timeliness and reliability. Market participants value timely earnings information. Firms therefore often release earnings before all assurance-related processes are complete. This behavior may be efficient in many circumstances, but it also means investors should understand the assurance status of preliminary earnings information.

Accordingly, if a semiannual filer voluntarily provides first- or third-quarter earnings information without filing a Form 10-Q, the Commission should be cautious before imposing a mandatory independent review requirement for all such releases. A mandatory review requirement could substantially erode the cost savings and flexibility that motivate the proposal. A more modest and targeted approach would be to require prominent disclosure of whether the quarterly earnings release has been reviewed by an independent public accountant. This would allow investors to price the reliability of the information while preserving issuers’ ability to determine whether the benefits of quarterly reviewed information justify the cost.

VII. Information Intermediaries Reduce Information Processing Costs but Also Depend on Standardized Public Disclosures

The Commission’s proposal appropriately recognizes that the modern information environment differs substantially from the environment in which quarterly reporting was adopted in 1970. Public company information today does not travel only through a direct issuer-to-investor channel. It enters a broader information ecosystem that includes newswires, data aggregators, analysts, institutional investors, trading platforms, and other intermediaries. Two studies speak directly to how intermediaries process periodic SEC filings. A third, Li (2013), makes a related but distinct point about Form 8-K current reporting as a separate channel for timely disclosure of material events.

Second, D’Souza, Ramesh, and Shen (2010a) examines the speed with which Standard & Poor’s disseminates accounting information from periodic SEC filings through Compustat. The study finds that dissemination speed reflects both demand-side and supply-side forces. S&P disseminates accounting information faster for firms with higher quasi-indexer ownership, lower transaction costs, lower idiosyncratic risk, and major-index membership. The study also finds that EDGAR substantially reduced collection lags, although cross-sectional variation in dissemination speed persisted.

Together, Li, Ramesh, and Shen (2011) and D’Souza, Ramesh, and Shen (2010a) show that periodic SEC filings enter an information ecosystem in which newswires, data aggregators, analysts, institutional investors, and other intermediaries identify, standardize, process, and redistribute information. These studies do not imply that standardized SEC filings are unimportant. To the contrary, they show that periodic reports are critical inputs into the broader information ecosystem relied on by investors and other market participants.

Li (2013) makes a related but distinct point. Rather than focusing on intermediaries’ processing of periodic filings, the study examines Form 8-K current reporting as an alternative channel for timely disclosure of material, future-relevant information. In the setting of material contracts, Li (2013) shows that accelerated Form 8-K filing allowed firms to communicate information about future operations without issuing forecasts and that accelerated material-contract filing was associated with lower information asymmetry. The study also documents that, before the 2004 Form 8-K amendments, firms had discretion to delay material-contract filings until later Form 10-K, Form 10-Q, or registration statement filings, and that filing dates clustered around periodic-report due dates.

This evidence is relevant to the Commission’s proposal because optional semiannual reporting would increase the importance of current reporting for material developments that arise between periodic reports. Li (2013) does not suggest that Form 8-K is a substitute for standardized interim financial statements. Rather, it shows that current reporting can play an important complementary role by requiring timely disclosure of material events that should not wait until the next periodic report.

Accordingly, if the Commission adopts optional semiannual reporting, it should preserve both components of the disclosure infrastructure. First, it should maintain the quality and usability of standardized periodic reports by requiring Form 10-S to contain the same narrative and financial information as Form 10-Q for the covered period and by retaining Inline XBRL tagging. Second, it should preserve and enforce a robust Form 8-K system for material developments between periodic reports. The point is not that Form 8-K or information intermediaries are complete substitutes for standardized interim financial statements. Rather, standardized semiannual filings, current reporting, and information intermediaries can together support an effective disclosure environment under the Commission’s optional approach.

VIII. Investor Demand for Quarterly Information Is Likely to Discipline Reporting Choices

Conversely, for some firms, especially those for which quarterly financial statements provide limited incremental information relative to event-driven disclosures and business milestones, mandatory quarterly reporting may impose costs that exceed its benefits. The Commission gives the example of pre-revenue biotechnology companies whose investors may focus more on clinical and regulatory milestones than on quarterly revenues or earnings.[6] The broader principle is that reporting frequency should reflect the informational needs of the firm’s investor base and the economics of the firm’s business model.

The evidence therefore supports allowing all Exchange Act reporting companies to elect semiannual reporting rather than restricting eligibility only to smaller reporting companies or emerging growth companies. Restricting eligibility may be administratively simple, but it assumes that size alone determines the optimal disclosure frequency. The research suggests a more nuanced view: investor demand for timely standardized information varies with ownership structure, analyst following, index membership, arbitrage costs, information intermediaries, and disclosure practices. These characteristics do not map perfectly onto issuer size.

IX. Responses to Selected Questions Raised by the Commission

Based on the foregoing evidence, we offer the following recommendations.

1. In response to Questions 1 and 2, the Commission should adopt an optional, not mandatory, semiannual reporting framework. The evidence is consistent with substantial heterogeneity across firms in the incremental value of quarterly Form 10-Q filings. Optionality allows firms and investors to choose the reporting frequency that best fits their circumstances.
2. In response to Question 3, the option should be available broadly, rather than limited only to smaller reporting companies or emerging growth companies. Although smaller firms may benefit disproportionately from reduced compliance costs, larger firms may also have circumstances in which quarterly Form 10-Q filings provide limited incremental value. Market discipline should limit adoption by firms whose investors strongly value quarterly reporting.
3. In response to Question 14, and relatedly Question 15, Form 10-S should remain substantively comparable to Form 10-Q for the covered semiannual period. The studies discussed above underscore that standardized, processable SEC filings remain important inputs into the capital market information infrastructure. Inline XBRL tagging, auditor review, MD&A, controls disclosures, and certifications should remain part of the semiannual filing framework.
4. In response to Questions 18, 19, and 20, the Commission should not generally impose filing (as opposed to furnishing) or review requirements on voluntary first- or third-quarter earnings releases solely because an issuer elects semiannual reporting. The research discussed above suggests that voluntary earnings releases can provide economically meaningful and market-responsive information. Imposing additional filing or review requirements on those releases could discourage voluntary quarterly disclosure and reduce the availability of interim information that might otherwise mitigate concerns about less frequent Form 10-Q filings. A more proportionate approach is to preserve the existing framework, Regulation G, Item 10(e) of Regulation S-K, antifraud rules, and Regulation FD, while requiring prominent disclosure of whether the quarterly financial information has been reviewed by an independent public accountant.
5. In response to Question 46, and relatedly Question 22, the Commission should consider whether semiannual filers should provide more timely disclosure of changes in accounting principles, changes in accounting estimates, or corrections of accounting errors that occur during the first or third quarter and are not otherwise subject to current reporting under Item 4.02. Without recreating Form 10-Q reporting, the Commission should consider targeted current-disclosure requirements to prevent such accounting changes or corrections from remaining undisclosed until the next Form 10-S or Form 10-K.
6. In response to Question 22, the Commission should preserve and, where appropriate, clarify the role of Form 8-K and Regulation FD. Less frequent Form 10-Q reporting increases the importance of event-driven disclosure and broad, non-exclusionary dissemination. The Commission’s proposal appropriately leaves the Form 8-K and Regulation FD framework largely intact.
7. In response to Question 30, the Commission should consider whether to require clearer period disaggregation in annual reports by semiannual filers. If a semiannual filer reports only the first six months in Form 10-S and annual results in Form 10-K, investors may need to infer second-half results. We do not have direct evidence from the studies cited in this letter on whether such disaggregation should be mandatory, but requiring second-half financial information in Form 10-K may improve comparability and reduce investor processing costs without fully reintroducing quarterly reporting.[7]
8. In response to Questions 52 and 56 through 58, the Commission should consider monitoring the effects of adoption. Because adoption patterns and market responses are uncertain, the Commission could commit to reviewing adoption rates, voluntary quarterly disclosure practices, analyst coverage, liquidity, bid-ask spreads, and capital-raising outcomes after implementation. Such monitoring would help assess whether the optional framework is functioning as intended.

X. Conclusion

We welcome the opportunity to comment on the Commission’s proposal to allow Exchange Act reporting companies to elect semiannual reporting on a new Form 10-S instead of quarterly reports on Form 10-Q. We appreciate the Commission’s careful and thorough analysis of the relevant academic research that speaks to the potential costs and benefits of the proposed rule change. That said, potential cost savings arising from the proposed rule change (e.g., redirecting managerial time and attention toward strategic and operational issues) are, by their nature, difficult to observe and quantify.

Broadly speaking, the research discussed in this letter supports a measured conclusion. Quarterly information can be valuable, but quarterly Form 10-Q filings are not always the first or most important channel through which market-relevant information reaches investors. Earnings releases, Form 8-K disclosures, Regulation FD, analyst activity, newswires, data aggregators, and other information intermediaries now play a central role in the disclosure ecosystem. At the same time, standardized SEC filings remain important for comparability, reliability, investor protection, and the functioning of information intermediaries.

For these reasons, we believe the Commission’s optional semiannual reporting proposal is directionally appropriate. Properly implemented, the proposal would allow firms and investors greater flexibility to choose a reporting frequency that better fits firm-specific circumstances without materially impairing capital markets. Notably, while the costs and benefits of changes in reporting frequency are hard to observe, management and investors are generally best positioned to assess and weight up these firm-specific tradeoffs; hence, we welcome the flexibility at the heart of the Commission’s proposal. The Commission should, however, preserve the standardized and reviewed nature of Form 10-S, maintain robust Form 8-K and Regulation FD requirements, and consider targeted transparency about the assurance status of voluntary first- and third-quarter earnings releases.

Li, E. X., & Ramesh, K. (2009). Market reaction surrounding the filing of periodic SEC reports. The Accounting Review, 84 (4): 1171–1208. https://doi.org/10.2308/accr.2009.84.4.1171

Li, E. X., Ramesh, K., & Shen, M. (2011). The role of newswires in screening and disseminating value-relevant information in periodic SEC reports. The Accounting Review, 86 (2): 669–701. https://doi.org/10.2308/accr.00000023

Li, E. X., Ramesh, K., Shen, M., & Wu, J. (2025). Running without moving? Corporate disclosure and annual price discovery in bad versus good times. The Accounting Review, 100 (4): 357-384. https://doi.org/10.2308/TAR-2023-0504

Ramnath, S. 2002. Investor and analyst reactions to earnings announcements of related firms: An empirical analysis. Journal of Accounting Research, 40 (5): 1351–1376. https://doi.org/10.1111/1475-679X.t01-1-00057

U.S. Securities and Exchange Commission. (2026). Semiannual Reporting. Release Nos. 33-11414; 34-105368; File No. S7-2026-15.

Watts, R. L. (1975). The time series behavior of quarterly earnings, Unpublished paper (University of Newcastle, Newcastle, N.S.W.) (cited in Watts (1978)).

Watts, R. L. (1978). Systematic ‘abnormal’ returns after quarterly earnings announcements. Journal of Financial Economics, 6 (2-3): 127–150. https://doi.org/10.1016/0304-405X(78)90027-2

1Academic research has examined the pros and cons of financial reporting frequency. For instance, the empirical study by Fu, Kraft, and Zhang (2012) finds that higher financial reporting frequency reduces information asymmetry and the cost of equity, including in settings involving mandatory increases in reporting frequency. They caution, however, that these benefits alone do not establish that firms should be required to report more frequently, because their analysis does not measure the potential costs of increased reporting frequency, such as preparation and proprietary costs. Gigler, Kanodia, Sapra, and Venugopalan (2014) provides a theoretical model in which more frequent reporting can improve capital-market discipline by reducing the likelihood that firms undertake negative-NPV projects but can also increase price pressure and induce managerial short-termism. Their analysis therefore reinforces that reporting frequency involves a cost-benefit tradeoff.(go back)

2Information transfer studies show that accounting information released (e.g., earnings announcements and management forecasts) by one firm can convey information relevant to the valuation of other firms in the same industry and beyond (e.g., see Foster 1981; Baginski 1987; Han, Wild, and Ramesh 1989; Freeman and Tse 1992; Ramnath 2002; Bonsall, Bozanic, and Fischer 2013; Brochet 2018).(go back)

3The direct compliance costs to issuers, which the Commission estimates at $330,000 on average may not capture the principal burden of quarterly reporting. Rather, the most significant cost may be the diversion of senior management time and attention from strategic and operational priorities, a cost that is inherently difficult to quantify.(go back)

4This section is based on Leftwich, Watts, and Zimmerman (1981). We acknowledge the discussions with Professor Steve Zeff regarding the historical evolution of quarterly reporting.(go back)

5This finding is broadly echoed in Li, Ramesh, Shen, and Wu (2025), which examines how managers use different corporate disclosure channels in bad news years versus good news years. The study finds that periodic SEC filings, including 10-Ks and 10-Qs, contribute only modestly to annual price discovery in bad news years compared with voluntary disclosure channels such as earnings releases and management guidance, while they have no incremental bearing on the price discovery process in good news years.(go back)

6 Consistent with the Commission’s example, note 26 of D’Souza, Ramesh, and Shen (2010b) states that “in its earnings press release dated February 3, 2004, Rigel Pharmaceuticals, Inc., a company meeting our definition of a cash-strapped development stage company, highlighted in the body of the press release the magnitude of tangible assets consisting of cash and available-for-sale securities….”(go back)

7There is an extensive literature on the time-series properties of quarterly earnings dating back at least to Watts (1975), Foster (1977), Griffin (1977), and Brown and Rozeff (1979). That literature is relevant because the policy question is not whether quarterly earnings contain predictive information, but whether the predictive ability of earnings would be materially reduced if mandatory disclosure occurred on a semiannual rather than quarterly basis. To the extent the seasonal stochastic properties of quarterly earnings are highly informative to investors and other market participants, market forces would be expected to create incentives for firms to continue supplying such information voluntarily, particularly where the benefits of doing so exceed the costs.(go back)