FCLTGlobal respectfully submits this comment in response to the Securities and Exchange Commission’s proposed rule amendments that would permit public companies to elect semiannual reporting in lieu of quarterly reporting (Release No. 33-11414, File No. S7-2026-15).
FCLTGlobal is a nonprofit research organization whose mission is to mobilize companies and investors to focus capital on the long term. Our membership spans asset owners, asset managers, and corporations domiciled in countries around the world that support a longer-term framing in corporate and investment decision-making
This proposal is a meaningful step toward reducing structural short-termism in U.S. public capital markets — a problem FCLTGlobal has studied and documented over more than a decade. We offer the comments below to both affirm the proposal’s direction and to identify several considerations.
1. Long-term Investment is Critical in Both Public and Private Capital Markets
The quarterly cycle in the United States reinforces a systematic bias toward short-term decision-making that is costly to companies, investors, and the broader economy. FCLTGlobal’s foundational research found that 88 percent of executives agree that operating with longer time horizons would improve financial performance. Yet the same executives reported feeling constrained by a market infrastructure built around the 90-day interval.
Quarterly reporting creates a cadence that organizes management attention, investor expectations, and media coverage around three-month intervals. Even where companies resist the temptation to manage around quarterly targets, the surrounding ecosystem of analyst consensus models and earnings calls reinforces a short-term orientation that is difficult to overlook.
The investment case against short-termism is equally compelling. McKinsey research found that from 2001 to 2014, long-term oriented firms cumulatively grew revenues on average 47 percent more than other firms, with less volatility, and realized earnings growth 36 percent higher over the same period. Structural reforms that give companies room to operate on longer planning horizons can both protect investors and support capital formation.
The Impact of Private Markets
The operating environment has also changed substantially since the quarterly reporting requirement was last examined. The U.S. private markets have expanded dramatically in scale and sophistication over the past two decades. Private equity, private credit, and venture capital now deploy capital across a far wider range of industry sectors and company stages than was true when quarterly reporting norms were established. Critically, companies operating within these private market structures face no mandatory quarterly disclosure requirements and are subject to materially lower reporting burdens than their public-market counterparts. The resulting asymmetry has become a structural force shaping the IPO decision.
This outcome narrows the investment universe available to retail and institutional investors operating in public markets. Reducing the reporting burden through optional semiannual filing recalibrates the cost-benefit equation in a way that makes public market participation more competitive with private alternatives.
2. In Support of the Proposed Framework
When the Commission previously solicited comment on quarterly reporting standards in 2018 and 2019, FCLTGlobal submitted formal recommendations that included permitting companies to choose between a quarterly schedule and a half-yearly reporting model, provided they adopt a higher standard for interim disclosure of material information. The Commission’s current proposal reflects that approach, and we are pleased to see it move forward.
An opt-in framework is the right mechanism for this reform. Different companies operate on different business cycles; a mandatory shift for all companies would be both unnecessary and potentially counterproductive. By contrast, an optional framework allows companies and their boards to make disclosure frequency decisions that reflect their operating models, in dialogue with their investors. It also reduces the disincentive for companies considering going public.
We also note that this approach aligns U.S. markets with practice in other jurisdictions. The United Kingdom and European Union have, for some time, permitted companies to report at a lower frequency, complemented by requirements for timely disclosure of material events. Experience in those markets does not support the concern that reduced reporting frequency leads to a deterioration in transparency. What it does suggest is that investor protection can be maintained when companies are not forced to organize all external communication around artificial 90-day intervals.
A 2023 study of Japanese firms demonstrated that when companies were required to report quarterly, managers systematically reduced R&D spending and adjusted operations to meet near-term targets. Parallel findings emerged in Europe: research published in The Accounting Review found that firms subject to mandatory quarterly disclosure engaged in short-term manipulation, saw brief performance improvements, and then experienced subsequent deterioration.
3. Key Considerations to Strengthen the Framework
We offer the following observations to help ensure the framework achieves its objectives:
Addressing Investor Concerns About Information Asymmetry
We recognize that a meaningful segment of the investor community has expressed concern that reduced reporting frequency will widen the information gap between companies and their shareholders, increase capital costs, and introduce greater volatility. However, we believe these concerns are best addressed through the design of the framework rather than rejection of the proposal. The opt-in structure ensures companies elect semiannual reporting only where their boards and investor base support it, and robust continuous disclosure requirements for material events can ensure investors receive timely, relevant information regardless of the base reporting cadence (more below).
Enhanced Material Event Disclosure
Any reduction in mandatory reporting frequency must be paired with rigorous requirements for continuous disclosure of material developments. Investors relying on semiannual reports rather than quarterly reports must be assured that significant events that a reasonable investor would consider important will reach the market promptly. We recommend that the Commission provide explicit guidance on the heightened expectation for Form 8-K and related material event disclosures that should accompany an election to file semiannual reports.
Distinguishing Reporting from Guidance
It is critical, in the Commission’s final rule and any accompanying interpretive guidance, to maintain a clear distinction between mandatory reporting (the retrospective disclosure of historical financial performance) and voluntary earnings guidance (forward-looking projections of near-term results).
Quarterly guidance and quarterly reporting create a self-perpetuating cycle. FCLTGlobal’s research has consistently shown that it is quarterly EPS guidance that most directly drives short-term corporate behavior. Companies playing the quarterly guidance game attract transient, short-term-oriented investors, face pressure to manage around self-imposed short-term targets, and underinvest in R&D, talent, and other long-term value drivers. The share of S&P 500 companies issuing quarterly EPS guidance has already declined substantially (from nearly 50 percent of large-cap companies in 2004 to approximately 21 percent in 2024) as management teams have recognized the practice’s costs. More than 75 percent of institutional investors surveyed by FCLTGlobal indicated that companies should move away from quarterly guidance, and fewer than 7 percent said they wanted guidance on any metric for periods of less than one year.
A company that elects semiannual reporting but continues to issue short-term EPS guidance will capture only limited benefit from reduced reporting frequency. Conversely, a company that eliminates quarterly guidance while maintaining quarterly reporting may realize significant gains in its long-term investor base and strategic flexibility. The Commission should make clear that the proposal addresses reporting frequency, and that the SEC does not expect or encourage short-term guidance but welcomes companies to provide investors with a long-term strategic framework — a forward-looking articulation of the company’s three-to-five-year objectives, KPIs, and capital allocation priorities
Alternative Reporting Formats as a Complement to Reduced Frequency
FCLTGlobal has previously recommended that the Commission explore alternative reporting formats as a complement to any change in reporting frequency, including year-to-date cumulative reporting and trailing twelve-month presentations. These formats maintain continuity of information for investors while reducing the quarter-to-quarter variance that can distort business decisions. We encourage the Commission to consider how Form 10-S could incorporate or permit such formats, giving companies flexibility not only in when they report but in how they present performance trends.
4. Conclusion
FCLTGlobal supports the Commission’s proposed amendments permitting optional semiannual reporting. The proposal reflects a well-grounded recognition that the existing quarterly reporting mandate imposes structural costs on long-term investment and that a one-size-fits-all approach does not serve all companies or investors equally.
Since the quarterly reporting standard was last examined, private markets have grown into a formidable alternative operating without comparable disclosure obligations. The proposal offers an opportunity to reduce that asymmetry and to make public markets more attractive to the companies and long-term investors who have been drifting toward private alternatives.
Well-designed disclosure frameworks are foundational to efficient capital markets. The critical factor is not how frequently companies report, but whether the information investors receive helps them make well-informed, long-term decisions. The Commission’s proposal moves the framework in that direction.
We welcome the opportunity to discuss these issues further and are glad to make our research available to Commission staff.
FCLTGlobal. “Rising to the Challenge of Short-Termism.” FCLTGlobal. September 28, 2016. https://www.fcltglobal.org/resource/rising-to-the-challenge-of-short-termism/.[/ref]
FCLTGlobal, and McKinsey Global Institute. “Measuring the Economic Impact of Short-Termism.” FCLTGlobal. February 8, 2017. https://www.fcltglobal.org/resource/measuring-the-economic-impact-of-short-termism/.[/ref]
FCLTGlobal. “FCLTGlobal Weighs in on Quarterly IR Communications with the SEC.” FCLTGlobal. August 15, 2025. https://www.fcltglobal.org/resource/fcltglobal-weighs-in-on-quarterly-ir-communications-with-the-sec/.[/ref]
Keita Haga, Akinobu Shuto, and Takuya Iwasaki, “Does Mandatory Quarterly Reporting Induce Managerial Myopic Behavior? Evidence from Japan,” Journal of Contemporary Accounting & Economics 19, no. 3 (2023), https://www.sciencedirect.com/science/article/abs/pii/S1544612323005147.[/ref]
Jürgen Ernstberger, Benedikt Link, Michael Stich, and Oliver Vogler, “The Real Effects of Mandatory Quarterly Reporting,” The Accounting Review 92, no. 5 (September 2017): 33–60, https://doi.org/10.2308/accr-51705.[/ref]
FCLTGlobal. “Moving beyond Quarterly Guidance: A Relic of the Past.” FCLTGlobal. October 23, 2017. https://www.fcltglobal.org/resource/moving-beyond-quarterly-guidance-a-relic-of-the-past/.[/ref]
He, Allen. “The End of Quarterly Guidance: A New Era for Corporate Strategy.” FCLTGlobal. December 2, 2025. https://www.fcltglobal.org/resource/quarterly-guidance-corporate-strategy/.[/ref]
FCLTGlobal. “Moving beyond Quarterly Guidance: A Relic of the Past.” FCLTGlobal. October 23, 2017. https://www.fcltglobal.org/resource/moving-beyond-quarterly-guidance-a-relic-of-the-past/.[/ref]
Comment Letter on the SEC’s Proposal to Replace Quarterly Reporting with Semiannual Reporting
More from: Sarah Keohane Williamson, FCLTGlobal
Sarah Keohane Williamson is the CEO of FCLTGlobal. This post is based on her SEC comment letter.
FCLTGlobal respectfully submits this comment in response to the Securities and Exchange Commission’s proposed rule amendments that would permit public companies to elect semiannual reporting in lieu of quarterly reporting (Release No. 33-11414, File No. S7-2026-15).
FCLTGlobal is a nonprofit research organization whose mission is to mobilize companies and investors to focus capital on the long term. Our membership spans asset owners, asset managers, and corporations domiciled in countries around the world that support a longer-term framing in corporate and investment decision-making
This proposal is a meaningful step toward reducing structural short-termism in U.S. public capital markets — a problem FCLTGlobal has studied and documented over more than a decade. We offer the comments below to both affirm the proposal’s direction and to identify several considerations.
1. Long-term Investment is Critical in Both Public and Private Capital Markets
The quarterly cycle in the United States reinforces a systematic bias toward short-term decision-making that is costly to companies, investors, and the broader economy. FCLTGlobal’s foundational research found that 88 percent of executives agree that operating with longer time horizons would improve financial performance.[1] Yet the same executives reported feeling constrained by a market infrastructure built around the 90-day interval.
Quarterly reporting creates a cadence that organizes management attention, investor expectations, and media coverage around three-month intervals. Even where companies resist the temptation to manage around quarterly targets, the surrounding ecosystem of analyst consensus models and earnings calls reinforces a short-term orientation that is difficult to overlook.
The investment case against short-termism is equally compelling. McKinsey research found that from 2001 to 2014, long-term oriented firms cumulatively grew revenues on average 47 percent more than other firms, with less volatility, and realized earnings growth 36 percent higher over the same period.[2] Structural reforms that give companies room to operate on longer planning horizons can both protect investors and support capital formation.
The Impact of Private Markets
The operating environment has also changed substantially since the quarterly reporting requirement was last examined. The U.S. private markets have expanded dramatically in scale and sophistication over the past two decades. Private equity, private credit, and venture capital now deploy capital across a far wider range of industry sectors and company stages than was true when quarterly reporting norms were established. Critically, companies operating within these private market structures face no mandatory quarterly disclosure requirements and are subject to materially lower reporting burdens than their public-market counterparts. The resulting asymmetry has become a structural force shaping the IPO decision.
This outcome narrows the investment universe available to retail and institutional investors operating in public markets. Reducing the reporting burden through optional semiannual filing recalibrates the cost-benefit equation in a way that makes public market participation more competitive with private alternatives.
2. In Support of the Proposed Framework
When the Commission previously solicited comment on quarterly reporting standards in 2018 and 2019, FCLTGlobal submitted formal recommendations that included permitting companies to choose between a quarterly schedule and a half-yearly reporting model, provided they adopt a higher standard for interim disclosure of material information.[3] The Commission’s current proposal reflects that approach, and we are pleased to see it move forward.
An opt-in framework is the right mechanism for this reform. Different companies operate on different business cycles; a mandatory shift for all companies would be both unnecessary and potentially counterproductive. By contrast, an optional framework allows companies and their boards to make disclosure frequency decisions that reflect their operating models, in dialogue with their investors. It also reduces the disincentive for companies considering going public.
We also note that this approach aligns U.S. markets with practice in other jurisdictions. The United Kingdom and European Union have, for some time, permitted companies to report at a lower frequency, complemented by requirements for timely disclosure of material events. Experience in those markets does not support the concern that reduced reporting frequency leads to a deterioration in transparency. What it does suggest is that investor protection can be maintained when companies are not forced to organize all external communication around artificial 90-day intervals.
A 2023 study of Japanese firms demonstrated that when companies were required to report quarterly, managers systematically reduced R&D spending and adjusted operations to meet near-term targets.[4] Parallel findings emerged in Europe: research published in The Accounting Review found that firms subject to mandatory quarterly disclosure engaged in short-term manipulation, saw brief performance improvements, and then experienced subsequent deterioration.[5]
3. Key Considerations to Strengthen the Framework
We offer the following observations to help ensure the framework achieves its objectives:
Addressing Investor Concerns About Information Asymmetry
We recognize that a meaningful segment of the investor community has expressed concern that reduced reporting frequency will widen the information gap between companies and their shareholders, increase capital costs, and introduce greater volatility. However, we believe these concerns are best addressed through the design of the framework rather than rejection of the proposal. The opt-in structure ensures companies elect semiannual reporting only where their boards and investor base support it, and robust continuous disclosure requirements for material events can ensure investors receive timely, relevant information regardless of the base reporting cadence (more below).
Enhanced Material Event Disclosure
Any reduction in mandatory reporting frequency must be paired with rigorous requirements for continuous disclosure of material developments. Investors relying on semiannual reports rather than quarterly reports must be assured that significant events that a reasonable investor would consider important will reach the market promptly. We recommend that the Commission provide explicit guidance on the heightened expectation for Form 8-K and related material event disclosures that should accompany an election to file semiannual reports.
Distinguishing Reporting from Guidance
It is critical, in the Commission’s final rule and any accompanying interpretive guidance, to maintain a clear distinction between mandatory reporting (the retrospective disclosure of historical financial performance) and voluntary earnings guidance (forward-looking projections of near-term results).
Quarterly guidance and quarterly reporting create a self-perpetuating cycle. FCLTGlobal’s research has consistently shown that it is quarterly EPS guidance that most directly drives short-term corporate behavior.[6] Companies playing the quarterly guidance game attract transient, short-term-oriented investors, face pressure to manage around self-imposed short-term targets, and underinvest in R&D, talent, and other long-term value drivers. The share of S&P 500 companies issuing quarterly EPS guidance has already declined substantially (from nearly 50 percent of large-cap companies in 2004 to approximately 21 percent in 2024)[7] as management teams have recognized the practice’s costs. More than 75 percent of institutional investors surveyed by FCLTGlobal indicated that companies should move away from quarterly guidance, and fewer than 7 percent said they wanted guidance on any metric for periods of less than one year.[8]
A company that elects semiannual reporting but continues to issue short-term EPS guidance will capture only limited benefit from reduced reporting frequency. Conversely, a company that eliminates quarterly guidance while maintaining quarterly reporting may realize significant gains in its long-term investor base and strategic flexibility. The Commission should make clear that the proposal addresses reporting frequency, and that the SEC does not expect or encourage short-term guidance but welcomes companies to provide investors with a long-term strategic framework — a forward-looking articulation of the company’s three-to-five-year objectives, KPIs, and capital allocation priorities
Alternative Reporting Formats as a Complement to Reduced Frequency
FCLTGlobal has previously recommended that the Commission explore alternative reporting formats as a complement to any change in reporting frequency, including year-to-date cumulative reporting and trailing twelve-month presentations. These formats maintain continuity of information for investors while reducing the quarter-to-quarter variance that can distort business decisions. We encourage the Commission to consider how Form 10-S could incorporate or permit such formats, giving companies flexibility not only in when they report but in how they present performance trends.
4. Conclusion
FCLTGlobal supports the Commission’s proposed amendments permitting optional semiannual reporting. The proposal reflects a well-grounded recognition that the existing quarterly reporting mandate imposes structural costs on long-term investment and that a one-size-fits-all approach does not serve all companies or investors equally.
Since the quarterly reporting standard was last examined, private markets have grown into a formidable alternative operating without comparable disclosure obligations. The proposal offers an opportunity to reduce that asymmetry and to make public markets more attractive to the companies and long-term investors who have been drifting toward private alternatives.
Well-designed disclosure frameworks are foundational to efficient capital markets. The critical factor is not how frequently companies report, but whether the information investors receive helps them make well-informed, long-term decisions. The Commission’s proposal moves the framework in that direction.
We welcome the opportunity to discuss these issues further and are glad to make our research available to Commission staff.
[1]FCLTGlobal. “Rising to the Challenge of Short-Termism.” FCLTGlobal. September 28, 2016. https://www.fcltglobal.org/resource/rising-to-the-challenge-of-short-termism/.[/ref]
[2]FCLTGlobal, and McKinsey Global Institute. “Measuring the Economic Impact of Short-Termism.” FCLTGlobal. February 8, 2017. https://www.fcltglobal.org/resource/measuring-the-economic-impact-of-short-termism/.[/ref]
[3]FCLTGlobal. “FCLTGlobal Weighs in on Quarterly IR Communications with the SEC.” FCLTGlobal. August 15, 2025. https://www.fcltglobal.org/resource/fcltglobal-weighs-in-on-quarterly-ir-communications-with-the-sec/.[/ref]
[4]Keita Haga, Akinobu Shuto, and Takuya Iwasaki, “Does Mandatory Quarterly Reporting Induce Managerial Myopic Behavior? Evidence from Japan,” Journal of Contemporary Accounting & Economics 19, no. 3 (2023), https://www.sciencedirect.com/science/article/abs/pii/S1544612323005147.[/ref]
[5]Jürgen Ernstberger, Benedikt Link, Michael Stich, and Oliver Vogler, “The Real Effects of Mandatory Quarterly Reporting,” The Accounting Review 92, no. 5 (September 2017): 33–60, https://doi.org/10.2308/accr-51705.[/ref]
[6]FCLTGlobal. “Moving beyond Quarterly Guidance: A Relic of the Past.” FCLTGlobal. October 23, 2017. https://www.fcltglobal.org/resource/moving-beyond-quarterly-guidance-a-relic-of-the-past/.[/ref]
[7]He, Allen. “The End of Quarterly Guidance: A New Era for Corporate Strategy.” FCLTGlobal. December 2, 2025. https://www.fcltglobal.org/resource/quarterly-guidance-corporate-strategy/.[/ref]
[8]FCLTGlobal. “Moving beyond Quarterly Guidance: A Relic of the Past.” FCLTGlobal. October 23, 2017. https://www.fcltglobal.org/resource/moving-beyond-quarterly-guidance-a-relic-of-the-past/.[/ref]