On May 5, the SEC issued a proposed rule that would permit public companies to file semiannual interim reports in lieu of quarterly reports. Under the proposal, companies subject to Exchange Act §§ 13(a) or 15(d) reporting obligations could elect to file one semiannual report on a new Form 10-S and one annual report each fiscal year, replacing the current requirement to file three quarterly reports on Form 10-Q and one annual report. Companies would make this election annually by checking a box on the cover of their Form 10-K, or on Securities Act registration statements (Forms S-1, S-3, S-4, or S-11) or Exchange Act registration statements on Form 10, as applicable, and the choice could not be changed mid-year. The proposal would not apply to investment companies, foreign private issuers, or asset-backed issuers.

The new Form 10-S would cover a six-month reporting period and include the same types of narrative disclosures and financial information currently required under Form 10-Q. According to the NPRM, the semiannual financial statements would need to be prepared in accordance with GAAP and reviewed, though not audited, by an independent public accountant. The filing deadline would be 40 or 45 days after the end of the first semiannual period, depending on the company’s “filer status.” The proposal also includes amendments to Regulation S-X to align financial statement requirements in periodic reports with the semiannual reporting option, address “staleness” concerns under existing age-of-financial-statement rules, and consolidate those requirements into a single rule. In addition, it would revise transition report rules under Exchange Act Rules 13a-10 and 15d-10 and make conforming technical updates to other existing rules and forms that reference quarterly reporting. The SEC is seeking public comment on numerous aspects of the proposal, with comments due by July 6.