October 3, 2025
SEC Decision to Scrap Quarterly Reporting in 2025 and How It Changes Corporate Procedure

SEC Decision to Scrap Quarterly Reporting in 2025 and How It Changes Corporate Procedure

In 2025, the U.S. Securities and Exchange Commission (SEC), under Chair Paul Atkins, signaled a major shift: to move away from the requirement for public companies to issue quarterly financial reports (Form 10-Q), toward a model where companies may report instead on a semiannual (twice per year) basis.

If this change is adopted, it would be one of the most significant overhauls of U.S. securities disclosure rules in decades. The implications would ripple through corporate accounting, investor relations, compliance, audit, and regulatory teams.

In this article, I’ll lay out:

  1. The background and rationale behind the shift
  2. The main proposals and possible variants
  3. The risks, criticisms, and counterarguments
  4. How companies would need to adjust their procedures, systems, and governance
  5. A realistic timeline and transition path

Background & Rationale

Historical Context

Since 1970, U.S. public companies have been required to file quarterly reports (Form 10-Q) containing interim financial statements, disclosures, and management discussion & analysis.

Quarterly reporting has long been viewed as a mechanism to ensure transparency, reduce information asymmetry, and allow investors to monitor performance more frequently.

However, over time, critics have argued that quarterly reporting:

  • Encourages short-termism, pushing executives to optimize for the next quarter rather than long-term strategy
  • Imposes heavy compliance burdens (audit, accounting, internal control, etc., especially on smaller public companies
  • Drives high costs of staff, consultants, investor communications, and regulatory filings

Chair Atkins and proponents now argue that moving away from compulsory quarterly reporting can free companies to focus on strategy, reduce compliance costs, and reduce pressure to “manage earnings.”

They point to international precedent: many jurisdictions (the U.K., EU) do not require quarterly reporting, though many companies still publish interim/four-quarter updates voluntarily. 

What Is Being Proposed

Two professionals review financial charts and reports on a desk with documents, a tablet, and a pen
SEC may allow firms to pick quarterly or semiannual reports, raising debate on cost and transparency

Rather than a mandate to eliminate all quarterly reporting, the current proposal envisions optional semiannual reporting. In other words, companies might be allowed to choose to continue with quarterly reporting or to switch to twice-yearly reporting if they believe it is more efficient or strategic.

Importantly, other mandatory disclosure obligations (such as Form 8-K for material events) would likely remain in place, so significant news could still be disclosed outside the schedule.

Supporters suggest that moving to semiannual frequency would:

  • Reduce audit and compliance costs
  • Reduce distractions of short-term earnings focus
  • Be more flexible, especially for smaller or less frequent revenue businesses
  • Align U.S. practices more closely with global norms

Critics warn that this could reduce transparency, delay critical information, and weaken the discipline imposed by market scrutiny.

Key Considerations & Risks

Any shift of this magnitude brings tradeoffs. Below are the main risks and criticisms, with how they might play out:

Concern Explanation Potential Mitigation / Response
Reduced Transparency & Information Flow Investors, analysts, and markets currently expect quarterly updates. Less frequent reporting may widen information gaps and increase asymmetry. Companies may voluntarily provide quarterly metrics or interim updates; enhanced 8-K disclosures for more events.
Market Volatility With fewer data points, surprises may have exaggerated effects on stock prices. More robust forward guidance, communication policies, and stress testing.
Analyst Coverage & Valuation Impact Less frequent financials may make forecasting harder and reduce analyst coverage, especially for smaller companies. Some companies will voluntarily maintain more frequent disclosures to preserve market visibility.
Legal & Investor Pushback Institutional investors, pension funds, and governance advocates may resist, especially if they perceive a loss of rights or oversight. SEC must weigh public comments; regulatory safeguards may be inserted (e.g., minimum interim thresholds).
Transition & Systems Overhaul Companies’ systems, processes, internal controls, audits, and governance are all structured around quarterly cycles. Change is operationally complex. Phased implementation, parallel reporting periods, system retooling, and training.

Critics also point out that optional semiannual reporting could lead to inconsistency across companies, where some firms provide detailed interim results while others stay “quiet” for six months, complicating comparability.

Another practical issue: audit and accounting standards are tied to quarterly review timetables, and “staleness” rules for financial statements might need adjustment.

How Corporate Procedure Would Change

A person reviews financial charts and notes on a board, pointing to data while holding a report
Firms may need strong voluntary updates to keep investor trust

If the SEC ultimately allows or mandates the shift, companies must change or reengineer several core practices. Here’s how the internal mechanics would evolve:

1. Financial Reporting Cycle & Calendar

  • The internal calendar would change from a quarterly cycle (Q1, Q2, Q3, Q4) to a half-year cycle (H1, H2), with only two audited periods per year.
  • Interim months would likely be used for management metrics, internal forecasting, and variance analysis rather than full external reporting.
  • Companies opting to maintain quarterly disclosures would need to determine which metrics to publish (less than full GAAP disclosures) and set disclosure cadence and scope.

2. Audit and Review Processes

  • The number of audited interim reviews could drop from three to one (if annual audit + one interim) or even none, depending on the rules.
  • The cycle for internal controls, disclosure controls, and risk assessments would need modification; testing schedules might be reallocated.
  • Audit firms would need to adjust their staffing, review frequency, and methodology to accommodate semiannual rather than quarterly workstreams.

3. Disclosure & Investor Relations

  • Companies would need to develop robust voluntary interim disclosure policies if they want to maintain investor confidence.
  • Forward guidance, earnings calls, investor presentations, and press releases may shift timing or format.
  • Investor relations teams may need to engage in more continuous communication, rather than relying on quarterly earnings as the anchor.

4. Regulatory Compliance & Legal Teams

Two people review documents at a desk with a judge’s gavel placed in front of them
Firms must follow Form 8-K rules and may set new policies for voluntary disclosures
  • Legal counsel must assess how to amend SEC registration statements, offering documents, bond indentures, debt covenants, and other agreements that reference quarterly reporting.
  • Systems and governance frameworks tied to quarterly deadlines (e.g., board reviews, audit committees, regulatory committee checks) will need recalibration.
  • Companies must ensure continued compliance with material event triggering rules (Form 8-K) and potentially adopt new internal policies about the frequency of voluntary disclosures.

5. Systems, Tools, and Processes

  • Financial systems (ERP, consolidation, reporting tools) will require reconfiguration for semiannual period definitions and reporting schedules.
  • Budgeting, forecasting, and rolling forecasts may shift to a more continuous or monthly cadence.
  • Data pipelines, dashboards, internal scorecards, and performance metrics must adapt to new intervals.
  • Teams must be retrained; internal controls must be reorganized according to the new cycle.

6. Governance, Board Oversight & Accountability

  • Board reports and board meeting cycles might shift to align with half-year reporting.
  • Performance evaluation, compensation plans, and executive incentives tied to quarterly performance targets may need redesign.
  • Risk committees and audit committees will need modified frameworks to monitor disclosures, interim risks, and management performance over a longer interval.

Timeline & Likely Transition Path


Because regulatory changes of this scale typically follow a structured rulemaking path, here is a plausible timeline and transitional roadmap based on SEC precedents and public commentary:

Stage What Happens Approximate Timing*
Proposed rule issuance SEC staff prepare a proposed rule, publish for comment Late 2025 or early 2026
Public comment & hearings Investors, companies, and other stakeholders provide feedback 60–120 days after the rule proposal
Final rule adoption SEC votes, publishes final rule, defines effective dates Mid to late 2026 (or later)
Transition period Companies adopt new systems, dual reporting, and parallel years 1–2 years of overlap or optional phase
Full implementation Quarterly reporting becomes optional or replaced; semiannual becomes standard for those who elect it 2027–2028 in practice, depending on adoption and regulatory cadence

* These timings are speculative, based on usual SEC rulemaking schedules and public signals from the SEC.

During the transition, many large public companies are likely to opt to continue quarterly reporting voluntarily, to maintain market confidence, investor relations alignment, and comparability with peers. Smaller or more compliance-strained companies may more readily adopt semiannual schedules.

Final Thoughts

 

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The SEC’s proposed move in 2025 to scrap or relax quarterly reporting is more than a technical adjustment; it signals a philosophical shift in capital markets toward less prescriptive regulation and a greater reliance on market-driven disclosure.

If adopted, it would require companies to rethink their internal financial calendars, audit cycles, disclosure practices, investor relations, and governance frameworks. The transition will not be trivial; it will require substantial system changes, process redesign, and stakeholder management.

For companies engaged in cross-border trade, questions about investor protection often overlap with legal issues such as how to sue a foreign seller that ships to the US.

Yet, the potential upside, reduced compliance burdens, less short-term pressure, and more strategic focus could be significant, especially for smaller public firms. The key challenge will be balancing flexibility and cost efficiency with maintaining sufficient transparency, comparability, and investor trust.