SEC proposes semiannual reporting option for public companies

The SEC on Tuesday proposed amendments that would give public companies the option of filing semiannual reports in lieu of quarterly reports to meet their interim reporting obligations under federal securities laws.

Under the new proposal, companies could decide whether quarterly or semiannual reporting is the right fit for them, SEC chair Paul Atkins said in a statement.

“Public companies have an obligation under the federal securities laws to provide information that is material to investors,” Atkins said. “Yet, the rigidity of the SEC’s rules has prevented companies and their investors from determining for themselves the interim reporting frequency that best serves their business needs and investors. Today’s proposed amendments, if ultimately adopted, would provide companies with increased regulatory flexibility in this regard.”

The SEC has required quarterly filings since 1970.

The proposal will remain open for public comment for 60 days after its publication in the Federal Register.

An SEC news release said the proposed filing deadline for semiannual reports on the new Form 10-S would be 40 or 45 days after the end of the first semiannual period of the fiscal year, depending on the company’s filer status. The proposal also would amend Regulation S-X, which governs the financial statement requirements for periodic reports, registration statements, and proxy statements, to reflect the new semiannual reporting option and simplify the existing financial statement requirements.

“Today’s proposal is just the first step of the larger, comprehensive effort to review and reshape the current SEC rules governing public companies with respect to their ongoing reporting obligations and their ability to raise capital in the public markets,” Atkins said. “Over the next few months, I expect that the Commission will be considering a series of proposals that, if adopted, will not only redefine what it means to be a public company, but will make being public attractive again.”

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.