IAA Comments on SEC’s Semiannual Reporting Proposal
July 6, 2026
Via Electronic Transmission
Vanessa A. Countryman
Secretary
Securities and Exchange Commission
100 F Street NE
Washington, DC 20549-1090
Re: Semiannual Reporting; File No. S7-2026-15
Dear Ms. Countryman:
The Investment Adviser Association (IAA)[1] appreciates the opportunity to comment on the Securities and Exchange Commission’s (SEC’s or Commission’s) proposed amendments to allow public companies to file semiannual reports on new Form 10-S instead of quarterly reports on Form 10-Q to meet their interim reporting obligations under the Securities Exchange Act of 1934 (Exchange Act).[2]
We support the Commission’s efforts to reduce unnecessary regulatory costs and burdens on public companies. Robust public markets play a critical role in providing investors with broad access to investment opportunities, liquidity, and efficient price discovery. At a time when the number of public companies has declined significantly, we appreciate the Commission’s careful consideration of ways to encourage companies to enter and remain in the public markets while preserving the transparency and investor protections that are essential to the strength and integrity of these markets.
While we support the goals of the Proposal, we do not believe that reducing the frequency of periodic reporting is the most effective way to achieve those objectives. Less frequent reporting requirements would deprive investment advisers that act as fiduciaries to their clients of material, standardized, and comparable information that is important to their ability to make informed investment decisions in those clients’ best interest. It also could disproportionately disadvantage smaller and mid-sized advisers, which often lack the resources and alternative information channels available to larger firms, potentially further increasing information asymmetries in the public markets. Moreover, research suggests that compliance costs explain only approximately 7 percent of the decline in initial public offerings (IPOs).[3]
We thus highlight several potential issues for the Commission to evaluate as it considers the Proposal. We also recommend that the Commission consider alternatives to the Proposal that would not result in the same unintended consequences. For example, the Commission should consider whether its objectives could be achieved through more targeted reforms, such as streamlining the content of periodic reports, without reducing the frequency of disclosures available to investors.
Executive Summary
We make the following comments:
- Quarterly reporting is important to informed investment decision‑making.
- Semiannual reporting could exacerbate information asymmetry.
- Small and mid-sized investment advisers are likely to be disproportionately disadvantaged.
- Lenders may have access to material information before it becomes available to the markets.
- Semiannual reporting would likely reduce standardization, impair comparability, and increase volatility.
- Timely periodic reporting benefits investors regardless of investment horizon.
- Instead of changing the reporting cadence, the Commission should review the required content of Form 10-Q filings and consider other ways to encourage entry into the public markets.
Quarterly Reporting Is Important to Informed Investment Decision‑Making
IAA members rely extensively on public-company disclosures in making investment, portfolio management, asset allocation, and risk management decisions in the best interest of their clients. Timely, standardized, and comparable information is essential to these activities. Form 10‑Q filings provide advisers with regular insight into a company’s financial condition, operating performance, liquidity, and risks, helping them fulfill their fiduciary obligations. Quarterly reporting helps advisers identify emerging trends, assess risks, value securities, and detect potential financial, operational, or internal control issues before they become more significant problems.[4] Quarterly reports are particularly valuable because they provide information in a standardized format that is broadly available to all market participants and subject to established disclosure, review, and certification requirements.[5]
The importance of timely reporting has increased as the pace of technological change has accelerated. Changes in company revenues, earnings, cash flows, capital investment, research and development, and competitive positioning can occur much more rapidly than in the past. A six-month reporting interval would leave advisers having to evaluate investments with older information for longer periods at a time when monitoring changes in the underlying business environment is even more vital.
These considerations are not limited to the equity markets. For example, investment advisers that manage fixed-income portfolios that include public bonds for their clients likewise rely on quarterly reports to assess leverage, liquidity, cash flows, debt-servicing capacity, refinancing risks, and overall credit quality. Quarterly reports facilitate ongoing credit surveillance and enable advisers to monitor changes in an issuer’s financial condition, evaluate risk exposures, and make informed asset allocation decisions. Less frequent reporting would require advisers to make these assessments using older financial information for longer periods, increasing uncertainty and potentially reducing the effectiveness of credit analysis. In addition, many lending arrangements and debt instruments incorporate quarterly financial reporting requirements, underscoring the importance of regular financial information to creditors and other market participants. Reducing the frequency of periodic reporting therefore could diminish transparency in the corporate bond market and make it more difficult to assess credit risk and monitor issuer performance.
Semiannual Reporting Could Exacerbate Information Asymmetry
Small and mid-sized investment advisers are likely to be disproportionately disadvantaged
The information asymmetry concerns are not limited to lenders having access to private information channels. Public companies may in general shift more disclosure into private or bilateral channels, such as bank group calls, underwriter due diligence sessions, or meetings with large investors, which may be accessible primarily to larger or more well-resourced market participants. Frequent public reporting is thus critical for smaller and mid-sized investment advisers, which often have less direct access to these channels and fewer resources to support alternative data, research teams, and expert networks. Form 10-Q helps level the playing field.
Reducing mandatory disclosure to a six-month cycle could thus worsen information asymmetry between corporate insiders and the most well-resourced market participants, on the one hand, and smaller and mid-sized advisers, on the other hand. Smaller advisers in particular depend on public-company disclosures to evaluate investments and monitor portfolio holdings. A shift to semiannual reporting, even if optional, could disproportionately disadvantage these investment advisers and the clients they serve. This effect would be particularly significant because smaller advisers represent the core of the investment adviser industry, serving millions of individual[6] and institutional investors.[7]
Lenders may have access to material information before it becomes available to the markets
Information asymmetry may also arise in the context of information provided to lenders by public companies. Lenders typically require certified quarterly financial statements from their borrowers. To the extent that these lenders would continue to require this information, there is a risk that investors that only see semiannual financial statements would not have access to the same information. This could increase information asymmetries among market participants and create circumstances in which certain creditors possess material information that has not yet been broadly disseminated to the market.[8]
Semiannual Reporting Would Likely Reduce Standardization, Impair Comparability, and Increase Volatility
While we recommend that the Commission not move forward with the Proposal, if it nevertheless adopts a semiannual reporting framework, we agree that issuers should retain the option of continuing to provide quarterly reports. Preserving issuer choice would be preferable to requiring all reporting companies to move to a semiannual reporting regime and would allow market participants to determine whether investors value more frequent periodic disclosures.
However, optionality would not eliminate our concerns with the Proposal. Regardless of whether participation is voluntary, allowing issuers to report on different schedules would reduce the comparability and standardization of public-company disclosures. Although there is currently some variation depending on a company’s fiscal year end, every issuer today files financial information that covers the preceding three months, giving investors four snapshots of financial performance per year. This allows them to compare quarter-over-quarter trends using relatively frequent and consistent reporting periods. Under the Proposal, some companies may continue filing quarterly reports, others may file semiannual reports supplemented by quarterly earnings releases, and still others may provide only semiannual reports.[9] These differing disclosure practices could make it more difficult for investors and advisers to compare issuers consistently across companies. Importantly, they would also make it more challenging for investors and advisers to evaluate the same issuer over time using a common set of standardized disclosures.
To the extent that companies that elect to file semiannual reports continue to provide more frequent voluntary information to the markets, we do not believe that voluntary earnings announcements or other discretionary disclosures are an adequate substitute for filed financial statements that are prepared in accordance with U.S. GAAP and reviewed by an independent auditor. Although voluntary communications may provide useful information, they are not subject to the same standardized content requirements, review processes, and disclosure framework as Form 10-Q filings. Academic research has found that less frequent reporting is associated with more information asymmetry, higher trading costs, less liquidity, and a higher cost of capital.[10] These outcomes would work against the very issuers the Proposal is intended to benefit and be contrary to the SEC’s mission to protect investors and maintain fair, orderly, and efficient markets.
The IAC Recommendation against the Proposal raises other concerns as well. For instance, a semiannual cadence could lead to reduced securities analyst coverage and could adversely affect valuation, liquidity, and financing costs for some issuers.[11] Semiannual reporting could also increase stock price volatility following interim disclosures because more information would be withheld for longer periods. We encourage the Commission to carefully consider these potential consequences, particularly because they could affect not only issuers, but also investors and investment advisers, market efficiency, and the quality of information available for investment decision-making.
Timely Periodic Reporting Benefits Investors Regardless of Investment Horizon
We disagree with the suggestion in the Proposal that quarterly reporting primarily benefits short-term investors. Long-term investors, and the investment advisers that manage their portfolios as fiduciaries, also rely on timely periodic disclosures to make informed investment decisions, monitor portfolio holdings, assess risks, evaluate creditworthiness, oversee management performance, and engage with issuers. A long-term investment horizon should not be equated with a “set-it-and-forget-it” approach. Rather, long-term investing requires ongoing monitoring of developments that could affect an issuer’s financial condition or operations, including changes in liquidity, leverage, profitability, internal controls, and other risks. Timely periodic reporting enables investors and advisers to identify and evaluate these developments as they emerge, rather than months later after they may have materially affected the value or risk profile of an investment. Reducing the frequency of periodic reporting, therefore, would not only affect short-term investors. It also would make it more challenging for long-term investors and their advisers to monitor and make well-informed investment decisions.
Moreover, less information does not reduce the market’s demand for short-term signals. Instead, delayed disclosure of material information is likely to increase uncertainty about issuers, potentially leading to greater reliance on informal or alternative information sources. Unofficial data sources would likely develop to fill the void between reporting periods for investors seeking to assess near-term performance.[12]
Instead of Changing the Reporting Cadence, the Commission Should Review the Required Content of Form 10-Q Filings and Consider Other Ways to Encourage Entry Into the Public Markets
While we recognize that preparing and filing periodic reports impose costs on issuers and that each additional filing creates incremental compliance burdens, other factors appear more likely to influence the decisions whether to enter or remain in the public markets. These include the complexity and expense of the IPO process, extensive disclosure and governance obligations, and litigation and liability risks associated with being a public company.[13]
Rather than reduce the frequency of public companies’ periodic reports, therefore, we recommend that the Commission undertake a review of the required content of quarterly reports on Form 10-Q to identify opportunities for simplification and streamlining.[14] Reducing unnecessary or duplicative disclosure requirements would lessen compliance burdens and costs while preserving the timely, standardized, and comparable information that investors and fiduciary investment advisers rely on to make informed decisions. In our view, streamlining the content of periodic reports, rather than reducing their frequency, would better balance the Commission’s objectives of reducing regulatory burdens and maintaining the transparency and investor protections that are fundamental to healthy public markets.[15]
Conclusion
Quarterly reporting under the Exchange Act plays an important role in promoting transparency, comparability, and fairness in U.S. markets. We respectfully urge the Commission to consider the potential for semiannual reporting to worsen information asymmetry, reduce standardization, increase volatility, and disadvantage smaller and mid-sized investment advisers and their clients. We recommend that the Commission address the substance, rather than the frequency, of reporting to reduce the regulatory burden on public companies while promoting investor protection and maintaining efficient capital markets.
* * *
Thank you for your consideration of our comments on this important issue. Please do not hesitate to contact the undersigned at (202) 293-4222 if we can be of further assistance.
Respectfully,
/s/ Gail C. Bernstein
Gail C. Bernstein
General Counsel and Head of Public Policy
/s/ Laura L. Grossman
Laura L. Grossman
Associate General Counsel
cc: Honorable Paul S. Atkins, Chairman
Honorable Hester M. Peirce, Commissioner
Honorable Mark T. Uyeda, Commissioner
Brian Daly, Director, Division of Investment Management
[1] The IAA is the leading organization dedicated to advancing the interests of fiduciary investment advisers. For nearly 90 years, the IAA has been advocating for advisers before Congress and U.S. and global regulators, promoting best practices and providing education and resources to empower advisers to effectively serve their clients, the capital markets, and the U.S. economy. Our members range from global asset managers to the medium- and small-sized firms that make up the majority of our industry. Together, the IAA’s member firms manage more than $57 trillion in assets for a wide variety of individual and institutional clients, including pension plans, trusts, mutual funds, private funds, endowments, foundations, and corporations. For more information, please visit www.investmentadviser.org and see the IAA’s Investment Adviser Industry Snapshot (Snapshot).
[2] Semiannual Reporting, 91 Fed. Reg. 24968 (May 7, 2026) (Proposal).
[3] See infra n. 13 and accompanying text.
[4] These insights are even more pronounced in industries such as the technology and consumer sectors that are driven by fast-moving signals. Less frequent reporting risks issues becoming worse before they are publicly disclosed.
[5] We note that voluntary disclosures that are furnished but not filed with Sarbanes-Oxley certifications could affect the credibility and informational value of those disclosures.
[6] In 2025, SEC-registered investment advisers provided asset management services to 61.0 million individual investors. The bulk of these clients (83.9%) were non-high net worth individuals. See Snapshot at 37.
[7] We generally agree with the SEC’s Investor Advisory Committee’s (IAC’s) concern that less frequent reporting may widen the gap between investors that have access to alternative information sources and those that rely primarily on public disclosures. We share the IAC’s concern that these information disparities “may also create broader negative externalities for U.S. capital markets, including diminished perceptions of fairness, erosion of trust and reduced participation.” See Recommendation of the Investor as Owner Subcommittee of the SEC Investor Advisory Committee Regarding Quarterly vs. Semi-annual Reporting (May 28, 2026) (IAC Recommendation) at 9.
[8] We recognize that if an issuer selectively discloses material nonpublic information to certain persons, it must make public disclosure of that information under Regulation FD on Form 8-K or through another method “that is reasonably designed to provide broad, non-exclusionary distribution of the information to the public.” However, while Regulation FD may reduce some information asymmetry, in our view it is not a substitute for quarterly reporting. It is not as comprehensive as Form 10-Q, the format and method of disclosure vary, and there are several exceptions to the rules. For example, Regulation FD may not apply to a lender that receives material nonpublic information. Moreover, even if an issuer makes public disclosure on Form 8-K or an alternative method, the disclosed information is unlikely to be as fulsome as the nonpublic information provided to the lender.
[9] Indeed, under the Proposal, a company could change its reporting frequency in its annual report on Form 10-K each fiscal year.
[10] See IAC Recommendation at n. 65.
[11] See id. at 9-10 and n. 66-68 (“Companies reporting quarterly also attract greater analyst coverage, which in turn is associated with enhanced liquidity and lower cost of capital for those firms. Empirical studies also indicate that reduced frequency of disclosures harms price efficiency and valuation through two related channels. First, when firms report only semiannually, investors rely on information provided by peer-firms, often overreacting to those signals and leading to over or under valuation of public companies.” (citing academic research)).
[12] Researchers have generally found that less frequent reporting has an adverse impact, including less efficient capital allocation by investors, more stock volatility, reduced analyst coverage, and wider information gaps. See IAC Recommendation at 5. We encourage the Commission to review the experiences of other jurisdictions that switched from quarterly to semiannual reporting, e.g., the United Kingdom, the European Union, Hong Kong, and Singapore.
[13] See IAC Recommendation at n. 52. See also Regulatory costs of being public: Evidence from bunching estimation (March 2024) (finding that regulatory compliance costs explain only about 7.3% of the decline in IPOs. According to the authors, the majority of the decline is explained by the rise of private funding including venture capital, private equity, and other alternative financing options).
[14] See Proposal, Question 15, and Commissioner Peirce’s question in her Statement on the Proposal, “Should we adjust the reporting burden rather than adjusting whether that burden is quarterly?”
[15] We also recommend that the Commission consider and conduct a cost-benefit analysis of the Proposal together with its recent Registered Offering Reform, 91 Fed. Reg. 31022 (May 26, 2026) and Filer Status Reform, 91 Fed. Reg. 30086 (May 21, 2026) proposals.