From quarterly to semiannual: Implications for disclosure and D&O risk

On May 5, 2026, the Securities and Exchange Commission proposed a significant change to the U.S. public company reporting framework, permitting companies to opt out of mandatory quarterly reporting in favor of semiannual disclosures.

While described as a change in reporting frequency, the more important implications involve how companies manage disclosure risk and how those practices are evaluated by D&O insurers. The central issue is not cadence itself, but how changes in reporting frequency may influence disclosure practices, claim severity and underwriting assessment.

Core disclosure obligations remain unchanged

Even if mandatory quarterly earnings reports become optional, public companies would remain subject to the antifraud provisions of the federal securities laws and to ongoing obligations to disclose material information on a timely basis. These obligations are not tied to any particular reporting schedule.

For issuers, reduced required filings would not necessarily mean diminished exposure. Fewer mandated reporting events may, instead, increase reliance on management judgment and place greater pressure on disclosure controls, escalation frameworks and coordination across finance, legal and risk functions.

Claim dynamics: Potentially greater severity

Adjustments to reporting frequency could change how and when disclosure-related claims arise. For companies electing semiannual reporting, longer intervals between required financial reports may allow adverse developments to accumulate, widening information gaps between formal disclosures. This may or may not increase claim frequency, but it has the potential to heighten severity. In this regard, where corrective disclosures are more abrupt or encompass a longer period of performance, stock price reactions may be more pronounced, driving larger losses and greater D&O exposure.

Factoring into this is the Supreme Court’s 2024 decision in Macquarie Infrastructure Corp. v. Moab Partners, L.P., which held that a “pure omission” is not actionable under Rule 10b-5(b) unless the omission renders an existing statement misleading. In the context of less frequent reporting, that standard may place greater focus on whether prior disclosures remained accurate and complete over longer reporting periods as adverse developments emerge between formal filings. Claims may focus on alleged delays in disclosure, failures to update prior statements, or selective communications during extended reporting intervals

Interim disclosures become a source of risk

If companies reduce the frequency of formal earnings reports, investor communications between reporting periods become more scrutinized. For risk teams, the key is how these communications are structured, controlled and documented — not only in execution, but also in the judgment about when and whether to disclose. While interim disclosures can present heightened risk if they are not subject to the same level of internal review and consistency as traditional earnings releases, perhaps the greater exposure lies in getting the disclosure decision right; once the difficult decision to disclose is made, companies may actually apply heightened discipline to ensure accuracy and consistency.

Forward-looking statements, in particular, require disciplined processes and consistent use of cautionary language. As reporting becomes more flexible, maintaining consistency becomes more dependent on internal processes, and the risk of inconsistency, omission, or contradiction increases. Moving away from required quarterly reporting means disclosure becomes less about following a schedule and more about defending judgment calls.

Insider trading, Reg FD and governance considerations

Longer gaps between periodic reports may also affect insider trading risk and governance oversight. With fewer scheduled disclosure events, directors and officers may possess material nonpublic information for longer periods, potentially extending the amount of time during which trading restrictions may be appropriate. This may increase the importance of well-designed trading policies, blackout periods and Rule 10b5-1 plans.

For risk and compliance teams, this raises practical questions about disclosure policies, internal monitoring and enforcement. Reg FD issues related to selective disclosure of material nonpublic information could become harder to manage as companies go longer between formal reporting periods while continuing to engage with analysts and investors. Selective or inconsistent communications may draw regulatory scrutiny and increase the risk of claims tied to weaknesses in disclosure controls or board oversight.

D&O insurance considerations

An optional reporting framework, under which some companies report quarterly and others semiannually, introduces greater variability in issuer behavior. As a result, underwriting is likely to focus less on how often a company reports and more on how disclosure decisions are made, controlled and overseen.

From a coverage perspective, elective semiannual reporting would not modify the antifraud provisions of the federal securities laws. Even if the nature of the allegations changes, such as claims involving selective or misleading communications during extended reporting intervals, most D&O policies would continue to cover such claims, subject, as always, to the policy’s specific terms and limitations.

Takeaways

If adopted, optional semiannual earnings reporting would modify the public company reporting framework without changing the underlying liability framework. The more important shift is how disclosure risk is managed and how those practices are evaluated by insurers.

As D&O renewals approach, companies electing semiannual reporting should work closely with their brokers to develop a clear underwriting narrative around how disclosure controls, escalation procedures and communication practices will function within a less structured reporting environment.