SUMMARY: The Securities and Exchange Commission (“Commission”) is proposing

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Conformed to Federal Register Version




SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 200, 210, 229, 230, 232, 239, 240, 249, and 260

Release Nos. 33-11414; 34-105368; 39-2563; IC-36140; File No. S7-2026-15

RIN 3235-AN58

Semiannual Reporting

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

SUMMARY: The Securities and Exchange Commission (“Commission”) is proposing

amendments to allow companies to file semiannual reports on new Form 10-S in lieu of quarterly

reports on Form 10-Q to meet their interim reporting obligations under the Securities Exchange

Act of 1934 (“Exchange Act”). The Commission is also proposing changes to the financial

statement requirements of Regulation S-X to facilitate semiannual reporting and to simplify rules

regarding the age of financial statements.

DATES: Comments should be received on or before July 6, 2026.

ADDRESSES: Comments may be submitted by any of the following methods:

       Electronic comments:

   •   Use the Commission’s Internet comment form

       (https://www.sec.gov/rules/submitcomments.htm).

   •   Send an email to [email protected]. Please include File Number S7-2026-15 on the

       subject line.

       Paper comments:

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•     Send paper comments to Vanessa A. Countryman, Secretary, Securities and Exchange

         Commission, 100 F Street NE, Washington, DC 20549-1090.

         All submissions should refer to File Number S7-2026-15. This file number should be

included on the subject line if email is used. To help the Commission process and review your

comments more efficiently, please use only one method of submission. The Commission will

post all comments on the Commission’s website https://www.sec.gov/rules-regulations/public-

comments/s7-2026-15. Do not include personally identifiable information in submissions; you

should submit only information that you wish to make available publicly. The Commission may

redact in part or withhold entirely from publication submitted material that is obscene or subject

to copyright protection.

         Studies, memoranda, or other substantive items may be added by the Commission or staff

to the comment file during this rulemaking. A notification of the inclusion in the comment file of

any such materials will be made available on the Commission’s website. To ensure direct

electronic receipt of such notifications, sign up through the “Stay Connected” option at

www.sec.gov to receive notifications by email.

         A summary of the proposal of not more than 100 words is posted on the Commission’s

website https://www.sec.gov/rules-regulations/2026/05/s7-2026-15.

FOR FURTHER INFORMATION CONTACT: Mark Saltzburg, Senior Special Counsel,

Office of Rulemaking, Division of Corporation Finance, at (202) 551-3430, or Ryan Milne,

Associate Chief Accountant, Office of Chief Accountant, Division of Corporation Finance, at

(202) 551-3400, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC

20549.




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SUPPLEMENTARY INFORMATION: The Commission is proposing to amend or add the

following rules and forms:

    Commission Reference                 Name            17 CFR Citation
    Securities Act of 1933 1             Rule 138        § 230.138
                                         Rule 139        § 230.139
                                         Rule 139b       § 230.139b
                                         Rule 144        § 230.144
                                         Rule 158        § 230.158
                                         Rule 175        § 230.175
                                         Rule 405        § 230.405
                                         Rule 485        § 230.485
                                         Form S-1        § 239.11
                                         Form S-3        § 239.13
                                         Form S-11       § 239.18
                                         Form S-4        § 239.25
                                         Form F-1        § 239.31
                                         Form F-3        § 239.33
                                         Form F-4        § 239.34
                                         Form F-10       § 239.40
    Securities Exchange Act of 1934 2    Rule 3a55-1     § 240.3a55-1
                                         Rule 3b-6       § 240.3b-6
                                         Rule 10b5-1     § 240.10b5-1
                                         Rule 12b-2      § 240.12b-2
                                         Rule 12b-25     § 240.12b-25
                                         Rule 13a-10     § 240.13a-10
                                         Rule 13a-13     § 240.13a-13
                                         Rule 13a-14     § 240.13a-14
                                         Rule 13a-16     § 240.13a-16
                                         Rule 13d-1      § 240.13d-1
                                         Rule 14a-5      § 240.14a-5
                                         Rule 14a-8      § 240.14a-8

1
      15 U.S.C. 77a et seq.
2
      15 U.S.C. 78a et seq.

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Commission Reference                  Name           17 CFR Citation
                                      Schedule 14A   § 240.14a-101
                                      Rule 15c2-11   § 240.15c2-11
                                      Rule 15d-10    § 240.15d-10
                                      Rule 15d-13    § 240.15d-13
                                      Rule 15d-14    § 240.15d-14
                                      Form 10        § 249.210
                                      Form 6-K       § 249.306
                                      Form 8-K       § 249.308
                                      Form 10-S      § 249.308b
                                      Form 10-K      § 249.310
                                      Form 12b-25    § 249.322
Regulation S-K                        Item 10        § 229.10
(17 CFR 229.10 through 229.1610)
                                      Item 101       § 229.101
                                      Item 103       § 229.103
                                      Item 201       § 229.201
                                      Item 302       § 229.302
                                      Item 303       § 229.303
                                      Item 308       § 229.308
                                      Item 402       § 229.402
                                      Item 407       § 229.407
                                      Item 408       § 229.408
                                      Item 601       § 229.601
                                      Item 701       § 229.701
                                      Item 1100      § 229.1100
Regulation S-X                        Rule 3-01      § 210.3-01
(17 CFR 210.1-01 through 210.15-01)
                                      Rule 3-12      § 210.3-12
                                      Rule 8-03      § 210.8-03
                                      Rule 8-08      § 210.8-08
                                      Rule 10-01     § 210.10-01
                                      Rule 11-02     § 210.11-02
                                      Rule 15-01     § 210.15-01
Regulation M-A                        Item 1010      § 229.1010
(17 CFR 229.1000 through 229.1016)


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Commission Reference                           Name        17 CFR Citation
    Regulation S-T                                 Rule 11     § 232.11
    (17 CFR 232.10 through 232.501)
                                                   Rule 303    § 232.303
                                                   Rule 405    § 232.405
                                                   Rule 406    § 232.406
    Trust Indenture Act of 1939 3                  Rule 0-11   § 260.0-11
    OMB Control Numbers Assigned Pursuant to the   Rule 800    § 200.800
    Paperwork Reduction Act (17 CFR 200.800)




3
      15 U.S.C. 77aaa et seq.

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TABLE OF CONTENTS
I.    INTRODUCTION............................................................................................................. 7
II.   BACKGROUND ............................................................................................................... 8
III.  DISCUSSION OF PROPOSED
      AMENDMENTS ............................................................................................................. 16
A.    Proposed Amendments for Semiannual Reporting ............................................................25
B.    Proposed Amendments to Regulation S-X ........................................................................44
C.    Proposed Amendments Regarding Transition Reports ......................................................61
D.    Proposed Technical Amendments......................................................................................62
E.    General Request for Comment...........................................................................................64
IV.   OTHER MATTERS ....................................................................................................... 64
V.    ECONOMIC ANALYSIS .............................................................................................. 65
A.    Introduction ........................................................................................................................65
B.    Broad Economic Considerations........................................................................................68
C.    Baseline ..............................................................................................................................78
D.    Costs and Benefits..............................................................................................................98
E.    Anticipated Effects on Efficiency, Competition, and Capital Formation ........................130
F.    Reasonable Alternatives...................................................................................................134
G.    Request for Comment ......................................................................................................140
VI.   PAPERWORK REDUCTION ACT
      ANALYSIS .................................................................................................................... 143
A.    Summary of the Collections of Information ....................................................................143
B.    Estimated Paperwork Burden Effects of the Proposed Amendments ..............................145
C.    Incremental and Aggregate Burden and Cost Estimates..................................................145
D.    Request for Comment ......................................................................................................150
VII. CONGRESSIONAL REVIEW ACT .......................................................................... 151
VIII. INITIAL REGULATORY FLEXIBILITY
      ACT ANALYSIS ........................................................................................................... 152
A.    Reasons for, and Objectives of, the Proposed Action......................................................152
B.    Legal Basis .......................................................................................................................154
C.    Small Entities Subject to the Proposed Rules and Amendments .....................................154
D.    Reporting, Recordkeeping, and Other Compliance Requirements ..................................157
E.    Duplicative, Overlapping or Conflicting Federal Rules ..................................................159
F.    Significant Alternatives ...................................................................................................159
G.    Request for Comment ......................................................................................................162
STATUTORY AUTHORITY .................................................................................................. 163




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I.       INTRODUCTION

         We are proposing amendments to provide all companies subject to reporting obligations

under Exchange Act Section 13(a) or 15(d) (“Exchange Act reporting companies”) 4 that file

quarterly reports the option of filing interim reports on a semiannual basis. Currently, Exchange

Act reporting companies must file quarterly reports on Form 10-Q pursuant to 17 CFR 240.13a-

13 (“Exchange Act Rule 13a-13”) or 17 CFR 240.15d-13 (“Exchange Act Rule 15d-13”), with

certain exceptions. 5 Pursuant to these rules, Exchange Act reporting companies file with the

Commission three quarterly reports on Form 10-Q each fiscal year, with the fourth fiscal quarter

subsumed within the reporting company’s annual report on Form 10-K. The proposed

amendments to Exchange Act Rules 13a-13 and 15d-13, if adopted, would allow Exchange Act

reporting companies electing to do so to file semiannual reports on new Form 10-S in lieu of

quarterly reports on Form 10-Q. Our proposal would provide an Exchange Act reporting

company with the flexibility to determine the frequency of interim reporting that best suits its

particular circumstances, such as its ability to bear the costs of preparing the quarterly reports,

the stage of its business development, and the expectations of its investors, without undermining

fundamental investor protections. Providing such regulatory flexibility could reduce the


4
     For purposes of this release, with respect to the terms “Exchange Act reporting company” or “Exchange Act
     reporting companies” (or, where the context is clear, abbreviated terms “reporting company” and “reporting
     companies”): (A) unless otherwise noted, we use these terms interchangeably with the terms “registrant” or
     “registrants” in the context of registrants with a reporting obligation under Exchange Act Section 13(a) or 15(d)
     but, in the context of companies that are “in registration” (i.e., have filed a registration statement that has not yet
     become effective), we use the term “registrant” to include these companies as well, and (B) we generally limit
     the use of these terms in this release to those companies that are subject to a requirement to file Form 10-Q
     quarterly reports, unless the context clearly indicates all Exchange Act reporting companies are referred to. See
     infra note 5 for discussion of Exchange Act reporting companies that are excluded from Form 10-Q reporting
     requirements.
5
     Exchange Act Rules 13a-13 and 15d-13 exempt investment companies that are required to file reports pursuant
     to 17 CFR 270.30a-1 (which includes open-end management investment companies, closed-end management
     investment companies other than business development companies, and unit investment trusts), foreign private
     issuers, and asset-backed issuers (as defined in Item 1101 of Regulation AB) from the quarterly reporting
     obligations imposed by these rules.

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regulatory burden of being a reporting company, which could potentially influence a company’s

decision to become or remain a reporting company and encourage more companies to go or

remain public. These proposed amendments would not substantively affect investment

companies except for business development companies and face-amount certificate companies. 6

          We are also proposing amendments to the financial statement requirements of 17 CFR

Part 210 (“Regulation S-X”)—including to 17 CFR 210.3-01 (“Rule 3-01”), 17 CFR 210.3-12

(“Rule 3-12”), and 17 CFR 210.8-08 (“Rule 8-08”)—to facilitate semiannual reporting and to

simplify rules regarding the age of financial statements in registration statements and other

Commission filings.

II.       BACKGROUND

          Companies subject to Exchange Act Sections 13(a) and 15(d) must file periodic and other

reports as prescribed in Commission rules. Exchange Act reporting companies have been

required to file annual reports on Form 10-K since 1935 7 as well as current reports on Form 8-K

for certain material events since 1936. 8 In 1946, the Commission required certain reporting

companies to file quarterly reports on Form 8-K to disclose, among other things, the dollar




6
      See 17 CFR 240.13a-13(b)(3) and 17 CFR 270.30a-1 (together exempting registered investment companies that
      file Investment Company Act annual reports from the requirement to file a quarterly Form 10-Q). Business
      development companies currently file Form 10-Q quarterly reports and Form 10-K annual reports. See 17 CFR
      240.13a-1 (requiring Exchange Act Section 12 registrants to file annual reports); 15 U.S.C. 80a-2(a)(48)
      (defining business development company); 15 U.S.C. 80a-53 (making the election to be subject to certain
      provisions of the Investment Company Act conditional on registration under Exchange Act Section 12). Face-
      amount certificate companies are a type of registered investment company that is not required to file reports
      pursuant to 17 CFR 270.30a-1 and thus is required to file periodic reports pursuant to Exchange Act Section 13.
      See Investment Company Reporting Modernization, Investment Company Act Release No. 32314 (Oct. 13,
      2016) [81 FR 81870 (Nov. 18, 2016)], at n.757.
7
      Rule Adopting Form 10-K, Release No. 34-445 (Dec. 20, 1935) [not published in the Federal Register]. An
      annual report requirement for Section 12 registrants remains in place today pursuant to 17 CFR 240.13a-1. See
      also 17 CFR 240.15d-1 (annual report requirement for Securities Act registrants).
8
      Rule Adopting Form 8–K, Release No. 34-925 (Nov. 11, 1936) [not published in the Federal Register].

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amount of gross sales (less discounts, returns, and allowances) and operating revenue. 9 In 1953,

the Commission ended this quarterly reporting requirement, 10 and, in 1955, it adopted rules

requiring semiannual interim reports pursuant to Rules X-13A-13 and X-15D-13. 11 These rules

required one semiannual report to be filed each fiscal year by Exchange Act reporting companies

on a new Form 9-K. 12 Semiannual reports on Form 9-K, which were due 45 days after the end of

the reporting period, did not require the narrative disclosures mandated by Form 10-Q and

provided only limited disclosures typically associated with an income statement. 13

         After 15 years of this semiannual reporting system, the Commission rescinded

semiannual reports on Form 9-K in 1970 and instead required quarterly reporting pursuant to

amended Rules 13a-13 and 15d-13. 14 The rules required Exchange Act reporting companies to


9
     See, e.g., Current Reports to be Filed and Requirements of Quarterly Reports by Certain Companies, 11 FR
     3393 (Apr. 2, 1946) and Current Reports and Instructions for Use Thereof, 11 FR 3394 (Apr. 2, 1946) (together
     requiring quarterly reports pursuant to Item 11 of Form 8-K to be filed not more than 45 days after the close of a
     quarter by certain issuers, including those that file annual reports on Form 10-K, but exempting insurance
     companies, investment companies, common-carriers, and public utility companies). See also Adoption of New
     and Revised Forms, Release No. 34-4340 (Nov. 2, 1949), 1949 SEC LEXIS 71 (adopting new quarterly report
     form, Form 9-K, to replace Item 11 of Form 8-K but not making any substantial change in the quarterly
     reporting requirements).
10
     See Rescission of Form 9-K and Rules X-13A-13 and X-15D-13, Release No. 34-4949 (Oct. 9, 1953), 1953 SEC
     LEXIS 30 (rescinding the quarterly reporting requirements and Form 9-K); Notice of Proposed Adoption of
     Form 9-K and Rules X-13A-13 and X-15D-13, Release No. 34-5129 (Jan. 27, 1955) [20 FR 771 (Feb. 4, 1955)]
     (“In October 1952, the Commission proposed revised rules calling for quarterly statements of profit and loss
     and earned surplus. These rules were not adopted and about a year later the requirement of quarterly reports of
     sales and revenues was discontinued.”).
11
     Adoption of Form 9-K and Rules X-13A-13 and X-15D-13, Release No. 33-3553 (June 23, 1955) [20 FR 4816
     (July 7, 1955)].
12
     Certain issuers were excepted from these requirements. The rules provided exemptions from required
     semiannual reporting for: (1) banks and bank holding companies, (2) investment companies, (3) certain
     insurance companies, (4) certain public utilities and common carriers filing reports with certain Federal
     agencies, (5) certain single-crop agricultural commodity producers, (6) certain promotional or development
     stage companies, and (7) foreign issuers other than private issuers domiciled in a North American country or
     Cuba.
13
     Specifically, semiannual Form 9-K required items including: (i) gross sales (less discounts, returns, and
     allowances), (ii) operating revenues, (iii) extraordinary items and special items, (iv) net income before tax, (v)
     provision for tax, (vi) net income, and (vii) earned surplus. Semiannual Form 9-K did not require a detailed
     balance sheet, statement of stockholders’ equity, or statement of cash flows.
14
     Adoption of Form 10-Q, Rescission of Form 9-K and Amendment of Rules 13a-13 and 15d-13, Release No. 34-
     9004 (Oct. 28, 1970) [35 FR 17537 (Nov. 14, 1970)].

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file three quarterly reports on Form 10-Q each fiscal year. 15 When it proposed the quarterly

report on Form 10-Q, the Commission explained that the new report would “provide detailed

information as a back-up to information released pursuant to timely disclosure policies” and

would provide “uniform standards” for all Exchange Act reporting companies. 16 The

Commission’s move towards a quarterly reporting requirement was also consistent with the

recommendation of the 1969 Wheat Report, which concluded “that a regular, quarterly report

would be more useful than the present, irregular 8-K report.” 17 Although the Commission has

amended Form 10-Q and requirements in connection with quarterly reporting over time, 18 the

Commission has not changed this cadence of quarterly interim reporting since it was adopted in

1970.

         Form 10-Q today requires more detailed information than the rescinded semiannual

report on Form 9-K. Form 10-Q requires financial statements (inclusive of footnote disclosures)

for the covered quarterly period that are prepared in accordance with United States (“U.S.”)

generally accepted accounting principles (“U.S. GAAP”), 19 have been reviewed by an



15
     Certain exemptions were provided for: (1) certain investment companies, (2) certain real estate companies, (3)
     certain foreign private issuers, (4) certain life insurance companies, (5) certain public utilities, common carriers,
     and pipeline carriers filing reports with certain Federal agencies, and (6) certain promotional or development
     stage companies.
16
     Proposal to Adopt Form 10-Q Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
     and to Rescind Forms 8-K and 9-K Under That Act, Release No. 34-8683 (Sept. 15, 1969) [34 FR 14239, 14239
     (Sept. 10, 1969)].
17
     Disclosure to Investors—A Reappraisal of Federal Administrative Policies Under the ’33 and ’34 Acts (The
     Wheat Report) 332 (1969). The Wheat Report was a product of a review of the periodic reporting system from
     1967 to 1969 conducted by Commissioner Francis Wheat and staff members of the Commission.
18
     See, e.g., Audit Committee Disclosure, Release No. 34-42266 (Dec. 22, 1999) [64 FR 73389 (Dec. 30, 1999)]
     (requiring interim financial statements included in Form 10-Q to be reviewed by an independent public
     accountant).
19
     Foreign private issuers may voluntarily file on domestic forms, including Form 10-Q, and include financial
     statements for the covered quarterly period that are prepared in accordance with: (a) International Financial
     Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) without
     reconciliation to U.S. GAAP or (b) home-country GAAP with reconciliation to U.S. GAAP.

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independent public accountant (but are not required to be audited), 20 and are data tagged using

inline XBRL. 21 It also requires narrative disclosures regarding:

         •    Management’s discussion and analysis of financial condition and results of operations

              (“MD&A”); 22

         •    Market risk; 23

         •    Effectiveness of disclosure controls and procedures and material changes in internal

              control over financial reporting; 24

         •    Legal proceedings; 25

         •    Material changes in risk factors; 26

         •    Unregistered equity security sales and use of proceeds; 27


20
     The regulation at 17 CFR 210.10-01(d) (Rule 10-01(d) of Regulation S-X) requires that, prior to filing, interim
     financial statements included in quarterly reports on Form 10-Q “must be reviewed by an independent public
     accountant using applicable professional standards and procedures for conducting such reviews, as may be
     modified or supplemented by the Commission.” See also 17 CFR 210.8-03. Public Company Accounting
     Oversight Board (“PCAOB”) Auditing Standard 4105 sets forth the auditing standard that currently applies to
     an independent public accountant conducting a review of interim financial statements and explains that “the
     objective of a review of interim financial information pursuant to this section is to provide the accountant with a
     basis for communicating whether he or she is aware of any material modifications that should be made to the
     interim financial information for it to conform with generally accepted accounting principles.” See PCAOB
     Auditing Standard 4105, Reviews of Interim Financial Information, ¶ .07. That standard further explains that the
     objective of such review “differs significantly from that of an audit conducted in accordance with the standards
     of the PCAOB” because “[a] review of interim financial information does not provide a basis for expressing an
     opinion about whether the financial statements are presented fairly, in all material respects, in conformity with
     generally accepted accounting principles” as an auditor would do when expressing an unqualified opinion in an
     audit of the financial statements. Id. See also PCAOB Auditing Standard 1000, General Responsibilities of the
     Auditor in Conducting an Audit, ¶ .18 (setting forth the standard for an auditor to express an unqualified opinion
     in an audit of the financial statements).
21
     See Form 10-Q, Part I, Item 1; 17 CFR 210.10-01 (Regulation S-X Rule 10-01); 17 CFR 210.8-03 (Regulation
     S-X Rule 8-03); Form 10-Q, Part II, Item 6; 17 CFR 229.601(b)(101)(i)(A).
22
     See Form 10-Q, Part I, Item 2; 17 CFR 229.303 (17 CFR Part 229 (“Regulation S-K”) Item 303).
23
     See Form 10-Q, Part I, Item 3; 17 CFR 229.305 (Regulation S-K Item 305).
24
     See Form 10-Q, Part I, Item 4; 17 CFR 229.307 (Regulation S-K Item 307); 17 CFR 229.308(c) (Regulation S-
     K Item 308(c)).
25
     See Form 10-Q, Part II, Item 1; 17 CFR 229.103 (Regulation S-K Item 103).
26
     See Form 10-Q, Part II, Item 1A; 17 CFR 229.105 (Regulation S-K Item 105).
27
     See Form 10-Q, Part II, Item 2; 17 CFR 229.701 (Regulation S-K Item 701).

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•    Defaults on senior securities; 28

         •    Material changes to the procedures by which security holders may recommend

              nominees to the registrant’s board of directors; 29

         •    Disclosure of director or officer adoptions or terminations of certain plans for the

              purchase or sale of registrant securities; 30

         •    Exhibits required under Item 601 of Regulation S-K; 31 and

         •    Certifications by the principal executive and financial officers as exhibits. 32

         Form 10-Q reports are filed electronically with the Commission through its EDGAR

system. The deadline for filing Form 10-Q with the Commission is 40 or 45 days after the end of

a fiscal quarter, depending on the filer status of the reporting company. 33

         Finally, securities exchange listing standards generally do not mandate a particular

frequency of interim reporting. Instead, they refer generally to compliance with Commission

rules requiring interim reports (with at least one exchange making specific reference to quarterly




28
     See Form 10-Q, Part II, Item 3.
29
     See Form 10-Q, Part II, Item 5(b); 17 CFR 229.407(c)(3) (Regulation S-K Item 407(c)(3)).
30
     See Form 10-Q, Part II, Item 5(c); 17 CFR 229.408(a) (Regulation S-K Item 408(a)).
31
     See Form 10-Q, Part II, Item 6; 17 CFR 229.601 (Regulation S-K Item 601).
32
     See Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 302, 116 Stat. 745, 777 (2002); 17 CFR 240.13a-14;
     17 CFR 240.15d-14; 17 CFR 229.601(b)(31) (Regulation S-K Item 601(b)(31)) (exhibits regarding
     certifications that include those related to internal controls, untrue statements of material facts, and material
     omissions); Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 906, 116 Stat. 745, 806 (2002), 17 CFR
     229.601(b)(32) (Regulation S-K Item 601(b)(32)) (exhibits regarding certifications related to financial condition
     and results of operations).
33
     Large accelerated filers and accelerated filers, as defined in 17 CFR 240.12b-2 (“Exchange Act Rule 12b-2”),
     must file Form 10-Q within 40 days after the end of a fiscal quarter and all other Exchange Act reporting
     companies must file Form 10-Q within 45 days after the end of a fiscal quarter. See Form 10-Q, General
     Instruction A.

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reports on Form 10-Q), 34 require availability of interim reports, 35 or require quick dissemination

of quarterly earnings information to the market. 36

         Certain companies that are not subject to Section 13(a) or Section 15(d) already report on

a semiannual basis under the Commission’s rules, 37 and certain other companies are exempt

from quarterly reporting but furnish semiannual information pursuant to other requirements such




34
     See, e.g., Nasdaq Stock Market Rule 5250(c)(1) (providing that a company shall timely file all required periodic
     financial reports with the Commission through the EDGAR system); NYSE Listed Company Manual §
     802.01ESEC (providing that, for purposes of remaining listed on the exchange, a company will incur a late
     filing delinquency and be subject to the procedures set forth in Section 802.01E on the date on which any of
     several events occurs, including where the company fails to file its annual report (Forms 10-K, 20-F, 40-F or N-
     CSR) or its quarterly report on Form 10-Q with the SEC by the date such report was required to be filed by the
     applicable form).
35
     See, e.g., Nasdaq Stock Market Rule 5250(d)(3)(A) (providing that each company that is not a limited
     partnership and is subject to Rule 13a-13 under the Exchange Act shall make available copies of quarterly
     reports including statements of operating results to shareholders either prior to or as soon as practicable
     following the company’s filing of its Form 10-Q with the Commission).
36
     See, e.g., NYSE Listed Company Manual § 202.05 (providing that a listed company is expected to release
     quickly to the public any news or information which might reasonably be expected to materially affect the
     market for its securities); NYSE Listed Company Manual § 203.02 (providing that any company with voting or
     non-voting common securities listed on the exchange that is required to file interim financial statements with
     the Commission is required to disseminate in a manner consistent with the exchange’s immediate release policy
     an interim earnings release as soon as its interim financial statements are available and citing Section 202.06 for
     the exchange’s immediate release policy); NYSE Listed Company Manual § 202.06 (providing that annual and
     quarterly earnings are examples of news items that should be handled on an immediate release basis).
37
     For example, issuers that sell up to $75 million of securities within a 12-month period under the Regulation A
     exemption (“Tier 2 issuers”) are required to file a Form 1-SA semiannual report with the Commission within 90
     days after the end of the first semiannual period of the issuer’s fiscal year and an annual report on Form 1-K
     within 120 days after fiscal year end. 17 CFR 230.257(b)(3). Semiannual reports on Form 1-SA require interim
     financial statements and MD&A disclosures. The financial statements are not required to be reviewed (which
     differs from the requirement that Form 10-Q financial statements be reviewed by an independent public
     accountant). In adopting the semiannual reporting requirement for Tier 2 issuers, the Commission found that a
     semiannual, rather than a quarterly, reporting requirement strikes an appropriate balance between the need to
     provide information to the market and the cost of compliance for smaller issuers. Amendments for Small and
     Additional Issues Exemption under the Securities Act, Release No. 33-9741 (Mar. 25, 2015) [80 FR 21806,
     21847 (Apr. 20, 2015)]. Based on our analysis of Tier 2 issuer filings on Form 1-SA and amendments thereto on
     the Commission’s EDGAR system, we estimate that there were 470 unique filers of such forms in calendar year
     2024 and 448 unique filers of such forms in calendar year 2025.

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as exchange listing standards. 38 Several foreign jurisdictions also require semiannual reporting of

financial information (but not quarterly reporting). 39

         Over the years, the Commission at times has reassessed the current periodic reporting

system, its impact on Exchange Act reporting companies, and potential alternatives including

semiannual reporting. Most recently, as part of the Commission’s disclosure effectiveness

review, the Commission issued two releases that addressed and requested public comment on the

frequency of interim reporting. 40 In July 2019, the Commission also held a roundtable that


38
     Foreign private issuers, as defined in 17 CFR 230.405 (“Securities Act Rule 405”) and 17 CFR 240.3b-4(c), are
     effectively required by a combination of Commission and securities exchange rules to file with the Commission
     one semiannual report on Form 6-K (due no later than six months following second fiscal quarter end) for each
     fiscal year. See 17 CFR 240.13a-16 (requiring every foreign private issuer which is subject to 17 CFR 240.13a-
     1 to make reports on Form 6-K, with certain exceptions); 17 CFR 15d-16 (requiring every foreign private issuer
     which is subject to 17 CFR 240.15d-1 to make reports on Form 6-K, with certain exceptions); General
     Instruction B of Form 6-K (requiring foreign private issuers to furnish to the Commission whatever reports that:
     they make public pursuant to the law of their jurisdiction of domicile or organization; they file or are required to
     file with a stock exchange on which their securities are traded and that are made public by that exchange; or
     they distribute or are required to distribute to security holders); NYSE Listed Company Manual § 203.03
     (requiring that an NYSE-listed foreign private issuer file with the Commission a Form 6-K that includes (i) an
     interim balance sheet as of the end of its second fiscal quarter and (ii) a semiannual income statement that
     covers its first two fiscal quarters); Notice of Filing and Immediate Effectiveness of Proposed Rule Change
     Amending the NYSE Listed Company Manual to Adopt a Requirement that Listed Foreign Private Issuers Must,
     at a Minimum, Submit a Form 6-K to the Securities and Exchange Commission Containing Semi-Annual
     Unaudited Financial Information, Release No. 34-77198 (Feb. 19, 2016) [81 FR 9563 (Feb. 25, 2016)]; Nasdaq
     Stock Market Rule 5250(c)(2) (providing for similar semiannual report requirements for foreign private issuers
     as in NYSE Listed Company Manual § 203.03); Self-Regulatory Organizations; National Association of
     Securities Dealers, Inc.; Order Approving Proposed Rule Change and Amendments Nos. 1 and 2 Thereto to
     Require Semi-annual Financial Reporting by Foreign Private Issuers, Release No. 34-52192 (Aug. 2, 2005) [70
     FR 46241 (Aug. 9, 2005)].
39
     For example, the securities regulations in the European Union (“EU”), the United Kingdom (“UK”), Hong
     Kong, and Japan provide for such semiannual reporting. Both the EU and the UK transitioned from quarterly to
     semiannual reporting in the 2010s. See, e.g., Directive 2013/50/EU Amending Directive 2004/109/EC on the
     Harmonisation of Transparency Requirements in Relation to Information About Issuers Whose Securities are
     Admitted to Trading on a Regulated Market (Oct. 22, 2013), available at https://eur-
     lex.europa.eu/eli/dir/2013/50/oj/eng; Removing the Transparency Directive’s Requirement to Publish Interim
     Management Statements, Financial Conduct Authority (Nov. 2014), available at
     https://www.fca.org.uk/publication/policy/ps14-15.pdf. See also Section 13.46 to 13.50B of the Listing Rules
     and Guidance of the Hong Kong Exchange Main Board, available at https://en-
     rules.hkex.com.hk/rulebook/main-board-listing-rules and Article 24-5 and the changes to the Japanese securities
     regulations in the Financial Instruments and Exchange Act (Act No. 25 of 1948), available at
     https://www.japaneselawtranslation.go.jp/en/laws/view/4633#je_ch2at48 (the revision from quarterly to
     semiannual reporting was enacted in 2024).
40
     Business and Financial Disclosure Required by Regulation S-K, Release No. 33-10064 (Apr. 13, 2016) [81 FR
     23916 (Apr. 22, 2016)] (“2016 Regulation S-K Concept Release”); Request for Comment on Earnings Releases


                                                               14

--- page 15 ---

discussed issues including the frequency of periodic reporting. 41 The Commission received

significant public feedback as a result of these recent efforts, including from companies and their

representative organizations, asset managers and institutional investors, investor groups and

individual investors, accounting firms, law firms, and other market participants. 42 Commenters

expressed a wide variety of views about the frequency of interim reporting requirements, 43 with

some supporting the current frequency but others recommending less-frequent interim reporting,

such as semiannual reports, due to concerns about compliance costs and short-termism. 44 Finally,



     and Quarterly Reports, Release No. 33-10588 (Dec. 18, 2018) [83 FR 65601 (Dec. 21, 2018)] (“2018 Request
     for Comment on Quarterly Earnings and Reporting”).
41
     Roundtable on Short-Term/Long-Term Management of Public Companies, Our Periodic Reporting System and
     Regulatory Requirements, U.S. Sec. & Exch. Comm’n (July 18, 2019) (“2019 Periodic Reporting Roundtable”),
     available at https://www.sec.gov/newsroom/meetings-events/071819-roundtable-short-term-long-term-
     management-public-companies.
42
     Additionally, separate from public comments on these releases and the roundtable, the Commission received a
     petition for rulemaking in 2025 that requested the Commission provide public companies the option to file
     interim reports semiannually instead of quarterly and that the Commission: issue a notice of proposed
     rulemaking to amend Rule 13a-13, Rule 15d-13, and Form 10-Q; consider additional conforming amendments
     to related rules as necessary; and “take such other action as the Commission deems appropriate to address the
     harmful effects of mandatory quarterly reporting on long-term value creation.” See Long Term Stock Exchange,
     Inc., Petition for Rulemaking to Amend Quarterly Reporting Requirements Under the Securities Exchange Act
     of 1934, File No. 4-872 (Sept. 30, 2025), available at https://www.sec.gov/files/rules/petitions/2025/petn4-
     872.pdf.
43
     See comments on 2016 Regulation S-K Concept Release, available at https://www.sec.gov/comments/s7-06-
     16/s70616.htm; comments on 2018 Request for Comment on Quarterly Earnings and Reporting, available at
     https://www.sec.gov/comments/s7-26-18/s72618.htm. One commenter provided survey data from 183 listed
     public companies that indicated 75% of those companies supported a move to semiannual reporting. Letter from
     Nasdaq, Inc. (Mar. 21, 2019) (“Nasdaq 2019”) (responses by 183 listed companies to the question “Do you
     believe that your company and/or your investors would benefit from moving to a semi-annual reporting
     model?” indicated: Yes: 75%; No: 25%). In this release, generally comment letters cited that are dated 2018 or
     2019 are comments received in response to the 2018 Request for Comment on Quarterly Earnings and
     Reporting and comment letters cited that are dated 2016 are comments received in response to the 2016
     Regulation S-K Concept Release; we generally do not provide individual hypertext links for each comment but
     the comment letters can be found at the links provided above. Comment letters in response to the 2019 Periodic
     Reporting Roundtable are found at the same link above as the comments in response to the 2018 Request for
     Comment on Quarterly Earnings and Reporting.
44
     Short-termism is an expression commonly used to refer generally to a focus on short-term results instead of
     long-term business strategies and short-term actions by a company that can have a negative long-term impact on
     the company; such actions can include: reducing capital expenditure (including investment in intangible assets
     and research and development); deferring needed maintenance; forgoing opportunities with long-term net
     present value; reducing advertising; delaying new hires; and earnings management. For examples of comments
     regarding short-termism, see generally comments on the 2018 Request for Comment on Quarterly Earnings and
     Reporting, supra note 43.

                                                            15

--- page 16 ---

the concept of semiannual reporting was recently discussed at: a meeting of the Commission’s

Investor Advisory Committee; 45 the Commission’s 45th Annual Small Business Forum (and the

prior year’s forum); 46 and the Commission’s 2025 Small Cap Policy Roundtable. 47

III.       DISCUSSION OF PROPOSED AMENDMENTS

           Interim reports provide investors with material information about the financial

performance of their companies during a fiscal year. Yet quarterly reporting may not be the ideal

interim reporting frequency for every Exchange Act reporting company, given the varied

circumstances each company faces. We are proposing rule and form amendments to provide all

Exchange Act reporting companies with the option of filing semiannual reports on new Form 10-

S in lieu of quarterly reports on Form 10-Q. The flexibility provided under our proposed

amendments would enable all Exchange Act reporting companies to choose the reporting

frequency that would best serve the company and its investors. Companies that elect semiannual

interim reporting may see a reduction in compliance costs of time and money, as they would

incur these interim reporting costs only one time in connection with each fiscal year instead of

three times in connection with each fiscal year pursuant to quarterly reporting. 48 These

companies could then choose to dedicate any compliance cost and resource savings to their

business growth. Other potential benefits of semiannual reporting include: less distraction from

running the day-to-day business; reallocation of attention from interim reporting to company


45
       U.S. Sec. & Exch. Comm’n, Panel Discussion: Public Company Disclosure Reform, in Meeting of the Inv.
       Advisory Comm., 2026 03 12 Investor Advisory Committee Part 01, YouTube (Mar. 12, 2026), available at
       https://www.youtube.com/watch?v=y0ZrTZ-uUg0.
46
       45th Annual Small Business Forum, U.S. Sec. & Exch. Comm’n (Mar. 9, 2026), available at
       https://www.sec.gov/files/transcript-45th-sb-forum.pdf; 44th Annual Small Business Forum, U.S. Sec. & Exch.
       Comm’n (Apr. 10, 2025), available at https://www.sec.gov/files/2025-SBF-508-Transcript.pdf.
47
       Small Cap Policy Roundtable: Reassessing the Framework for Small Public Companies, U.S. Sec. & Exch.
       Comm’n (July 22, 2025), available at https://www.sec.gov/files/small-cap-policy-roundtable-transcript.pdf;
48
       See infra economic analysis discussion in Section V.E.

                                                                16

--- page 17 ---

strategy; additional time spent on new product development; and ability to engage in transactions

that might not be possible when management is focused on preparing interim reports. 49 To the

extent that companies could not previously do so due to quarterly reporting, companies electing

semiannual reporting may employ business strategies that may help ensure these companies’

long-term viability. In particular, emerging growth companies 50 and smaller reporting

companies 51 may value having the flexibility to select the interim reporting requirement that is

most appropriate for them and their investors. 52 Additionally, reducing the compliance costs

associated with quarterly reporting may contribute to more private companies deciding to enter

the public markets and more companies deciding to remain public. Further, the flexibility

provided in the proposal may appeal to companies in certain industries where investors may




49
     The economic analysis discussion in Section V.E further discusses opportunity costs. See infra note 229 and
     accompanying text.
50
     In 2012, the Jumpstart Our Business Startups Act (Pub. L. No. 112-106, 126 Stat. 306 (2012)) amended the
     Securities Act and Exchange Act to add provisions regarding and to define an “emerging growth company.”
     Commission rules also define an “emerging growth company.” Pursuant to Securities Act Rule 405 and
     Exchange Act Rule 12b-2, the term “emerging growth company” means an issuer that had total annual gross
     revenues of less than $1.235 billion during its most recently completed fiscal year. Pursuant to these rules, if an
     issuer qualifies as an “emerging growth company” on the first day of its fiscal year, it maintains that status until
     the earliest of: (i) the last day of the fiscal year of the issuer during which it had total annual gross revenues of
     $1.235 billion or more; (ii) the last day of its fiscal year following the fifth anniversary of the first sale of its
     common equity securities pursuant to an effective registration statement under the Securities Act; (iii) the date
     on which the issuer has, during the previous three-year period, issued more than $1 billion in nonconvertible
     debt; or (iv) the date on which the issuer is deemed to be a “large accelerated filer” (as defined in Exchange Act
     Rule 12b-2).
51
     For the definition of smaller reporting company, see 17 CFR 229.10(f)(1); 17 CFR 230.405; and 17 CFR
     240.12b-2. Under these rules, “smaller reporting company” is defined as an issuer that is not an investment
     company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting
     company and that: (1) had a public float of less than $250 million; or (2) had annual revenues of less than $100
     million and either: (i) no public float; or (ii) a public float of less than $700 million.
52
     Letter from Society for Corporate Governance (Apr. 19, 2019) (survey of 130 public companies who responded
     to the question “Regardless of any other proposed changes to the reporting scheme, do you think that emerging
     growth companies or smaller reporting companies should be permitted to elect a semi-annual reporting
     frequency?” indicated the following results: Yes: 45%; No: 22%; Unsure: 34%).

                                                                17

--- page 18 ---

focus more on certain business, product, or regulatory developments than interim financial

results. 53

         Under the proposal, companies would have the option to elect on an annual basis to

comply with the semiannual reporting requirements. Exchange Act reporting companies could

continue to file quarterly reports on Form 10-Q under the proposal. Companies might continue to

report quarterly, for example, where they determine that quarterly frequency is best for the

company and its investors or due to factors such as expectations of investors and securities

analysts, disclosure practices in a particular industry, contractual obligations, or other regulatory

requirements. 54 It is also possible some companies may view semiannual reporting as increasing

the length of time that the company’s directors or employees possess non-public information that

may be subject to the company’s closed trading windows and see quarterly reporting as a better

approach for the company, because it may provide more frequent open trading windows for the

company’s directors and employees.

         Although one result of the proposal will be a reduction in the frequency of interim reports

for some Exchange Act reporting companies, we expect certain material information about these

companies between interim semiannual reports and annual reports will continue to be disclosed



53
     For example, a pre-revenue biotechnology company could find semiannual reporting best serves the company
     and its investors where investors’ primary focus is on progress in product development and applicable
     regulatory approvals and where investors find semiannual reports to be sufficient. See, e.g., Remarks of Charles
     Baltic, Member, Advisory Comm. on Small & Emerging Cos., in Meeting of the Advisory Comm. on Small and
     Emerging Cos., U.S. Sec. & Exch. Comm’n 64-65 (Sept. 23, 2015), available at
     https://www.sec.gov/info/smallbus/acsec/acsec-transcript-092315.pdf (remarking that emerging-growth, small
     capitalization biotechnology companies do not trade on their financial quarterly reporting but trade on their
     fundamental clinical development events and regulatory events, that these events follow their own non-quarterly
     cycle and are captured in Form 8-K filings, and that most capital-intensive companies (in technology generally
     as well as biotechnology) trade most significantly on basic business developments such as new products as
     opposed to incremental revenues or earnings on a quarterly basis). See also infra note 141 and accompanying
     text.
54
     For additional discussion of factors that may provide incentives for companies to elect to continue to file
     quarterly reports, see the economic analysis in this release, infra Section V.D.

                                                               18

--- page 19 ---

either voluntarily or as a result of other requirements. Significant regulatory enhancements have

occurred since 1970 with regard to disclosure of certain material events during interim periods.

Investors currently have access to information through the current reporting system on Form 8-K

regarding certain material events that is far more robust and timely than in 1970 when

semiannual reports on Form 9-K were last required. Since that time, the Commission

significantly accelerated that era’s Form 8-K filing deadline of 10 days after the end of the month

in which the applicable event occurred to the current general deadline of within four business

days of the event. 55

         In addition to shortening the filing deadlines, the Commission over time significantly

expanded the list of events that would trigger a filing obligation under Form 8-K and prescribed

standardized disclosures that must be provided upon the occurrence of the material event,

including through amendments in 2003 and 2004. 56 In fact, several of the Form 10-Q disclosure

requirements largely duplicate the Form 8-K requirements. 57 Importantly, in 2003, the

Commission added Item 2.02 as a Form 8-K filing trigger event for the furnishing of earnings

releases and other material information about companies’ results of operations and financial

condition for a completed interim period. 58 Current Item 2.02 requires reporting companies

generally to furnish their quarterly earnings releases as an exhibit to Form 8-K on the




55
     Release No. 34-13156 (Jan. 13, 1977) [43 FR 4424 (Jan. 25, 1977)] (adopting the general Form 8-K filing
     deadline of 15 calendar days after the event); Additional Form 8-K Disclosure Requirements and Acceleration
     of Filing Date, Exchange Act Release No. 49424 (Mar. 16, 2004) [69 FR 15594 (Mar. 30, 2004)] (“2004
     Amended Form 8-K Adopting Release”) (adopting the general Form 8-K filing deadline of four business days
     after the event).
56
     See Conditions for Use of Non-GAAP Financial Measures, Release No 34-47226 (Jan. 22, 2003) [68 FR 4820
     (Jan. 30, 2003)] (“2003 Amended Form 8-K Adopting Release”); 2004 Amended Form 8-K Adopting Release.
57
     For example, both Form 8-K and Form 10-Q require disclosures of recent sales of unregistered securities, mine
     safety, and defaults on debt securities.
58
     2003 Amended Form 8-K Adopting Release.

                                                            19

--- page 20 ---

Commission’s EDGAR system. 59 Many Exchange Act reporting companies hold a conference

call in connection with their earnings releases. Item 2.02 provides the conference call does not

need to be furnished with Form 8-K subject to certain conditions, including that the call occur

within 48 hours of the earnings release, the call be accessible to the public, and the call and dial-

in information be announced in advance to the public. 60 In practice, many public companies

make recordings of the call freely available on their website. Recordings of the calls are also

commonly freely available on third-party platforms.

         We believe that the requirements of Form 8-K elicit important disclosures about material

events on a more timely basis than quarterly reports on Form 10-Q. We acknowledge, however,

that quarterly earnings releases furnished with an Item 2.02 Form 8-K differ from Form 10-Q

financial information because they are not required to be reviewed by an independent public

accountant or to comply with the Commission’s interim financial statement requirements or

certain other requirements in Form 10-Q. 61 We also acknowledge that, if a company elects to

take advantage of semiannual reporting and stops reporting quarterly earnings or having

quarterly earnings release conference calls, then the disclosures elicited by Item 2.02 of Form 8-

K would not be available. We expect that a company’s individual characteristics, facts, and



59
     The term “earnings release” as used in this release means a public announcement or release by a company, or
     person acting on its behalf, of material non-public information regarding a company’s results of operations or
     financial condition for a completed fiscal year or interim period. The requirements of Item 2.02 of Form 8-K are
     triggered by the disclosure of this information, with the earnings releases furnished under the cover of Form 8-
     K. Forward-looking information provided by a company to its investors on a quarterly basis in a method other
     than Form 8-K or Form 10-Q is referred to as “forward-looking earnings guidance” or “earnings guidance.” The
     non-GAAP financial measure rules in 17 CFR 244.100 through 17 CFR 244.102 (“Regulation G”) and 17 CFR
     229.10, along with the antifraud provisions of the Federal securities laws (such as Exchange Act Section 10(b)
     and 17 CFR 240.10b-5 (Exchange Act Rule 10b-5)), apply to earnings releases and earnings guidance.
60
     Form 8-K, Item 2.02(b).
61
     In addition, the information furnished under Item 2.02 of Form 8-K is not required to be prepared in accordance
     with GAAP (although it is subject to requirements concerning non-GAAP financial measures in Regulation G
     and 17 CFR 229.10(e)(i)), is not required to be data tagged, and is not required to include disclosures or
     certifications related to disclosure controls and procedures or internal control over financial reporting.

                                                             20

--- page 21 ---

circumstances will determine whether it would make quarterly earnings releases or

announcements after electing to report semiannually. 62

         Regulation FD, adopted in 2000, was another significant development in the evolution of

disclosure requirements for Exchange Act reporting companies. Regulation FD requires that any

material non-public information selectively shared with certain enumerated persons be promptly

(in the case of unintentional disclosure) or simultaneously (in the case of intentional disclosure)

disclosed to the market by either furnishing or filing a Form 8-K report or disseminating the

information through another method that is reasonably designed to provide broad, non-

exclusionary distribution. 63 In connection with Regulation FD, Exchange Act reporting

companies may disclose material information during a fiscal year through Item 7.01 of Form 8-

K. 64 Regulation FD seeks to promote full and fair disclosure and may cause a company to

disclose material information—whether on Form 8-K or through other means—at various points



62
     While specific registrants may base decisions on their specific circumstances, the experience in foreign
     jurisdictions may be broadly illustrative. A 2017 CFA Research Institute study said, “When quarterly reporting
     was no longer required of UK companies in 2014, less than 10% stopped issuing quarterly reports (as of the end
     of 2015).” Robert Pozen, Suresh Nallareddy & Shivaram Rajgopal, The Impact on Reporting Frequency on UK
     Public Companies (Mar. 2017) (“2017 CFA Study of UK”), available at
     https://rpc.cfainstitute.org/sites/default/files/-/media/documents/article/rf-brief/rfbr-v3-n1-1-pdf.pdf. Our
     interpretation of the 2017 CFA Study of UK is that where the study refers to “issuing quarterly reports,” the
     study is referring to voluntary earnings releases, because companies no longer file quarterly reports with the UK
     Financial Conduct Authority. See 2018 Request for Comment on Quarterly Earnings and Reporting, at 65602–
     65603 (discussing required UK semiannual reporting and the elimination of quarterly reporting). For additional
     discussion of semiannual filers that may voluntarily release quarterly earnings if the proposal is adopted, see the
     economic analysis in this release, infra Section V.D.
63
     17 CFR 243.100(b)(1); 17 CFR 243.101(e). Regulation FD restricts selective disclosure of material, non-public
     information to persons including: broker-dealers; investment advisers; investment companies; and
     securityholders if it is reasonably foreseeable they will trade on the information. If a company or person covered
     by the rule intentionally discloses material nonpublic information to a covered recipient, then the company must
     make simultaneous public disclosure and, if the disclosure to a covered recipient is unintentional, then public
     disclosure must be prompt. See also Selective Disclosure and Insider Trading, Release No. 34-43154 (Aug. 15,
     2000) [65 FR 51715 (Aug. 24, 2000)].
64
     A study in 2021 that took a sample of 2,108 public companies found that a public company, on average, files
     six to eight Form 8-K reports per year, and, among those filings, files one Item 7.01 (Regulation FD disclosure)
     Form 8-K filing per year. Azi Ben-Rephael et al., Who Pays Attention to SEC Form 8-K?, at 14 (Aug. 20,
     2021), available at https://academicweb.nd.edu/~zda/8k.pdf.

                                                               21

--- page 22 ---

during a fiscal year, depending on the company and its circumstances (such as whether the

company seeks to communicate previously material non-public information to analysts or other

persons covered by Regulation FD). Such disclosure results in greater investor access to material

information disclosed outside quarterly reports on Form 10-Q. Regulation FD and current Form

8-K disclosure requirements were either not present or less robust when the Commission last

required the limited form of semiannual reporting during the period from 1955 to 1970.

         Although we are proposing to amend our rules regarding frequency of interim reporting,

our proposal does not include any general changes to the current regulatory requirements

governing: (1) earnings releases, other than proposed technical amendments to Item 2.02 of

Form 8-K to include references to semiannual periods, or (2) earnings guidance practices.

Federal securities laws do not impose general duties upon Exchange Act reporting companies to

announce or publish earnings, conduct earnings calls, or issue earnings guidance. 65 We received

public feedback on earnings releases and earnings guidance practice in connection with the

Commission’s 2016 Regulation S-K Concept Release and 2018 Request for Comment on

Quarterly Earnings and Reporting, with commenters expressing a variety of views on these

practices and on a wide range of related topics. Our proposal is focused on the more specific

issue of the frequency of interim reporting as mandated by the Federal securities laws, with the

goal of providing more flexibility with respect to this mandated disclosure. Although the

proposal is not intended to change the regulatory framework for voluntary practices regarding

earnings releases and guidance, we welcome comments on the impact of our proposal on these

voluntary practices.


65
     Certain regulatory requirements that apply to Form 10-Q, however, do not apply to earnings releases. See supra
     note 61 and accompanying text. When earnings information is selectively disclosed to certain covered persons,
     however, Regulation FD requires disclosure in a Form 8-K filing or another method that is reasonably designed
     to provide broad, non-exclusionary distribution.

                                                             22

--- page 23 ---

We believe our proposal represents a balanced approach of maintaining a reporting

system that elicits material, timely, and regular disclosures in a manner that best suits the needs

of both the company and its investors, promoting efficiency by reducing compliance costs, and

maintaining robust investor protections. The proposal is one step in a broader Commission effort

to encourage more companies to go and remain public by reducing the costs and burdens

associated with Exchange Act reporting. A robust public capital market—with more emerging

companies and small businesses choosing to become public companies through initial public

offerings or other paths—benefits companies and investors alike. Becoming a public company

provides companies with access to the public markets that allows them to raise capital to grow

their businesses, a broader set of potential investors who may purchase their securities in the

secondary trading market, and the benefits of transparent valuations by public markets and of a

market following. For investors, public companies represent opportunities to participate in the

future growth of promising companies. Initial public offerings represent liquidity opportunities

for early-stage investors. Investors in public companies are protected by mandated disclosures

and by liability provisions of the Federal securities laws that apply to public companies’

disclosures, such as Securities Act Section 11 and Exchange Act Section 18. 66

         We are also proposing amendments to Regulation S-X. Our proposed amendments would

incorporate provisions applicable to registrants that elect semiannual reporting frequency into the



66
     Securities Act Section 11 provides for liability for an untrue statement of a material fact in a Securities Act
     registration statement and for an omission to state a material fact required to be stated therein or necessary to
     make the statements therein not misleading. Many public companies commonly make registered offerings of
     securities and thus are subject to potential Section 11 liability. Exchange Act Section 18 provides for liability
     for a false or misleading statement with respect to a material fact in an Exchange Act report. Interim reports on
     Form 10-Q are not subject to Section 18 liability with respect to Items 1, 2, and 3 of Part I of Form 10-Q
     (respectively relating to financial statements, management’s discussion and analysis of financial condition and
     results of operations, and quantitative and qualitative disclosures about market risk). See Form 10-Q, General
     Instruction F.1. Proposed semiannual reporting Form 10-S would similarly provide that Items 1, 2, and 3 of Part
     I of the form are not subject to Section 18 liability. See proposed Form 10-S, General Instruction F.1.

                                                              23

--- page 24 ---

financial statement requirements for periodic reports. We are also proposing changes to the age

of financial statement requirements in Regulation S-X to ensure that financial statements in

registration statements filed by semiannual filers would not be considered “stale” under existing

rules, which were built along a quarterly reporting framework, and to revise those age

requirements for semiannual filers to fit with their reporting schedule. The proposed changes to

the age of financial statement rules would also simplify existing rules, including by consolidating

the age requirements into a single rule.

         Finally, we recognize that, if the proposal is adopted, in order to comport with

semiannual reporting by public companies, it is possible that changes may be necessary or

appropriate to the rules of securities exchanges 67 or to various accounting or auditing

standards. 68 If the proposal is adopted, to facilitate any such changes, we expect the Commission

staff would coordinate with accounting and auditing standard-setters, securities exchanges, and

other market participants. To help inform those efforts, we are soliciting comment in this release

on what changes to accounting or auditing standards or rules of securities exchanges should be

made to comport with semiannual reporting. 69


67
     See, e.g., letter from NYSE Group, Inc. (Mar. 21, 2019) (“If the Commission elected to make reporting
     requirements less frequent, giving public issuers the option to report two or three times a year, the NYSE
     Exchanges believe we could comply with our regulatory duties by adapting our rules and practices
     accordingly.”).
68
     See supra note 20 and infra notes 92, 93, 188, 191, 214 and accompanying text for discussion of certain
     auditing standards relevant to quarterly and proposed optional semiannual reporting.
69
     We are also aware that the regulations of some Federal agencies contain references to quarterly reports filed
     with the Commission. These agencies may wish to consider whether they should revise their law to reflect
     semiannual reporting if the proposal is adopted. See, e.g., 12 CFR 16.6 (providing the Comptroller of the
     Currency will deem offers or sales of national bank or Federal savings association issued nonconvertible debt to
     be in compliance with certain regulations if a number of requirements are met, including that each purchaser
     receives an offering document that contains, among other things, the national bank’s, Federal savings
     association’s, or the holding company’s (where the national bank or Federal savings association is a subsidiary
     of a holding company with securities registered under the Exchange Act) Forms 10-K, 10-Q, and 8-K filed
     under the Exchange Act); 13 CFR 315.7 (requiring companies petitioning the Economic Development
     Administration, which is part of the U.S. Department of Commerce, for eligibility for trade adjustment


                                                              24

--- page 25 ---

Our proposal is discussed in greater detail below. We welcome interested parties to

submit comments on any aspects of the proposed rule and form amendments. When

commenting, please include the reasoning in support of your position or recommendation and

provide any supporting documentation or data.

         A. Proposed Amendments for Semiannual Reporting

         We are proposing amendments to Exchange Act Rules 13a-13 and 15d-13 (and other

relevant rules and forms that we discuss below) to change the current quarterly reporting

requirements for Exchange Act reporting companies to a more flexible system that permits

Exchange Act reporting companies to elect to file semiannual reports instead of quarterly

reports. 70 Under the proposal, an Exchange Act reporting company that elects semiannual

reporting would be required to file one semiannual report and one annual report for each fiscal

year. Semiannual filers would file their interim report on new Form 10-S. This form would

require the same narrative disclosures and financial information as existing Form 10-Q but

would cover a six-month period (rather than a fiscal quarter). The deadline for filing Form 10-S

would be 40 or 45 days (depending on the company’s filer status) after the fiscal year’s first

semiannual period end—the same as with current Form 10-Q’s fiscal quarter end deadline, which

would not change—while the second semiannual period would be subsumed in the annual period

presented in the annual report on Form 10-K. 71 Reporting companies that do not elect to report



     assistance to provide information, including the most recent Form 10–K annual reports (or Form 10–Q quarterly
     reports, as appropriate) filed with the Commission for the entire period covered by the petition); 10 CFR 50.71
     (creating an exemption for companies licensed by the U.S. Nuclear Regulatory Commission from providing an
     annual financial report if they submit a Form 10-Q filed with the Commission). See also Section VI.C
     (discussing Federal agency regulations and discussing State law that refers to quarterly filings with the
     Commission).
70
     Proposed Rule 13a-13(b) and Rule 15d-13(b).
71
     We are not proposing to require that semiannual filers present separately the second semiannual period interim
     financial information in Form 10-K but request comment on whether we should require semiannual filers to


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on a semiannual basis—thereby effectively opting to report on a quarterly basis under the default

rules that would apply—would continue to be required to file three quarterly reports on Form 10-

Q and one annual report on Form 10-K for each fiscal year as under the current system for

reporting companies. We are proposing to add a check box to the cover page of Form 10-K as

the sole means by which a reporting company would indicate annually whether it is selecting a

semiannual interim reporting frequency (by checking the semiannual box) or quarterly reporting

(by not checking the semiannual box) and by which the reporting company would disclose the

selected frequency to investors and other market participants.

         We are also proposing amendments to add a similar check box concerning the

semiannual reporting election to the cover page of Securities Act registration statements on

Forms S-1, S-3, S-4, and S-11 and Exchange Act registration statements on Form 10. Companies

that have yet to file Exchange Act reports, such as private companies conducting initial public

offerings, would make initial elections to use semiannual reporting by checking the box on the

cover page of the registration statement filed. 72 This election would determine what financial

statements are required in the registration statement 73 and indicate the company’s planned




     break out the second semiannual period in their annual reports on Form 10-K and similarly require quarterly
     filers to break out their fourth fiscal quarter in their annual report on Form 10-K.
72
     While the check box on the registration statement forms would be the method by which private companies in
     registration indicate their planned reporting frequency, there may be other situations where registration
     statement forms that would contain the new check box are filed by a reporting company. In those other
     situations, the reporting company would check or leave unchecked the box consistent with the reporting
     company’s prior election on its most recent Form 10-K or, in the case of a newly public reporting company that
     has not yet filed a Form 10-K, on its registration statement form where it made its election in connection with
     becoming a public company. A reporting company filing a registration statement form would not be able to
     respond differently to this check box than it has indicated in such most recent Form 10-K or, for a newly public
     company, such registration statement, because, as we discuss below, mid-fiscal-year changes in reporting
     frequency would not be permitted.
73
     An election to use semiannual reporting made in an initial registration statement would not preclude a registrant
     from providing financial statements more current than otherwise required.

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interim reporting frequency to investors and other market participants. 74 Similar to current

requirements for the first quarterly report for companies that have newly become Exchange Act

reporting companies, 75 the first semiannual report on Form 10-S would be due the later of 45

days after the effective date of the registration statement or the date that Form 10-S would

otherwise have been due had the company been an Exchange Act reporting company. 76

         In connection with our proposed optional semiannual reporting approach, we are

proposing to add two new definitions—“quarterly filer” and “semiannual filer”— to 17 CFR

240.12b-2 (and to add two identical definitions to 17 CFR 230.405) to facilitate a number of

amendments we are proposing, including a number of technical amendments to insert references

to semiannual reporting in rules that currently refer to quarterly-reporting-related concepts. A

“quarterly filer” would be defined as a registrant that is required to file quarterly reports on Form

10-Q, pursuant to 17 CFR 240.13a-13(a). A “semiannual filer” would be defined as a registrant

that is required to file semiannual reports on Form 10-S, pursuant to 17 CFR 240.13a-13(b).

         Under our proposed optional semiannual reporting approach, we are proposing to permit

a change in interim reporting frequency—either from quarterly to semiannually or vice versa—to

be indicated on a Form 10-K by checking the box on the cover page to file semiannually or

leaving the box unchecked to file quarterly. As proposed, the determination to report

semiannually or quarterly would therefore be made on an annual basis and may not be changed




74
     A company that is not a reporting company and that is in registration in connection with an initial registration
     statement may change its check box answer with respect to semiannual reporting until the initial registration
     statement becomes effective. Once the initial registration statement becomes effective, the company becomes a
     reporting company and, as with existing reporting companies, can change its interim reporting frequency in
     accordance with the proposed amendments to Rules 13a-13 and 15d-13.
75
     17 CFR 240.13a-13(a); 17 CFR 240.15d-13(a).
76
     Proposed Rules 13a-13(b)(1) and 15d-13(b)(1).

                                                              27

--- page 28 ---

until the next Form 10-K annual report is filed. 77 Companies would then be required to file

interim reports based on the chosen frequency, beginning with the report for the first interim

period (semiannual or quarterly) of the fiscal year in which the Form 10-K with the election was

filed. 78

     •      For example, an Exchange Act reporting company reporting quarterly with a December

            31 fiscal year-end wants to file semiannual reports on Form 10-S for the next fiscal year.

            The company would file its Form 10-K for fiscal year 2026 in March 2027. Under the

            proposal, the company would have to make its election to switch to semiannual reporting

            for fiscal year 2027 by checking the box for semiannual reporting on the cover page of its

            Form 10-K for fiscal year 2026. With this election made in fiscal year 2027 (i.e., when

            the Form 10-K for fiscal year 2026 was filed), the company would be required to report

            semiannually and would begin semiannual reporting by filing in August 2027 its Form

            10-S for the first six-month period (ended June 30, 2027) of fiscal year 2027. 79




77
     Companies that leave an unmarked box on Form 10-K would be deemed to have opted for quarterly reporting
     and therefore be required to file quarterly reports on Form 10-Q for the next fiscal year (i.e., the fiscal year for
     which the election is being made which, for the avoidance of doubt, is the fiscal year that follows the fiscal year
     covered by that Form 10-K). This means that semiannual filers that wish to continue to file on a semiannual
     basis in future fiscal years must make the election again each year on their Form 10-K. Otherwise, if these
     companies do not make the election on Form 10-K, they would be required to resume filing quarterly reports
     beginning with the first quarter of the fiscal year in which the Form 10-K with the election is filed.
78
     Proposed Rules 13a-13(b)(2) and (3); proposed Rules 15d-13(b)(2) and (3).
79
     In this example, in its Form 10-S for fiscal year 2027, the reporting company would be required to present
     statements of comprehensive income, cash flows, and changes in stockholders’ equity for the first six months of
     the preceding fiscal year (2026)—in addition to these statements for the first six months of 2027. The company
     would have previously filed a first quarter Form 10-Q covering January to March 2026 and a second quarter
     Form 10-Q covering April to June 2026. In the second quarter 2026 Form 10-Q, the company would have been
     required to file year-to-date (i.e., January to June 2026) statements of comprehensive income, cash flows, and
     changes in stockholders’ equity. Therefore, a reporting company would not need to take extra steps to prepare
     those preceding year financial statements (covering January to June 2026) when changing its reporting
     frequency from quarterly reporting to semiannual reporting (in contrast to the situation discussed below where a
     company changes from semiannual reporting to quarterly reporting, where extra steps may be required).

                                                                28

--- page 29 ---

•   Similarly, for example, an Exchange Act reporting company with a December 31 fiscal

         year-end that previously chose to file semiannual reports on Form 10-S as indicated in its

         Form 10-K for the fiscal year ended December 31, 2026 wishes to switch to quarterly

         reporting. The company will file its Form 10-K for fiscal year 2027 in March 2028. The

         reporting company would change its interim reporting frequency by leaving the box

         unchecked for semiannual reporting on the cover page of its Form 10-K for fiscal year

         2027. With this election made in fiscal year 2028 (i.e., when the Form 10-K for 2027 was

         filed), the company would be required to report quarterly and would begin quarterly

         reporting by filing in May 2028 its Form 10-Q for the first quarter (ended March 31,

         2028) of fiscal year 2028. In its Form 10-Q for the first quarter of fiscal year 2028, the

         company would be required to present statements of comprehensive income, cash flows,

         and changes in stockholders’ equity for the first quarter of the preceding fiscal year

         (2027). 80 These first quarter 2027 financial statements would have been subsumed within

         (but would not have been required to be separately presented in) the semiannual financial

         statements included in the previously filed Form 10-S covering January to June 2027.

         Therefore, in changing the election by leaving the box unchecked (thereby choosing to

         file quarterly reports on Form 10-Q for fiscal year 2028), the reporting company may

         need to take additional steps to prepare the financial statements for the comparable 2027

         quarterly periods, including ensuring that an independent public accountant has reviewed

         the comparable quarterly periods for fiscal year 2027. 81


80
     Proposed Rules 8-03(a)(2), 8-03(a)(5),10-01(a)(7), and 10-01(c) of Regulation S-X.
81
     Registrants must provide MD&A disclosure pursuant to Part I, Item 2 of Form 10-Q. With respect to results of
     operations, 17 CFR 229.303(c)(2)(ii) requires registrants to compare the most recent quarter to either: (1) the
     corresponding quarter for the preceding fiscal year or (2) the immediately preceding sequential quarter. That
     regulation also requires, where the comparison is made to the preceding sequential quarter, that financial


                                                              29

--- page 30 ---

Once an Exchange Act reporting company has elected its interim reporting frequency, it

would be committed to that reporting frequency for the remainder of that fiscal year. This

proposed approach would avoid potential investor confusion that could result if Exchange Act

reporting companies were permitted to switch interim reporting frequency in the midst of a fiscal

year, such as confusion over when the companies would file interim reports.

         We recognize the possibility that a company may mistakenly leave the check box

unmarked or incorrectly mark the check box (for example, a company mistakenly checking the

box for semiannual reporting when it intended to be a quarterly filer or a company mistakenly

leaving the check box unmarked when it intended to be a semiannual filer). We therefore

propose to amend Rule 13a-13(b) and Rule 15d-13(b) to permit companies to amend their Form

10-K to correct any such inadvertent mistakes. Such corrective amendments would be required to

be filed as soon as practicable after discovery of the mistake but no later than the due date by

which the company’s first Form 10-Q report would be required to be filed for the fiscal year in

which the initial Form 10-K with the erroneous election was filed. 82 For example, a quarterly

filer with a December 31 fiscal year-end wants to continue filing quarterly reports on Form 10-Q.

The company filed its Form 10-K for fiscal year 2026 in March 2027. It mistakenly marked the

check box on the cover page of its Form 10-K for fiscal year 2026, thereby electing to switch to


     information for such sequential quarter be presented in summary form or identified in prior EDGAR filings. In
     this example, if the company chose to compare results of operations for the first quarter of fiscal year 2028 to
     the results for the fourth quarter of fiscal year 2027, then the company would need to take further additional
     steps to include information for the fourth quarter of fiscal year 2027 in summary form in its Form 10-Q for the
     first quarter of fiscal year 2028.
82
     Proposed Rules 13a-13(b)(4) and 15d-13(b)(4). If a company were to amend Form 10-K for the sole purpose of
     correcting a check box error under the proposal, we would not expect the company to refile the certifications
     required under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (discussed supra note 32). See also 17
     CFR 240.12b-15. Where such an error was made and is being timely corrected, a company would file a Form
     10-K/A indicating the number of the amendment and provide the amended cover page, an explanatory note, the
     exhibit list, and signatures. Electing to file semiannual reports in compliance with this rule and the filing of this
     corrective amendment would not impact the company’s timeliness for the purposes of determining eligibility to
     file short form registration statements (e.g. Form S-3).

                                                                30

--- page 31 ---

semiannual reporting for fiscal year 2027. The company would be able to correct this error by

amending its Form 10-K no later than the due date for its Form 10-Q for the first quarter of fiscal

year 2027. 83

         Proposed Form 10-S would require the same information as currently required by Form

10-Q but for the covered six-month period instead of a quarter. 84 Required disclosures would

include, among other things, MD&A, legal proceedings, material changes in risk factors,

unregistered equity security sales and use of proceeds, defaults on senior securities, director

nomination procedures, disclosure of director or officer adoptions or terminations of certain

plans for the purchase or sale of registrant securities, and exhibits required under Item 601 of

Regulation S-K. The financial statements for the covered semiannual period would be required to

be prepared in accordance with U.S. GAAP 85 and reviewed by an auditor (but not required to be

audited). 86 They would also be required to be data tagged using Inline XBRL. The current

disclosure and certifications requirements for disclosure controls and procedures, as well as for

internal control over financial reporting, would apply to proposed Form 10-S. 87 Non-GAAP




83
     The filing of Form 12b-25 in accordance with 17 CFR 240.12b-25 to provide notification of an inability to
     timely file a Form 10-Q would not affect a company’s error correction deadline, which would remain the
     original due date for the company’s Form 10-Q.
84
     Form 10-S is not proposed to be substantively different from Form 10-Q (other than the reporting period
     covered). Scaled disclosure would be available to smaller reporting companies on proposed Form 10-S as with
     Form 10-Q. See, e.g., proposed Form 10-S, Item 1 (permitting smaller reporting companies to provide financial
     information required by 17 CFR 210.8-03); Item 3 (which requires quantitative and qualitative disclosures of
     market risk pursuant to 17 CFR 229.305, which provides that smaller reporting companies are not required to
     provide the information otherwise required).
85
     But see supra note 19 regarding a foreign private issuer’s election to voluntarily file on domestic forms and
     ability to apply accounting standards other than U.S. GAAP in its financial statements.
86
     A semiannual filer would not be precluded from voluntarily providing quarterly financial information in a Form
     10-S in addition to the required semiannual financial information. If the quarterly financial information is
     presented in the financial statements, the quarterly financial information would be subject to review by an
     auditor.
87
     See 17 CFR 229.307 (Regulation S-K Item 307); 17 CFR 229.308(c) (Regulation S-K Item 308(c)).

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financial measures presented in proposed Form 10-S would be subject to the current

requirements of Regulation G and Item 10(e) of Regulation S-K.

Request for Comment

1.     The proposed amendments would allow Exchange Act reporting companies to elect to file

       interim reports on a semiannual basis in lieu of quarterly reports on Form 10-Q. Should

       companies have this option, or should all companies continue to be required to file Form

       10-Q? What types of companies are likely to elect the option to file semiannual reports?

       Are companies in certain industries more likely than those in other industries to elect to file

       semiannual reports?

2.     We are proposing amendments that would permit, but not require, all Exchange Act

       reporting companies that file Form 10-Q today to file semiannual reports. Should we

       instead require all companies to file semiannual reports? What would be the benefits and

       costs of such a mandatory approach? Would mandatory semiannual reporting, with the

       option to file quarterly reports, lead to more companies electing to forgo quarterly

       reporting?

3.     Our proposal would permit semiannual reports for all Exchange Act reporting companies

       that file Form 10-Q today, regardless of filer status, revenues, market capitalization, or

       other criteria. Should the option for semiannual reporting be available only for Exchange

       Act reporting companies that satisfy certain criteria? If so, what criteria should be imposed

       and why? For example, should only emerging growth companies or smaller reporting

       companies be allowed to report semiannually? 88 Should only companies below alternative


88
     See definition of “emerging growth company” supra note 50 (containing a total annual gross revenue threshold
     of $1.235 billion) and definition of “smaller reporting company” supra note 51 (containing a public float
     threshold of less than $250 million under one prong of the definition and a public float threshold of less than
     $700 million under the second prong of the definition).

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--- page 33 ---

quantitative or monetary thresholds be allowed to report semiannually? Should the

     Commission consider a pilot program to permit optional semiannual reporting for a subset

     of reporting companies and, if so, what would be the benefits of such a pilot program?

     What types of companies should be included in the pilot program?

4.   Under the proposal, reporting companies currently required to file Form 10-Q would have

     the option instead to file semiannual reports on Form 10-S. Should any types of companies

     that currently file Form 10-Q be excluded from the option of electing semiannual reporting,

     such as business development companies?

5.   We are proposing that the filing deadlines for semiannual reports on Form 10-S be the

     same as for quarterly reports on Form 10-Q. Should the filing deadline for semiannual

     reports on Form 10-S be longer or shorter than proposed? If so, what would be an

     appropriate filing deadline? Do companies need more time to prepare semiannual reports

     than quarterly reports and if so, why? Should smaller public companies, newly public

     companies, or emerging growth companies be afforded a longer filing deadline for Form

     10-S to allow for additional time to consult with their accountants and advisers?

6.   If adopted, would semiannual reporting have an impact on investors’ ability to compare

     same-company performance over time? Why or why not?

7.   What effect would our proposal have on investors’ ability to compare the relative peer

     company financial performance of a quarterly filer to a semiannual filer? For example, can

     an investor reasonably compare a quarterly filer to a semiannual filer where the companies

     have the same fiscal year and the comparison is sought to be made in the second quarter

     (when first quarter information that would be subsumed in the semiannual filer’s

     semiannual report on Form 10-S is not yet available) or made in the fourth quarter (when



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--- page 34 ---

third quarter information that would be subsumed in the semiannual filer’s annual report on

      Form 10-K is not yet available)?

8.    Should the check box that indicates a company has elected semiannual reporting be added

      to registration statements on Forms 10, S-1, S-3, S-4, and S-11 and annual reports on Form

      10-K as proposed? Should we add a similar check box to any other forms, including Forms

      1-A or 8-A? If so, why?

9.    Under our proposal, companies that want to file semiannual reports instead of quarterly

      reports would make their election by checking a box on the cover page of their annual

      report on Form 10-K for the most recently completed fiscal year. For investors and other

      market participants, this would mean that the first indication that a company will file only

      semiannual reports going forward will be when the company files its most recent Form 10-

      K. For example, under our proposal, a December 31 fiscal year-end company that files its

      Form 10-K for fiscal year 2026 in March 2027 would be able to cease filing quarterly

      reports immediately, with its next interim report being its first Form 10-S for the first six

      months of fiscal year 2027. Would investors and other market participants benefit from

      earlier notice of a company’s intent to file semiannual reports instead of quarterly reports?

      If so, how would investors and others benefit and what would be the magnitude of any

      benefit? If so, what should the mechanism be for a company to provide earlier notice of

      intent to file semiannual reports?

10.   Our proposal would require Exchange Act reporting companies that elect to file semiannual

      reports to continue with that interim reporting frequency for the rest of the fiscal year in

      which the election was made. Therefore, companies would not be allowed to file a

      semiannual report on Form 10-S for the first six months of a fiscal year and then file a



                                                     34

--- page 35 ---

quarterly report for the third quarter for that fiscal year. Likewise, companies would not be

      allowed to file a quarterly report on Form 10-Q for the first quarter of a fiscal year, file a

      semiannual report on Form 10-S for the first six months for that fiscal year, and not file a

      quarterly report on Form 10-Q for the third fiscal quarter. Would this proposed approach

      help avoid potential confusion that could be caused by changes in interim reporting

      frequency during a fiscal year? Is it necessary to add any language to the proposed rules to

      make more explicit the requirement to maintain the selected frequency for the full fiscal

      year? Rather than the proposed approach, should we allow: (1) semiannual filers and

      quarterly filers to make a change in interim reporting frequency during the fiscal year, or

      (2) only semiannual filers to switch to filing quarterly reports during the fiscal year?

      Should issuers that elect semiannual reporting be required to commit to that disclosure

      frequency for a certain period of time? Why or why not?

11.   Do companies that have newly become a public company (e.g., through an initial public

      offering, de-SPAC transaction, or direct listing) need to have greater flexibility for

      switching interim reporting frequency within a fiscal year? For example, a private company

      that elected semiannual reporting in a Form S-1 for an initial public offering could

      subsequently decide that quarterly reporting is preferable (e.g., to promote greater trading

      liquidity by increasing the frequency of its interim reporting) and wish to switch to

      quarterly reporting for the rest of the fiscal year. Should we allow such newly public

      companies to switch the interim reporting frequency within a fiscal year?

12.   Should correction of errors with respect to the Form 10-K check box related to semiannual

      reporting be permitted as we propose? Are the proposed time limits on when an error

      correction may be made appropriate? In addition to allowing error correction in an



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amended Form 10-K—or in lieu thereof—should we allow check box error correction

      through a Form 8-K filing?

13.   We are proposing a new Form 10-S for companies that elect to file semiannual reports. Is

      the proposed new form needed? Should there be one form for all interim reports, regardless

      of whether they are for a fiscal quarter or a semiannual period? If so, why?

14.   Proposed Form 10-S would mandate the same narrative and financial information as Form

      10-Q, albeit for semiannual periods rather than quarterly periods. Should Form 10-S

      require narrative or financial information that differs from what is required in Form 10-Q?

      If so, please specify what information should be different and why this information is or is

      not needed in Form 10-S. Are there any disclosure items, such as mine safety violations, in

      proposed Form 10-S that should be required instead to be disclosed in other forms, such as

      Form 10-K, Form 8-K, or Form SD?

15.   As an alternative to the proposal for optional semiannual reporting, should we instead

      revise the disclosure requirements of Form 10-Q to reduce the burden on reporting

      companies of filing this form, such as amending the current rules for the required interim

      financial statement review by an independent public accountant, XBRL data tagging,

      MD&A, information about unregistered sales of registrant securities pursuant to 17 CFR

      229.701 (Item 701 of Regulation S-K), or year-to-date comparisons involving financial

      statements and MD&A? How should these requirements, or any other requirements of

      Form 10-Q, be revised? What aspects of Form 10-Q’s current reporting framework are

      most burdensome for reporting companies?

16.   What impact would the flexibility to file semiannual reports on Form 10-S, instead of

      quarterly reports on Form 10-Q, have on a private company’s decision to become an



                                                    36

--- page 37 ---

Exchange Act reporting company? Would more companies choose to go public under the

      proposed flexible approach to interim reporting? What impact would the proposed flexible

      approach have on existing Exchange Act reporting companies’ desire to remain public

      companies?

17.   What impact would the proposed option to file semiannual reports on Form 10-S have on

      Exchange Act reporting companies’ ability to focus on: (1) business operations, (2) growth,

      or (3) long-term business strategies? Please provide any data on the amount of employee

      and director time spent on preparing a quarterly report on Form 10-Q.

18.   What is the likelihood that companies that elect semiannual reporting will continue to issue

      quarterly earnings releases (to the extent they did so previously when they reported

      quarterly)? Why would semiannual filers still issue earnings releases on a quarterly basis?

      Would this practice create any new or heightened investor protection concerns? For

      example, would there be any new investor protection concerns if an Exchange Act

      reporting company with a December 31 year-end elects to file semiannual reports and

      issues an earnings release for the first quarter of the fiscal year, with the semiannual report

      for the first six months of the fiscal year (which includes that first quarter) not due until

      months later (e.g., in August of that fiscal year)? Would companies that currently issue

      quarterly earnings releases but elect to become semiannual filers change their earnings

      release practices either: (1) to issue earnings releases semiannually, or (2) to cease issuing

      earnings releases? Please provide any data or analysis regarding any experience with

      earnings releases in foreign jurisdictions where issuers report semiannually.

19.   Our proposal generally would not change the current Item 2.02 Form 8-K furnishing

      requirement for earnings releases (but we are proposing technical amendments to include



                                                      37

--- page 38 ---

references to semiannual periods). Should we change these requirements generally for

      semiannual filers? For example, should we amend the Form 8-K requirements so that Item

      2.02 Form 8-K submissions are “filed,” not “furnished,” for semiannual filers thereby

      subjecting the earnings release to additional liability provisions, such as Exchange Act

      Section 18 (and Securities Act Section 11 if incorporated into a Securities Act registration

      statement), given that investors could rely more heavily on earnings releases by semiannual

      filers due to the less frequent interim reporting by such filers as compared to quarterly

      filers? If we require the filing (not furnishing) of earnings releases for semiannual filers,

      should we require the incorporation by reference of earnings releases into Securities Act

      registration statements of those semiannual filers? Would requirements for semiannual

      filers to file (not furnish) earnings releases discourage semiannual filers from issuing

      earnings releases? Would requirements for semiannual filers to file (not furnish) earnings

      releases have an impact on companies’ decisions about whether to elect quarterly or

      semiannual reporting? Are there particular reasons or need for the information provided in

      an Item 2.02 Form 8-K submission by a semiannual filer to be treated differently than a

      similar Item 2.02 Form 8-K submission by a quarterly filer?

20.   In connection with any adoption of the proposal, should there be a new requirement for

      semiannual filers that announce or release earnings for the first or third quarters of their

      fiscal year (i.e., the periods that would later be subsumed in Forms 10-S and 10-K but for

      which there would be no quarterly report filed with the Commission)—that financial

      information in any first or third quarter earnings releases be reviewed by an independent

      public accountant? If so, would any changes to current auditing standards (e.g., governing

      reviews) be required?



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21.     For companies that issue earnings releases, would the proposed flexible approach to interim

        reporting have any effect on how quickly these releases would be issued after the end of the

        reporting period?

22.     Would the option for semiannual reporting result in an overall reduction in material

        information for investors? Or would other regulatory requirements, such as Form 8-K filing

        requirements and Regulation FD, elicit sufficient information to offset the less-frequent

        interim reports and address any investor protection concerns? Would market forces or

        demands on a company’s business—such as contractual obligations, investor expectations,

        and potential for shareholder activism—encourage semiannual filers to: (1) voluntarily

        disclose more information than required, (2) disclose information more frequently than is

        required, or (3) opt not to become semiannual filers at all?

23.     With semiannual reporting, would there be an impact on investors or other market

        participants as a result of less frequent certifications by management relating to internal

        control over financial reporting and disclosure controls and procedures, as well as less

        frequent disclosures of changes in such controls? 89

24.     Would the nature and extent of procedures that an independent public accountant performs

        during a review change depending upon whether the independent public accountant is

        performing a review over a fiscal semiannual period or a fiscal quarterly period? Would

        independent public accountants conducting reviews do the same amount of work for a

        fiscal semiannual period as they currently do for two quarterly fiscal periods on a combined

        basis? Would an independent public accountant experience any impact on efficiency or



89
      See 17 CFR 229.308(c) (requiring disclosure of any change in the registrant’s internal control over financial
      reporting during the period that has materially affected, or is reasonably likely to materially affect, the
      registrant’s internal control over financial reporting).

                                                               39

--- page 40 ---

economies of scale when conducting reviews and annual audits under semiannual reporting

      versus under quarterly reporting for the same company? Would any changes to independent

      public accountants’ review or audit procedures or any impact on efficiency or economies of

      scale result in changes in costs to companies? If so, describe the impact and whether the

      impact could vary depending upon the size of the registrant subject to the review.

25.   Would companies that elect semiannual reporting retain their independent public

      accountant to perform a review of their financial statements at the end of each quarter

      either to: (1) support financial information that is used for purposes of a quarterly earnings

      release (notwithstanding that, as noted above, there is no Commission requirement for a

      quarterly earnings release to be reviewed by an independent public accountant), or (2)

      guard against the possible need for a quarterly review to be performed should the company

      decide to change back to quarterly reporting in a future period (where that period would

      require comparative quarterly data for the prior year)?

26.   For semiannual filers, what impact would a shift to semiannual reporting have on: (1)

      companies’ disclosure controls and procedures, (2) companies’ internal control over

      financial reporting, and (3) independent public accountants’ strategy and approach for the

      annual audit of companies’ internal control over financial reporting or financial statements?

      With semiannual reporting, is there a potential for a material increase in the risk that

      material misstatements (either due to error or fraud) or control deficiencies are not timely

      detected by or communicated to the independent public accountant thereby limiting

      potential remediation of these issues by the issuer? Please provide any data related to these

      questions.




                                                     40

--- page 41 ---

27.     Would there be reduced securities analyst coverage of Exchange Act reporting companies

        that elect the semiannual reporting option as compared to quarterly filers? Would

        underwriters’ requests for independent public accountants to provide “comfort letters” 90 in

        securities offerings (to support potential due diligence defenses) 91 lead semiannual filers to

        continue to retain independent public accountants to conduct quarterly financial statement

        reviews? If so, are changes needed to PCAOB Auditing Standards (regarding reviews by

        independent public accountants)? 92 For example, to comport with semiannual reporting, are

        changes needed to PCAOB Auditing Standard 6101, Letters for Underwriters and Certain

        Other Requesting Parties, to permit independent public accountants to provide comfort

        letters expressing negative assurance on changes subsequent to the date and period of the

        latest financial statements included (or incorporated by reference) in the registration




90
      “Comfort letters” (which provide negative assurance) commonly state that: (1) the auditor’s review of unaudited
      financial statements found nothing indicating information is not presented fairly in all material respects in
      accordance with U.S. GAAP, (2) certain specified auditor procedures found nothing in the information derived
      from the financial statements (e.g., MD&A) indicating the information is not in agreement in all material
      respects with the financial statements, and (3) certain auditor procedures found nothing indicating certain
      financial items changed (e.g., increases in net sales, increases in long-term debt) from the end of the last audited
      or reviewed period to an established cut-off date in a manner that is inconsistent with the disclosure in the
      registration statement (i.e., “subsequent change” comfort).
91
      Underwriters may seek to defend against potential registration statement-based Securities Act Section 11
      liability claims by: (1) with respect to the unexpertized portions of the registration statement, relying on the
      comfort letter to show they conducted a reasonable investigation to form a reasonable belief the unexpertized
      portions are not inaccurate or misleading, and (2) with respect to the expertized portions of the registration
      statement, that they relied on the expert (e.g., an auditor) and had no reasonable grounds to believe the
      expertized portions were inaccurate or misleading. Underwriters may also seek to defend against potential
      prospectus-based Securities Act Section 12(a)(2) liability by relying on the comfort letter to show they did not
      know and, in the exercise of reasonable care, could not have known of any misstatement or omission. The
      degree to which comfort letters help to establish these defenses depends on the particular facts and
      circumstances.
92
      See PCAOB Auditing Standard 4105, Reviews of Interim Financial Information; PCAOB Auditing Standard
      6101, Letters for Underwriters and Certain Other Requesting Parties, ¶ .37 (providing that, when accountants
      have not conducted a review in accordance with AS 4105, they may not comment in the form of negative
      assurance and are, therefore, limited to reporting the procedures performed and findings obtained). See also
      PCAOB Auditing Standard 4101, Responsibilities Regarding Filings Under Federal Securities Statutes. For
      additional discussion of PCAOB Auditing Standards, see the discussion of baseline conditions in the economic
      analysis in this release, infra notes 188 through 191 and accompanying text.

                                                                41

--- page 42 ---

statement? 93 If semiannual filers would continue to prepare quarterly financial information

        or to retain independent public accountants to conduct quarterly reviews, should the

        Commission make any rule changes or take any other steps to address this issue?

28.     Would our proposal have any impact on a semiannual filer’s application of relevant

        accounting standards to prepare financial statements in accordance with U.S. GAAP, IFRS,

        or home-country GAAP? How? Are any changes to accounting standards, including U.S.

        GAAP or IFRS, necessary or appropriate to effectuate semiannual reporting (e.g., changes

        to the guidance on annual impairment testing, lag reporting, earnings per share, or other

        topics of authoritative guidance)?

29.     Are any changes to rules of securities exchanges necessary or appropriate to effectuate

        semiannual reporting?

30.     Should we require the second semiannual period financial information (for semiannual

        filers) or the fourth quarter financial information (for quarterly filers) to be included in

        Form 10-K so investors do not need to back out this information if companies do not

        voluntarily provide it? Would having a longer period (six months for semiannual reports

        versus three months for quarterly reports) make it more difficult for investors to back out

        this information? Relatedly, should we require semiannual filers to break out financial

        statement information for the six-month period covered by Form 10-S into two three-month

        periods and provide similarly broken-out three-month information for the fiscal year

        covered by Form 10-K?




93
      See PCAOB Auditing Standard 6101, Letters for Underwriters and Certain Other Requesting Parties, ¶ .46
      (permitting negative assurance as to subsequent changes in specified financial statement items as of a date less
      than 135 days from the end of the most recent period for which the accountants have performed an audit or a
      review).

                                                               42

--- page 43 ---

31.     Many public companies have standalone insider trading policies or insider trading policies

        that are part of the company’s code of ethics, 94 and these policies may provide for trading

        windows. 95 What impact would optional semiannual reporting have on company insider

        trading policies, including trading windows? For example, would companies impose longer

        trading blackout periods at the beginning of a semiannual period or towards the end of a

        semiannual period than they would impose if reporting quarterly? Even if these periods are

        longer, would the total number of blackout days be fewer each fiscal year for semiannual

        filers compared to quarterly filers given that semiannual filers would report less frequently?

        To the extent that there are longer blackout periods or fewer total blackout period days each

        year, what effects would these changes have on semiannual filers? Under our proposal,

        semiannual filers are allowed to voluntarily issue quarterly earnings releases. How would

        this affect current trading windows practices, if at all? Where a company elects to be a

        semiannual filer, would this be likely to have an effect on trading plans that may be

        adopted by companies or insiders (e.g., company directors, officers, or employees) for

        purposes of 17 CFR 240.10b5-1 (Exchange Act Rule 10b5-1)? If so, what are the effects?




94
      The regulations found at 17 CFR 229.406 and 17 CFR 229.408(b) require registrants to disclose whether they
      have adopted a code of ethics and whether they have adopted an insider trading policy, respectively, and are
      both incorporated into Form 10-K. See Item 10 of Form 10-K. For foreign private issuers, similar requirements
      are incorporated into Form 20-F. See Items 16B and 16J of Form 20-F. The rules of securities exchanges require
      listed companies to adopt a code of ethics. See, e.g., NYSE Listed Company Manual § 303A.10 (Code of
      Business Conduct and Ethics); Nasdaq Stock Market Rule 5610.
95
      Generally, trading windows are periods under company insider trading policies when there are no blackout
      periods in effect and covered persons (such as company directors, employees, and consultants) are permitted to
      transact in the securities of the company if they do not possess material non-public information. Company
      policies often use fixed blackout periods to reduce the risk that covered persons may trade while in possession
      of material non-public information at times when it is more likely that a covered person may possess it. Many
      company policies impose these fixed blackout periods that prohibit trading around the close of a fiscal quarter
      until after earnings for a fiscal quarter or year are released. Collectively, these fixed blackout periods can mean
      that at many public companies, trading windows each fiscal quarter are only open for two or three weeks around
      the middle of that fiscal quarter. In addition to these fixed blackout periods, companies also may impose event-
      specific blackout periods, such as around product developments or major company transactions.

                                                                43

--- page 44 ---

32.   Would there be an increased risk of insider trading at companies that elect to report on a

      semiannual basis? If so, please provide the basis for this view, as well as data. Could

      companies enhance their insider trading policies or improve their self-enforcement of these

      policies to help address this concern? What other actions could companies or the

      Commission take to mitigate any increase in the risk of insider trading?

33.   How would the proposed flexible approach to semiannual reporting affect the

      competitiveness of U.S. reporting companies vis-a-vis foreign competitors? For Exchange

      Act reporting foreign companies that would not be foreign private issuers (which report

      semiannually as discussed above) and that would report quarterly under the current system,

      would the proposed option to report semiannually make these foreign companies more

      likely to list on a U.S. exchange? What would be the competitive implications of the

      proposed optional semiannual reporting approach between U.S. reporting companies

      (which report quarterly under the current system) and foreign private issuers (which report

      semiannually under the current system as a practical matter)? Should there be different

      periodic reporting for foreign private issuers compared to domestic issuers? Why or why

      not?

34.   If the proposal is adopted, what should be the compliance date for the proposed

      amendments? If the proposal is adopted, is there a need for a transition period and, if so,

      what should be the length of the period?

       B. Proposed Amendments to Regulation S-X

       We are proposing amendments to various rules in Regulation S-X that would incorporate

semiannual reporting and simplify the rules with respect to the age of financial statements.

Specifically, the proposed amendments would:



                                                     44

--- page 45 ---

•   simplify Rule 3-01 and Rule 8-08 by reorganizing each and consolidating the

             requirements of Rule 3-12 regarding the age of financial statements in a registration

             or proxy statement into the balance sheet requirements of Rule 3-01;

         •   revise the age requirements to incorporate semiannual reporting through the

             introduction of a revised model for determining the age of interim financial

             statements; and

         •   revise other rules in Regulation S-X to incorporate semiannual reporting.

             1. Streamlining Age of Financial Statements Requirements

         To simplify our rules and effectuate our proposed optional semiannual reporting

approach, we are proposing amendments to Rules 3-01 and 8-08 of Regulation S-X so that each

amended rule clearly sets forth the requirements for annual financial statements and interim

financial statements. The proposed amendments would consolidate the requirements of Rule 3-

12 into Rule 3-01 and eliminate Rule 3-12.

         Currently, Rule 3-01 governs the date of audited and interim balance sheets required to

be included in filings as of the filing date. 96 The requirements for statements of comprehensive

income, cash flows, and changes in stockholders’ equity—set out in current 17 CFR 210.3-02

(Rule 3-02 of Regulation S-X) and 17 CFR 210.3-04 (Rule 3-04 of Regulation S-X)—are

derived from dates of annual and interim balance sheets required by Rule 3-01. 97 While current



96
     Registered management investment companies apply the requirements of Rule 3-18 of Regulation S-X instead
     of Rule 3-01. Foreign private issuers are not necessarily subject to Rule 3-01. Rather, they may apply the
     requirements in Form 20-F. See current Rules 3-01(g) and (h), which we are proposing to reorder as paragraphs
     (h) and (i).
97
     Rule 3-02 requires that the filing include audited statements of comprehensive income and cash flows for two or
     three fiscal years preceding the date of the most recent audited balance sheet being filed as well as interim
     statements for the period between the latest audited balance sheet and the date of the most recent interim
     balance sheet and for the corresponding period of the preceding fiscal year. Rule 3-04 requires that the filing
     include an analysis of changes in stockholders’ equity and noncontrolling interests in the form of a


                                                             45

--- page 46 ---

Rule 3-01 addresses the dates of the balance sheets as of the filing date, current Rule 3-12

addresses the age of financial statements as of the effective date of a registration statement or

mailing of a proxy statement. 98 Notwithstanding this difference, application of the two rules

currently results in age requirements that are aligned: if a registrant were to apply current Rule 3-

01’s filing date age requirements to a registration statement at the date of effectiveness (or a

proxy statement at the mailing date), the resulting financial statement requirements would be no

different than if Rule 3-12 were applied. Our proposed consolidation of Rules 3-01 and 3-12

would streamline Regulation S-X, making the age of financial statement requirements easier to

apply. To clarify the dual purpose of Rule 3-01 as proposed to be revised, we are proposing new

Rule 3-01(a), which would provide that the date of the most recent balance sheet included in a

registration or proxy statement must be updated to comply with that section’s requirements as if

the effective date of the registration statement, or proposed mailing date in the case of a proxy

statement, were the filing date.

         Further, we are proposing several amendments to streamline and reorganize Rule 3-01 as

well as integrate Rule 3-12 into Rule 3-01.

     •   We are proposing to place the rules regarding annual balance sheets in Rule 3-01(b). We

         do not propose any substantive amendments to the rules regarding annual balance sheets.

         Proposed Rule 3-01(b) would require audited balance sheets as of the end of the two most

         recently completed fiscal years, which would be the same as current Rule 3-01(a).




     reconciliation of the beginning balance to the ending balance for each period for which a statement of
     comprehensive income is required to be filed.
98
     The Commission, in connection with the adoption of Rule 3-12, stated that the rule ensures “that interim data
     provided in registration statements under the Securities Act is at least as current as the data already filed under
     the Exchange Act.” See Uniform Instructions as to Financial Statements – Regulation S-X, Release No. 33-6234
     (Sept. 2, 1980) [45 FR 63682, 63684 (Sept. 25, 1980)] (“1980 Regulation S-X Adopting Release”).

                                                               46

--- page 47 ---

•   The current exceptions to current Rule 3-01(a) applicable to filings other than on Form

         10-K would be included in proposed Rules 3-01(b)(1) and (b)(2).

              o Proposed Rule 3-01(b)(1), which would be the same as current Rules 3-01(b) and

                   3-12(b), would permit that if the filing is made no more than 45 days after the end

                   of the registrant’s fiscal year, the audited balance sheets may be as of the end of

                   the two fiscal years preceding the most recently completed fiscal year and must

                   include an additional balance sheet as of an interim date specified in proposed

                   paragraph (c)(1), as described further below.

              o Proposed Rule 3-01(b)(2), which would be the same as current Rules 3-01(c) and

                   3-12(b), would permit that—if the filing is made more than 45 days but no more

                   than 59 days (for large accelerated filers, as defined in § 240.12b-2 of this

                   chapter), 74 days (for accelerated filers, as defined in § 240.12b-2 of this chapter),

                   or 89 days (for all other registrants) after the end of the registrant’s most recently

                   completed fiscal year—so long as three conditions are met, the registrant may

                   apply proposed paragraph (b)(1), which means that, in this situation, the audited

                   balance sheets may also be as of the end of the two fiscal years preceding the

                   most recently completed fiscal year and the filing must include an additional

                   balance sheet as of an interim date specified in proposed paragraph (c)(1). 99 We

                   do not propose any changes to the three conditions.




99
     The three conditions would be set out in proposed Rules 3-01(b)(2)(i) through (iii) and continue to provide: (i)
     the registrant is subject to Exchange Act reporting and has filed all required reports; (ii) for the most recently
     completed fiscal year for which audited financial statements are not yet available, the registrant reasonably and
     in good faith expects to report income attributable to the registrant after income taxes; and (iii) for at least one
     of the two fiscal years immediately preceding the most recently completed fiscal year, the registrant reported
     income attributable to the registrant after income taxes.

                                                                47

--- page 48 ---

•   Proposed Rule 3-01(b)(3), which would be similar to the second sentence of current Rule

          3-01(a), would require the filing of an audited balance sheet dated as of a date not more

          than 134 days before the date of the filing if the registrant was not in existence as of the

          end of its fiscal year.

      •   Proposed Rule 3-01(b)(4), which would be the same as Rules 3-01(b) and 3-12(c), 100

          would require that, notwithstanding the requirements of this section, the filing must be

          updated with audited financial statements for the most recently completed fiscal year if

          they become available prior to the filing date.

          The proposed amendments to Rules 3-01 and 8-08 reflect the replacement of references

to filing dates from the current text of “within” a certain number of days after a milestone (e.g.,

filing date or end of the fiscal year or quarter) to “more than” or “no more than” a certain number

of days. 101 We believe this change will clarify the filing requirements and ensure alignment of

financial statement updating dates with the Forms 10-K, 10-Q, and 10-S filing deadlines. A

registration or proxy statement filed on the same date a periodic report is due would be required

to include the financial statements required in that periodic report. We are making similar

clarifying amendments to Exchange Act Rules 13a-13 and 15d-13.

          We are proposing to place the rules regarding an interim balance sheet in Rule 3-01(c).

      •   Proposed Rule 3-01(c)(1) would require that, when an audited balance sheet for the most

          recently completed fiscal year is not included in the filing, the interim balance sheet must


100
      While current Rule 3-01(b) does not explicitly state this requirement as Rule 3-12(c) does and as proposed Rule
      3-01(b)(4) would do, this requirement is implicit in current Rule 3-01(b). We believe it is clearer to registrants
      to set this requirement out explicitly.
101
      See proposed Rule 3-01(b)(1), (2), and (3) and Rule 8-08(a)(1) and (2). For example, current Rule 3-01(c)(1)
      references filings “made after 45 days but within the number of days of the end of the registrant's fiscal year
      specified in paragraph (i) of this section.” Instead, proposed rule 3-01(b)(2) references filings “made more than
      45 days but no more than 59 days (for large accelerated filers, as defined in § 240.12b-2 of this chapter), 74
      days (for accelerated filers, as defined in § 240.12b-2 of this chapter), or 89 days (for all other registrants).”

                                                                48

--- page 49 ---

be as of the end of the third fiscal quarter of the most recently completed fiscal year for

       quarterly filers or as of the end of the first fiscal semiannual period of the most recently

       completed fiscal year for semiannual filers. This proposed rule would be similar to

       current Rule 3-01(b) and Rule 3-12(b), except that it would require a semiannual filer to

       file an interim balance sheet as of the end of its semiannual period.

   •   Proposed Rule 3-01(c)(2) would set forth requirements for an interim balance sheet when

       an audited balance sheet for the most recently completed fiscal year is included in the

       filing. We discuss proposed Rule 3-01(c)(2)’s requirements for an interim balance sheet

       for the current fiscal year in detail in Section III.B.2 below on determining the age of

       interim financial statements.

   •   Proposed Rule 3-01(c)(3) would be substantively unchanged from current requirements

       in Rules 3-01(f) and 3-12(a) and would provide that an interim balance sheet provided in

       accordance with proposed Rule 3-01(c) need not be audited and need not be presented in

       greater detail than is required by § 210.10-01.

       We are proposing to renumber current Rule 3-01(g), regarding registered management

investment companies, as Rule 3-01(d). Likewise, we are proposing to renumber current Rule 3-

01(h), regarding foreign private issuers, as Rule 3-01(e)(1). We are proposing to incorporate

current Rule 3-12(f) regarding financial statements of a foreign business into proposed Rule 3-

01(e)(2).

       We are proposing to delete current Rule 3-01(d), which requires—when filings are made

after 45 days but within a number of days of the end of the registrant’s fiscal year based on its

filer status and the three conditions in Rule 3-01(c) are not met—that balance sheets for the two

most recently completed fiscal years must be included. We believe current Rule 3-01(d) is



                                                     49

--- page 50 ---

redundant with current Rule 3-01(a) and is unnecessary to include in Rule 3-01 as proposed to be

revised, because we believe it is clear if the required conditions in current Rule 3-01(c) are not

met, then the registrant must provide the balance sheet for the two most recently completed fiscal

years as required by current Rule 3-01(a) and as would be required by proposed Rule 3-01(b)(2).

          We do not propose to integrate current Rule 3-12(d) into Rule 3-01 as proposed to be

revised, as we believe it would be redundant with proposed Rule 3-01(b). Current Rule 3-12(d)

requires the age of the registrant’s most recent audited financial statements included in a

registration statement filed under the Securities Act or filed on Form 10 under the Exchange Act

to be no more than one year and 45 days old at the date the registration statement becomes

effective if the registration statement relates to the security of an issuer that was not subject,

immediately before the time of filing the registration statement, to the reporting requirements of

Exchange Act Section 13 or 15(d). Because a registrant in this situation would not satisfy the

first of the three conditions in proposed Rule 3-01(b)(2), it would be required to file an annual

balance sheet for the most recently completed fiscal year, which would be as of a date more

current than one year and 45 days.

          Because proposed Rule 3-01 would integrate current Rule 3-12, as described above, we

are proposing to eliminate Rule 3-12. We are also proposing technical amendments to rules that

currently refer to Rule 3-12 to reflect its integration into Rule 3-01. 102

          Smaller reporting companies apply Rule 8-08 to determine the age of financial

statements. We are proposing amendments to Rule 8-08 to conform its organization to proposed

Rule 3-01, as described above.



102
      See proposed amendments to replace references to Rule 3-12 with references to Rule 3-01 in: Instruction 1 to 17
      CFR 210.11-02(c)(3); 17 CFR 210.15-01(c); and 17 CFR 230.485; proposed amendments to 17 CFR 210.15-
      01(b) to replace reference to Rule 3-12 with reference to 17 CFR 210.3-20 (Rule 3-20 of Regulation S-X).

                                                              50

--- page 51 ---

With respect to annual financial statements, we are proposing to eliminate the

introductory text of Rule 8-08 and revise paragraph (a) to address annual financial statements.

Consistent with proposed Rule 3-01(b), proposed paragraph (a) of Rule 8-08 would require a

registrant to file, in filings other than on Form 10-K, audited annual financial statements for the

registrant and its predecessors, as required by Rule 8-02. We are also proposing to move current

paragraph (a) to paragraph (a)(1) of Rule 8-08 and revise the rule to require that if the effective

date of a registration statement or anticipated mailing date of a proxy statement is no more than

45 days after the end of the most recently completed fiscal year, the filing may include financial

statements as of the end of the two fiscal years preceding the most recently completed fiscal year

and for the years then ended and must include interim financial statements, the requirements for

which we propose to move to a revised paragraph (b). We are proposing to move the

requirements in current paragraph (b) of Rule 8-08, that address the requirements when the

effective date of a registration statement or mailing date of a proxy statement is more than 45

days but not more than 90 days after the end of the most recently completed fiscal year, to a new

proposed paragraph (a)(2) of Rule 8-08. The proposed amendments would not change the age of

annual financial statements requirements for a smaller reporting company.

       With respect to interim financial statements, we are proposing to revise paragraph (b) of

Rule 8-08 to include the interim financial statement requirements. Proposed paragraph (b)(1) of

Rule 8-08 would require that, if audited financial statements for the most recently completed

fiscal year are not included in the filing, a quarterly filer must file interim financial statements as

of the end of the third fiscal quarter of the most recently completed fiscal year and for the nine

months then ended and a semiannual filer must file interim financial statements as of the end of

the first fiscal semiannual period of the most recently completed fiscal year and for the



                                                      51

--- page 52 ---

semiannual period then ended. Proposed paragraph (b)(2) of Rule 8-08 would require that, if

audited financial statements for the most recently completed fiscal year are included in a filing,

the registrant must file interim financial statements as of the end of the most recently completed

fiscal quarter (for quarterly filers) or semiannual period (for semiannual filers) and for the year-

to-date interim period then ended that has been filed, or is required to be filed on or before the

filing date, in a Form 10-Q or Form 10-S. A registrant that is not subject to Exchange Act

Section 13(a) or 15(d) would apply this rule as if it were required to file Form 10-Q or Form 10-

S.

       These proposed interim requirements in Rule 8-08 would replicate the requirements in

proposed Rules 3-01(c)(1) and (2). Proposed paragraph (b)(3) of Rule 8-08 would require that

interim financial statements must be prepared and presented in accordance with Rule 8-03, which

would replicate proposed Rule 3-01(c)(3).

           2. Determining Age of Interim Financial Statements

       As noted in Section III.B.1 above, proposed Rule 3-01(c)(2) would address age

requirements for interim financial statements (and proposed Rule 8-08(b)(2) would address age

requirements for smaller reporting companies). These proposed amendments would revise how

the date of an interim balance sheet is determined in registration or proxy statements. Currently,

Rule 3-01(e) requires that, for filings made after 129 days or 134 days (depending on filer status)

after fiscal year end, the filing must include a balance sheet as of an interim date within 130 days

or 135 days of the date of filing (depending on filer status). Rule 3-12 similarly requires that, if

the financial statements in a filing are as of a date 130 days or 135 days (depending on filer

status) or more before the date the filing is expected to become effective, or the proposed mailing

date in the case of a proxy statement, the financial statements must be updated with a balance

sheet as of an interim date within 130 days or 135 days (depending on filer status). Rule 8-08

                                                     52

--- page 53 ---

contains a similar age requirement for the filing of interim financial statements in a registration

or proxy statement.

          Under the proposed amendments, a registrant would no longer assess the number of days

from the filing date or from the effective date of the registration statement (or mailing date of a

proxy statement) to the date of the most recent balance sheet to determine if the balance sheet

falls within 130 days or 135 days, as applicable. Rather, under the proposed amendments to

Rules 3-01(c)(2) and 8-08(b)(2), a registrant, in determining if interim financial statements are

required when audited financial statements for the most recently completed fiscal year are

included in the filing, would include the interim financial statements as of the end of the most

recently completed fiscal quarter (for quarterly filers) or semiannual period (for semiannual

filers) that has been filed, or is required to be filed on or before the filing date, in a Form 10-Q or

Form 10-S. 103 A registrant that is not subject to Exchange Act Section 13(a) or 15(d) would

apply this rule as if it were required to file Form 10-Q or Form 10-S. In this regard, for a non-

reporting company that filed a registration statement that has not yet become effective, these

provisions of proposed Rules 3-01(c)(2) and 8-08(b)(2) (regarding the interim financial

statements that would have been required in a Form 10-Q or Form 10-S) would mean that the

non-reporting company must file in a registration statement the interim financial statements that

would have been required in periodic reports if that non-reporting company were an Exchange

Act reporting company. 104 For example, the Form 10-Q or proposed Form 10-S for a company


103
      The filing of Form 12b-25 in accordance with 17 CFR 240.12b-25 to provide notification of an inability to
      timely file a Form 10-K, 10-S, or 10-Q would not impact when financial statements are required to be updated
      in a registration or proxy statement.
104
      This simplified approach in the proposed rules is similar to the approach in current Rule 8-08’s introductory
      text, which requires that financial statements not be less current than the financial statements that would be
      required in Forms 10-K and 10-Q if such reports were required to be filed. In this manner, Rule 8-08 would
      continue to use this same approach except, in connection with our proposed revisions of Rule 8-08, the


                                                                53

--- page 54 ---

that is a large accelerated filer or accelerated filer would be due 40 days after the end of the

interim period (or 45 days for all other registrants). For an interim period ending on June 30, the

Form 10-Q or proposed Form 10-S would be due by August 10 for a large accelerated or

accelerated filer (August 14 for all other registrants). Under the proposed amendments, a

registration statement filed by a large accelerated or accelerated filer on August 10 (or August 14

for all other registrants) would be required to include financial statements for the interim period

ended June 30.

          We are proposing this change to simplify the updating requirements in current rules and

to align the date upon which the interim financial statements of a quarterly filer’s second quarter

would be required to be updated with that of a semiannual filer’s first semiannual period. In this

regard, with respect to semiannual filers, if we were to simply add 90 days to the existing 135-

day window, based on the application of current Rule 3-12 of Regulation S-X, the date upon

which a semiannual filer would have to update its interim financial statements for the semiannual

financial statements could differ by one or two days compared to the date upon which a quarterly

filer would have to update its second quarter financial statements. 105 The proposed amendments

to Rule 3-01(c)(2) and 8-08(b)(2) would avoid disparate treatment between semiannual filers and

quarterly filers with respect to the age of the interim financial statements requirements.




      introductory text would be eliminated and this requirement would be found in Rule 8-08(b)(2). Current Rule 3-
      01 does not use this approach, so the proposed revisions to Rule 3-01 would differ compared to that current rule
      and instead employ the approach currently found in Rule 8-08.
105
      For example, a quarterly filer with a February 28 fiscal year would be required to update a registration
      statement with interim financial statements as of the end of the second quarter of August 31 on October 13 (or
      135 days from the end of the first quarter of May 31). If we were to instead add 90 days to the 135-day interval,
      then a semiannual filer with the same February 28 fiscal year end would be required to update a registration
      statement with semiannual financial statements as of October 11 (or 225 days from the Feb 28 fiscal year end),
      two days earlier than October 13 for the quarterly filer.

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--- page 55 ---

The 1980 Regulation S-X Adopting Release stated that Rule 3-12 would result in

requirements for the age of financial statements in registration statements that “correspond with

the requirements for quarterly data under the 1934 Act on Form 10-Q.” 106 While the

requirements correspond, they are not identical: Rule 3-12 requires updated financial statements

to be as of a date within 130 days or 135 days of effectiveness (depending on filer status); while

a Form 10-Q is due 40 days or 45 days after the end of the fiscal quarter (depending on filer

status). As a result of this difference, under current rules, the financial statements in a registration

statement or proxy statement may be required to be updated one or two days before those same

financial statements are required to be filed on Form 10-Q. Such a difference results from the

number of days in a quarter that exceeds 90 days. 107 Our proposed rule would align the financial

statement age requirements of registration statements (and proxy statements) with the filing

deadlines of Form 10-Q and Form 10-S, eliminating such one- or two-day differences. Proposed

Rule 3-01(c)(2) results in both quarterly filers and semiannual filers having the same date on

which the financial statements would be required to be updated because both filers would

determine the date from the end of their most recently completed interim period as opposed to,

for example, the quarterly filer’s determination being from the end of the first quarter and the

semiannual filer’s determination being from the end of the fiscal year.

          Under the proposed amendments to Rule 3-01(c), the interim financial statement period

required in a registration or proxy statement would be as of the end of a registrant’s fiscal

quarterly or semiannual period, as applicable. This would differ from current Rule 3-12, which


106
      1980 Regulation S-X Adopting Release, at 63685.
107
      For example, assume a calendar year registrant that is a non-accelerated filer that files a registration statement
      on August 13. The second quarter Form 10-Q would be due on August 14. However, a registration statement
      filed on August 13 would require updated financial statements, for the quarter ended June 30, in order to
      comply with current Rule 3-12. This difference of one day between August 14 and August 13 is due to April,
      May, and June containing 91 days instead of the 90-day quarterly period implicit in the 135 days.

                                                                 55

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permits interim financial statements as of any date so long as they cover a period within the

prescribed number of days from the date of effectiveness or mailing date. We observe that

virtually all registrants file interim financial statements as of the end of a quarter, since those

financial statements would be filed in future Exchange Act reports on Form 10-Q. Further,

registrants who wish to file interim financial statements as of a date that does not align with a

quarterly or semiannual period may request a substitution of financial statements under 17 CFR

210.3-13 (Rule 3-13 of Regulation S-X). As a result, we do not expect that this aspect of the

proposed amendments would result in any change in today’s practice. 108

          When interim financial statements for a semiannual filer are required in a registration or

proxy statement, proposed Rule 3-01(c)(2) would require those interim financial statements to be

for a semiannual period. Under the proposed rules, depending on when the registration statement

becomes effective or the proxy statement is mailed, an investor in a registrant that is a

semiannual filer may not receive interim financial statements that are as current as would be

required today. For example, if a non-reporting registrant with a calendar fiscal year that elects

semiannual reporting files a registration statement as late as August 13, proposed Rule 3-01(c)(2)

would not require any interim financial statements to be included in the registration statement. In

contrast, under the current requirements and under the proposal for those registrants that continue

to report quarterly, the filing would include interim financial statements for the first fiscal

quarter. As discussed in Section I, we are proposing these amendments that may result in less

current interim financial statements in a registration statement to reduce regulatory burden and




108
      The proposed amendments would not have any effect on the accommodations available for issuers that submit
      draft registration statements for nonpublic review.

                                                            56

--- page 57 ---

align the requirements for updating interim financial statements with the requirements for

periodic reporting under the Exchange Act, including the proposed semiannual reporting option.

              3. Other Proposed Amendments to Regulation S-X

          We are proposing amendments to Rules 10-01 and 8-03 of Regulation S-X to reflect that

registrants would have the option to report semiannually on Form 10-S. Specifically, we are

proposing to amend Rules 10-01(c) and 8-03 to clarify that “interim” for quarterly filers

represents a fiscal quarterly period (except when the rule addresses a year-to-date interim period)

and that “interim” for semiannual filers represents a fiscal semiannual period. To facilitate these

changes, the proposed revisions to Rules 10-01 and 8-03 would refer to the new proposed

definitions of quarterly filer and semiannual filer discussed above.

          Under the proposed amendments to Rule 10-01, where required, a semiannual filer would

provide an interim balance sheet as of the end of the first semiannual period and a balance sheet

as of the end of the preceding fiscal year. A balance sheet as of the end of the first semiannual

period from the preceding fiscal year would not be required unless necessary for an

understanding of the impact of seasonal fluctuations on the registrant’s financial condition.

Under the proposed amendments to Rule 10-01, where required, a semiannual filer would

provide interim statements of comprehensive income and cash flows for the first semiannual

period and the corresponding period of the preceding fiscal year; a semiannual filer would also

have the option to present these statements for the cumulative twelve-month period ending as of

the end of the semiannual period. 109




109
      We are also proposing technical amendments to Rules 10-01(c)(2) through (4) to change “twelve month period
      ended during…” to “twelve-month period ending as of the end of…”

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--- page 58 ---

Under the proposed amendments to Rule 8-03, 110 where required, a semiannual filer

would provide in Form 10-S a balance sheet as of the end of the issuer’s first semiannual period,

a balance sheet as of the end of the preceding fiscal year, and statements of comprehensive

income and statements of cash flows for the interim period up to the date of the interim balance

sheet date and the comparable period of the preceding fiscal year.

          We are also proposing related technical amendments to Rules 10-01(b)(6), 10-01(d), and

8-03(b)(5) (which as renumbered would become 8-03(c)(5)) to indicate that the rules apply to

Form 10-S, in addition to Form 10-Q. We are proposing amendments to Rules 8-03(a)(5) (which

as renumbered would become Rule 8-03(b)(5)) and 10-01(a)(7) to change “interim” to

“quarterly” and clarify that the requirement to disclose subtotals in the statement of changes in

stockholders’ equity for each quarterly period applies only to quarterly filers. We are proposing

to relocate current Instruction 1 to Rule 8-03, which requires that statements of comprehensive

income for the most recent quarter and the comparable quarter of the preceding fiscal year be

provided when the year-to-date interim period is more than one quarter, to Rule 8-03(a)(2) to

enhance its prominence.

          Lastly, we are proposing a technical amendment to reinsert Instruction 2 to Rule 8-03

concerning management adjustments to financial statements that was inadvertently deleted in a

2018 adopting release, except this provision would be reinserted as paragraph (c)(2) of Rule 8-

03. 111

Request for Comment



110
      For Rule 8-03, we are proposing to renumber the introductory text as paragraph (a), renumber paragraph (a) as
      paragraph (b), and renumber paragraph (b) as paragraph (c).
111
      Disclosure Update and Simplification, Release No 34-83875 (Aug. 17, 2018) [83 FR 50148 Oct. 4, 2018)]
      (adopting amendments to Rule 8-03, including to Instruction 1, and indicating through the use of five asterisks
      at the end of Instruction 1 that Instruction 2 was not amended).

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--- page 59 ---

35.   Should the Commission adopt the proposed amendments to Regulation S-X to effectuate

      semiannual reporting? Are there any other changes beyond those proposed that the

      Commission should make to Regulation S-X to effectuate semiannual reporting?

36.   In connection with registration and proxy statements, are the proposed changes to

      Regulation S-X necessary to take into account semiannual reporting? If the proposed

      changes to Regulation S-X were not made and the relevant rules remained structured

      around quarterly reporting, would this have a negative impact on semiannual filers

      seeking to raise capital or solicit proxies?

37.   What impact would the proposal have on the ability of semiannual filers to conduct

      public offerings? Would reporting companies that elect to become semiannual filers

      nonetheless decide to include quarterly or more recent financial information in Securities

      Act registration statements or prospectuses based on market practices or liability

      concerns and, if so, would that reduce the cost savings that would otherwise be generated

      by less frequent interim reporting? For example, would semiannual filers continue to

      retain independent public accountants to review their financial statements on a quarterly

      basis to facilitate capital-raising by the company in offerings registered under the

      Securities Act?

38.   Should we change how the age of financial statements in a registration statement is

      determined in order to precisely align with the deadlines of Exchange Act reporting

      requirements as proposed? Would our proposed changes to consolidate Rule 3-12 into

      Rule 3-01 help to streamline Regulation S-X’s requirements so that they are easier for

      registrants to apply?




                                                     59

--- page 60 ---

39.       Should we have the deadlines that apply at the time of filing and that apply at the time of

          effectiveness (for registration statements) or mailing (for proxy statements) centrally

          located in the same rule as we propose? Why or why not? With respect to this dual role

          the revised Rule 3-01 would serve, does new paragraph (a) make clear to registrants

          that—in considering what age requirements apply with respect to effectiveness or

          mailing—they should substitute effectiveness or mailing dates for the filing dates

          explicitly mentioned in the rule?

40.       Instead of the amendments we propose, should we retain the current 135-day age

          requirement for quarterly filers and adopt a 225-day age requirement for semiannual

          filers—even if that means semiannual filers may have to update one or two days sooner

          than quarterly filers? 112 Why or why not?

41.       As discussed above, the proposed elimination of the 135-day provisions of the current

          rules would mean that registrants could no longer provide a mid-period dated financial

          statement but would need to provide financial statements that coincide with fiscal interim

          period ends or annual fiscal year end. Are there any registrants who employ the 135-day

          provision to provide mid-period financial statements today? If so, why and under what

          circumstances do registrants do this? Does providing this ability for some registrants

          justify the added complexity these provisions may create for other registrants?

42.       Are there any other changes needed to simplify the age of financial statement

          requirements? Are there any other changes we should make to reduce the compliance

          burdens associated with Regulation S-X’s requirements in connection with proposed

          optional semiannual reporting?


112
      See supra note 107 and accompanying text (providing an example of a one-day difference).

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--- page 61 ---

43.    Should we adopt changes to Rule 10-01 and Rule 8-03 regarding the contents of interim

       financial statements as proposed? Do the proposed amendments appropriately incorporate

       the reporting of semiannual periods on Form 10-S without changing how the interim

       financial statement rules apply to a registrant reporting on Form 10-Q?

44.    When a registrant acquires a significant business, financial statements of that business are

       required to be filed on Form 8-K and must comply with the age requirements of Rule 3-

       01 at the date the initial Form 8-K reporting the acquisition is filed. Depending on the

       timing of the acquisition, pre-acquisition interim financial information for upwards of six

       to nine months may never be required to be filed by semiannual filers. Should we require

       other financial information (e.g., summarized financial information) to inform investors

       of pre-acquisition results of operations, financial condition, and cash flows of the

       acquiree beyond the information that would be required under Rule 3-01 as proposed to

       be amended?

       C. Proposed Amendments Regarding Transition Reports

       We are proposing amendments to Exchange Act Rules 13a-10 and 15d-10, which set

forth the Commission’s requirements with respect to transition reports upon a change in fiscal

year, to incorporate the proposed semiannual reporting option. Specifically, we are proposing to

amend Rule 13a-10(e) and Rule 15d-10(e) to place the requirements applicable to quarterly

filers, which are unchanged, in a new subparagraph (1) and place the requirements applicable to

semiannual filers in a new subparagraph (2). New proposed Rule 13a-10(e)(2)) and Rule 15d-

10(e)(2) for semiannual filers would mirror the rules applicable to quarterly filers.

       We do not propose to replicate current Rule 13a-10(e)(4), which addresses the reporting

of a “gap period” by quarterly filers who change their fiscal year closing date. A “gap period” is

the period of one or two months between the latest quarter end under the old fiscal year and the

                                                     61

--- page 62 ---

start of the quarterly reporting period under the new fiscal year. Because such a “gap period”

would not arise due to a change in fiscal year by a semiannual filer, we are not proposing an

analog for semiannual filers.

          We are also proposing related technical changes to Rules 13a-10 and 15d-10 to indicate

that the relevant rules apply to Form 10-S in addition to Form 10-Q. 113

Request for Comment

45.       Should the Commission make any other changes to transition reports under Rules 13a-10

          and 15d-10 to effectuate semiannual reporting?

          D. Proposed Technical Amendments

          We are proposing a number of technical amendments to conform existing rules and forms

to the proposed flexible approach to interim reporting by inserting references to semiannual

reporting or new Form 10-S and to make corrective deletions of references to previously

rescinded forms. These proposed amendments include:

      •   changes to several items in Regulation S-K, 114 an item in Regulation M-A, 115 and several

          proxy rules; 116




113
      See proposed amendments to Rule 13a-10(c), Rule 13a-10(d)(2)(ii), Rule 13a-10(d)(2)(iii), Note to Rule 13a-
      10(c) and (e), Rule 13a-10(f), Rule 13a-10(j)(2), Rule 15d-10(c), Rule 15d-10(d)(2)(ii) and (iii), Note to Rule
      15d-10(c) and (e), and Rule 15d-10(f).
114
      17 CFR 229.10 (General); 17 CFR 229.101 (Description of business); 17 CFR 229.103 (Legal proceedings); 17
      CFR 229.201 (Market price of and dividends on the registrant’s common equity and related stockholder
      matters); 17 CFR 229.302 (Supplementary financial information); 17 CFR 229.303 (Management’s discussion
      and analysis of financial condition and results of operations); 17 CFR 229.308 (Internal control over financial
      reporting); 17 CFR 229.402 (Executive compensation); 17 CFR 229.407 (Corporate governance); 17 CFR
      229.408 (Insider trading arrangements and policies); 17 CFR 229.601 (Exhibits); 17 CFR 229.701 (Recent sales
      of unregistered securities; use of proceeds from registered securities); 17 CFR 229.1100 (General).
115
      17 CFR 229.1010 (Financial statements).
116
      17 CFR 240.14a-5 (Presentation of information in proxy statement); 17 CFR 240.14a-8 (Shareholder
      proposals); 17 CFR 240.14a-101 (Schedule 14A. Information required in proxy statement).

                                                               62

--- page 63 ---

•   changes to rules regarding determination of market capitalization, among other things, 117

          and rules providing definitions; 118 and

      •   changes to rules regarding research reports, 119 underwriter status, 120 and liability under

          the securities laws. 121

          We are proposing the same types of technical amendments to rules related to several

aspects of the process of filing forms and schedules with the Commission regarding

incorporation by reference; 122 data tagging; 123 definitions; 124 late filing; 125 certifications; 126

disclosure controls and internal control over financial reporting; 127 foreign private issuers; 128 and

beneficial ownership schedules. 129 We are also proposing such technical amendments to a rule




117
      17 CFR 240.3a55-1 (Method for determining market capitalization and dollar value of average daily trading
      volume; application of the definition of narrow-based security index).
118
      17 CFR 230.158 (Definitions of certain terms in the last paragraph of section 11(a)); 17 CFR 230.405
      (Definitions of terms); 17 CFR 232.11 (Definition of terms used in this part).
119
      17 CFR 230.138 (Publications or distributions of research reports by brokers or dealers about securities other
      than those they are distributing); 17 CFR 230.139 (Publications or distributions of research reports by brokers
      or dealers distributing securities); 17 CFR 230.139b (Publications or distributions of covered investment fund
      research reports by brokers or dealers distributing securities).
120
      17 CFR 230.144 (Persons deemed not to be engaged in a distribution and therefore not underwriters).
121
      17 CFR 230.175 (Liability for certain statements by issuers); 17 CFR 240.3b-6 (Liability for certain statements
      by issuers); 17 CFR 240.10b5-1 (Trading “on the basis of” material nonpublic information in insider trading
      cases); 17 CFR 260.0-11 (Liability for certain statements by issuers).
122
      17 CFR 232.303 (Incorporation by reference).
123
      17 CFR 232.405 (Interactive Data File submissions); 17 CFR 232.406 (Cover Page XBRL Data Tagging).
124
      17 CFR 240.12b-2 (Definitions).
125
      17 CFR 240.12b-25 (Notification of inability to timely file all or any required portion of a Form 10-K, 20-F, 11-
      K, N-CEN, N-CSR, 10-Q, or 10-D).
126
      17 CFR 240.13a-14 (Certification of disclosure in annual and quarterly reports); 17 CFR 240.15d-14
      (Certification of disclosure in annual and quarterly reports).
127
      17 CFR 240.13a-15 (Controls and procedures); 17 CFR 240.15d-15 (Controls and procedures).
128
      17 CFR 240.13a-16 (Reports of foreign private issuers on Form 6-K (17 CFR 249.306)); 17 CFR 240.15d-16
      ((Reports of foreign private issuers on Form 6-K (17 CFR 249.306))..
129
      17 CFR 240.13d-1 (Filing of Schedules 13D and 13G).

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regarding Office of Management and Budget (“OMB”) control numbers. 130 Finally, we are

proposing such technical amendments to several Commission forms. 131

Request for Comment

46.       Should the Commission make any other technical, conforming, clarifying, or

          implementing changes to effectuate semiannual reporting?

47.       We are not proposing any technical amendments to references to “quarter” in Forms F-8

          and F-80 (related to the calculation of U.S. holders), because companies that use those

          forms are foreign private issuers, which do not report quarterly currently. Is there any

          need for technical amendments to those forms to include references to semiannual

          reporting?

          E. General Request for Comment

          We request and encourage any interested person to submit comments on any aspect of

our proposal, other matters that might have an impact on the proposed amendments, and any

suggestions for additional changes. With respect to any comments, we note that they are of

greatest assistance to our rulemaking initiative if accompanied by supporting data and analysis of

the issues addressed in those comments and by alternatives to our proposal where appropriate.

IV.       OTHER MATTERS

          This proposing release is an economically significant regulatory action under Section

3(f)(1) of Executive Order 12866, as amended, and has been reviewed by OMB. This action, if

finalized as proposed, is expected to be an Executive Order 14192 deregulatory action.



130
      17 CFR 200.800 (OMB control numbers assigned pursuant to the Paperwork Reduction Act).
131
      17 CFR 239.11 (Form S-1); 17 CFR 239.13 (Form S-3); 17 CFR 239.18 (Form S-11); 17 CFR 239.25 (Form S-
      4); 17 CFR 239.31 (Form F-1); 17 CFR 239.33 (Form F-3); 17 CFR 239.34 (Form F-4); 17 CFR 239.40 (Form
      F-10); 17 CFR 249.306 (Form 6-K); 17 CFR 249.308 (Form 8-K); 17 CFR 249.310 (Form 10-K); 17 CFR
      249.322 (Form 12b-25—Notification of late filing).

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V.        ECONOMIC ANALYSIS

          We are attentive to the costs that would be imposed by and the benefits that would be

obtained from the proposed amendments. 132 The discussion below addresses the potential

economic effects of the proposed amendments, including the likely benefits and costs, as well as

the likely effects on efficiency, competition, and capital formation. We also analyze the potential

costs and benefits of reasonable alternatives to the amendments.

          A. Introduction

          As discussed in Section III, the proposed amendments would provide companies subject

to reporting obligations under Exchange Act Section 13(a) or 15(d) with the option of filing

interim reports on a semiannual basis rather than on a quarterly basis. This flexibility would

allow reporting companies to choose the reporting frequency that best aligns with their business

needs and investor expectations.

          Currently, Exchange Act reporting companies must file quarterly reports on Form 10-Q.

These interim reports can be costly to prepare and provide. Reporting companies dedicate time

and resources for preparing quarterly reports and associated voluntary disclosures (i.e., earnings

announcements and management guidance), for independent public accountant’s reviews of

quarterly financial statements, and for related investor engagements such as earnings conference

calls. Further, more frequent disclosure increases the risk of disclosing proprietary information




132
      Securities Act Section 2(b) and Exchange Act Section 3(f) require us, when engaging in rulemaking that
      requires us to consider or determine whether an action is necessary or appropriate in the public interest, to
      consider, in addition to the protection of investors, whether the action will promote efficiency, competition, and
      capital formation. 15 U.S.C. 77b(b), 78c(f). Exchange Act Section 23(a)(2) requires us, when making rules
      under the Exchange Act, to consider the impact that the rules would have on competition and prohibits the
      Commission from adopting any rules that would impose a burden on competition not necessary or appropriate
      in furtherance of the purposes of the Exchange Act. 15 U.S.C. 78w(a)(2).

                                                                65

--- page 66 ---

that could benefit competitors to the detriment of the reporting company. 133 Reporting

companies that reduce their reporting frequency could potentially redirect resources towards

strategic priorities and other business needs while reducing the risk of disclosing proprietary

information.

          Conversely, the efficiency of financial markets rests on material information becoming

public in a timely fashion. In addition to protecting investors, greater availability of material

information allows securities prices to better reflect their issuers’ fundamental value and

ultimately promotes capital formation as issuers have access to lower cost of capital and

investors in those issuers’ securities have access to higher liquidity, as discussed in detail below.

A reduction in the frequency of interim reporting could result in delayed disclosure of material

information, reduced comparability, and some lost information. Therefore, there exists a tradeoff

between reducing regulatory burdens so that reporting companies can reallocate their resources

to potentially more value enhancing activities, which would ultimately benefit investors, and

promoting efficient financial markets through timely disclosure. The optimal reporting frequency

may differ across reporting companies and industries, depending on their size, business model,

investor base, and other factors. Under the proposed rules, reporting companies could choose the

frequency of reporting that best fits their circumstances. This flexibility is intended to allow

reporting companies to make firm-specific choices that reflect the unique needs and preferences

of their investors. Barring significant agency costs, this could lead to a more efficient, firm

specific choice for reporting frequency that would benefit both issuers and investors.




133
      The proposed amendments would not change what is required to be disclosed in the interim reports, simply the
      frequency. The impact of the proposed rules on the disclosure of proprietary information would be limited to
      instances where delaying competitively sensitive information contained in the interim reports or aggregating
      quarterly information into semiannual information decreases the value of the information to competitors.

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Reporting companies that would choose to report on a semiannual basis could also decide

whether to supplement with voluntary information on a quarterly basis. For instance, these

companies may still voluntarily provide earnings announcements or similar disclosures during

the first or third quarter or both. 134 Reporting companies that would be impacted by the proposed

rules would fall into three broad groups: (1) companies that would file a Form 10-S semiannual

report and choose not to voluntarily provide information for the first and third quarters; (2)

companies that would continue to file Form 10-Q quarterly reports; and (3) companies that

would file a Form 10-S semiannual report and choose to voluntarily provide information for the

first or third quarter or both. 135 For purposes of our analyses, we discuss these groups separately

and refer to the first group of issuers as semiannual reporters, the second group of issuers as

quarterly reporters, and the third group of issuers as hybrid reporters.

          Overall, the impact of the proposed rules would depend on the number and type of

reporting companies that decide to provide interim reports on a semiannual basis instead of a

quarterly basis and the extent to which those companies supplement with voluntary disclosure.

Because the decision to switch reporting frequency is voluntary and firm-specific, the aggregate

effects will reflect a range of company and investor preferences. While we are unable to quantify

the number of companies that would switch to semiannual reporting, we discuss factors that

likely would influence reporting frequency decisions in Section V.D.4 below.




134
      See supra note 61 and accompanying text for a discussion of quarterly earnings releases and the fact that there
      is no requirement that they be reviewed by an independent public accountant or prepared in accordance with
      U.S. GAAP, among other regulatory requirements that apply to quarterly reports filed with the Commission on
      Form 10-Q.
135
      There is a wide range of information that these issuers could choose to disclose voluntarily for the first or third
      quarter or both. The economic effects of the proposed rules would therefore vary based on the amount of
      information these issuers provide and the costs of producing this information. Specifically, both the benefits and
      costs for an issuer would generally be reduced as more information is voluntarily disclosed.

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--- page 68 ---

B. Broad Economic Considerations

          This section summarizes a number of broad economic considerations regarding the

frequency of periodic disclosures to provide context for the more detailed analysis of potential

outcomes and the associated economic costs and benefits that follow.

          The production of financial reports and disclosures on a periodic basis is a significant

undertaking by reporting companies, involving internal staff time as well as the use of external

service providers and requiring the attention of management. Additional voluntary efforts to

engage with investors on some or all of the content of the disclosures, such as through earnings

releases and conference calls, 136 may increase the burden of periodic reporting on company

resources and, in particular, on management time. Periodic disclosures may also affect a

company’s value by increasing proprietary costs of revealing information that has competitive

value to rival companies. 137 Reducing the frequency of periodic disclosures can, for some

companies, provide savings of time and cash flow for other purposes. For companies that face

financing constraints or limited managerial capacity, such savings may be directed to potentially

more productive uses, such as strategic planning or capital investments. In other cases, savings

may be returned to shareholders. A reduced burden of periodic disclosures on reporting issuers

could also be a positive factor in encouraging additional companies to raise capital through

registered securities offerings or to become or remain a public company. 138


136
      These disclosures generally exist because of the interim reports. While the proposed rules would not directly
      impact such voluntary disclosure, the proposed rules would have an indirect impact, at least to the extent that
      semiannual filers would forgo providing such voluntary disclosure for quarters for which they would no longer
      file interim reports.
137
      See, e.g., Robert E. Verrecchia, Discretionary Disclosure, 5 J. Acct. & Econ. 179 (1983) (showing,
      theoretically, how proprietary costs can result in a manager withholding information when disclosure is
      discretionary).
138
      Studies have found that costs associated with mandated reporting may affect companies’ going public decision
      as well as the decision to exit public markets. For example, there is some evidence of favorable effects of


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On the other hand, reducing the frequency of periodic disclosures may delay the public

disclosure of material information about a company. Such decreased transparency may make it

more difficult for investors to make well-informed decisions and may increase the expected

return (i.e., the cost of capital) that they demand for holding a company’s securities. In particular,

less frequent disclosures may result in a higher cost of capital if investors receive less precise

information about a company’s cash flows and how they covary with other companies’ cash

flows 139 and/or if there is an increased risk of information asymmetry across investors as a result


      emerging growth company accommodations on IPO activity, see, e.g., Michael Dambra et al., The JOBS Act
      and IPO Volume: Evidence that Disclosure Costs Affect the IPO Decision, 116 J. Fin. Econ. 121 (2015). There
      is also evidence suggesting that costs associated with the Sarbanes-Oxley Act regulations encouraged
      companies to exit U.S. public stock markets. See, e.g., Francesco Bova et al., The Sarbanes-Oxley Act and Exit
      Strategies of Private Firms, 31 Contemp. Acct. Rsch. 818 (2014) (finding that “SOX appears to have shifted the
      preferences of private firms from going public to exiting the private market via acquisition by a public
      acquirer”); Ellen Engel et al., The Sarbanes–Oxley Act and Firms’ Going-Private Decisions, 44 J. Acct. &
      Econ. 116 (2007) (finding that “the quarterly frequency of going-private transactions has increased after the
      passage of SOX”); Christian Leuz et al., Why do Firms Go Dark? Causes and Economic Consequences of
      Voluntary SEC Deregistrations, 45 J. Acct. & Econ. 181 (2008), (“document[ing] a spike in going dark that is
      largely attributable to the Sarbanes–Oxley Act. Firms experience large negative abnormal returns when going
      dark. We find that many firms go dark due to poor future prospects, distress and increased compliance costs
      after SOX”). While savings associated with the proposed amendments may be one factor in a company’s
      decision to go public (or to stay public), we also acknowledge that non-regulatory factors may play a more
      significant role in driving initial public offering activity. Some academic research has found that regulatory
      costs have likely played only a limited role in the decrease in the number of public companies in the U.S. after
      the 1990s. See, e.g., Michael Ewens et al., Regulatory Costs of Being Public: Evidence from Bunching
      Estimation, 153 J. Fin. Econ. 103775 (2024) (estimating that regulatory costs may explain about 7% of the
      decline in the likelihood of initial public offerings after 2000, and stating that non-regulatory factors, such as
      abundant private equity financing, changing economies of scale and scope, and changing acquisition behavior,
      are likely to have played a more important role); Xiaohui Gao et al., Where Have All the IPOs Gone? 48 J. Fin.
      & Quantitative Econ. 1663 (2013) (documenting various patterns in initial public offering activity, small firm
      profitability, mergers and acquisitions activity, and other trends that the authors find to be inconsistent with a
      regulatory costs explanation for the decline in initial public offerings after 2000 but consistent with increases in
      the importance of economies of scope over time).
139
      See, e.g., Richard Lambert et al., Accounting Information, Disclosure, and the Cost of Capital, 45 J. Acct. Rsch.
      385 (2007) (“Lambert et al. 2007 Study”) (finding that higher quality disclosures reduce investors’ assessed
      covariances of the firm’s cash flows with other firms’ cash flows, thereby reducing the proportion of non-
      diversifiable risk in these cash flows and, thereby, the firm’s cost of capital); Puneet Handa & Scott C. Linn,
      Arbitrage Pricing with Estimation Risk, 28 J. Fin. & Quantitative Analysis 81 (1993) (finding that assets for
      which a greater amount of information is available should, ceteris paribus, trade at higher prices, i.e., reflect a
      lower cost of capital, due to the reduction in estimation risk borne by investors); Xiaofei Zhao, Does
      Information Intensity Matter for Stock Returns? Evidence from Form 8-K Filings, 63 Mgmt. Sci. 1382 (2017)
      (finding that a greater frequency of current reports on Form 8-K is associated with a lower cost of capital and
      attributing this reduced return demanded by investors to reduced uncertainty). The Lambert et al. 2007 Study
      also identifies indirect effects on the cost of capital to the extent that the quality of disclosures affect decisions
      made by management, which in turn affect the distribution (and covariances) of the issuer’s cash flows.

                                                                 69

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of the increased time gaps between public disclosures. 140 A higher cost of capital, in turn, may

discourage companies from raising funds for new investments.

          It is unclear what frequency of periodic reporting would strike the best balance between

the potential benefits related to lower company reporting burdens and reduced disclosure of

competitive sensitive information on the one hand, and the potential costs related to a reduction

or delay of information to investors on the other hand, and such an optimal frequency may vary

across issuers. Fundamentally, in a discounted cash flow valuation framework, both the savings

from reduced reporting costs and potential productivity gains from reallocating managerial and

other resources would have a positive effect on an issuer’s valuation by increasing the expected

cash flows it is able to generate from its business and new investments. In contrast, any resulting

increase in the cost of capital would negatively affect the valuation by increasing the discount

factor that would apply to produce the total value investors are willing to place on those expected

cash flows today.

          Allowing issuers to choose their own frequency of interim reporting would mitigate some

of the risk of a suboptimal tradeoff between the opposing economic effects discussed above by

allowing individual issuers to weigh which effects are likely to dominate in their unique

situation. An issuer whose quarterly reports would not tend to reflect any material changes

beyond those already made public in current reports may determine that the costs of producing

quarterly reports would outweigh the benefit of providing these reports to investors and thus

choose to report semiannually. For example, commenters have noted that pre-revenue



140
      See, e.g., Douglas W. Diamond & Robert E. Verrecchia, Disclosure, Liquidity, and the Cost of Capital, 46 J.
      Fin. 1325 (1991); David Easley & Maureen O’Hara, Information and the Cost of Capital, 59 J. Fin. 1553
      (2004). These articles, however, also describe limited theoretical circumstances under which greater disclosure
      could lead to a higher cost of capital, such as in the case where public disclosures are so extensive that they
      reduce incentives for market making.

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biotechnology companies’ securities may trade more based on the outcome of clinical

developments and regulatory events than their quarterly financial reporting. 141 Conversely,

companies in other industries or with different investor bases may find that more frequent

reporting better serves their needs. Issuers can best estimate their own costs of more frequent

reporting and should be incentivized to evaluate the impact of more frequent reporting on

investors and other market participants. For instance, if investors demand more frequent interim

reporting and issuers fail to meet that demand, the issuers could experience negative market

effects such as higher cost of capital or lower liquidity. 142 Under the proposed optional

semiannual reporting approach, individual issuers would be able to make a more tailored trade-

off between the costs and the benefits of reporting frequency for interim reports, which they do

not have the ability to do under the current system of mandated quarterly reporting. Because

issuers are incentivized to consider how their frequency of interim reports would impact

investors, having the option to choose between quarterly reporting and semiannual reporting

could lead to a more optimal reporting frequency for both the issuers and investors.

          That said, there are various reasons why issuers may be likely to provide less disclosure

when given optionality in their reporting frequency than would be optimal for investors and the

market as a whole. For example, there is substantial literature discussing circumstances in which

the incentives of managers are not perfectly aligned with those of their shareholders. 143 There




141
      See supra note 53. See also letter from Davis Polk & Wardwell LLP (Mar. 21, 2019) (“Davis Polk 2019”).
142
      See supra notes 139 and 140 (all sources).
143
      See, e.g., Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs
      and Ownership Structure, 3 J. Fin. Econ. 305 (1976). More specifically, career concerns or certain
      compensation arrangements may incentivize managers to conceal bad news, particularly when facing limited
      litigation risk. See, e.g., S. P. Kothari, et al., Do Managers Withhold Bad News? 47 J. Acct. Rsch. 241 (2009);
      Iván Marinovic & Felipe Varas, No News is Good News: Voluntary Disclosure in the Face of Litigation, 47
      Rand J. Econ. 822 (2016).

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may also be numerous additional costs and benefits for investors and issuers associated with the

frequency of periodic reporting and also associated with any variation in this frequency across

issuers, many of which may not be fully accounted for by managers when making these tradeoffs

for a particular issuer.

          For example, researchers have found that longer gaps between issuer disclosures increase

information asymmetry between investors, because some investors are more able than others to

access or process information from alternative, often third-party, channels that provide indirect

insight into an issuer’s financial status or performance. 144 Recent advancements in alternative

data collection, surveillance, and data processing technologies may exacerbate such information

asymmetry. 145 Information asymmetry, in turn, is associated with reduced liquidity and increased

transactions costs for investors. 146 Widespread information asymmetry can also diminish

perceptions of fairness, which can erode trust in markets and reduce capital market

participation. 147 To the extent these potential negative externalities borne by market participants

from increased information asymmetry may not be fully internalized by individual companies


144
      See, e.g., Robert Stoumbos, The Growth of Information Asymmetry Between Earnings Announcements and Its
      Implications for Reporting Frequency, 69 Mgmt. Sci. 1901 (2023) (“Robert Stoumbos 2023”) (finding that
      information asymmetry grows steadily between earnings announcements, until a new earnings announcement
      causes it to fall, and that semiannual reporting is associated with greater information asymmetry than quarterly
      reporting in the second half of each semiannual period). For theoretical work in this area, see, e.g., Nils H.
      Hakansson, Interim Disclosure and Public Forecasts: An Economic Analysis and a Framework for Choice, 52
      Acct. Rev. 396 (1977) (“Hakansson 1977 Study”) and Baruch Lev, Toward a Theory of Equitable and Efficient
      Accounting Policy, 63 Acct. Rev. 1 (1988). See also 17 CFR 243.100 through 17 CFR 243.103 (Regulation FD)
      (generally prohibiting public companies from disclosing nonpublic, material information to selected parties
      unless the information is distributed to the public first or simultaneously).
145
      See, e.g., Zsolt Katona et al., On the Capital Market Consequences of Big Data: Evidence from Outer Space, 60
      J. Fin. & Quantitative Analysis 551 (2025) (“Katona et al. 2025 Study”) (studying the introduction of access to
      satellite imagery data for certain sophisticated investors and finding that such access led to increased
      information asymmetry and lower stock liquidity around the reports of retailers with satellite coverage).
146
      See, e.g., Lawrence R. Glosten & Paul R. Milgrom, Bid, Ask, and Transaction Prices in a Specialist Market
      with Heterogeneously Informed Investors, 14 J. Fin. Econ. 71 (1985). (As noted above, increased information
      asymmetry can also increase an issuer’s cost of capital.) See supra note 140 (discussing studies by Douglas W.
      Diamond & Robert E. Verrecchia and David Easley & Maureen O’Hara) and accompanying text.
147
      See, e.g., Luigi Guiso et al., Trusting the Stock Market, 63 J. Fin. 2557 (2008).

                                                                72

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when choosing semiannual reporting under the proposed amendments, it could result in less

disclosure than optimal for the market.

          Less frequent periodic disclosures may also result in securities prices that deviate for

longer periods of time from their issuers’ fundamental value. 148 Reduced information about an

issuer can result in deviations not only in the market prices of its own securities but also in the

prices of other issuers’ securities and other traded assets, given the interdependence of asset

valuations on the risk and return profiles of other investible assets. 149 Increasing the delay before

information is released thereby risks obscuring the attractiveness of investment opportunities and

impeding the direction of capital to its most productive uses. In effect, the delayed incorporation

of information into pricing can result in suboptimal investor portfolios and a misallocation of

capital at the market level. These pricing effects may also result in increased “jump” volatility

(given that prices may update by larger amounts under a less frequent periodic disclosure

schedule, rather than more incrementally across multiple shorter disclosure cycles) which may

reduce liquidity. 150 Less frequent financial reporting by an issuer may also reduce the efficiency

of production if managers of that issuer or of other issuers thereby have access to less data (i.e.,

less informative market prices and less frequent information from peer companies) on which to

base their operating and investing decisions. 151 The aforementioned negative effects on market


148
      See, e.g., Jeff L. McMullin et al., Increased Mandated Disclosure Frequency and Price Formation: Evidence
      from the 8-K Expansion Regulation, 24 Rev. Acct. Stud. 1 (2019).
149
      See, e.g., Lambert et al. 2007 Study.
150
      See letter from Alon Kalay (Mar. 18, 2019), available at https://www.sec.gov/comments/s7-26-18/s72618-
      5144730-183368.pdf (attaching revised copy of Dan Amiram, et al., The Information Environment, Volatility
      Structure, and Liquidity (Colum. Bus. Sch., Rsch. Paper No. 15-62, Feb. 21, 2019), available at
      https://ssrn.com/abstract=2618424 (retrieved from SSRN Elsevier database).
151
      See, e.g., Shane Heitzman & Mengjie Huang, Internal Information Quality and the Sensitivity of Investment to
      Market Prices and Accounting Profits, 36 Contemp. Acct. Rsch. 1699 (2019); Darren Bernard et al.,
      Information Flows Among Rivals and Corporate Investment, 136 J. Fin. Econ. 760 (2020); Brad Badertscher et
      al., Externalities of Public Firm Presence: Evidence from Private Firms’ Investment Decisions, 109 J. Fin.


                                                             73

--- page 74 ---

dynamics from less frequent reporting are additional examples of potential negative externalities

borne by market participants that may not be internalized by an individual issuer when choosing

its reporting frequency under the proposed amendments.

          These asymmetric information effects and market pricing and volatility effects may be

mitigated by the presence of alternative sources of information, 152 including private information

collection and analysis or by market discipline. Such mitigation is most likely in situations where

alternate data is available, significant incentives for private collection of such data are present,

and the market is efficient at incorporating such information into prices. 153 For example, with

large companies, investors may have abundant and lucrative opportunities for private data

collection and analysis, which creates opportunities to trade on the basis of the resulting

information, which may result in the incorporation of significant amounts of information into

these issuers’ security prices even in the absence of public disclosure. Even in such cases,

however, the extent of price discovery may be less complete than in the case of public




      Econ. 682 (2013); Thierry Foucault & Laurent Fresard, Learning from Peers’ Stock Prices and Corporate
      Investment, 111 J. Fin. Econ. 554 (2014).
152
      See, e.g., Dan Givoly & Dan Palmon, Timeliness of Annual Earnings Announcements: Some Empirical
      Evidence, 57 Acct. Rev. 486 (1982) (finding a reduction in the market reaction to annual earnings
      announcements when the reporting lag between the end of the period in question and the disclosure date is
      lengthy and suggesting this implies that the information in more lagged disclosures becomes partially available
      through other channels, including possible leaks or the disclosures of other issuers in the same industry).
153
      Under some circumstances, reduced public disclosures could increase the incentives for private information
      collection sufficiently that price discovery could even be improved rather than impaired. See, e.g., Itav
      Goldstein & Liyan Yang, Information Disclosure in Financial Markets, 9 Ann. Rev. Fin. Econ. 101 (2017),
      available at https://doi.org/10.1146/annurev-financial-110716-032355.

                                                              74

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disclosure 154 and the process of price discovery may be less efficient (e.g., because of the

resources directed towards information collection rather than other productive purposes). 155

          Less frequent periodic disclosures may also have implications for the ability of investors

and other market participants to hold corporate management accountable. For example, less

frequent disclosures may reduce the ability of investors and other market participants to monitor

the issuer and its management because they would receive less frequent signals about issuer

performance and managerial decision-making. Such a reduced frequency of information

revelation can delay investors from intervening when they are concerned with management’s

choices, whether through direct engagement with management or by making their views known

through their trading activity and thus market prices. 156 These delays can result in poor

management decisions compounding into bigger issues (e.g., poor investments, deficient

business strategies, or inefficient operations) before investors can react. Reduced disclosure also

could reduce the incentives of analysts to cover an issuer and thus reduce this source of scrutiny



154
      Private information collection may not fully replicate the information that the issuer could disclose publicly.
      See, e.g., Jack Hirshleifer, The Private and Social Value of Information and the Reward to Inventive Activity, 61
      Amer. Econ. Rev. 561 (1971) (demonstrating that relying on private, individual incentives to collect
      information can result in a level of information collection that diverges significantly from the optimal level of
      public information for the economy). Further, the availability of information to selected market participants and
      their strategic trading on the basis of that information does not guarantee that it is incorporated into prices in a
      timely manner. See, e.g., Katona et al. 2025 Study (studying the introduction of access to satellite imagery data
      for certain sophisticated investors and finding limited evidence of any acceleration of price discovery as a result
      of the availability of this data to select investors).
155
      See, e.g., Douglas W. Diamond, Optimal Release of Information by Firms, 40 J. Fin. 1071 (1985) (discussing
      the “savings of real resources which would be devoted to private information acquisition if public information
      were not released”); Hakansson 1977 Study (discussing the “social disutility of having a subset of investors
      forego ‘productive’ employment in favor of time-consuming but profitable private search for information”).
156
      See, e.g., Benedikt Downar et al., The Monitoring Effect of More Frequent Disclosure, 35 Contemp. Acct. Rsch.
      2058 (2018) (finding evidence consistent with the argument that more frequent disclosure provides shareholders
      with the opportunity for timelier monitoring and the ability to better constrain managers from misusing
      corporate resources); Frank Gigler et al., How Frequent Financial Reporting Can Cause Managerial Short-
      Termism: An Analysis of the Costs and Benefits of Increasing Reporting Frequency, 52 J. Acct. Rsch. 357
      (2014) (“Gigler et al. 2014 Study”) (showing, theoretically, that periodic disclosures enable market prices to
      impose discipline on the firm’s choices, thereby limiting the initiation of negative net present value projects,
      and that greater reporting frequency provides more effective discipline).

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and its associated benefits, 157 such as enhanced liquidity for the issuer’s securities. 158 To the

extent a reduced frequency of interim disclosure is accompanied by fewer interim reviews and

less interim testing by independent public accountants to support their annual financial statement

or integrated audit, the independent auditors may be slower to identify certain accounting

misstatements and deficiencies in internal control, which could negatively impact the timeliness

and reliability of the audited annual financial statements. 159 This impact could be more prevalent

for smaller reporting companies, particularly for those with fewer qualified accounting staff or

other resources available to them.

          Less frequent periodic disclosures may affect management incentives. If less frequent

disclosure reduces scrutiny of issuers as discussed above, then this could reduce potential

managerial incentives to overly focus on short-term outcomes to the detriment of long-term

performance. 160 Survey evidence has found that management feels pressure to meet short-term

earnings benchmarks, with a majority reporting a willingness to make corporate investment or

operating decisions that smooth earnings (i.e., reduce their volatility), even if such decisions




157
      See, e.g., Mark H. Lang & Russell J. Lundholm, Corporate Disclosure Policy and Analyst Behavior, 71 Acct.
      Rev. 467 (1996); Alexander Dyck, et al., Who Blows the Whistle on Corporate Fraud?, 65 J. Fin. 2213 (2010);
      Bryan Kelly & Alexander Ljungqvist, Testing Asymmetric-Information Asset Pricing Models, 25 Rev. Fin.
      Stud, 1366 (2012); Tao Chen, et al., Do Analysts Matter for Governance? Evidence from Natural Experiments,
      115 J. Fin. Econ. 383 (2015); François Derrien et al., The Real Effects of Financial Shocks: Evidence from
      Exogenous Changes in Analyst Coverage, 68 J. Fin. 1407 (2013); Jeong-Bon Kim et al., Analyst Coverage and
      Expected Crash Risk: Evidence from Exogenous Changes in Analyst Coverage, 94 Acct. Rev. 345 (2019).
158
      See, e.g., Darren. T. Roulstone, Analyst Following and Market Liquidity, 20 Contemp. Acct. Rsch. 552 (2003);
      Karthik Balakrishnan et al., Shaping Liquidity: On the Causal Effects of Voluntary Disclosure, 69 J. Fin. 2237
      (2014).
159
      See, e.g., Brant. E. Christensen et al., Archival Evidence on the Audit Process: Determinants and Consequences
      of Interim Effort, 38 Contemp. Acct. Rsch. 942 (2021).
160
      See, e.g., Gigler et al., 2014 Study (showing, theoretically, that more frequent reporting can increase the
      probability of inducing managerial short-termism).

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would reduce long-term value by a small amount. 161 Still, reductions in the reporting frequency

are less likely to affect decision-making regarding long-horizon outcomes, such as investment

decisions that are intended to generate profits five or ten years down the road. Further, other

factors may play a larger role in short-termism concerns than the periodic disclosure cycle, such

as executive compensation design or messaging to investors through, for example, earnings

guidance.

          Overall, the economic tradeoffs involved in the choice of interim disclosure frequency

are complex and difficult to measure, 162 and the ideal frequency may differ across companies and

industries. Allowing issuers the flexibility to report either semiannually or quarterly may help to

better balance certain issuer-specific benefits against the issuer-specific costs of interim

disclosure. The discussion above, however, identifies externalities borne by investors, other

issuers, and the economy resulting from interim disclosure frequency that an individual issuer is

unlikely to consider when selecting its own frequency of interim disclosure. 163 The existence of

flexibility in interim disclosure frequency may itself result in additional concerns. For example,

such flexibility may reduce the efficiency by which investors digest and use disclosures, because

issuers disclosing at different frequencies may complicate comparative evaluations and analyses.

The ability of an issuer to change its interim disclosure frequency in the future may also make it


161
      See, e.g., John R. Graham et al., The Economic Implications of Corporate Financial Reporting, 40 J. Acct. &
      Econ. 3 (2005) (finding, based on a survey of 400 executives, that managers place a great deal of importance on
      meeting earnings benchmarks, with 78% of the surveyed executives indicating a willingness to sacrifice at least
      a small amount of long-term value to smooth earnings).
162
      See, e.g., Christian Leuz & Peter D. Wysocki, The Economics of Disclosure and Financial Reporting
      Regulation: Evidence and Suggestions for Future Research, 54 J. Acct. Rsch. 525 (2016) (stating that
      researchers “generally lack evidence on market-wide effects and externalities from regulation, yet such
      evidence is central to the economic justification of regulation” and acknowledging that “the identification of
      such market-wide effects and externalities is even more difficult than the identification of direct economic
      consequences on individual firms”).
163
      See, e.g., Anat R. Admati & Paul Pfleiderer, Forcing Firms to Talk: Financial Disclosure Regulation and
      Externalities, 13 Rev. Fin. Stud. 479 (2000).

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difficult for issuers who select a more frequent disclosure frequency to credibly convey to the

market that they will continue to disclose at that frequency. This lack of a commitment device

could reduce the benefits of an issuer choosing greater transparency because of uncertainty about

their future transparency. That said, investor pressure and the development of market norms

could help to address some of these concerns.

          Ultimately, the costs and benefits of the proposed amendments will depend on how

issuers use the accorded flexibility, and the potential outcomes and their effects are explored in

depth in the more detailed sections that follow.

          C. Baseline

          The baseline against which the costs, benefits, and the effects on efficiency, competition,

and capital formation of the proposed amendments are measured consists of the current state of

the market, Form 10-Q filers’ current practices, and the current regulatory framework. 164

               1. Regulatory Baseline

                            a) Commission Regulations

Requirements for Quarterly and Transition Reporting

          Companies subject to Exchange Act Sections 13(a) and 15(d) must file periodic and other

reports in accordance with such rules and regulations as the Commission may prescribe as

necessary or appropriate in the public interest or for the protection of investors. 165 The




164
      See, e.g., Nasdaq v. SEC, 34 F.4th 1105, 1111–14 (D.C. Cir. 2022). This baseline approach also follows
      Commission staff guidance on economic analysis for rulemaking. See Current Guidance on Economic Analysis
      in SEC Rulemaking 6 (Mar. 16, 2012), available at
      https://www.sec.gov/divisions/riskfin/rsfi_guidance_econ_analy_secrulemaking.pdf (‘‘The economic
      consequences of proposed rules (potential costs and benefits including effects on efficiency, competition, and
      capital formation) should be measured against a baseline, which is the best assessment of how the world would
      look in the absence of the proposed action.’’); id. at 7 (‘‘The baseline includes both the economic attributes of
      the relevant market and the existing regulatory structure.’’).
165
      15 U.S.C. 78m(a), 78o(d).

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Commission has prescribed Form 10-Q for issuers to use for quarterly reports under Exchange

Act Sections 13 and 15(d), 166 and to use for certain transition and quarterly reports when they

change their fiscal closing dates. 167

          Pursuant to Regulation S-X, Form 10-Q must include interim financial statements

(inclusive of footnote disclosures) prepared in accordance with U.S. GAAP 168 and must be

reviewed by (but are not required to be audited by) an independent public accountant. 169 Parts I

and II of Form 10-Q require narrative disclosures regarding certain information, including

MD&A and market risk. 170 Form 10-Q must be filed with exhibits required under Item 601 of

Regulation S-K, 171 including certifications by principal executive and financial officers. 172

          Certain registrants have scaled reporting obligations. Smaller reporting companies, as

defined in Exchange Act Rule 12b-2, 173 can elect to apply the form and content requirements in

Article 8 of Regulation S-X and need not apply the form and content required by Regulation S-X

for other reporting companies with certain enumerated exceptions. 174 Smaller reporting

companies may omit reporting material changes from risk factors previously disclosed. 175



166
      17 CFR 240.13a-13; 17 CFR 240.15d-13; 17 CFR 249.308a(a).
167
      17 CFR 240.13a-10; 17 CFR 240.15d-10; 17 CFR 249.308a(b).
168
      As an exception, foreign private issuers that voluntarily file on domestic forms, including Form 10-Q, may
      include financial statements prepared in accordance with either IFRS (without reconciliation to U.S. GAAP) or
      home-country GAAP (with reconciliation to U.S. GAAP). See supra note 19.
169
      See Form 10-Q, Part I, Item 1; 17 CFR 210.8-03 and 10-01 (Regulation S-X Rules 8-03, 10-01).
170
      See Form 10-Q, Part I, Items 2 through 4; Part II, Items 1, 1A, 2, 3, 5(b), 5(c); 17 CFR 229.103; 17 CFR
      229.105; 17 CFR 229.303; 17 CFR 229.305; 17 CFR 229.307; 17 CFR 229.308(c); 17 CFR 229.407(c)(3); 17
      CFR 229.408(a); 17 CFR 229.701; supra Section II.
171
      See Form 10-Q, Part II, Item 6; 17 CFR 229.601 (Regulation S-K Item 601).
172
      See 17 CFR 240.13a-14; 17 CFR 240.15d-14; 17 CFR 229.601(b)(31) and (32) (Regulation S-K Items
      601(b)(31) and (32).
173
      17 CFR 240.12b-2.
174
      See Form 10-Q, Part I, Item 1; 17 CFR 210.8-01 through 210.8-08 (Article 8 of Regulation S-X).
175
      See Form 10-Q, Part II, Item 1A.

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Certain wholly-owned subsidiaries that do not have a history of material defaults may substitute

the MD&A analysis with a more streamlined analysis of the results of operations and may omit

reporting changes in securities, defaults on senior securities, and quantitative and qualitative

disclosures about market risk. 176

          Form 10-Q reports are filed electronically with the Commission through its EDGAR

system, 177 and reporting companies must structure certain portions of Form 10-Q, including the

financial statements and cover page information, in Inline XBRL. 178 The deadline for filing

Form 10-Q with the Commission is within 40 or 45 days after the end of a fiscal quarter,

depending on the filer status of the reporting company. 179

Age of Financial Statements Requirements

          Registrants are also subject to age of financial statements requirements, under which they

must update the financial statements provided in their registration and proxy statements. In

general, the most recent balance sheet in a registration or proxy statement must be as of a date no

more than 134 days for nonaccelerated filers (or 129 days for accelerated and large accelerated

filers) before the effective date of the registration statement (or date the proxy statement is

mailed). 180 The audited annual financial statements for the most recently completed fiscal year,

however, are not required to be included in a registration statement that goes effective (or proxy

statement that is mailed) no more than 45 days after the end of the most recently completed fiscal

year, provided interim financial statements as of the end of the third quarter of the most recently


176
      See Form 10-Q, General Instruction H; Form 10-Q, Part I, Items 2 and 3 and Part II, Items 2 and 3.
177
      See 17 CFR 232.101(a) (Regulation S-T Rule 101(a)).
178
      See 17 CFR 229.601(b)(101) and (104) (Regulation S-K Items 601(b)(101) and (104)); 17 CFR 232.405 and 17
      CFR 232.406 (Regulation S-T Rules 405 and 406).
179
      See Form 10-Q, General Instructions; 17 CFR 249.308a(a).
180
      17 CFR 210.3-12(a); 17 CFR 210.8-08.

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--- page 81 ---

completed fiscal year are included. 181 Further, if the registrant meets certain conditions, 182 then

those interim financial statements would be timely through the 59th day, 74th day, or 89th day

(depending on filer status) after the most recently completed fiscal year end. 183

Other Commission Rules and Information Collections

          Requirements for quarterly reporting on Form 10-Q are referenced in other Commission

rules and information collections. For example, registration statements on Form S-1 or S-3

require the issuer’s prospectus to describe material changes which have occurred since the end of

the latest fiscal year for which certified financial statements were included in the latest annual

report to security holders and which have not been described in a Form 10-Q or Form 8-K. 184

                            b) National Securities Exchanges and PCAOB Standards

          National securities exchanges and the PCAOB have rules and standards that incorporate

or otherwise reflect the requirement to file quarterly reports on Form 10-Q and would not be

amended by the proposed amendments. 185 The standards may affect entities’ incentives to

continue filing quarterly reports on Form 10-Q instead of semiannual reports on proposed Form

10-S.




181
      17 CFR 210.3-01(b); 17 CFR 210.8-08(a).
182
      See supra note 99 (describing the conditions in current rules which would be continued in the proposed rules
      but renumbered).
183
      17 CFR 210.3-12(b); 17 CFR 210.3-01(c); 17 CFR 210.8-08(b).
184
      Form S-1, Part I, Item 11A; Form S-3, Part I, Item 11(a).
185
      National securities exchanges establish and amend their listing standards by filing proposed rule changes,
      pursuant to Section 19(b) of the Exchange Act and Rule 19b-4 thereunder, for Commission review, and certain
      proposed rule changes must be approved by the Commission before they can go into effect. See Exchange Act
      Section 19(b), 15 U.S.C. 78s(b). The Commission’s approval is also required before the PCAOB may
      promulgate or amend a rule or standard. See Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 107(b), 15
      U.S.C. 7217(b).

                                                                  81

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The exchanges’ listing standards generally do not mandate a particular frequency of

interim reporting. 186 In some cases, however, the exchanges’ listing standards explicitly

reference Commission requirements for quarterly reporting on Form 10-Q, for example by

requiring listed companies to make quarterly reports available to shareholders prior to or as soon

as practicable after filing Form 10-Q or by subjecting listed companies to delinquency

procedures for filing Form 10-Q late. 187

          The regulatory baseline of the proposed amendments also includes PCAOB Auditing

Standard 4105, 188 which addresses the requirement in Regulation S-X Rules 10-01(d) 189 and 8-

03 190 for a registrant to engage an independent public accountant to review the registrant’s

interim financial statements before the registrant files its quarterly report on Form 10-Q. Under

PCAOB Auditing Standard 6101, less frequent periodic reviews performed in accordance with

Auditing Standard 4105 affect auditors’ ability to furnish comfort letters to underwriters

expressing negative assurance without performing additional interim reviews under AS 4105. 191




186
      See supra Section II.
187
      See supra note 34 (citing NYSE Listed Company Manual § 802.01ESEC) and note 35 (citing Nasdaq Stock
      Market Rule 5250(d)(3)(A)).
188
      See PCAOB Auditing Standard 4105, Reviews of Interim Financial Information, supra note 20, at ¶ .03.
189
      17 CFR 210.10-01(d).
190
      17 CFR 210.8-03.
191
      See PCAOB Auditing Standard 6101, Letters for Underwriters and Certain Other Requesting Parties, supra
      note 93, at ¶ .37 (“[w]hen the accountants have not conducted a review in accordance with AS 4105, the
      accountants may not comment in the form of negative assurance and are, therefore, limited to reporting
      procedures performed and findings obtained”); id. at ¶ .46 (permitting negative assurance “as to subsequent
      changes in specified financial statement items as of a date less than 135 days from the end of the most recent
      period for which the accountants have performed an audit or a review”). See also letters from BDO USA, LLC
      (Mar. 21, 2019) (“BDO 2019”); Marcum LLP (Mar. 21, 2019) (“Marcum 2019”).

                                                              82

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c) Other Federal Agency Regulations

          Other Federal agencies have incorporated Form 10-Q filing requirements into their own

regulatory requirements affecting discrete sectors of the economy. The proposed amendments

would not revise these other requirements.

          For example, the Federal Deposit Insurance Corporation (“FDIC”) requires State

nonmember banks and State savings associations with one or more classes of securities subject to

the registration provisions of Section 12(b) or 12(g) of the Exchange Act to file, with the FDIC,

“[t]he applicable forms for annual, quarterly, current, and other reports . . . codified in 17 CFR

part 249. . . . titled with the name of the FDIC instead of the SEC” (emphasis supplied). 192 The

Federal Housing Finance Administration requires a Federal housing enterprise to make certain

public disclosures “no later than 10 business days after an Enterprise files its corresponding

Annual Report on SEC Form 10-K at the end of a fiscal year or its corresponding Quarterly

Report on SEC Form 10-Q at the end of other calendar quarters.” 193 The Office of the

Comptroller of the Currency 194 will deem offers or sales of national bank or Federal savings

association issued nonconvertible debt to be in compliance with certain regulations if a number

of requirements are met, including that each purchaser receives an offering document that

contains, among other things, the national bank’s, the Federal savings association’s, or the

holding company’s (where the national bank or Federal savings association is a subsidiary of a

holding company with securities registered under the Exchange Act) Forms 10-K, 10-Q, and 8-K

filed under the Exchange Act.




192
      12 CFR 335.311(a).
193
      12 CFR 1240.62; 12 CFR 1240.205.
194
      12 CFR 16.6(a)(5).

                                                     83

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Outside of regulations specific to the financial services industry, the Department of

Commerce requires a firm petitioning for certification of eligibility for trade adjustment

assistance to submit information, including its most recent Forms 10-Q or 10-K, as appropriate,

for the entire period covered by the petition. 195 The Nuclear Regulatory Commission provides

that certain licensees and permit holders that submit Form 10-Q are not subject to other filing

requirements. 196

                            d) State Law

          Several states have adopted laws (statutes or administrative regulations) referring to Form

10-Q. In some cases, Form 10-Q is listed as one of a number of forms that must be submitted to

the state, if required to be filed with the Commission, 197 or the law requires submission of either

the 10-Q or substitute information. 198 In other cases, State laws permit entities to submit Form

10-Q to avoid other State financial reporting requirements, 199 or the timing of State law

requirements or exemptions is linked to the timing of entities’ Form 10-Q filings. 200 Other State




195
      13 CFR 315.7(b)(5).
196
      10 CFR 50.71(b); 10 CFR 72.80(b).
197
      See, e.g., 239 Mass. Code Regs. 239.04 (operator must maintain records of “any securities filings . . . including,
      but not limited to . . . forms S-1, 8-K, 10-Q, and 10-K, proxy or information statements and all registration
      statements”); 26 Del. Admin. Code § 1002D-3.0 (applicant for approval to issue securities must file most recent
      Form 10-K and 10-Q “if the applicant is required to make such filings by the Securities and Exchange
      Commission”).
198
      See, e.g., Va. Code Ann. § 56-539 (applicant for certificate of authority must provide Forms 10-K and 10-Q or
      “other financial information demonstrating . . . financial fitness”); Conn. Agencies Regs. § 16-47-2 (application
      must include most recent Forms 10-K and 10-Q “or comparable information if the applicant is not required to
      submit the identified document” to the Commission).
199
      See, e.g., N.H. Rev. Stat. § 361-A19 (retail sales finance company or retail seller may submit Form 10-Q and
      10-K “in lieu of” prescribed financial statements); Fla. Admin. Code r. 25-8.003 (public utility may provide,
      inter alia, financial statements and accompanying footnotes from most recent Form 10-Q “in lieu of” prescribed
      financial statements).
200
      See, e.g., Mo. Code Regs. Ann. tit. 15, § 30-54.220 (exemption from certain State securities law requirements
      where the issuer makes available quarterly reports “prior to or as soon as practicable following the company’s
      filing of its Form 10-Q with the SEC”).

                                                                84

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laws categorize entities based on the contents of their Form 10-Q filings, 201 affirmatively require

entities to submit Form 10-Q in connection with State approvals (or to submit the more recent of

Form 10-Q or 10-K), 202 or make the submission of Form 10-Q a condition for obtaining a

regulatory exemption or safe harbor. 203 These provisions of State law might affect reporting

companies’ incentives to continue filing quarterly reports on Form 10-Q instead of semiannual

reports on proposed Form 10-S. Over time, however, states may revise their corporate law

requirements to accommodate for semiannual reporting.

               2. Affected Parties

          The proposed amendments would directly affect Exchange Act reporting companies that

currently must file quarterly reports on Form 10-Q pursuant to Exchange Act Rule 13a-13 or

Exchange Act Rule 15d-13, 204 which excludes investment companies other than business

development companies and face-amount certificate companies, foreign private issuers filing

annual reports on Form 20-F or Form 40-F, and asset-backed issuers. 205 We estimate that 5,976

Exchange Act reporting companies, including 133 business development companies and 2 face-



201
      See, e.g., Del. Code Ann. tit. 30, § 1901 (for State law purposes, a “worldwide headquarters corporation” is one
      that has recorded the site of its principal executive office within the state on Form 10-Q).
202
      See, e.g., 30 Tex. Admin. Code § 305.50 (applicant for permit, if a publicly traded entity, shall submit “a copy
      of . . . Form 10-Q for the most recent quarter”); La. Admin. Code tit. 42, pt. III, § 2525 (shelf application based
      on a publicly traded company’s stock equity “as reported in its most recent report on Form 10-K or Form 10-Q”
      filed with the Commission); Nev. Gaming Reg. § 16.115 (application for approval of a continuous or delayed
      public offering based on stockholder’s equity as reported in entity’s “most recent report on Form 10-K or Form
      10-Q”); 02-031 Me. Code R. Ch. 730, § 8 (insurer must submit its “most recent Form 10-K (and Forms 10-Q
      since the date of the 10-K) and proxy statement” if registered with the Commission).
203
      See, e.g., Ga. Code Ann. § 7-1-1001 (exemption from mortgage lender licensing requirements based, in part, on
      market capitalization “disclosed in the most recent Form 10-Q” filed with the Commission); Tex. Admin. Code
      § 25.271 (safe harbor for certain investments where a holding company adheres to a covenant to file a quarterly
      report of aggregate investments “from the company’s most recent SEC form 10-Q”).
204
      We note that, because Exchange Act reporting companies are owned by investors, any effects on reporting
      companies as a result of the proposed amendments would ultimately accrue to investors.
205
      Besides current reporting companies, non-reporting companies that are planning or considering registered
      securities offerings and thereby would become Exchange Act reporting companies upon effectiveness of the
      registration statement would also be affected by the proposed amendments.

                                                                85

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amount certificate companies, filed on domestic forms during calendar year 2024 (“CY2024”)

and are required to file quarterly reports on Form 10-Q. 206 Affected parties also include

independent public accountants that review the financial statements in connection with quarterly

report filings; investors that use the information in the quarterly reports to inform investment

decisions; and other market participants and intermediaries (e.g., financial analysts, investment

advisers, underwriters, government agencies) that process and analyze quarterly reports to

produce research reports, ratings, or other datasets used by issuers or investors. The proposed

amendments could also affect other parties, such as companies who are competitors of Exchange

Act reporting companies currently required to file Form 10-Q. In addition, the proposed

amendments would directly affect filers of certain Securities Act and Exchange Act registration

statements as they would be required to check a box to indicate whether they have elected to file

semiannual reports. In CY 2024, we estimate that 933 Forms S-1 were filed, 1,574 Forms S-3

were filed, 193 Forms S-4 were filed, 13 Forms S-11 were filed, and 87 Forms 10 were filed. 207

          Among the affected Exchange Act reporting companies, we expect there is heterogeneity

in terms of both costs of and demand for quarterly financial information due to, for example,

differences in regulatory environment, exchange listing status, industry, or other company

characteristics. For example, if there is a significant fixed cost component of quarterly reporting




206
      This number of registrants is estimated as the number of unique registrants, identified by Central Index Key
      (CIK), that filed a Form 10-K, or an amendment thereto during calendar year 2024, which we see as an
      appropriate estimate of the companies with ongoing reporting duties that would be required to file interim
      reports on either Form 10-Q or the proposed Form 10-S. We recognize that registrants that have filed effective
      registration statements but not yet filed a Form 10-K would also have interim reporting duties and that
      registrants that have deregistered following their Form 10-K filing would cease to have interim reporting duties,
      but, because the inflow and outflow of companies with reporting duties is a continuous process, we view the
      number of companies that have filed a 10-K as a reasonable estimate of the number of companies that would be
      affected by the proposed amendments.
207
      Estimates are based on the number of unique registered offerings filed on EDGAR in CY 2024.

                                                               86

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costs, smaller companies, such as smaller reporting companies, 208 may face a disproportionate

compliance burden compared to larger companies. On the other hand, due to the smaller size of

operations, smaller companies may face lower costs associated with gathering, processing,

verifying, and integrating information from across their operations as compared to the costs for

larger companies. Smaller reporting companies can also take advantage of certain scaled

disclosure requirements when filing Form 10-Q, which incrementally could reduce the costs of

Form 10-Q reporting for smaller reporting companies compared to other reporting companies. 209

          Because of differences in regulation and other market characteristics (such as investor

composition), Exchange Act reporting companies that are listed on a national securities exchange

may be differentially affected compared to reporting companies whose securities trade only over-

the-counter (or, in some cases, are not traded at all). For example, exchange-listed companies are

likely to have more widespread professionally managed fund ownership and greater coverage by

financial analysts, and, as result, may face greater demand by financial professionals for the

quarterly information currently provided in Form 10-Q, even though the proposal would permit

these companies to elect to report semiannually on Form 10-S. 210 We estimate that around 4,300

(72%) of the CY2024 Exchange Act reporting companies had securities listed on either Nasdaq


208
      We estimate that 2,933 (49.1%) of the CY2024 Exchange Act reporting companies required to file quarterly
      reports are smaller reporting companies. This estimate is based on reporting companies’ self-reported smaller
      reporting company status on the cover pages of their CY2024 annual filings. There were five reporting
      companies for which there was not sufficient information provided on the cover page of their CY2024 annual
      filings to determine their smaller reporting company status.
209
      See supra notes 174 and 175 and associated text.
210
      Consistent with demand among institutional asset managers and analysts for the information disclosed in Form
      10-Q, even in the presence of earning releases, a 2019 CFA Institute survey of its global membership found that
      50% of respondents (N=705) strongly agreed or agreed that “quarterly reports are more important to investors
      than earnings releases” (while 37% strongly disagreed or disagreed and 13% had no opinion) and 91% of
      respondents strongly agreed or agreed that “quarterly reports are important to investors because they include
      incremental financial statement disclosures and management discussion and analysis.” See Mohini Singh &
      Sandra Peters, The Case for Quarterly and Environmental, Social, and Governance Reporting (2019) (“2019
      CFA Survey”), available at https://rpc.cfainstitute.org/sites/default/files/-/media/documents/survey/financial-
      reporting-quarterly-and-esg-2019.pdf.

                                                              87

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or NYSE exchanges. In addition, current Nasdaq and NYSE listing standards explicitly reference

quarterly financial reporting. 211

          Currently, a company raising external capital in a securities offering (whether registered

or exempt) may face demand for quarterly financial information from underwriters and other

requesting parties. 212 Underwriters or other requesting parties also frequently request a comfort

letter from an independent public accountant prior to offers or sales of securities. 213 Under

current PCAOB standards, the independent public accountant is required to have performed an

audit or interim review in order to provide negative assurance in the comfort letter regarding the

interim financial information, and the independent public accountant can only provide negative

assurance level of comfort on other subsequent period information that is as of a date less than

135 days from the end of the most recent period audited or reviewed. 214 Given this practice, even

if only semiannual reporting is required, depending on the timing of the offering during the fiscal

year, an underwriter may request a review of more recent interim financial statements than those

included in the last semiannual or annual report in order to obtain negative assurance comfort in

a timely manner (or delay the offering until negative assurance can be obtained from the next set




211
      See supra section V.C.1. We estimate that more than 1,750 (29%) of the CY2024 Exchange Act reporting
      companies had securities listed on NYSE. Some of these companies may decide not to switch to semiannual
      reporting under the proposed amendments until NYSE makes conforming changes to its listing standards by
      filing a proposed rule change, pursuant to Section 19(b) of the Exchange Act and Rule 19b-4 thereunder, for
      Commission review.
212
      See, e.g., letter from New York City Bar (Apr. 10, 2019) (“NY Bar 2019”) ( “[W]e suspect that investors would
      continue to demand quarterly reporting, even if the Commission’s rules allowed for semi-annual reporting. We
      note by way of analogy that the Rule 144A debt markets generally require quarterly financial reporting as a
      contractual matter, even though many debt issuers are not subject to the periodic reporting requirements of the
      Securities Exchange Act of 1934, as amended.”).
213
      See supra note 90 for a description of such “comfort letters.”
214
      See supra note 191 and associated text.

                                                                88

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of financial statements scheduled to be filed under the periodic reporting requirements). 215 Thus,

companies needing to raise external capital in a securities offering may have incentives to

continue to file Form 10-Q under the proposed amendments to meet underwriting process

demands, as discussed in more detail below.

          In addition, companies issuing notes or bonds or raising other types of debt may face a

contractual demand for quarterly financial information during the lifetime of the bond or loan, 216

and such demand may persist also under the proposed amendments. Syndicated loans almost

invariably include loan covenants based on financial information and may require firms to

submit Commission filings to the lenders. Recent evidence suggests that financial information is

becoming more informative to debt markets. Specifically, one study finds that financial numbers

(e.g., earnings, liabilities, etc.) are increasingly capable of predicting bond valuation and returns,

and concludes that this greater association implies greater relevance of financial disclosures for

lenders in recent years. 217 Some studies, however, have found that lender reliance on financial

information declines when the quality of information declines, and, when this happens, debt

contract design shifts to rely on other sources of risk mitigation, such as external credit ratings

over which managers have less direct control. 218 Thus, reporting companies with significant debt




215
      See, e.g., letters from Grant Thornton LLP (Mar. 15, 2019); PriceWaterhouseCoopers LLP (Mar. 18, 2019);
      Center for Audit Quality (Mar. 20, 2019); Crowe LLP (Mar. 20, 2019) (“Crowe 2019”); BDO 2019; Marcum
      2019; KPMG LLP (Mar. 21. 2019) (“KPMG 2019”).
216
      See, e.g., letter from CIT Group Inc. (Mar. 21, 2019) (stating, “In our view, benefits of quarterly reporting in
      comparison to semi-annual reporting include:…(iii) the provision of financial data for quarterly updates
      required by certain private and public debt facility agreements.”).
217
      See, e.g., Dan Givoly et al., The Changing Relevance of Accounting Information to Debt Holders over Time, 22
      Rev. Acct. Stud. 64 (2017) (finding R2 values of accounting based bond valuation models increase significantly
      from 1975 through 2013, and that this increase in association is likely related to accounting standards becoming
      more conservative and shifting towards more fair value emphasis on the balance sheet).
218
      See, e.g., Anna M. Costello & Regina Wittenberg-Moerman, The Impact of Financial Reporting Quality on
      Debt Contracting: Evidence from Internal Control Weakness Reports, 49 J. Acct. Rsch. 97 (2011).

                                                                89

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financing needs may have incentives to provide quarterly financial statements, even if not

mandated under the Exchange Act.

          As discussed above, other Federal agency regulations or State laws may reduce the

incentives to switch to semiannual reporting under the proposed amendments for companies for

which those specific provisions are applicable unless conforming changes are made. 219 For

example, we estimate that 143 CY2024 Exchange Act reporting companies are national banks or

Federal savings institutions chartered and regulated by the Office of the Comptroller of the

Currency (“OCC”), 220 and, therefore OCC regulations that deem certain information to be

provided when Form 10-Q filings are included in offering documents in connection with sales of

non-convertible debt are relevant to these firms. 221

          In addition, Exchange Act reporting companies in different industries could be

differentially affected by the proposed amendments due to differences in industry characteristics

that may affect the propensity to continue to provide disclosures of quarterly financial

information on Form 10-Q. For example, commenters have noted that pre-revenue biotechnology

companies’ securities may trade more based on the outcome of clinical developments and

regulatory events than their quarterly financial reporting. 222 Conversely, companies in other

industries or with different investor bases may find that more frequent reporting better serves

their needs.




219
      See supra Section V.C.1.
220
      This estimation is based on the reporting companies’ self-reported SIC codes provided in their annual filings,
      i.e., whether they report having SIC codes of 6021 (National Commercial Banks) or 6035 (Savings Institution,
      Federally Chartered).
221
      See supra note 194 and associated text.
222
      See supra note 141.

                                                              90

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3. Compliance Costs of Form 10-Q Requirement

          Commenters have highlighted several categories of costs of complying with the current

Form 10-Q requirement, such as: (1) overall internal resources expended on interim report

preparation (including time spent by employees and board members and employment of

dedicated staff for reporting), 223 (2) specific timing issues and burdens of closing the accounting

books for the period, 224 (3) legal counsel fees, 225 (4) external accounting advice fees, 226 (5)




223
      See, e.g., letters from Arthur Gallagher & Co. (Mar. 14, 2019) (“the most significant cost, which is more
      difficult to quantify, is the time and effort expended by our colleagues, management team, and Board
      members.”); Society for Corporate Governance (Apr. 19, 2019) (“Society for Corporate Governance 2019”)
      (member survey responses to a question asking how quarterly reporting may be burdensome or complex said:
      (1) “Each quarter, the quarterly earnings process consumes a significant amount of our company’s legal and
      accounting resources.”; (2) “It takes a large team of accountants a long time to put together all the financial
      statements, notes, MD&A…”; (3) “Time consuming; involving lots of companies/functions/departments.”; (4)
      “Finance team takes several weeks to draft and finalize the 10Q, facilitate auditors’ review, circulate draft to
      Audit Committee, etc.”; (5) “Requires significant manhours and coordination amongst various internal groups
      (segment finance, corporate finance, tax, legal, [investor relations]).”; (6) “Requires a dedicated team of five
      full time employees, plus an internal review team of eight employees, plus the review time of the Disclosure
      Committee (13 employees).”; (7) “Substantial data collection and analysis requires headcount that is not
      productive (doesn’t add to revenues and represents cost without concomitant value)”); U.S. Chamber of
      Commerce Center for Capital Markets Competitiveness (Mar. 21, 2019) (“Chamber of Commerce 2019”)
      (“Assembling a Form 10-Q is an arduous task, even at the largest public companies. Time and attention of
      senior management and the board of directors that could be devoted to other pursuits are instead diverted to the
      preparation and review of the filing.”).
224
      See, e.g., Society for Corporate Governance 2019 (member survey responses to a question asking how quarterly
      reporting may be burdensome or complex said: (1) “Struggles of very short period to close books to produce the
      information to report both earnings and file 10-Q”; (2) “Consumes a large amount of resources to close
      books…”; (3) “Constant pressure to promptly close books to prepare the releases and 10-Q”).
225
      See, e.g., letters from Biotechnology Innovation Organization (Mar. 21, 2019) (“Biotechnology Innovation
      2019”); James Angel (Mar. 22, 2019); Society for Corporate Governance 2019.
226
      See, e.g., Biotechnology Innovation 2019 (quarterly reporting costs include “external consulting assistance on
      technical accounting matters”).

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auditor review fees, 227 (6) costs for XBRL data tagging, 228 and (7) distraction and opportunity

costs (i.e., valuable actions forgone because of time and money spent on interim reports). 229

          Commenters have also provided specific cost estimates. In particular, one stock exchange

provided cost estimates from a survey of a sample of listed companies as of March 2019. 230 In

terms of time spent by the survey respondents’ employees on complying with quarterly reporting



227
      See, e.g., letters from Biotechnology Innovation 2019 (quarterly reporting costs include “significant costs for
      external legal and independent auditor reviews”); Pacira Pharmaceuticals, Inc. (Mar. 18, 2019) (“Pacira
      Pharmaceuticals 2019”) (noting that auditor review costs include “significant supporting documentation
      required by the PCAOB and in turn by our auditors” and that there are “significant costs for the review of the
      10‐Q by the Company’s independent accounting firm on a quarterly basis”); Society for Corporate Governance
      2019.
228
      Letters from Biotechnology Innovation 2019 (“XBRL data is little-used by biotech investors, yet the costs of
      preparing the data remain significant for smaller registrants. Thus, the cost of XBRL requirements are high for
      small and emerging biotech companies, while the benefits are low for investors.”); Chamber of Commerce 2019
      (suggesting the Commission should “reevaluate the entities it requires to report using eXtensible Business
      Reporting Language (XBRL),” noting that “the cost-benefit of this requirement hasn’t been fully realized,
      particularly for smaller and newly public companies who bear the reporting burden in this technical format
      more disproportionately,” and noting that burdens associated with XBRL include “cost, personnel, additional
      liability, and increased time and documentation to conduct extensive reviews” before submitting filings);
      Nasdaq 2019; SIFMA (Mar. 21, 2019) (“SIFMA 2019”) (suggesting that “the Commission should eliminate its
      XBRL requirements, including its recently adopted Inline XBRL [iXBRL] requirements” and noting that “we
      do not believe that iXBRL sufficiently addresses concerns that the time and expense of preparing XBRL data
      may outweigh its benefit to investors”).
229
      See, e.g., letters from Ball Corporation (Feb. 25, 2019) (“The cycle of preparing quarterly 10-Q
      filings…distracts management from activities that would generate returns for investors.”); Biotechnology
      Innovation 2019 (“Investors, companies, and other market participants would benefit from management teams
      and company personnel to focus their attention on strategic efforts to grow the business rather than
      administering frequent reporting obligations. In addition, companies would incur reduced costs in preparing and
      obtaining legal and auditor review of those quarterly filings, which would enable them to repurpose funds into
      other strategic investments to grow the company and improve outcomes for investors.”); Chamber of
      Commerce 2019 (“Semi-annual reporting would afford more time for the organization, especially its financial
      and management teams, to spend on value adding activities and projects.”); Pacira Pharmaceuticals 2019
      (discussing that the costs of preparing interim financial statements and of auditor review are “both a financial
      cost and an opportunity cost in the time and dollars which could be directed towards other value‐added
      activities.”); Society for Corporate Governance 2019 (member survey responses to a question asking how
      quarterly reporting may be burdensome or complex said: (1) “The quarterly close/filing process requires the
      attention/focus on too many employees. It makes it difficult to do any other transaction during the same
      period.”; (2) “Imposition [on] Board of Directors who could otherwise use the time to support company’s
      strategic development”; (3) “Management focus / distraction from running the business”; (4) “Time consuming,
      diverts time from management of operations and strategy planning and execution.”).
230
      See study provided in Nasdaq 2019. The study is based on responses from a sample of up to 187 companies (the
      number or respondents varied across questions) that responded to the commenter’s solicitation of feedback on
      topics relating to the quarterly disclosure process. The study did not provide any characteristics of the
      companies that provided survey responses.

                                                              92

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requirements each quarter, the survey results indicated an average of 853 hours and median of

300 hours spent, with a maximum of 20,000 hours spent. 231

          In terms of monetary costs, the survey results indicated average monetary compliance

costs (direct and indirect costs) each quarter of $334,698 and median of $75,000, with a

maximum cost of $7,000,000. 232 Adjusting these cost estimates for inflation would be equivalent

to average (median) costs of approximately $426,700 ($95,600) and the maximum cost reported

would be approximately $8,923,500, as of December 2025. 233 The survey also provided

monetary cost estimates specifically for XBRL data tagging. The survey respondents reported

average (median) XBRL tagging costs of $20,412 ($7,500), with a maximum reported cost of

$350,000, as of March 2019. Adjusted for inflation the average (median) reported XBRL tagging

cost would be approximately $26,000 ($9,600) and the maximum reported cost would be

approximately $446,200, as of December 2025. 234




231
      See Nasdaq 2019 (responses by 164 listed companies to a question “approximately how many hours would you
      estimate your employees spend each quarter in total to comply with quarterly reporting requirements”). See also
      letters from Daktronics (March 19, 2019) (“Daktronics 2019”) (“Daktronics expends over 1,000 hours…per
      quarter complying with quarterly 10-Q requirements.” (emphasis omitted)); Arthur Gallagher 2019 (“Every
      three months, our company spends thousands of hours gathering, analyzing, and preparing information for our
      mandatory periodic disclosures.”).
232
      See Nasdaq 2019 (estimates based on responses by 151 listed companies to a question “approximately how
      much money (direct and indirect costs) do you estimate your company spends each quarter to comply with
      quarterly reporting requirements (i.e. outside counsel, vendors, etc.)”). See also Daktronics 2019 (“Daktronics
      expends…approximately $100,000 dollars per quarter complying with quarterly 10-Q requirements.” (emphasis
      omitted)).
233
      We adjust the estimates for inflation by inflating the originally reported estimates by the proportional increase
      in the Consumer Price Index for All Urban Consumers from March 2019 (the month of release of the NASDAQ
      survey) through December 2025 (the latest available data point at the time of this calculation). The Consumer
      Price Index for All Urban Consumers is the statistical metric developed by the Bureau of Labor Statistics of the
      Department of Labor to monitor the change in the price of a set list of products. This index represents changes
      in prices of all goods and services purchased for consumption by urban households. See U.S. Bureau Lab. Stat.,
      Consumer Price Index (Feb. 9, 2026), available at https://www.bls.gov/cpi. The actual change in the
      compliance costs over this time period may be different and these inflation adjusted estimates are provided
      solely for illustrative purposes.
234
      See supra note 233.

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To our knowledge, there are no readily available estimates of the incremental cost of the

mandated auditor review of Form 10-Q. 235 One academic study, however, using data from

Canada, where auditor review of interim financial statements of public companies is voluntary,

compared total disclosed annual audit fees between companies providing quarterly reviews and

those that did not, and estimated that audit fees were 18 percent higher for firms with interim

reviews, controlling for the decision to purchase interim reviews and for variables associated

with annual audit fees. 236 Taking this finding at face value, that difference implies that each

quarterly review on average cost 6% (18% divided over three quarters) of the cost of the annual

audit, which means a company on average could potentially save a monetary amount equivalent

to 12% of the cost of the annual audit by switching to semiannual reporting. Such cost savings

would be reduced to the extent that review costs for fiscal quarters one and three would transfer

to the semiannual review or annual audit.

               4. Earnings Release Practices and Prevalence

          Exchange Act reporting companies required to file Form 10-Q may also voluntarily

communicate certain quarterly financial results through earnings releases. Many academic




235
      In connection with the solicitation of proxies related to the election of directors and the election, approval or
      ratification of a registrant’s accountant, a registrant’s proxy statement must include, among other things, the
      disclosure of the “aggregate fees” billed for each of the last two fiscal years for the audit of the registrant’s
      financial statements and the review of interim financial statements included in Form 10-Q (or services that are
      normally provided in connection with statutory and regulatory filings). See Schedule 14A, Item 9(e)(1). There is
      no requirement to separately disclose the fees billed for the review of the interim financial statements. The fees
      related to the review of interim financial statements included in Form 10-Q typically do not make up a
      significant portion of a registrant’s total audit fees, however, there may be some variation in proportion
      depending upon the size of the registrant.
236
      See Jean Bédard & Lucie Courteau, Benefits and Costs of Auditor’s Assurance: Evidence from the Review of
      Quarterly Financial Statements 32 Contemp. Acct. Rsch. 308 (2015). See also Keren Bar-Hava, Switching to
      Semi-annual Financial Statement Reports - Market Reaction, Audit Fee and Corporate Governance Quality, 9
      J. Fin. & Acct. 249 (2021), available at https://doi.org/10.11648/j.jfa.20210906.15 (finding a significant
      decrease of 19.8% in the number of external auditing hours and a significant decrease of 16% in the annual
      external total audit fee for small cap firms publicly traded on the Tel-Aviv stock exchange that switched to
      semiannual reporting following a rule change allowing a switch from quarterly to semiannual reporting).

                                                               94

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studies have found that markets react strongly to the information released in these voluntary

disclosures, even more so when the releases also contain other information such as managerial

forecasts or guidance, or when accompanied by an earnings related conference call. 237 Some

studies have compared the market responses around earnings releases with those around the

filing of the associated interim reports for the same period, finding that markets generally react to

the information when it is first disclosed, but less so when it is subsequently repeated. 238 For

example, there might be a significant reaction to news in the earnings release but not to the Form

10-Q filed a week later, even though they both reflect the same financial information. As

discussed in more detail in Section II above, current Item 2.02 of Form 8-K requires earnings

releases to be furnished to the Commission under the cover of Form 8-K.

          Table 1 below shows statistics on the frequency of such earnings releases associated with

Form 10-Q and Form 10-K filings for the sub-sample of CY2024 Exchange Act reporting

companies that had a complete set of quarterly filings for their latest reported fiscal year in



237
      See, e.g., Linda Smith Bamber, Unexpected Earnings, Firm Size, and Trading Volume around Quarterly
      Earnings Announcements, 62 Acct. Rev. 510 (1987) (finding that significant abnormal trading volume around
      quarterly earnings announcements is positively related to the magnitude of unexpected earnings, implying
      markets react to the novel financial information disclosed); Wayne Landsman & Edward Maydew, Has the
      Information Content of Quarterly Earnings Announcements Declined in the Past Three Decades? 40 J. Acct.
      Rsch. 797 (2002) (finding that information content in quarterly earnings announcements, as measured by both
      abnormal trading volume and return volatility, has increased over the latter half of the 20th century); William H.
      Beaver et al., Increased Market Response to Earnings Announcements in the 21st Century: An Empirical
      Investigation, 69 J. Acct. & Econ. 101244 (2020) (finding that market responses to earnings announcements
      have increased over the 2001 to 2016 period, and attributing this to the concomitant increase in the practice of
      firms including management guidance, analyst forecasts, and disaggregated financial statement line items with
      their announcements); Dawn Matsumoto et al., What Makes Conference Calls Useful? The Information Content
      of Managers’ Presentations and Analysts’ Discussion Sessions, 86 Acct. Rev. 1383 (2011) (finding that markets
      react to the increasingly common practice of firms hosting a conference call in conjunction with their earnings
      announcement, and that both the prepared remarks and Q&A sections of such calls contain novel information to
      which markets respond).
238
      See, e.g., Edward Xuejun Li & K. Ramesh, Market Reaction Surrounding the Filing of Periodic SEC Reports,
      84 Acct. Rev. 1171 (2009) (“Edward Xuejun Li & K. Ramesh 2009”) (finding that markets do not significantly
      react to Form 10-Q filings when those filings are preceded by an earnings release, implying that earnings
      releases convey sufficient information to markets such that there is no average remaining reaction when the
      interim report is filed later).

                                                               95

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CY2024 (i.e., those who filed a Form 10-Q for the first through third fiscal quarters prior to their

CY2024 10-K filing). As shown in Table 1, reporting companies issue earnings releases in

association with almost three quarters of all quarterly or annual reports. The data also shows that

there is not a significant difference in propensity to issue earnings releases across quarters.

Comparing smaller reporting companies to other (larger) reporting companies, Table 1 shows

that smaller reporting companies issue earnings releases in conjunction with around 56% of

Form 10-Q filings, whereas other (larger) reporting companies’ issue earnings releases in

conjunction with over 90% of their Form 10-Q filings. This difference may indicate that there is

less demand from investors for these voluntary earnings releases for smaller companies. It could

also indicate that smaller reporting companies face greater costs of such disclosures compared to

their larger peers.

Table 1: Frequency of Earnings Releases Around Filings of Quarterly and Annual
Reports 239
                                                           Smaller Reporting        Other (Larger) Reporting
                        All Reporting Companies              Companies                     Companies
                                   Percentage of                  Percentage of               Percentage of
                       Number      Filings with an   Number      Filings with an   Number     Filings with an
                          of         Associated         of         Associated         of        Associated
                       Filings   Earnings Release    Filings    Earnings Release   Filings   Earnings Release
 All quarters           21,820        74.55%          10,680        56.00%         11,140        92.33%
 1st Fiscal Quarter     5,455         74.65%          2,670         56.25%         2,785         92.28%
 2nd Fiscal Quarter     5,455         74.65%          2,670         56.18%         2,785         92.35%
 3rd Fiscal Quarter     5,455         74.87%          2,670         56.59%         2,785         92.39%
 4th Fiscal Quarter     5,455         74.04%          2,670         54.98%         2,785         92.32%
 (Annual Report)




              5. Empirical Evidence on the Informational Value of Form 10-Q Disclosures

          The informational value of quarterly filings has been broadly studied, with results

generally suggesting that the quantitative financial information and qualitative descriptive


239
      The data on earnings releases comes from Calcbench.

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information contained in Form 10-Q filings are both informative but are often preceded by other

disclosures, such as earnings releases. Earnings releases will vary in how much information they

contain relative to Form 10-Q filings. Further, earnings releases do not always reflect

information in the same manner as quarterly filings, for example, by conveying the information

in a more optimistic tone. 240 Consequently, assessing the informational role that quarterly filings

provide requires differentiating between the types and timing of information contained therein.

          Quarterly filings have been found to provide markets with novel information in certain

circumstances. For example, studies find that investors react strongly to abnormally high levels

of “discretionary” accruals in quarterly financial information, to firms updating their quarterly

disclosure of risk factors, and to quarterly reports that contain specific financial information

(e.g., a specific GAAP measure) that is not included in their associated earnings release. 241

Together, this suggests that whether quarterly filings are perceived by markets to contain novel

information likely depends on the specific firms’ facts and circumstances.




240
      See Angela K. Davis & Isho Tama-Sweet, Managers’ Use of Language Across Alternative Disclosure Outlets:
      Earnings Press Releases Versus MD&A, 29 Contemp. Acct. Rsch. 804 (2012).
241
      See, e.g., Steven Balsam et al., Accruals Management, Investor Sophistication, and Equity Valuation: Evidence
      from 10-Q Filings, 40 J. Acct. Rsch. 987 (2002) (finding that firms with higher levels of unexpected
      discretionary accruals, calculated from Form 10-Q financial information, experience lower abnormal stock
      returns, implying that markets react to the novel information in those filings); Joshua J. Filzen, The Information
      Content of Risk Factor Disclosures in Quarterly Reports, 29 Acct. Horizons 887 (2015) (finding firms that
      update the set of risk factors disclosed in their Form 10-Q filings experience lower abnormal stock returns when
      forms are filed, implying that markets react to the novel information in those filings); Raluca Chiorean et al.,
      Investor Reaction to Information Generated Over the Reporting Cycle (Dec. 8, 2025), available at
      https://ssrn.com/abstract=5885082 (retrieved from SSRN Elsevier database) (finding that firms with more
      significant changes to the text of their Form 10-Q filings experience lower stock returns both around the time of
      the filing and over the subsequent quarter. The study concludes that Form 10-Q filings “convey valuable
      information…yet investors often ignore it.”); Yifan Li et al., Opportunity Knocks But Once: Delayed Disclosure
      of Financial Items in Earnings Announcements and Neglect of Earnings News, 25 Rev. Acct. Stud. 159 (2020)
      (finding that firms with proportionately more financial statement items disclosed in Form 10-Q filings that are
      not also disclosed in a separate earnings announcement have relatively larger market reactions to the filings of
      those forms compared to the reaction of those earnings announcements). We view the Yifan Li et al. findings as
      implying that markets are reacting to the financial information when it is learned, whether that be in an earnings
      announcement or a Form 10-Q filing.

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Most of these studies find that the filing of quarterly reports is on average associated with

a significant market return, which suggests that the market is reacting, on average, to novel

information in the filing. Given the common firm practice of reporting earnings separately, in

many cases before the quarterly report is filed, one study, however, cautions against drawing

conclusions about the information in the quarterly report broadly without separating out specific

financial information disclosed in earnings announcements. 242 This study finds that markets only

react to filed quarterly reports when no earnings announcement is disclosed previously. This

suggests that the average market response to quarterly report filings that studies have observed

may be primarily a reaction to the first disclosure of financial information (typically the primary

content of earnings announcements) rather than a reaction to the totality of the information that a

quarterly report comprises, both quantitative and qualitative. Overall, this evidence suggests that,

on average, quarterly filings may not provide markets with novel information, except to the

extent they are the first report of financial performance.

              6. Empirical Evidence on Interim Reporting Frequency

          The evidence on the informational value of Form 10-Qs and associated earnings releases

we discussed in the previous sections does not directly speak to the issue of what reporting

frequency would be optimal for investors and companies. Even if Form 10-Q disclosures have

incremental informational value per se, investors and the reporting companies they own could

still be better off with semiannual reporting. Because all Exchange Act reporting companies have

been mandated to file Form 10-Q quarterly interim reports for more than five decades, it is

difficult to empirically estimate the counterfactual value of semiannual reporting. 243 Some


242
      See Edward Xuejun Li & K. Ramesh 2009, supra note 238.
243
      We discuss broader economic considerations regarding the optimality of different interim reporting frequencies
      in Section V.B.

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studies have attempted to address this issue by examining historical U.S. disclosures prior to and

around the time that mandatory quarterly interim reports took effect in 1970. When considering

the evidence from these studies, we consider that there are limitations to inferences that can be

drawn from such historical U.S. studies due to dramatic changes in institutional investor

participation, technology, market structure, and market competition that have occurred since

then—together, composing a potentially different information environment for reporting

companies today.

          Using the U.S. historical setting, one study examined whether increasing reporting

frequency improves earnings timeliness (i.e., the speed with which accounting information is

reflected in security prices). 244 Differentiating between voluntary changes (firms switching from

semiannual to quarterly reporting) and mandatory changes (Commission mandates), the study

found that firms that voluntarily increased reporting frequency experienced improved earnings

timeliness, whereas there was no significant evidence of improved earnings timeliness for those

companies that were obligated to move to quarterly reporting following the 1970 Commission

mandate of quarterly interim reports. By contrast, another study using a similar historical sample

(1951–1973) covering voluntary and mandatory shifts in U.S. reporting frequency, found that

higher reporting frequency is significantly associated with lower information asymmetry

(measured by bid-ask spread and price impact) and a lower cost of equity capital (measured

using realized returns and factor models), which supports the informational benefits

hypothesized for more frequent disclosure, even when mandated. 245 Other studies have used the


244
      See Marty Butler et al., The Effect of Reporting Frequency on the Timeliness of Earnings: The Cases of
      Voluntary and Mandatory Interim Reports, 43 J. Acct & Econ. 181 (2007) (examining “a [US] sample of
      28,824 reporting-frequency observations from 1950 to 1973”).
245
      See Renhui Fu et al., Financial Reporting Frequency, Information Asymmetry, and the Cost of Equity, 54 J.
      Acct. & Econ. 132 (2012) (“[u]sing hand-collected data on [US] firms’ interim reporting frequency from 1951


                                                             99

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same historical U.S. setting to analyze the relationship between reporting frequency and

corporate investment and innovation and have found that higher reporting frequency is

negatively associated with both investments and innovation and found that this result is

consistent with higher frequency financial reporting inducing myopic corporate behavior. 246

          Other studies provide evidence on how reporting frequency affects firms’ information

environments, market outcomes, and managerial behavior by examining international

jurisdictions that have experienced regulatory changes in the frequency of interim financial

reporting. These studies provide evidence from more recent regulatory changes, but there are

limitations to consider when making inferences from these studies. There are significant

regulatory and institutional differences between the U.S. and the countries examined in these

studies that may alter how companies and market participants respond to changes in reporting

requirements. 247 One of these regulatory differences is that there are significant differences in the

level of information provided in the interim reports across jurisdictions. For example, the type of

quarterly reports that were required in the UK (Interim Management Statements) differed

significantly from Form 10-Qs. In contrast to the requirements of Form 10-Q described above in

Section II, the Interim Management Statements only needed to provide an explanation of


      to 1973” and finding that “higher reporting frequency reduces information asymmetry and the cost of equity,
      and they are robust towards considerations of the endogenous nature of firms’ reporting frequency choice. We
      obtain similar results when we focus on mandatory changes in reporting frequency. Our results suggest the
      benefits of increased reporting frequency.”)
246
      Regarding investments, see Arthur G. Kraft et al., Frequent Financial Reporting and Managerial Myopia, 93
      Acct. Rev. 249 (2018) (“[u]sing the transition of U.S. firms from annual reporting to semiannual reporting and
      then to quarterly reporting over the period 1950–1970” and finding that “increased reporting frequency is
      associated with an economically large decline in investments” and that “the decline in investments is most
      consistent with frequent financial reporting inducing myopic management behavior”). Regarding innovation,
      see Renhui Fu et al., Financial Reporting Frequency and Corporate Innovation, 63 J. Law & Econ. 501 (2020)
      (finding that higher reporting frequency significantly reduces innovation output, consistent with the hypothesis
      that frequent reporting induces managerial myopia).
247
      We refer to “institutional differences” to encompass those differences that do not directly stem from differences
      in regulatory form or functions. Examples of such differences include general market practices, investor
      preferences and behaviors, and levels of engagement.

                                                              100

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material events and transactions that took place during the period and to give a general

description of a firm’s financial position and performance. In fact, one study reported that many

UK firms failed to disclose any sales or earnings figures in their quarterly reports. 248

          While regulatory differences and institutional differences limit direct comparisons to U.S.

markets, the international experience may still highlight potential economic mechanisms relevant

to changes in reporting frequency. Evidence from the EU suggests that reductions in the

mandated frequency of interim reporting can weaken the information environment, for example,

by leading to more selective disclosures. 249 Related research shows lower financial reporting

frequency may increase investors’ reliance on alternative sources of information (e.g., third party

information intermediaries and peer companies), but those sources may not fully offset the

informational loss associated with less frequent reporting. 250

          International evidence also indicates that reporting frequency affects analyst behavior.

Leveraging the UK’s introduction and subsequent relaxation of mandatory quarterly reporting in

2007 and 2014, respectively, studies find that higher frequency of mandatory interim reporting is

associated with increased analyst coverage. 251 Similarly, another study examines firms in Taiwan



248
      Suresh Nallareddy et al., Consequences of More Frequent Reporting: The UK Experience, 6 J. Law, Fin. &
      Acct. 51 (2021).
249
      See, e.g., Tobias Bornemann et al., The Consequences of Abandoning the Quarterly Reporting Mandate in the
      Prime Market Segment, 34 Eur. Acct. Rev. 89 (2025) (finding in the Austrian sample that while only a few
      firms terminated quarterly reporting entirely following the deregulation of quarterly reporting, most firms
      reduced the content of quarterly reports by omitting the notes disclosures).
250
      See, e.g., Salman Arif & Emmanuel De George, The Dark Side of Low Financial Reporting Frequency:
      Investors’ Reliance on Alternative Sources of Earnings News and Excessive Information Spillovers, 95 Acct.
      Rev. 6 (2020) (concluding that “investors are unable to successfully offset the information loss arising from low
      reporting frequency, thus impairing their ability to value firms and adversely affecting the quality of financial
      markets”).
251
      See, e.g., letter from CFA Institute (Mar. 28, 2019) (“CFA Institute 2019”) (noting that a CFA Research
      Institute Report—the 2017 CFA Study of UK, supra note 62—found that analyst following increased after
      imposition of mandatory quarterly reporting in 2007, and that companies that moved to semiannual reporting
      after 2014 without supplementing with voluntary quarterly reports experienced a reduction in analyst coverage).

                                                              101

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and finds that firms that voluntarily disclose monthly earnings attract more analysts and have

more accurate and less dispersed analyst earnings forecasts. 252 One study that uses evidence

across numerous countries shows that mandatory quarterly reporting is associated with lower

analyst forecast errors and lower analyst forecast dispersion relative to semiannual regimes,

particularly in settings with higher information acquisition costs. 253

          There is some evidence that decreasing reporting frequency could reduce short termism.

Overall, however, the effects of reporting frequency on real corporate decisions are mixed.

Evidence from the EU suggests that increasing reporting frequency can exacerbate managerial

short-termism by increasing their manipulation of real business activities. 254 In contrast, studies

using data from the UK and Singapore find little evidence that changes in reporting frequency

materially affect firms’ investment decisions. 255

          D. Benefits and Costs

          The proposed amendments would provide Exchange Act reporting companies with

flexibility regarding the frequency of mandatory periodic reporting by permitting issuers to elect


252
      Shou-Min Tsao et al., Voluntary Monthly Earnings Disclosures and Analyst Behavior, 71 J. Banking & Fin. 37
      (2016).
253
      See, e.g., Andrei Filip et al., Shaping the Information Environment: International Evidence on Financial
      Reporting Frequency and Analysts’ Earnings Forecast Errors, 39 J. Acct., Auditing & Fin. 754 (2024). This
      study uses data from 49 countries to show that a mandatory quarterly reporting regime (as compared to
      semiannual) is associated with lower analysts’ annual earnings forecast errors. Consistent with an improvement
      in the information environment, this study’s findings are more pronounced for firms and analysts subject to
      higher information acquisition costs and in countries where the institutional setting is less able to meet analysts’
      information needs.
254
      See, e.g., Jürgen Ernstberger et al., The Real Effects of Mandatory Quarterly Reporting, 92 Acct. Rev. 33 (2017)
      (finding an increase in real activities manipulations—a measure capturing over-production and a reduction of
      discretionary expenses—for firms mandated to switch from semiannual to quarterly reporting. They conclude
      “this finding is in line with the notion of higher managerial short-termism resulting from increased reporting
      frequency requirements”).
255
      See, e.g., CFA 2017 Study of UK (finding that the imposition of mandatory quarterly reporting had no
      statistically significant impact on firms’ investment decisions); Peter Kajüter et al., The Effect of Mandatory
      Quarterly Reporting on Firm Value, 94 Acct. Rev. 251 (2019) (exploiting a regression discontinuity in
      Singapore, finding that mandatory quarterly reporting reduced firm value for smaller firms but did not generate
      clear informational benefits or induce myopic investment behavior around the reporting threshold).

                                                                102

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whether to continue filing quarterly reports on Form 10-Q or to shift to a semiannual reporting

cadence using a new Form 10-S. 256 We do not expect issuers to respond homogeneously to this

flexibility, since they will make reporting decisions based on how they assess the relative costs

and benefits of more or less frequent periodic reporting in their particular circumstances, such as

size, industry, stage of business development, financing needs, contractual obligations, investor

expectations, and other regulatory requirements. 257

          For purposes of our analyses, we distinguish among three categories of issuers based on

how they could respond to the proposed rules. This categorization is intended to facilitate a

clearer assessment of how the incidence and magnitude of costs and benefits may vary across

issuers and market participants.

          Some issuers may elect to provide mandatory periodic disclosures on a semiannual basis,

without systematically providing voluntary disclosure for the first and third quarters. We refer to

these issuers as semiannual reporters. For these issuers, the proposed amendments would

meaningfully alter both the frequency and timing of mandatory and likely voluntary disclosures

relative to the baseline.

          Other issuers may elect to continue filing quarterly reports notwithstanding the

availability of semiannual reporting. These issuers, referred to as quarterly reporters, may do so




256
      The proposed amendments to Regulation S-X would conform the financial statement requirements in periodic
      reports to the semiannual reporting frequency of semiannual filers and help ensure that, among other things,
      when semiannual filers file registration statements, their financial statements in those registration statements are
      not considered “stale” under existing rules built along a quarterly framework and would revise those age
      requirements for registrants that would be semiannual filers to fit with their reporting schedule. We do not
      expect the proposed amendments to Regulation S-X to have an economic impact beyond removing frictions that
      otherwise would have limited the ability of certain reporting companies to transition to semiannual reporting.
257
      See, e.g., Peter Kajüter et al., Consequences of Interim Reporting: A Literature Review and Future Research
      Directions, 31 Eur. Acct. Rev. 209 (2022) (surveying the literature on interim reporting including reporting
      frequency and concluding that while investors perceive interim reports to be useful, there is no clear evidence
      for strong capital market-based benefits of higher reporting frequency, such as increases in liquidity).

                                                                103

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because they perceive limited compliance cost savings from reducing reporting frequency or

because they face investor, contractual, or regulatory expectations favoring quarterly disclosure.

They may also view more frequent reporting as improving the liquidity of their stock, the

valuation of their stock, or their access to capital and not worth the cost savings associated with

less frequent reporting. 258

          Finally, some issuers may elect semiannual reporting for purposes of mandatory periodic

disclosure while continuing to provide voluntary disclosure of information on a quarterly basis

through other channels, such as earnings releases, earnings guidance, or conference calls. They

could even voluntarily provide quarterly financial information in a Form 10-S. 259 These issuers,

referred to as hybrid reporters, occupy an intermediate position between the first two groups. For

these issuers, the proposed amendments may reduce some regulatory compliance costs while

preserving aspects of the quarterly information environment through voluntary disclosures.

          This section discusses the potential economic benefits and costs of the proposed

amendments relative to the baseline of mandatory quarterly reporting for all affected issuers. The

economic effects of the proposed amendments depend in part on issuer reporting choices. As

such, this analysis is organized by issuer reporting category to reflect heterogeneity in issuer

responses as well as to clarify how costs and benefits may accrue differently to issuers, investors,

and other market participants. It is important to note that reporting companies would likely

choose the reporting category (i.e., semiannual reporter, quarterly reporter, or hybrid reporter)

that is optimal for them after weighing the perceived benefits and costs that they would

experience as a result of their decision.



258
      See supra notes 139 and 140.
259
      See supra note 86.

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While it is difficult to predict which reporting category particular issuers will choose, we

discuss factors that could potentially affect issuers’ choice of reporting frequency in Section

V.D.4 below. With that in mind, on average, for each issuer that switches to semiannual

reporting, we estimate annual direct compliance costs per issuer associated with filing three

Form 10-Q’s to be $330,000 260 and the annual compliance costs per issuer associated with filing

one Form 10-S to be $132,000. 261 Hence, for issuers that choose to provide semiannual reports in


260
      The $330,000 estimate is calculated by multiplying the compliance costs associated with filing a single Form
      10-Q by 3. We estimate that direct compliance costs associated with filing each Form 10-Q is $110,000 rounded
      to the nearest thousand and is based on the following calculations: 135.14 burden hours per response (Form 10-
      Q Current Burden Hours (2,624,187) divided by Form 10-Q Current Annual Responses (19,419), rounded to the
      second decimal place) x $616 per hour + $27,027 external costs per response (Form 10-Q Current Cost Burden
      ($524,837,313) divided by Form 10-Q Current Annual Responses (19,419)). For additional details on estimates
      of burden hours, see infra Section VI (Paperwork Reduction Act analysis). The $616 per hour rate reflects our
      current estimate of the blended hourly rate for lawyers ($744), accountants and auditors ($348), financial
      managers ($731), and general and operations managers ($666). We expect that the types of individuals, the rates
      for those individuals, and the proportion of each individual’s contributions would vary among issuers and could
      differ depending on which specific form an issuer is completing. Nonetheless, for purposes of this economic
      analysis, we believe the $616 per hour rate is a reasonable estimate of the hourly cost of completing Form 10-Q
      and Form 10-S. To calculate the occupational hourly rates used in this release, we used occupational mean
      hourly wage data from the Occupational Employment and Wage Statistics (OEWS) program of the U.S. Bureau
      of Labor Statistics (BLS) for the private sector. See Occupational Employment and Wage Statistics, U.S.
      Bureau of Labor Statistics, available at https://www.bls.gov/oes/. See also Standard Occupational
      Classification, U.S. Bureau of Labor Statistics, available at https://www.bls.gov/soc/ (describing occupational
      classification system used by BLS); OMB, North American Industry Classification System (2022), available at
      https://www.census.gov/naics/reference_files_tools/2022_NAICS_Manual.pdf (describing the industry
      classification system used by BLS and other agencies). The mean hourly wage for each occupation is adjusted
      for changes in the seasonally adjusted employment cost index for private wages and salaries between the data
      reference period and when the data are released by BLS. See Employment Cost Index, U.S. Bureau of Labor
      Statistics, available at https://www.bls.gov/eci/. The adjusted mean hourly wage is then multiplied by a factor
      that accounts for nonwage costs borne by employers, such as bonuses, benefits, and overhead. This factor is
      calculated as an average over the 10 most recently available years of data of the ratio of the Bureau of
      Economic Analysis’s annual gross output data for the private sector to total annual wages across all occupations
      for the private sector in the OEWS data. See Gross Output by Industry, U.S. Bureau of Economic Analysis,
      available at https://www.bea.gov/data/industries/gross-output-by-industry; Occupational Employment and
      Wage Statistics, supra. The final product is the occupational hourly rate. See generally U.S. Securities and
      Exchange Commission Staff, Updated Methodology for Calculating Occupational Hourly Rates (Dec. 19,
      2025), available at https://www.sec.gov/files/method-occupational-hourly-rates.pdf.
261
      The $132,000 estimate is rounded to the nearest thousand and is based on the following calculations: 162.18
      burden hours per response (Requested Form 10-S Burden Hours (193,808) divided by Requested Annual
      Responses (1,195), rounded to the second decimal place) x $616 per hour + $32,432 external costs per response
      (calculated as: $27,027 (the cost burden number per Form 10-Q—which is calculated as the Form 10-Q Current
      Cost Burden ($524,837,313) divided by Form 10-Q Current Annual Responses (19,419)) times 1.2
      (representing the incrementally greater burden of Form 10-S we estimate as compared to Form 10-Q). For
      additional details on estimates of burden hours, see infra Section VI (Paperwork Reduction Act analysis). For
      additional details on occupations involved, see supra note 260.

                                                              105

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lieu of quarterly reports, we estimate a net reduction in direct compliance costs equal to

$198,000 per fiscal year. As discussed below, there are additional cost savings that could not

reasonably be quantified. In addition to these cost savings, all filers of certain Securities Act and

Exchange Act registration statements and of Form 10-K would incur the cost of either checking

or not checking the semiannual box on the associated forms. We estimate that the direct

compliance cost per filing of completing the semiannual box when filing Securities Act

registration statements on Forms S-1, S-3, S-4, and S-11, Exchange Act registration statements

on Form 10, and annual reports on Form 10-K to be $123. 262

               1. Semiannual Reporters

                            a) Potential Benefits

          Issuers that elect to shift from quarterly to semiannual reporting are expected to realize

direct compliance cost savings from forgoing the preparation, review, and filing of quarterly

reports on Form 10-Q for the first and third quarters. These savings may include reductions in

internal staff time (including time spent by employees and board members) devoted to gathering,

processing, and presenting interim financial information, as well as investor relations and post-

earnings release events such as quarterly earnings conference calls. The savings may also include

lower expenditures on external legal counsel, accounting advisors, and other professional service

providers. Semiannual reporters may also avoid certain costs associated with auditor reviews of

interim financial statements and with structured data tagging requirements applicable to Form

10-Q filings. A detailed discussion of costs of complying with the current Form 10-Q




262
      The $123 estimate is rounded to the nearest dollar and is based on the following calculation: 0.2 burden hours
      per response x $616 per hour. For additional details on estimates of burden hours, see infra Section VI
      (Paperwork Reduction Act analysis). For additional details on occupations involved, see supra note 260.

                                                              106

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requirement, and therefore potential direct compliance cost savings for issuers that elect to shift

from quarterly to semiannual reporting can be found in Section V.C.3 above.

          In response to the Commission’s 2018 Request for Comment on Quarterly Earnings and

Reporting, several commenters expressed the view that smaller issuers should be able to provide

disclosure less frequently. 263 To the extent that ongoing compliance costs include a fixed

component, the relative impact of these savings may be greater for smaller issuers and issuers

with simpler operations. Other commenters, however, argued that more frequent reporting is

critical for smaller companies as well as emerging growth companies given that their information

environment is generally more opaque. 264

          Semiannual reporters may also realize indirect benefits. Reducing the frequency of

mandatory periodic reporting may lessen managerial distraction associated with quarterly



263
      See, e.g., letters from Ernst & Young LLP (Mar. 21, 2019) (“Ernst & Young 2019”) (smaller reporting
      companies that are not listed on an exchange should be required to file semiannual interim reports, not
      quarterly); KPMG 2019 (“We believe the Commission could include a scalable frequency model in its
      regulatory framework where periodic information required to be filed by a registrant is commensurate with its
      issuer status. This could be accomplished using the existing issuer categories and provide [emerging growth
      companies] and [smaller reporting companies] an option to furnish interim disclosures on a less frequent
      basis.”); Davis Polk 2019 (“it would make sense to reduce the quarterly reporting requirement to a semi-annual
      requirement for pre-commercial enterprises that do not yet have significant product revenue, such as young
      biotech companies”).
264
      See, e.g., letters from Bloomberg LP (July 21, 2016) (“Quarterly reporting is as important for smaller reporting
      companies as for market leaders, if not more so given that small companies receive less attention from analysts.
      Problems in [smaller reporting companies] are likely to elude attention for longer periods of time than highly
      liquid companies that receive a lot of market attention.”); Investment Company Institute (Mar. 21, 2019) (“ICI
      2019”) (opposing semiannual reporting for smaller companies as it “would frustrate…comparisons and even
      create disincentives for investors to invest their capital in smaller companies” and stating “investors are likely to
      want more frequent reporting by smaller companies because their business prospects are less certain and likely
      to change more quickly over time as compared to larger companies”); Marcum 2019 (“[Smaller reporting
      companies] tend to have less robust internal controls over financial reporting, as they have less resources. The
      same often holds true for [emerging growth companies], as they are newly reporting entities that are still
      establishing effective, consistent financial reporting routines. For these reasons, [smaller reporting companies
      and emerging growth companies] require more discipline, rigor and accountability, not less. Reducing required
      auditor involvement from four-times to two-times per year will likely reduce the emphasis many [smaller
      reporting companies and emerging growth companies] will place on the financial reporting process. Quarterly
      reporting requires finance departments to maintain a constant vigilance. Six month gaps between financial
      reporting will likely cause them to take their focus off of the external financial reporting process, negatively
      impacting quality, and increasing the likelihood of financial reporting errors or fraud”).

                                                                107

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reporting cycles and investor engagement activities that are closely tied to Form 10-Q filings. To

the extent that quarterly reporting contributes to managerial focus on short-term financial metrics

at the expense of long-term value creation, 265 reduced reporting frequency could mitigate this

behavior and associated resource misallocation, although the academic literature is mixed on

whether quarterly reporting is a primary driver of such behavior. 266

          In addition, to the extent there is proprietary information that companies are required to

or have an incentive to disclose in quarterly reporting, less frequent mandatory reporting may

reduce or at least delay the disclosure of competitively sensitive information and lead to a better

competitive environment from the perspective of the reporting firms. 267 The proposed

amendments would not change what is required to be disclosed in the interim reports, simply the

frequency of those reports. Still, instead of providing financial information for each quarter,

semiannual reports would likely aggregate the financial information over six-month periods,

which could potentially obfuscate information that would have been useful to competitors if



265
      See, e.g., Ernstberger et al., supra note 254 (finding higher managerial short-termism resulting from increased
      reporting frequency requirements in a EU setting); John R. Graham et al., Value Destruction and Financial
      Reporting Decisions, 62 Fin. Analysts J. 27, (2006) (finding, based on a survey of 401 senior U.S. financial
      executives, that executives may be willing “to routinely sacrifice shareholder value to meet earnings
      expectations or to smooth reported earnings”); Jeremy C. Stein, Efficient Capital Markets, Inefficient Firms: A
      Model of Myopic Corporate Behavior, 104 Q. J. Econ. 665 (1989) (modeling managerial myopia and linking it
      to stock market pressure arising from short-term performance evaluation when the market cannot perfectly
      observe managerial decisions).
266
      See, e.g., CFA 2017 Study of UK (found that the imposition of mandatory quarterly reporting had virtually no
      impact on firms’ investment decisions and that it “did not change the time horizon that UK public company
      management considers when making long-term investment decisions”); Peter Kajüter, et al., supra note 246
      (exploiting a regression discontinuity in Singapore, finding that mandatory quarterly reporting reduced firm
      value for smaller firms but did not generate clear informational benefits or induce myopic investment behavior
      around the reporting threshold); Frank Gigler et al., How Frequent Financial Reporting Can Cause Managerial
      Short-Termism: An Analysis of the Costs and Benefits of Increasing Reporting Frequency, 52 J. Acct. Rsch. 357
      (2014).
267
      See, e.g., Robert E. Verrecchia, supra note 137; Rachel M. Hayes & Russell Lundholm, Segment Reporting to
      the Capital Market in the Presence of a Competitor, 34 J. Acct. Rsch. 261 (1996); Jesse A. Ellis et al.,
      Proprietary Costs and the Disclosure of Information About Customers, 50 J. Acct. Rsch. 685 (2012); Yinghua
      Li et al., Trade Secrets Law and Corporate Disclosure: Causal Evidence on the Proprietary Cost Hypothesis,
      56 J. Acct. Rsch. 265 (2018).

                                                              108

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disclosed for each quarter. 268 Thus, the impact of the proposed amendments on reducing

proprietary costs would be limited to instances where aggregating financial information over six

months reduces the amount of competitively sensitive information that could have been gleaned

if financial information were presented for each quarter as well as instances where delaying the

disclosure of interim reports by three months would reduce its usefulness to competitors.

Moreover, some semiannual reporters may voluntarily provide quarterly financial information in

a Form 10-S which could further limit the impact of the proposed amendments on reducing the

disclosure of competitively sensitive information. 269

          For some issuers, however, the magnitude of realized compliance cost savings may be

attenuated by private contractual reporting obligations. Debt agreements, lending arrangements,

and other creditor contracts frequently require the provision of quarterly or even monthly

financial information to the lender, often irrespective of the frequency of mandatory reporting

under the Federal securities laws. As a result, some issuers that elect semiannual reporting for

purposes of reports under Exchange Act Sections 13(a) and 15(d) may nonetheless continue to

prepare quarterly financial information internally or obtain interim auditor reviews to satisfy

creditor monitoring, covenant compliance, or to facilitate raising capital (at least until contracts

or agreements are renegotiated to reflect different reporting frequencies). In such cases,

reductions in Form 10-Q filing obligations may not translate into commensurate reductions in

overall reporting-related costs. 270




268
      See infra note 280 and accompanying text.
269
      See supra note 86.
270
      See, e.g., Crowe 2019 (noting that lending and regulatory regimes applicable to certain issuers may continue to
      require quarterly financial information notwithstanding changes to Commission reporting requirements); NY
      Bar 2019, supra note 212.

                                                              109

--- page 110 ---

b) Potential Costs

          Potential costs for semiannual reporters and investors arise primarily from a reduction in

the frequency and timeliness of standardized public disclosures. Longer intervals between

mandatory reports may delay the dissemination of material information about an issuer’s

financial condition and operating performance, including through other market participants and

intermediaries, increasing information asymmetry among market participants. 271 Such effects

may disproportionately affect less sophisticated or less resourced investors who may rely more

heavily on periodic reports for their investment decisions.

          Increases in information asymmetry resulting from a reduction in reporting frequency

could be mitigated or exacerbated based on whether and how information intermediaries respond

to changes in reporting frequency. On the one hand, some information intermediaries (e.g.,

financial analysts) could provide information that substitutes for at least some of the information

that would have been included in the interim quarterly reports (i.e., Q1 and Q3), which could

mitigate potential increases in information asymmetry. On the other hand, studies of foreign

markets have found a positive correlation between reporting frequency and analyst following. 272

To the extent that a reduction in reporting frequency reduces analyst following for an issuer, the

incremental information that would have been provided by the discontinuing analysts would be

lost as well, further increasing information asymmetry. 273




271
      See, e.g., Robert Stoumbos 2023, supra note 144 (finding that information asymmetry grows steadily between
      earnings announcements and that semiannual reporting is associated with greater information asymmetry than
      quarterly reporting in the second half of each semiannual period).
272
      See supra notes 251 and 252.
273
      But see Jie (Jack) He & Xuan Tian, The Dark Side of Analyst Coverage: The Case of Innovation, 109 J. Fin.
      Econ. 856 (2013) (finding that firms covered by a larger number of analysts generate fewer patents and patents
      with lower impact, consistent with the hypothesis that analysts exert too much pressure on managers to meet
      short-term goals, impeding firms' investment in long-term innovative projects).

                                                             110

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Increased information asymmetry may, in turn, adversely affect market outcomes.

Academic literature and commenters have linked higher information asymmetry to lower

liquidity, higher transaction costs, reduced price informativeness, and a higher cost of capital. 274

Some commenters also expressed concern that less frequent reporting could impair investors’

ability to identify trends, 275 value securities, 276 and detect emerging problems in a timely

manner, 277 particularly for smaller or less followed issuers. Some commenters argued that the

elimination of quarterly reporting may increase stock price volatility, particularly around

earnings announcements. 278 Less frequent interim reports could also increase the degree to which

investors rely on other required disclosures (e.g., Form 8-K, Form 4, etc.) that are issued during



274
      See, e.g., Easley and O’Hara (2004); Christine A. Botosan, Disclosure and the Cost of Capital: What Do We
      Know?, 36 Acct. Bus. Rsch. 31 (2006 Special Issue) (stating that greater disclosure reduces cost of capital);
      Douglas W. Diamond & Robert E. Verrecchia, Disclosure, Liquidity and the Cost of Capital, 46 J. Fin. 1325
      (1991) (showing that revealing public information to reduce information asymmetry can reduce a firm’s cost of
      capital by attracting increased demand from large investors due to increased liquidity of its securities); Richard
      Lambert, et al., Accounting Information, Disclosure and the Cost of Capital, 45 J. Acct. Rsch. 385 (2007)
      (showing, in a conceptual framework, that “increasing the quality of mandated disclosures should in general
      move the cost of capital closer to the risk-free rate” and should “generally reduce the cost of capital for each
      firm in the economy” and further noting that “the benefits of mandatory disclosures are likely to differ across
      firms.”).
275
      See, e.g., letters from Hank Mishima (Jan. 20, 2019) (“Trends in performance can be discovered more easily
      [with quarterly statements] than reports with less frequency. Less frequent statements are potentially detrimental
      to the interests of stakeholders outside the organization like vendors and debt and equity holders to make
      decisions that may impact the relationship with the entity.”); XBRL US (Mar. 21, 2019) (“Quantitative analysis,
      which relies on time series data and analyzes trends, would be negatively affected by a move to semi-annual
      reporting.”).
276
      See, e.g., letters from Better Markets (Mar. 21, 2019) (“[quarterly financial] reports allow for more
      sophisticated investors to create forecast and valuation models and make informed decisions regarding
      allocation of capital across their portfolios.”); ICI 2019 (“Semi-annual reporting would diminish the amount and
      timeliness of information available to investors and inhibit their ability [to] assess the fundamental value of
      securities.”).
277
      See, e.g., Ernst & Young 2019 (quarterly reporting “also helps reduce risks in the corporate financial reporting
      system by facilitating timely identification and resolution of potential accounting and reporting issues.”)
278
      See, e.g., letters from ICI 2019 (expressing concern that “semi-annual reporting would impede price discovery
      and contribute to increased volatility in security prices”); R.G. Associates, Inc. (Feb. 24, 2019) (“security prices
      would become more volatile and incorporate a larger premium for uncertainty if interim reporting were
      reduced”); T. Rowe Price Associates, Inc. (Mar. 20, 2019) (expressing concern that a flexible system that
      allows registrants to report less frequently would produce negative effects that include “potential adverse
      impacts on price formation and increased volatility”).

                                                                111

--- page 112 ---

the quarters without quarterly interim reports, resulting in greater price movements following

those disclosures and a potentially higher cost of processing information for investors. 279

          Beyond delaying the dissemination of information, a reduction in reporting frequency

could also result in an overall loss in information provided to the public. Specifically, for

semiannual reporters, there would be a loss in the granularity of financial information across

time. Financial statements would no longer provide accounting information at the quarterly level,

instead aggregating two quarters into a single semiannual number. Investors may value

information on how companies change quarter over quarter and how certain quarters compare

across issuers. Such information would likely be more relevant to issuers with more seasonal

business operations and performance. 280 To the extent that more granular quarterly information

is valuable for investors’ decision-making, losing such granularity could exacerbate the issues

related to information asymmetry discussed above.

          The proposed rules could also reduce comparability of financial statements both across

issuers and across time. It may be difficult to compare semiannual reports to quarterly reports

and even to certain semiannual reports that have different fiscal periods. For instance, a

semiannual report with a fiscal year end in December would cover different periods from a

semiannual report with a fiscal year end in March. The first would report financial information




279
      See Elizabeth Blankespoor et. al., Disclosure Processing Costs, Investors’ Information Choice and Equity
      Market Outcomes, 70 J. Acct. Econ. 101344 (2020) (surveying the literature on disclosure processing costs,
      including costs of monitoring for, acquiring, and analyzing firm disclosure).
280
      More technically, reducing the frequency of periodic reporting to twice in a fiscal year would result in the loss
      of ability to observe quarterly seasonality. For firms opting not to voluntarily provide quarterly information, this
      would mean it would not be possible to differentiate between quarterly and half-yearly performance (e.g., six
      months of strong sales or just a holiday surge). This inability to differentiate is formalized in the Nyquist-
      Shannon Sampling Theorem, which states that in order to measure a periodic event, one must measure at least
      twice per period. For example, to detect a high/low sales pattern that occurs twice per year (i.e., a half-year
      period), semiannual reporting would not be sufficient, because it could not capture both the high and low
      portions of the period; to do so would require at least quarterly reporting.

                                                                112

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for January through June and for July through December while the other would report financial

information for April through September and for October through March. 281 Such lack of

comparability would be more severe for semiannual reporters with seasonal variation in

operations. Academic studies that examine other aspects of comparability provide evidence that

reductions in comparability could lead to lower liquidity, lower investor engagement, larger

analyst forecast errors, greater analyst forecast dispersion, and less institutional ownership. 282

          Of the 5,976 Exchange Act reporting companies that filed a domestic annual report

during calendar year 2024, 4,813 (81%) ended their fiscal year in December (calendar quarter 4);

236 (4%) ended their fiscal year in September (calendar quarter 3); 253 (4%) ended their fiscal

year in June (calendar quarter 2); 179 (3%) ended their fiscal year in March (calendar quarter 1);

and 495 (8%) ended their fiscal year in a month that did not coincide with the end of a calendar

quarter. Reduced comparability between semiannual reporters will be limited to issuers that do

not have the same fiscal period and have fiscal end dates that are more or less than six months

apart. For example, roughly 85% of the reporting companies have a fiscal end date in December

or June. Comparability between any of these issuers that move to semiannual reporting should

not be impacted by the proposed rules. Potential impacts of reduced comparability between


281
      Such lack of comparability currently exists to the extent that companies have fiscal quarters that end in different
      months within a given calendar quarter. For companies that lack comparability in the timing of their quarterly
      interim reports, the periods covered in their reports should only be off by one month. In contrast, companies that
      lack comparability in the timing of their semiannual interim reports could cover periods that differ by up to 3
      months. Further, roughly 92% of our population of affected reporting companies ended their fiscal year at the
      end of a calendar quarter (i.e., March, June, September, or December).
282
      See, e.g., Gus De Franco et al., The Benefits of Financial Statement Comparability, 49 J. Acct. Rsch. 895
      (2011); Donal Byard et al., The Effect of Mandatory IFRS Adoption on Financial Analysts’ Information
      Environment, 49 J. Acct. Rsch. 69 (2011); Mark Lang & Lorien Stice-Lawrence, Textual Analysis and
      International Financial Reporting: Large Sample Evidence, 60 J. Acct. Econ. 110 (2015); Kyle Peterson et al.,
      The Earnings Quality and Information Processing Effects of Accounting Consistency, 90 Acct. Rev. 2483
      (2015); Holger Daske et al., Mandatory IFRS Reporting Around the World: Early Evidence on the Economic
      Consequences, 46 J. Acct. Rsch. 1085 (2008); Hongping Tan et al., Analyst Following and Forecast Accuracy
      After Mandated IFRS Adoptions, 49 J. Acct. Rsch. 1307 (2011); Gwen Yu & Aida Sijamic Wahid, Accounting
      Standards and International Portfolio Holdings, 89 Acct. Rev. 1895 (2014).

                                                               113

--- page 114 ---

semiannual reports should be mitigated further to the extent that companies that are more likely

to be compared to each other (e.g., firms in the same industry or sector) are more likely to have

similar fiscal reporting periods. 283

          Reduced reporting frequency may also affect corporate accountability and financial

reporting quality. Several commenters noted that interim auditor reviews associated with

quarterly reporting can facilitate the early identification of accounting issues and internal control

deficiencies and that less frequent reviews could delay the resolution of such issues. 284

          The information asymmetry between insiders and outside investors generally decreases

following the disclosure of interim reports or associated earnings announcements. 285 A move to

semiannual reporting would generally delay the disclosure of information that would have been

contained in interim reports for the first and third quarters and therefore increase the length of

time for which information asymmetry between corporate insiders and outside investors is

higher. A potential additional cost may arise if insiders engage in trading on the information that

has not yet been released or if investors perceive that to be more likely 286—even though trading


283
      For example, companies in the retail industry may favor a January 31 year-end to better capture holiday sales
      and returns in their annual reports.
284
      See, e.g., letters from Marcum 2019 (“An auditor’s quarterly review procedures increase the likelihood that
      investors will receive timely information about material changes in [internal control over financial reporting]”);
      Center for Audit Quality (Mar. 20, 2019) (“There is a risk that a change in frequency of interim reporting could
      result in certain controls (e.g., financial closing and reporting controls) being performed less frequently. In
      addition, in instances where relevant controls fail and there are no compensating controls in place, there may be
      fewer opportunities to timely identify or remediate control deficiencies if these controls are performed less
      frequently.”).
285
      Paul M. Healy & Krishna G. Palepu, Information Asymmetry, Corporate Disclosure and the Capital Markets: A
      Review of the Empirical Disclosure Literature, 31 J. Acct. Econ. 405 (2001); Richard Frankel & Xu Li,
      Characteristics of a Firm’s Information Environment and the Information Asymmetry Between Insiders and
      Outsiders, 37 J. Acct. & Econ. 229 (2004); Steven Huddart, et al., Jeopardy, Non-Public Information, and
      Insider Trading Around SEC 10-K and 10-Q Filings, 43 J. Acct. Econ. 3 (2007).
286
      See, e.g., Steven J. Huddart & Bin Ke, Informational Asymmetry and Cross-sectional Variation in Insider
      Trading, 24 Contemp. Acct. Rsch.195 (2007) (finding that the presence of better informed insiders that trade on
      the basis of material non-public information may lead to adverse selection problems; decrease investor
      confidence in the issuer, the willingness of investors to trade the issuer’s shares, the liquidity of the issuer’s


                                                               114

--- page 115 ---

on the basis of material non-public information would be, among other things, a violation of

Exchange Act Section 10(b) and a violation of Rule 10b-5. Moreover, as part of internal

compliance, many companies monitor insider transactions as well as voluntarily implement

“blackout periods” or windows during which corporate insiders are prohibited from purchasing

or selling shares of the company. 287 One study documents that that the mean (median) window

for a blackout period begins roughly 46 (47) days before an earnings announcement and extends

until one day after the announcement. 288 Companies that move to semiannual reporting could

choose to incorporate, preserve, or extend such blackout periods to alleviate the potential

concerns described above. Some research, however, has found that companies may need to

compensate corporate insiders for restricting their trading activities. 289

          Finally, companies choosing to become semiannual reporters would incur switching costs

as they transition from quarterly reporting to semiannual reporting. Issuers generally have

systems, procedures, and controls in place to gather, process, review, and disclose information in

a Form 10-Q and relevant voluntary disclosures. Semiannual reporters would therefore incur

initial switching costs to update their systems, procedures, and controls. Such costs are likely to



      shares, and the overall market efficiency; have negative effects on capital formation (including increased cost of
      capital and decreased ability to raise capital) and the issuer’s ability to fund investments; and potentially distort
      the incentives of insiders (resulting in a loss of shareholder value)). For a comprehensive discussion of the
      economics of trading on the basis of material non-public information and the evidence on its implications for
      investors and the capital markets, see Insider Trading Arrangements and Related Disclosures, Release No. 33-
      11138, at 118-27 (Dec. 14, 2022) [87 FR 80362, 80394-97 (Dec. 29, 2022)].
287
      J.C. Bettis, et al., Corporate Policies Restricting Trading by Insiders, 57 J. Fin. Econ. 191 (2000); Darren T.
      Roulstone, The Relation Between Insider-Trading Restrictions and Executive Compensation, 41 J, Acct. Rsch.
      525 (2003); Inmoo Lee, et al., Do Voluntary Corporate Restrictions on Insider Trading Eliminate Informed
      Insider Trading?, 29 J. Corp. Fin. 158 (2014); Alan D. Jagolinzer, et al., Corporate Governance and the
      Information Content of Insider Trades, 49 J. Acct. Rsch. 1249 (2011); Wayne R. Guay, et al., Determinants of
      Insider Trading Windows, (Apr. 17, 2023) (unpublished manuscript), available at
      https://ssrn.com/abstract=3844986 (retrieved from SSRN Elsevier database).
288
      See Jagolinzer et al. (2011).
289
      See, e.g., Roulstone (2003) (finding that companies that implement blackout periods pay a premium in
      executive compensation relative to companies that do not have similar restrictions).

                                                                115

--- page 116 ---

be higher for larger firms with complex operations. Additionally, some semiannual reporters

would need to expend time and resources to renegotiate contracts or other agreements that relied,

at least to some degree, on quarterly reports. These could include, among other things, debt

contracts that rely on quarterly financial metrics for maintenance covenants as well as incentive-

based executive compensation contracts that rely on quarterly performance metrics.

              2. Quarterly Reporters

                            a) Potential Benefits

          Issuers that elect to continue filing quarterly reports are not expected to experience

material changes in their direct reporting costs or disclosure practices as a result of the proposed

amendments. For these issuers, a potential benefit of the proposal is the availability of flexibility

should their circumstances change in the future. The option to adjust reporting frequency may

have value even if it is not exercised immediately.

          Quarterly reporters may also benefit indirectly from market-level effects if the proposal

alters competitive dynamics or reporting norms among peer firms. For example, if some

competitors reduce reporting frequency, issuers that continue quarterly reporting may

differentiate themselves by signaling a commitment to transparency, which could be valued by

investors. 290 Additionally, maintaining quarterly reporting may help these issuers meet the

expectations of certain investors, analysts, or contractual partners who prefer or require more

frequent disclosure.

                            b) Potential Costs

          The proposed rules could also alter competitive dynamics in a way that increases the

relative costs for quarterly reporters. Quarterly reporters would continue to bear the direct and



290
      See, e.g., Robert E. Verrecchia, Essays on Disclosure, 32 J. Acct. & Econ. 97 (Dec. 2001).

                                                             116

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indirect costs associated with quarterly reporting, including internal preparation costs, external

professional fees, auditor review costs, and investor relations activities while peer firms that

move to semiannual reporting would experience these costs less frequently. In addition, peer

firms who report semiannually could benefit from spillover effects of information provided by

the quarterly reporters. Such factors could result in a competitive disadvantage for quarterly

reporters as they bear the cost of certain disclosures that could inadvertently benefit their

competitors. Still, these issuers may view such costs as justified by the potential benefits of more

frequent disclosure, including enhanced liquidity, lower cost of capital, and alignment with

investor and analyst expectations. Some issuers, however, may effectively be constrained to

continue quarterly reporting due to contractual obligations, debt covenants, bank regulatory

requirements, or listing standards imposed by self-regulatory organizations. 291

          The proposed rules could reduce comparability of quarterly reporters as well. It may be

difficult to compare quarterly financial statements from quarterly reporters to semiannual

financial statements. For example, investors would have to aggregate quarterly reports to

compare with semiannual reports and may have difficulty extracting quarter-level information

from the semiannual reports, depending on how the reports are structured. 292 This lack of




291
      See, e.g., Crowe 2019 (noting depository institutions may be required to file quarterly financial information
      under other law and may not see a reduced administrative burden from a Commission change to reporting
      frequency); BDO 2019 (“Certain stock exchanges and regulated industries also require quarterly reporting.
      Accordingly, the compliance and administrative relief intended by reducing the frequency of reporting for SEC
      rules may not be realized, or as significant, for all registrants.”); SIFMA 2019 (“The reporting requirements of
      other applicable regulatory authorities (e.g., banking regulators, stock exchanges, other SROs) currently require
      quarterly reporting of much of the same information that is included in a Form 10-Q. Failure to harmonize these
      requirements would at best effectively maintain the status quo and at worst increase costs to reporting
      companies or create conflicting requirements.”).
292
      Semiannual reporters could present quarter-level information in their reports but would not be required to do so.

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comparability could increase the cost of acquiring information, which could negatively impact

market factors such as liquidity, analyst following, and forecast accuracy. 293

              3. Hybrid Reporters

                            a) Potential Benefits

          Hybrid reporters—issuers that elect semiannual mandatory reporting while continuing to

provide certain quarterly voluntary disclosures—would benefit from the same compliance costs

savings as semiannual reporters as they would have the same reporting obligations. The effective

overall cost savings for hybrid reporters would be mitigated, however, to the extent that they

choose to prepare and provide additional voluntary disclosure. By forgoing Form 10-Q filings for

the first and third quarters, these issuers would reduce costs and time associated with the

preparation and review of full interim financial statements, but may incur (or continue to incur)

costs associated with voluntarily engaging in quarterly earnings communications that meet

investor expectations. Practically, the impact on this group of moving to semiannual reporting

under the proposed amendments while continuing to provide voluntary interim disclosures would

range somewhere between the impact on the quarterly reporters and the semiannual reporters

(both discussed above) depending on the amount of voluntary information provided and the

degree to which the perceived reliability of the voluntary disclosure matches that of mandatory

disclosure. 294

          Such issuers may preserve aspects of the quarterly information environment, potentially

mitigating increases in information asymmetry relative to semiannual reporters. The hybrid




293
      See supra note 282.
294
      See supra note 60.

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--- page 119 ---

approach may therefore represent a middle ground for issuers seeking to balance cost savings

with market demand for more frequent information.

                            b) Potential Costs

          At the same time, the hybrid reporting approach may introduce distinct costs. Voluntary

quarterly disclosures may differ from Form 10-Q filings in scope, standardization, structured

data requirements, and associated litigation risk. For example, earnings releases are typically

furnished rather than filed and are not subject to the same liability provisions as Form 10-Q

filings, which some commenters suggested could affect their credibility and informational

value. 295

          Like semiannual reporters, hybrid reporters would have less frequent interim auditor

reviews. An independent public accountant’s review of a registrant’s interim financial statements

required as part of quarterly reporting can facilitate the early identification of accounting

misstatements and internal control deficiencies, especially for smaller firms. Less frequent

reviews could delay the identification and resolution of such issues. Relative to semiannual

reporters, however, this concern could be mitigated to the extent that hybrid reporters’ voluntary

quarterly financial disclosures are reviewed by their independent public accountants.

          Hybrid reporting may also increase processing and comparability costs for investors and

information intermediaries. If quarterly voluntary information is provided in less standardized

formats or on varying timelines across issuers, then analysts and investors may incur additional




295
      See, e.g., ICI 2019 (noting that “earnings releases typically are considered to be ‘furnished’ to the SEC and thus
      are not subject to liability under Section 18 of the Securities Exchange Act of 1934,” that “Form 10-Q filings,
      on the other hand, are ‘filed’ with the SEC and subject to Section 18 liability,” that “[a]lthough earnings
      releases are subject to the antifraud provisions of the securities laws, the Commission does not regulate their
      content or structure,” and that “unlike with Form 10-Q, the information presented in earnings releases varies
      from issuer to issuer.”). But see supra note 66 (discussing the parts of Form 10-Q that are not subject to Section
      18 liability, including financial statements).

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costs to retrieve, standardize, and compare such information. To the extent that hybrid practices

become prevalent, these effects could reduce comparability across firms and over time. This cost

could be mitigated if issuers establish and follow common practices with standardized voluntary

disclosure across peers.

          The voluntary disclosure would not be subject to XBRL requirements and therefore,

unless voluntarily tagged, would not provide the benefits that derive from structured data.

Research has shown XBRL requirements improve the information environment for market

participants by increasing disclosure processing efficiency. 296 Such research indicates this has

led to benefits for individual companies and for the market as a whole, such as reduced

information asymmetry, 297 greater stock price reflectiveness of public disclosures, 298 enhanced

market competition, 299 increased liquidity, 300 decreased cost of capital, 301 more accurate




296
      See U.S. Sec. & Exch. Comm’n, Semi-Annual Report to Congress Regarding Public and Internal Use of
      Machine-Readable Data for Corporate Disclosures (Dec. 2025), available at https://www.sec.gov/files/fdta-
      report-1-2026.pdf.
297
      See, e.g., Xin Luo et al., Initial Evidence on the Market Impact of the iXBRL Adoption, 37 Acct. Horizons 143
      (2023).
298
      See, e.g., Yuyun Huang et al., Information Processing Costs and Stock Price Informativeness: Evidence from
      the XBRL Mandate, 46 Austl. J. Mgmt. 110 (2021); Ju-Chun Yen & Tawei Wang, The Association Between
      XBRL Adoption and Market Reactions to Earnings Surprises, 29 J. Info. Sys. 51 (2015); Yi Dong et al., Does
      Information-Processing Cost Affect Firm-Specific Information Acquisition? Evidence from XBRL Adoption, 51
      J. Fin. & Quant. Analysis 435 (2016); Yanan Zhang et al., XBRL Adoption and Expected Crash Risk, 38 J. Acct.
      & Pub. Pol’y 31 (2019); Jap Efendi et al., Do XBRL Filings Enhance Informational Efficiency? Early Evidence
      from Post-earnings Announcement Drift, 67 J. Bus. Rsch. 1099 (2014).
299
      See, e.g., Bing Li et al., The Impact of XBRL Adoption on Local Bias: Evidence from Mandated US Filers, 39 J.
      Acct. & Pub. Pol’y 6 (2020).
300
      See, e.g., Wafa Sassi et al., The Impact of Mandatory Adoption of XBRL on Firm’s Stock Liquidity: A Cross-
      Country Study, 19 J. Fin. Reporting & Acct. 299 (2021).
301
      See Chae-Won Ra & Ho-Young Lee, XBRL Adoption, Information Asymmetry, Cost of Capital, and Reporting
      Lags, 10 iBusiness, 93 (2018); Syou-Ching Lai et al., XBRL Adoption and Cost of Debt, Int’l. J. Acct. & Info.
      Mgmt. 199 (2015); Tienshih Hsieh & Jean C. Bedard, Impact of XBRL on Voluntary Adopters’ Financial
      Reporting Quality and Cost of Equity Capital, 15 J. Emerging Tech. Acct. 45 (2018); Marcin Jaskowski &
      Daniel Rettl, Information Acquisition Costs and Credit Spreads, 149 J. Banking Fin. 106775 (2023).

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financial analysis, 302 enhanced artificial intelligence capabilities, 303 and others. 304 To the extent

the magnitude of these effects varies with the frequency of XBRL data availability, these

benefits may be reduced as a whole given the lack of quarterly XBRL-tagged financial data from

semiannual and hybrid reporters.

          Hybrid reporters that disclose voluntary quarterly information may not gain the same

value from their disclosures as quarterly reporters gain, because markets assess the value of

voluntary and mandated disclosures differently. For example, studies have argued that certain

voluntary disclosures are believed by markets because they are subsequently confirmed by

mandatory disclosures covering materially the same information, and thus voluntary disclosure

becomes less valuable in the absence of such mandatory disclosures. 305 Mandatory semiannual

reports could serve this function, but the information provided in these mandatory reports would

be delayed and potentially less precise relative to mandatory quarterly reports. To the extent that




302
      See, e.g., Andrew J. Felo et al., Can XBRL Detailed Tagging of Footnotes Improve Financial Analysts’
      Information Environment?, 28 Int’l. J. Acct. Info. Sys. 45 (2018); Marcus Kirk et al., From Print to Practice:
      XBRL Extension Use and Analyst Forecast Properties (Aug. 18, 2016), available at
      https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2826159 (retrieved from SSRN Elsevier database);
      Chunhui Liu et al., XBRL’s Impact on Analyst Forecast Behavior: An Empirical Study, 33 J. Acct. & Pub. Pol’y
      69 (2014); but see Sherwood Lane Lambert et al., Analysts’ Forecasts Timeliness and Accuracy Post-XBRL, 27
      Int’l J. Acct. & Info. Mgmt. 151 (2019).
303
      See, e.g., Marcelo Farr et al., Can AI Be Trusted with Financial Data? (Sept. 15, 2025), available at
      https://ssrn.com/abstract=5316518 (retrieved from SSRN Elsevier database); See also Revathy Ramanan, Why
      Structured Data and Definitions Vastly Outperform Unstructured PDFs in LLM Analysis, XBRL (Dec. 19,
      2024), available at https://www.xbrl.org/why-structured-data-and-definitions-vastly-outperform-unstructured-
      pdfs-in-llm-analysis/.
304
      See, e.g. Jeong-Bon Kim et al., Does XBRL Adoption Constrain Earnings Management? Early Evidence from
      Mandated U.S. Filers, 36 Contemp. Acct. Res., 4 (2019); Jung Min Kim, Economics of Information Search and
      Financial Misreporting, 62 J. Acct. Res. 1007 (2024).
305
      See, e.g., Frank Gigler & Thomas Hemmer, On the Frequency, Quality, and Informational Role of Mandatory
      Financial Reports, 36 J. Acct. Rsch. 117 (1998) (arguing that mandatory disclosures are valuable because they
      can confirm previously made voluntary disclosures, facilitating market trust in otherwise unverifiable voluntary
      disclosures), Lin Cheng et al., The Commitment Effect Versus Information Effect of Disclosure—Evidence from
      Smaller Reporting Companies, 88 Acct. Rev. 1239 (2013) (finding that when firms no longer have mandatory
      reporting requirements but continue voluntarily disclosing, they see a decrease in liquidity, consistent with the
      loss of mandatory confirmation resulting in less valuable voluntary disclosures).

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hybrid reporters provide voluntary disclosures that are of a higher frequency than their

mandatory reporting, it could be the case that the market’s ability to confirm those disclosures is

diminished, thereby reducing the market’s perceived value of those voluntary disclosures.

       Finally, hybrid reporters would likely incur switching costs similar to those of

semiannual reporters as they transition from quarterly reporting to semiannual reporting. For

example, hybrid reporters may also incur initial switching costs to update their systems,

procedures, and controls as well as costs to renegotiate certain contracts. The changes, however,

and their respective costs may be more limited, relative to semiannual reporters, to the extent that

hybrid reporters preserve existing systems and procedures for the voluntary quarterly disclosure

that they provide.

       To the extent that hybrid reporters voluntarily provide quarterly financial information in a

Form 10-S filing, some of the costs discussed above, such as reduced comparability of

information, reduced credibility of information, and less structured data, could be mitigated.

           4. Factors Affecting Issuers’ Decisions on their Reporting Frequency

       Issuers’ reporting choices under the proposed amendments are likely to reflect a

combination of firm-specific, market-based, and institutional considerations. Firm size, operating

complexity, growth stage, and seasonality of business operations may influence both the

perceived costs of quarterly reporting and the perceived benefits of more frequent disclosure. For

instance, to the extent that the costs of providing interim reports are fixed, smaller issuers may

face relatively higher compliance burdens (in a relative sense compared to larger issuers as a

percentage of the issuer’s revenue) and be more motivated to switch to semiannual reporting

from a cost savings perspective. Conversely, investors may demand more frequent reporting

from such firms as there tends to be less available public information about smaller firms and



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therefore higher information asymmetry. 306 Investors’ expectations for more frequent reporting

may also be driven by poorer prior performance and more uncertain operating environments. 307

          Investor base composition and analyst coverage are also expected to play an important

role. Issuers with substantial institutional ownership or active analyst following may face

stronger market expectations for quarterly information, whether through Form 10-Q filings or

other disclosures. 308 In contrast, issuers with more concentrated or long-term-oriented ownership

may perceive less pressure to maintain quarterly reporting.

          Contractual and regulatory constraints may further shape issuer decisions. 309 Debt

agreements, bank regulatory requirements, exchange listing standards, or foreign legal

obligations may effectively necessitate continued quarterly reporting for certain issuers, limiting

their ability to rely on the proposed flexibility, unless these agreements and requirements are

modified.

          Issuers may also consider how reporting frequency interacts with capital raising activities

and liability frameworks. As discussed above in Section V.C.2, underwriters and investors may


306
      “Research suggests that size proxies for the amount of prior information available about a firm.” Frankel & Li,
      supra note 285 (surveying prior literature). Further, “Elliot et al. (1984) hypothesize that because fewer analysts
      follow smaller firms, small firms’ prices do not ‘completely reflect information,’ and insiders can more
      successfully use private information.” Id. (quoting John Elliott et al., The Association Between Insider Trading
      and Information Announcements, 15 Rand J. Econ. 521 (1984)). See also Mark Lang & Russell Lundholm,
      Cross-Sectional Determinants of Analyst Ratings of Corporate Disclosures, 31 J. Acct. Rsch. 246 (1993)
      (providing evidence consistent with firm size being positively correlated with the amount and quality of
      information provided).
307
      See, e.g. Shuping Chen et al., Is Silence Golden? An Empirical Analysis of Firms that Stop Giving Quarterly
      Earnings Guidance, 51 J. Acct. & Econ. 134 (2011) (studying firms that stop providing earnings guidance and
      showing relative to firms that continue guiding, stoppers have poorer prior performance and more uncertain
      operating environments. The paper also finds that stock market reacts negatively to the announcement of
      stopping guidance, and that stoppers subsequently experience increases in analyst forecast dispersion and
      decreases in analyst forecast accuracy).
308
      Kimball Chapman & Jeremiah R. Green, Analysts’ Influence on Managers’ Guidance, 93 Acct. Rev. 45 (2018)
      (finding that analysts’ questions during conference calls influenced future manager disclosure choices,
      consistent with analysts shaping managers’ disclosure choices).
309
      See sections V.C.1.c and .d (describing some of the Federal and State laws that could incentivize continued
      quarterly reporting by issuers).

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expect reviewed interim financial information in registered offerings, which could lead issuers

that access capital markets frequently to continue quarterly reporting or to obtain voluntary

auditor reviews of their quarterly financials even under a semiannual reporting regime. The

proposed amendments to Rule 3-01, Rule 3-12, and Rule 8-08 of Regulation S-X would alter the

age of financial statements requirements so that semiannual filers would not be required to

include or incorporate by reference quarterly financial statements in a registration statement (or a

proxy statement). 310 Nonetheless, investors and underwriters may still demand quarterly

financial disclosure to have more recent or granular information. Likewise, issuers participating

in or planning to participate in a merger or acquisition could face similar pressures.

          Finally, strategic and competitive considerations (including peer behavior and evolving

market norms) may influence issuer decisions. Issuers may weigh potential reductions in

disclosure of proprietary information against concerns that reduced reporting frequency could be

perceived negatively by investors or analysts. Given these interacting factors, issuer responses to

the proposed amendments are likely to be heterogenous and may evolve over time as market

practices adjust.

              5. Aggregate Monetized Benefits and Costs

          Throughout this economic analysis, we have estimated monetized benefits and costs per

response. In this section, we present aggregate measures of these monetized effects. These totals




310
      The impact of the proposed amendments to Rules 3-01, 3-12, and 8-08 of Regulation S-X on issuers of
      semiannual reports will depend on the timing of registration statements and proxy statements relative to the
      most recently filed financial statements. For instance, for semiannual filers, registration statements filed by
      reporting companies in the first (or third) fiscal quarter would simply need to include or incorporate by
      reference financial statements from the most recent annual report on Form 10-K (or semiannual report on Form
      10-S).

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include only benefits and costs that are monetized in the economic analysis 311 and thus do not

encompass all of the proposed amendments’ benefits and costs.


                             a) Annual Aggregate Monetized Benefits and Costs

          We report the annual aggregate monetized benefits and costs, respectively, of the

proposed amendments, which are aggregated across all affected entities and instances of

reporting each year. To aggregate these monetized effects, we use estimates of the number of

affected filings 312 and estimated burdens per filing under the Paperwork Reduction Act in

Section VI. Consistent with these estimated burdens, there are no initial monetized costs or

benefits that would accrue immediately upon adoption of the proposed rules (i.e., at Time 0).

Under the proposed amendments, these benefits and costs are incurred by reporting companies

that elect to report on a semiannual basis and by all companies that file certain registration and

reporting forms.

          Because the decision to switch to semiannual reporting is voluntary and firm-specific, we

are unable to predict with certainty how many reporting companies would make this change. For

the purpose of computing annual aggregate monetized effects, we assume that 20 percent of all

affected issuers would switch to semiannual reporting, which represents 1,195 issuers (i.e., 20%

of 5,976 affected issuers = 1,195 issuers). 313 As shown in Table 2, these issuers would save the

annual direct compliance costs associated with filing three Form 10-Q’s, which we estimated

earlier to be $330,000 per issuer on average. 314 Multiplying the number of affected issuers that

would switch by this cost saving per issuer, we estimate aggregate monetized cost savings (i.e.,


311
      See supra section V.D and supra notes 260, 261, 262.
312
      See supra section V.C.2.
313
      See id. for a discussion of affected parties and infra note 332 for a discussion of the 20 percent estimate.
314
      See supra Section V.D.

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benefits) across all affected issuers and filings of $394,350,000 per year (i.e., 1,195 issuers x

$330,000 per issuer = $394,350,000). The same 1,195 issuers would instead file Form 10-S. As

shown in Table 3, these issuers would thus incur annual direct compliance costs associated with

filing Form 10-S, which we estimated earlier to be $132,000 per issuer on average. 315

Multiplying the number of affected issuers that would switch by this cost per issuer, we estimate

aggregate monetized costs across all affected issuers of $157,740,000 (i.e., 1,195 issuers x

$132,000 per issuer = $157,740,000). The estimated aggregated annual monetized costs and

benefits would increase or decrease depending on whether more or fewer issuers decide to report

on a semiannual basis than we assumed. In addition, as shown in Table 3, all filers of Securities

Act registration statements on Forms S-1, S-3, S-4, and S-11, and Exchange Act registration

statements on Form 10, and annual reports on Form 10-K would incur a per filing cost of $123

associated with completing the semiannual box. The aggregate annual costs for each form are

calculated by multiplying $123 by the estimate for the number of affected filings of each form

each year. 316 Adding each of those aggregate monetized costs for each form to the aggregate

monetized costs associated with filing Form 10-S results in a total estimate of $158,821,000

aggregate annual monetized costs across all affected parties (i.e., $157,740,000 aggregate annual

monetized costs for Form 10-S + $1,081,000 total aggregate annual monetized costs for

semiannual check boxes = $158,821,000).


                                   Table 2. Aggregate Monetized Benefits
                                               (2025 dollars)



315
      See supra Section V.D.
316
      The estimates for affected filings per year are based on the number of filings in CY 2024. These estimates differ
      from the estimates provided in Section VI (Paperwork Reduction Act analysis), which are based on the number
      of annual responses for these forms reflected in the OMB inventory of currently approved information
      collections.

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Benefit per Affected          Number of Affected             Aggregate Annual
                                          Filing                  Filings Per Year                  Benefits
                                           (A)                          (B)                      (C) = (A)x(B)
           Form 10-Q                   $110,000                        3,585                     $394,350,000
             Total                                                                               $394,350,000
Note: See supra note 260 for an explanation of the $110,000 estimated benefit per affected filing.


                                      Table 3. Aggregate Monetized Costs
                                                 (2025 dollars)

                                     Cost per Affected           Number of Affected             Aggregate Annual
                                          Filing                  Filings Per Year                   Costsc
                                            (A)                         (B)                      (C) = (A)x(B)
           Form 10-S                    $132,000a                      1,195                     $157,740,000
            Form S-1                       $123b                        933                        $115,000
            Form S-3                       $123b                       1,574                       $194,000
            Form S-4                       $123b                        193                         $24,000
           Form S-11                       $123b                         13                          $2,000
            Form 10                        $123b                         87                         $11,000
           Form 10-K                       $123b                       5,976                       $735,000
              Total                                                                              $158,821,000
Notes:
a
    See supra note 261 for an explanation of the $132,000 estimated cost per affected filing.
b
    See supra note 262 for an explanation of the $123 estimated cost per affected filing.
c
    Estimates rounded to the nearest thousand.



                              b) Present Values and Annualized Values of Aggregate Monetized
                              Benefits and Costs

           Consistent with the requirements of Executive Order 12866, the Commission reports

estimated total monetized benefits and costs for all affected entities in two additional ways

specified in OMB Circular A-4. 317 The two presentations are intended to address the fact that the



317
       See E.O. 12866 (Sept. 30, 1993), 58 FR 51735, 51741 (Oct. 4, 1993) (requiring agencies to provide an analysis
       of benefits, costs, and regulatory alternatives to OIRA for significant regulatory actions); OMB, Circular A-4, at
       31-34, 45 (Sept. 17, 2003) (providing guidance to agencies regarding compliance with E.O. 12866); see also
       E.O. 14215 (Feb. 18, 2025), 90 FR 10447, 10448 (Feb. 24, 2025) (requiring independent agencies to comply
       with E.O. 12866). In addition, E.O. 14192 requires agencies to provide their best approximation of the total
       costs or savings associated with each new regulation or repealed regulation consistent with the analyses
       required by E.O. 12866. See E.O. 14192 (Jan. 31, 2025), 90 FR 9065, 9066 (Feb. 6, 2025). For purposes of
       approximating the total cost savings and costs under E.O. 14192, the Commission uses the annualized
       monetized benefits and costs using a real discount rate of 7 percent. See Table 5 and accompanying discussion.

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various benefits and costs of the proposed amendments would not accrue at the same point in

time; rather, benefits and costs that accrue sooner are generally more valuable than those that

occur later in time. 318

          We report (1) the present values of expected benefits and costs that are monetized in our

Economic Analysis, aggregated across all affected entities, over a 10-year time horizon, starting

in 2026, as well as (2) the annualized values over the same time horizon that are derived from the

present values. This time horizon represents the period over which the principal benefits and

costs that are monetized in the Economic Analysis are expected to accrue. 319 The present values

and annualized values account for the timing of benefits and costs through discounting, which is

a procedure that accounts for the time value of money. 320 Under the proposed amendments, these

benefits and costs are only incurred by reporting companies that elect to report on a semiannual

basis.

          Table 4 reports the present values of the aggregated monetized benefits and costs. The

analysis uses annual real discount rates of 3 percent and 7 percent over a 10-year time horizon,

starting in 2026. 321 We assume that affected issuers would switch to semiannual reporting in the


318
      See Circular A-4, at 32.
319
      See id. at 31 (stating that “[t]he ending point should be far enough in the future to encompass all the significant
      benefits and costs likely to result from the rule”). For the purposes of this analysis, we assume the effective date
      of the amendments, as well as the start year for the analysis’s time horizon, is the present year. The analysis
      uses calendar years and accounts for the compliance periods included in the release (see note a in Table 4).
320
      See id. at 32 (“The Rationale for Discounting”) & 45 (“Treatment of Benefits and Costs over Time”); see also
      OIRA, Regulatory Impact Analysis: A Primer, at 11 (Aug. 15, 2011), available at
      https://www.reginfo.gov/public/jsp/Utilities/circular-a-4_regulatory-impact-analysis-a-primer.pdf (“To provide
      an accurate assessment of benefits and costs that occur at different points in time or over different time
      horizons, an agency should use discounting. Agencies should provide benefit and cost estimates using both 3
      percent and 7 percent annual discount rates expressed as a present value as well as annualized.”); Harvey S.
      Rosen & Ted Gayer, Public Finance 151 (8th ed. 2008) (defining present value as “the value today of a given
      amount of money to be paid or received in the future”).
321
      This approach is consistent with OMB Circular A-4. See Circular A-4, at 31-34 (stating that, “[f]or regulatory
      analysis, [agencies] should provide estimates of net benefits using both 3 percent and 7 percent” discount rates
      and discussing why those rates are reasonable default rates). Also, we use a mid-year discount rate. See OMB,


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first year of the 10-year time horizon. We further assume that the number of affected issuers

would remain constant over that period. We estimated in Table 2 that aggregated monetized

benefits across affected issuers are $394,350,000 per year. Over a 10-year time horizon, the

present value of aggregated monetized benefits is thus $3,413,970,906 using a 3 percent discount

rate and $2,865,051,037 using a 7 percent discount rate. For the same affected issuers, we

estimated in Table 3 that aggregated monetized costs are $158,821,000 per year. Over a 10-year

time horizon, the present value of aggregated monetized costs is thus $1,374,946,807 using a 3

percent discount rate and $1,153,874,149 using a 7 percent discount rate.

                             Table 4: Present Value of Monetized Benefits and Costs
                                 over 10 years from 2026 to 2035 (2025 Dollars)
         Estimated Effects
                                              3% real discount rate                   7% real discount rate
                Benefits
                                                   $3,413,970,906                          $2,865,051,037
                 Costs
                                                   $1,374,946,807                          $1,153,874,149
Notes: The present values for aggregated monetized benefits represent the present values of annual aggregated
benefits of $394,350,000 per year over 10 years using each of a 3 percent and 7 percent discount rate. The present
values for aggregated monetized costs represent the present values of annual aggregated costs of $158,821,000 per
year over 10 years using each of a 3 percent and 7 percent discount rate. See Section V.D.5.a We assume that
monetized benefits and costs accrue mid-year, and we use a mid-year discount rate.


          Table 5 reports annualized monetized benefits and costs using real discount rates of 3

percent and 7 percent over a 10-year horizon. 322 The lump sum present values of monetized

benefits and costs reported in Table 4 are converted in Table 5 into a constant stream of

annualized benefits and costs over a 10-year time horizon, starting in 2026. 323 Because the



      Circular A-94, at 21-22 (Oct. 19, 1992) (stating that, “When costs and benefits occur in a steady stream,
      applying mid-year discount factors is more appropriate.”).
322
      This approach is consistent with the recommended treatment of benefits and costs over time in Circular A-4.
      See id. at 45 (“You should present annualized benefits and costs using real discount rates of 3 and 7 percent”).
323
      For each discount rate, the annualized monetized benefits (costs, respectively) in Table 5 represent the constant
      annual stream of benefits (costs, respectively) whose present value over the time horizon equates the
      corresponding present value in Table 4. See note a, Table 5 for additional calculation details.

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annual aggregated monetized benefits and costs reported in Tables 2 and 3 are identical in every

year of the 10-year time horizon and because there are no initial benefits or costs at Time 0, the

annualized aggregate monetized benefits and costs in Table 5 are the same as the annual

aggregate monetized benefits and costs in Table 3. Hence, across all affected issuers, we estimate

that annualized total monetized benefits are $394,350,000 per year using a 3 percent discount

rate and $394,350,000 per year using a 7 percent discount rate. For those same affected issuers,

we estimate that annualized total monetized costs are $158,821,000 per year using a 3 percent

discount rate and $158,821,000 per year using a 7 percent discount rate.

                               Table 5: Annualized Monetized Benefits and Costs
                                over 10 years from 2026 to 2035 (2025 Dollars)
         Estimated Effects                    3% real discount rate                  7% real discount rate
              Benefits                           $394,350,000                           $394,350,000
               Costs                             $158,821,000                           $158,821,000
 Notes: For each discount rate, the annualized values are calculated by dividing the corresponding present values in
 Table 4 by the sum of discount factors over the time horizon. The discount factor in year t of the time horizon is
 equal to 1/(1 + 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟)(𝑡𝑡−0.5) .

       E. Anticipated Effects on Efficiency, Competition, and Capital Formation

       Based on our discussion above, we expect that Exchange Act reporting companies that

would switch to becoming semiannual or hybrid reporters under the proposed amendments could

incur some cost savings in terms of both time and cash flows by not having to prepare and

disclose Form 10-Qs for the first and third fiscal quarters. We expect these savings would be

greater for those companies that would become semiannual reporters, rather than hybrid

reporters, depending on the extent of voluntary quarterly disclosure provided by the hybrid

reporters. To the extent any future semiannual or hybrid reporters currently face limited

managerial capacity or financing constraints, some or all of the time and cash flows saved may

be redirected to more productive use, thereby increasing the allocative efficiency of the

companies’ resources. In addition, to the extent that companies moving to semiannual reporting

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would feel less pressure to focus on shorter term earnings at the possible expense of long-term

value creation, there could be further efficiency gains through improved managerial incentives.

          The proposed amendments, however, could also lead to efficiency reductions. As

discussed above, 324 a switch to semiannual (or hybrid) reporting would likely increase

information asymmetries, thereby reducing the informational efficiency of share prices and

reducing stock market liquidity for the companies that move away from quarterly reporting. The

magnitude of this effect would likely vary based on company characteristics and the degree to

which the delayed disclosure would impact investor decision-making. For instance, as discussed

above, for some companies or industries, investors may mainly base their investment decisions

on information that is provided in current reports, in which case a switch to semiannual reporting

may only have a limited impact on information asymmetry.

          To the extent there would be an increase in information asymmetries for companies

choosing semiannual reporting, there could also be related spillover effects, including on the

companies that would continue to report at a quarterly frequency. In particular, as discussed

above, to the extent there would be a reduction in the frequency of interim financial reports

under the proposal for a significant number of reporting companies, it would make it more

difficult for investors and information intermediaries, such as financial analysts, to compare

disclosures over time and across companies and arrive at accurate company valuations in a

timely fashion, which could decrease the informational efficiency of share prices even for

companies that would continue to file quarterly reports. 325 To the extent a switch by companies


324
      See supra Sections V.C.1.b and V.C.3.b.
325
      Financial analysts and other investment professionals, as well as non-professional investors, may try to
      substitute for the reduction in reporting frequency by searching for alternative financial data to use for their
      company valuations but would most likely incur greater search and information processing costs. Such
      substitute data may also not be as reliable or comparable across companies or time as the financial information


                                                              131

--- page 132 ---

to semiannual reporting would reduce liquidity and reduce the informational efficiency of share

prices, it would, in turn, reduce investors’ ability to make informed investment and voting

decisions and could have adverse effects on their ability to make efficient capital allocation

decisions within their portfolios. 326

          The proposed amendments could also potentially affect competition. To the extent

required quarterly reporting currently makes companies disclose time-sensitive proprietary

business information useful to competitors earlier than they would otherwise do, or the quarterly

reporting frequency gives competitors greater insight into a company’s business dynamics than

semiannual reporting would give, there could be competitive benefits to a company that adopts

semiannual reporting. In addition, to the extent a reporting company’s competitors are privately

held domestic companies or foreign companies (including foreign private issuers) without

mandated quarterly reporting, companies may improve their competitive position by switching to

semiannual reporting if the current compliance costs of the required quarterly reporting are a

competitive disadvantage. To the extent there is a fixed cost component to the quarterly reporting

requirements, smaller companies may benefit disproportionately more from any cost savings

associated with switching to semiannual reporting relative to larger industry peers (because these

fixed costs represent a larger percentage of their revenues) and thereby may also get a

comparatively larger competitive benefit from switching. We note that any competitive benefits



      disclosed in a Form 10-Q. In addition, to the extent reduced timeliness and comparability of interim reports
      increases processing and other costs to financial analysts, they may stop covering certain companies altogether.
      See supra notes 251 and 252.
326
      There are other potential negative externalities in terms of reduced allocative efficiency to the extent companies
      would adopt semiannual reporting under the proposed amendments. For example, to the extent other market
      participants (such as peer companies, whether publicly traded or privately held, customers, and suppliers) use
      and compare the information contained in the current quarterly reports made by a large number of public
      companies as an input for their own capital investment or other business decisions, the efficiency of these
      market participants’ resource allocations may also be reduced if a significant number of reporting companies
      would adopt semiannual reporting under the proposed amendments.

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from cost savings or a reduction in the frequency of disclosures of proprietary information could

be mitigated if less frequent reporting leads to a higher cost of capital, as discussed above.

       The proposed amendments may also have effects on capital formation. On the one hand,

to the extent that companies adopt semiannual (or hybrid) reporting and the cost savings from

switching from quarterly reporting can be redeployed to a more productive use such as new

investments, there could be an increase in net capital formation. In addition, a reduced burden of

periodic disclosures on reporting companies may encourage additional companies to raise capital

through registered securities offerings in public markets. An increase in the number of

companies who access public capital markets could increase capital formation to the extent it

facilitates the raising of more capital than would be available to these issuers outside of public

markets, for example, due to an enhancement of investor protections and a broadening of the

investor base.

       On the other hand, less frequent disclosures may result in a higher cost of capital if

investors receive less precise information about an issuer’s cash flows and how they covary with

other issuers’ cash flows or if there is an increased risk of information asymmetry across

investors because of the increased time gaps between public disclosures. A higher cost of capital

could, in turn, reduce corporate investment and thereby negatively impact capital formation.

Thus, to the extent the proposed amendment would lead to higher cost of capital for semiannual

or hybrid reporters, it could negatively affect capital formation. Capital formation could be

further impaired to the extent companies’ choice of switching to semiannual reporting would

lead to the negative externalities on the broader information environment discussed above,

thereby also potentially raising the cost of capital for quarterly reporters as well. Such a negative

spillover effect on quarterly reporters’ cost of capital could be mitigated, however, if continued



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quarterly reporting is viewed by investors as a credible signal of company quality, and therefore

quarterly reporters may benefit from a comparatively higher degree of investor confidence

compared to those companies that would choose to become semiannual or hybrid reporters.

          The aggregate effects on efficiency, competition, and capital formation will depend on

how many reporting companies choose to report on a semiannual basis and how investors

respond to that choice. It also depends on which types of reporting companies choose to report

on a semiannual basis as the importance of more frequent periodic disclosure to investors and

market participants would vary across reporting companies.

          F. Reasonable Alternatives

          In this section, we present certain significant alternatives and a discussion of their

benefits and costs relative to the proposed rules.

              1. Mandatory Semiannual Reporting; Elimination of Quarterly Reporting

          As an alternative to the proposed optional semiannual reporting approach, we considered

retaining the existing Form 10-Q disclosure requirements but requiring interim reporting on a

semiannual rather than quarterly basis for all reporting companies. 327

          Compared to the proposed optional semiannual reporting approach, this alternative would

provide no flexibility for reporting companies to elect the reporting frequency option—either

semiannual or quarterly—that may best serve the company and its investors. This lack of

flexibility could run counter to what some companies may view as the better reporting frequency

to serve the company and its investors. For example, if a reporting company believed the best

way to manage investor or analyst expectations or obligations under an agreement would be to




327
      See, e.g., supra note 62 (discussing required UK semiannual reporting and the elimination of UK quarterly
      reporting).

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report quarterly to the Commission, this ability could be frustrated under the alternative proposal

consisting of mandated semiannual reporting.

       Because mandated semiannual reporting would force companies to become either

semiannual or hybrid reporters, with no choice of filing reports on Form 10-Q, we expect the

potential costs to be larger under this alternative than under the proposal. To the extent those

companies that would have incentives to remain as quarterly reporters under the proposal would

have incentives to become hybrid reporters under this alternative, the expected larger costs of

this alternative relative to the proposal would be mitigated to some extent.

       We expect that the benefits associated with reporting cost savings, as discussed above,

would be larger under this alternative than under the proposal since no company would incur the

costs associated with filing interim reports with the Commission for the company’s first and third

fiscal quarters. These larger benefits, however, would be reduced for those companies that would

choose to become hybrid reporters under this alternative, as they may continue to provide

voluntary quarterly information.

       In terms of the effects on efficiency, competition, and capital formation, we expect the

potential negative market externalities from less frequent reporting, as discussed in Section V.F

above, to be greater under this alternative than under the proposal, because we expect a greater

potential loss of information (compared to the baseline) under this alternative than under the

proposal.

            2. Semiannual Reporting Only for Certain Registrant Categories

       As an alternative, we considered an optional semiannual reporting approach that would

be available only to reporting companies in certain smaller size categories, for example reporting

companies that are: (1) within one of the existing categories under Commission rules, which

generally base the criteria for the category on company size—including (A) emerging growth

                                                    135

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companies, (B) smaller reporting companies, or (C) companies that are not accelerated filers or

large accelerated filers—or (2) companies that meet the criteria of a new size-based category the

Commission could create. Or such an alternative could consist of one or more combinations of

those categories.

       As compared to the proposal, an alternative that limited optional semiannual reporting to

one category or a combination of categories of companies that generally indicate small company

size would result in the exclusion of larger companies from optional semiannual reporting. Thus,

under that alternative, larger companies would have less flexibility to opt for the reporting

frequency that best serves those companies and their shareholders and would not be able to avail

themselves of the benefits of cost savings and time savings that could accrue under the proposal.

Even though the alternative would reduce the aggregate potential benefits from reporting cost

savings compared to the proposal (by precluding large companies from filing semiannual

reports), it would still provide the flexibility of reporting frequency choice and the associated

potential cost savings for smaller sized reporting companies that may currently face a

disproportionate cost burden of the quarterly reporting requirement, as discussed above.

       The potential informational costs of the proposal stem from those companies that choose

to switch to semiannual reporting, as discussed above. As compared to the proposal, an

alternative that does not allow this option for larger companies would have the potential

informational costs limited to smaller, potentially less economically influential companies. This

difference in costs is limited by the extent to which we would expect large companies to opt to

continue filing quarterly under the proposal. To the extent that larger companies may convey

more information about market fundamentals, this alternative could result in less expected




                                                    136

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informational costs, compared to the proposal, because there would still be potentially valuable

information spillovers from the large quarterly filers to smaller semiannual filers.

               3. Form 8-K Filing Requirement When Company Decides to Change Reporting
                  Frequency for Next Fiscal Year

          Another alternative would be a requirement that a reporting company must file a report

on Form 8-K within four business days of a decision that the company intends to change its

frequency of reporting in connection with periodic reports that cover the next fiscal year.

          As compared to the proposal, this alternative could add complexity to Commission rules

as we expect that under such an alternative the Commission would need to provide for

requirements concerning when a decision is considered to have been made that triggers the Form

8-K filing obligation. Once a decision to change the frequency of interim reporting has been

disclosed in a Form 8-K, companies may have less flexibility to change their minds before filing

the next Form 10-K as doing so would likely confuse investors or be interpreted negatively.

          To the extent uncertainty about what interim reporting frequency to expect from a

company for the upcoming fiscal year imposes costs on investors or other market participants, 328

they may benefit from the alternative of a Form 8-K filing obligation by receiving an earlier

notice of what the company intends to do.

          The alternative of a Form 8-K filing obligation would impose Form 8-K filing costs not

present under the proposal that could marginally offset time and money savings for semiannual

filers under the proposal.




328
      One such cost could be potentially increased volatility of share prices before the uncertainty about issuers’
      upcoming interim reporting frequency is resolved.

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4. Longer Filing Deadline for Form 10-S than for Form 10-Q

       Another alternative would be a longer filing deadline for Form 10-S than for Form 10-Q.

Under this alternative, the disclosure requirements of Form 10-S would be the same as those of

Form 10-Q (except that Form 10-S would cover a longer six-month period). One factor relevant

to this alternative is whether it would take the independent public accountant a longer period of

time to review financial statements covering a six-month period than a three-month period

because of the longer period of time covered or because less frequent auditor review would

involve a loss of economies of scale that could slow down the independent public accountant’s

review process.

       Extending the reporting deadline for semiannual interim reports could grant semiannual

reporters and independent public accountants that conduct reviews more time to effectively

manage their resources. This could potentially reduce the overall cost of preparing the interim

reports, reduce the likelihood of delinquent filings, and potentially reduce the risk of errors in the

interim financial statements. Conversely, extending the deadline to file Form 10-S could delay

the disclosure of Form 10-S even further which could incrementally increase information

asymmetry and costs to investors.

           5. Revisions to Form 10-Q

       As another alternative to the proposed semiannual reporting, we considered revising

Form 10-Q to reduce the burden on reporting companies of filing this form. Potential changes to

Form 10-Q could include changes related to one of the following items or a combination of these

items: required interim financial statement review by an independent public accountant, XBRL

data tagging, MD&A, certain items disclosed in Part II of Form 10-Q such as Item 2 information

required by Item 701 of Regulation S-K and associated referencing to any previously filed Form



                                                     138

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8-K containing Item 701 disclosures, or year-to-date comparisons involving financial statements

and MD&A.

       Relative to the baseline, such revisions to Form 10-Q could reduce reporting companies’

compliance costs in terms of both time and money, thereby potentially enabling the companies to

improve the allocative efficiency of their resources. Private companies could be more inclined to

enter public markets if they expect lower compliance costs under this alternative, and more

companies could decide to remain public for the same reason. To the extent the reduced

disclosure requirements would result in less information provided publicly, however, such

compliance cost savings could be offset by increased costs associated with higher information

asymmetry, such as less liquidity and a higher cost of capital. There could also be other costs

depending on the specific type of revisions that would be made to Form 10-Q under this

alternative. For example, if the revisions would remove the requirement of financial statement

review by an independent public accountant it could increase the likelihood of errors in the

interim financial statements, which could be costly to both issuers and investors.

       Fundamentally, the difference in benefits between this alternative and the proposal is that

the alternative would lower reporting costs by reducing mandated reporting requirements,

whereas the proposal would lower reporting costs by reducing mandated reporting frequency.

The difference in costs would primarily be costs associated with less information disclosed to

investors (and potentially also reliability of quarterly reports depending on type of revisions to

Form 10-Q) under the alternative versus the costs associated with investors receiving existing

disclosures less frequently under the proposal. The optionality of semiannual reporting would

allow issuers to tailor reporting frequency to their own specific situation, whereas the Form 10-Q

revisions under the alternative would apply to all issuers, which could make the proposal more



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beneficial to both issuers and investors than this alternative, all else equal. The comparative cost

and benefits of this alternative versus the proposal would ultimately depend on the extent of the

potential changes to Form 10-Q under the alternative and how many and what type of companies

would elect semiannual reporting under the proposal. It would also depend on how many and

what type of companies would choose to voluntarily provide disclosure that would no longer be

required under the alternative. For example, depending on the specific type of revisions that

would be done to Form 10-Q under this alternative, such a reduction in information could

increase the likelihood that errors in financial statements go unnoticed by investors, reduce

investors’ understanding of changes in the business over time, or increase information

asymmetry and related costs to investors, potentially resulting in less liquidity and a higher cost

of capital.

        G. Request for Comment

        We request comment on all aspects of our economic analysis, including the potential

costs and benefits of the proposed amendments and alternatives, and whether the amendments, if

adopted, would promote efficiency, competition, and capital formation. Commenters are

requested to provide empirical data, estimation methodologies, and other factual support for their

views, in particular, on costs and benefits estimates. In addition, we request comment on the

following:

48.   What would be the benefits to investors from reporting companies’ flexibility to file

      semiannual reports on Form 10-S, instead of quarterly reports on Form 10-Q? Are there

      certain types of companies or industries for which such benefits would be greater than for

      others? Would the benefits to investors be limited to the pass-through of cost savings, or

      would there be other kinds of benefits, such as improved managerial incentives or

      reallocation of company resources to potentially more productive corporate activities?

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49.   What would be the costs to investors from providing reporting companies with flexibility to

      file semiannual reports on Form 10-S, instead of quarterly reports on Form 10-Q? Would

      the option for semiannual reporting increase information asymmetries in ways that impair

      investors’ abilities to make investment and voting decisions? To the extent there are such

      costs or information is reduced, would other regulatory requirements (beyond those

      requiring interim reports) or market forces mitigate such factors?

50.   What compliance cost savings would be realized by companies that would elect the

      proposed semiannual reporting option? Please provide any data regarding the cost of

      preparing quarterly reports, including employee and director time, legal counsel fees,

      external accounting advice or independent public accountant review fees, costs for XBRL

      data tagging, and other costs associated with filing Form 10-Q. To what extent would the

      option to file one semiannual report, rather than two quarterly reports for the same period,

      result in lower costs, such as independent public accountant review fees? Would

      semiannual filers’ audit fees paid—in connection with an annual audit of their financial

      statements or management’s assessment of the effectiveness of internal control over

      financial reporting—be materially different in any way compared to the fees that would

      have been paid if the same company were a quarterly filer?

51.   If the proposal were adopted and a reporting company were to switch from quarterly to

      semiannual reporting as a result, what would be the initial costs of the switch? What would

      be the recurring costs, if any? In connection with such a switch, would there be costs

      associated with procuring, developing, and testing new information technology, engaging

      service providers, or updating policies, procedures, and compliance systems and, if so,

      what would be the amount of those costs? Would there be potential costs associated with



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adjusting or renegotiating contracts and agreements that may rely on quarterly financial

      information, such as loan agreements or managerial compensation contracts, and, if so,

      what would be the amount of those costs?

52.   What percentage of companies currently required to report quarterly on Form 10-Q would

      likely switch to semiannual reporting? Please provide an explanation of any percentage

      estimate(s), including assumptions and methodology used.

53.   What general economic consequences would result from companies electing to report

      semiannually under the proposed flexible approach? Would semiannual filers reallocate

      any resources freed up from a potentially lower reporting burden to alternative uses, such

      as capital expenditure or other business needs?

54.   Are there capital market factors that would limit a reporting company’s ability to switch to

      semiannual reporting if the proposal were adopted? For example, is creditor demand for

      quarterly financial information one such potential limiting factor?

55.   For semiannual filers who would not voluntarily release earnings quarterly, would stock

      price movements around the release of semiannual financial information be more volatile

      compared to movements around quarterly releases? If so, what are the reasons this would

      occur? If so, how would this affect investors, companies, and markets?

56.   If the proposal were to reduce securities analyst coverage of Exchange Act reporting

      companies that elect the semiannual reporting option, what effect would this have on

      investors and companies? How would such a reduction in analyst coverage affect stock

      market price efficiency? How would such a reduction affect liquidity of semiannual filers’

      securities?




                                                   142

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57.     What impact would the proposal—including the proposed option to file interim reports on a

        semiannual basis and the proposed financial statement rule changes, including to age of

        financial statement rules—have on the ability of semiannual filers to conduct public

        offerings? Would any cost savings generated by the less frequent interim reporting be

        offset by a potential perceived need to include quarterly or more recent financial

        information in Securities Act registration statements or prospectuses based on market

        practices or liability concerns? For example, would semiannual filers continue to retain

        independent public accountants to review their financial statements on a quarterly basis to

        facilitate capital-raising by the company in offerings registered under the Securities Act?

58.     Would a company’s valuation or cost of capital differ based on whether the company is a

        quarterly filer or a semiannual filer? Please explain the reasons why there would be a

        difference and provide any specific data. Would less frequent interim reporting negatively

        affect the ability of investors or other market participants to value the company’s

        securities? If cost of capital would increase for semiannual filers, would this result from an

        increase in the cost of equity or cost of debt (or both)? How?

VI.       PAPERWORK REDUCTION ACT ANALYSIS

          A. Summary of the Collections of Information

          Certain provisions of our rules and forms that would be affected by the proposed

amendments contain “collection of information” requirements within the meaning of the

Paperwork Reduction Act (“PRA”). 329 We are submitting the proposed amendments to OMB for

review and approval in accordance with the PRA. 330 The hours and costs associated with



329
      44 U.S.C. 3501 et seq.
330
      44 U.S.C. 3507(d); 5 CFR 1320.11.

                                                      143

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preparing, filing, and sending the forms and retaining records constitute reporting and cost

burdens imposed by each collection of information. An agency may not conduct or sponsor, and

a person is not required to comply with, a collection of information requirement unless it

displays a currently valid OMB control number. The titles for the collections of information are:

          •   Form S-1 (OMB Control No. 3235-0065);

          •   Form S-3 (OMB Control No. 3235-0073);

          •   Form S-4 (OMB Control No. 3235-0324);

          •   Form S-11 (OMB Control No. 3235-0067);

          •   Form 10-K (OMB Control No. 3235-0063);

          •   Form 10-Q (OMB Control No. 3235-0070);

          •   Form 10 (OMB Control No. 3235-0064); and

          •   Form 10-S (a proposed new collection of information).

          We are applying for an OMB control number for the proposed new collection of

information in accordance with 44 U.S.C. 3507(j) and 5 CFR 1320.13, and OMB has not yet

assigned a control number to this new collection. The forms listed above were adopted or, in the

case of proposed Form 10-S, would be adopted under the Securities Act or the Exchange Act.

These forms set forth the disclosure requirements for registration statements, annual reports,

quarterly reports, and proposed semiannual reports filed by registrants to provide investors with

information to make informed investment decisions. 331 Responses to these collections of

information are mandatory. Responses to these information collections are not kept confidential,

and there is no mandatory retention period for the information disclosed.


331
      We are also proposing technical amendments to Form 8-K, Form 6-K, Form 12b-25, and Schedule 14A to
      include references to semiannual reporting. We have not included these filings among the affected collections of
      information because we do not believe the paperwork burden for these filings would change as a result of these
      technical amendments.

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A description of the proposed amendments, including the need for the information and its

use, as well as a description of the likely respondents, can be found in Section III above, and a

discussion of the economic effects of the proposed amendments can be found in Section V

above.

         B. Estimated Paperwork Burden Effects of the Proposed Amendments

         The following PRA Table 1 summarizes the estimated effects of the proposed

amendments on the paperwork burdens associated with the affected forms.

 PRA Table 1. Estimated Paperwork Burden Effects of the Proposed Amendments*

 Proposed Amendment                                                   Affected Forms            Estimated Effect



 § 240.13a-13 and § 240.15d-13                                         Form 10-Q                Estimated reduction of 3,585 Form 10-Q
                                                                                                filings per year**
 Permit reporting companies to file semiannual interim
 reports on Form 10-S in lieu of filing quarterly reports on
 Form 10-Q                                                             Form 10-S                162.2 burden hours per response***
                                                                                                $32,437 cost burden per response****

 Form S-1, Form S-3, Form S-4, Form S-11, Form 10,                     Form S-1                 For all forms shown, 0.2 hour increase in
 Form 10-K                                                             Form S-3                 burden hours per response
                                                                       Form S-4
 Add a check box to indicate whether the registrant has                Form S-11
 elected to file semiannual reports                                    Form 10
                                                                       Form 10-K
  * In this table, the burden hours per response have been rounded to the first decimal place and the cost burden per response has been
  rounded to the nearest dollar.
  ** The estimated reduction of 3,585 Form 10-Q filings per year is calculated as: (1) in connection with proposed new Form 10-S, the
  Annual Responses from Column (A) of PRA Table 4 below (1,195), times (2) 3 (representing the first, second, and third fiscal quarter
  Form 10-Q filings that would no longer be made by a company electing semiannual reporting on Form 10-S).
  *** The burden hours per response for Form 10-S is calculated as: (1) the estimated Burden Hours in Column (B) of PRA Table 4
  below (193,816), divided by (2) the estimated Annual Responses in Column (A) of PRA Table 4 below (1,195).
  **** The cost per response for Form 10-S is calculated as: (1) the estimated Cost Burden in Column (C) of PRA Table 4 below
  ($38,763,204), divided by (2) the estimated Annual Responses in Column (A) of PRA Table 4 below (1,195).


         C. Incremental and Aggregate Burden and Cost Estimates

         We estimate below the incremental and aggregate increase in paperwork burden as a

result of the proposed amendments. These estimates represent the average burden for all

respondents, both large and small. In deriving our estimates, we recognize that the burdens will

likely vary among individual respondents based on a number of factors, including the size and


                                                                         145

--- page 146 ---

complexity of their business. These estimates include the time and the cost of preparing and

reviewing disclosure, filing documents, and retaining records. We believe that some registrants

would experience costs in excess of this average and some registrants would experience less than

the average costs. Our methodologies for deriving these estimates are discussed below.

        For purposes of the PRA, the burden is generally allocated between burden hours and

costs. The cost burden generally reflects the portion of the burden carried by outside

professionals, while the burden hours generally reflect the portion of the burden carried by the

company internally. With respect to the changes related to the inclusion of a check box on Forms

S-1, S-3, S-4, S-11, 10, and 10-K, we believe the burden would typically be assumed entirely by

the registrant internally and reflected as burden hours and, therefore, we have not reflected an

increased cost burden associated with those proposed amendments. The following PRA Table 2

summarizes the estimated effects of the proposed amendments on the paperwork burdens

associated with these affected collections of information:


 PRA Table 2. Standard Estimated Burden Allocation for Specified Collections of
 Information
                        Number of         Estimated Burden Hour         Total Estimated Incremental
 Form               Estimated Affected   Increase or (Decrease) per   Increase or (Decrease) in Burden
                        Responses            Affected Response                     Hours
                           (A)                      (B)                         (C) = (A) x (B)

 Form S-1                  908                       .2                            181.60
 Form S-3                 1,467                      .2                            293.40
 Form S-4                  588                       .2                            117.60
 Form S-11                 14                        .2                             2.80
 Form 10                   104                       .2                             20.80
 Form 10-K                8,292                      .2                           1,658.40



        With respect to Form 10-Q, we expect the proposed amendments would reduce the

number of annual responses proportionate to the number of registrants that elect to report

semiannually. For purposes of the PRA, taking a conservative approach, we estimate that

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--- page 147 ---

approximately 20% of reporting companies would change their reporting frequency from

quarterly reporting to semiannual reporting if the proposed rules are adopted. 332 As a result, we

estimate that this would result in a reduction of approximately 3,585 Form 10-Q filings per year.

          The following PRA Table 3 summarizes the requested paperwork burden changes to

existing information collections, including the estimated total reporting burdens and costs, under

the proposed amendments.




332
      We derived our estimate that 20% of reporting companies would change their reporting frequency from
      quarterly reporting to semiannual reporting based on an analysis that took into account and synthesized the
      anticipated effects of several factors, including: (1) responses answering “Yes” by 75% of 183 listed companies
      that responded to the survey question, “Do you believe that your company and/or your investors would benefit
      from moving to a semi-annual reporting model?” (Nasdaq 2019); (2) evaluation of the potential impact of the
      factors we discuss in Section III on companies that may be inclined to switch to semiannual reporting but may
      determine to continue to report quarterly, including: expectations of investors and securities analysts, disclosure
      practices that may be prevalent in a company’s industry, contractual obligations, and companies’ insider
      trading-related concerns; and (3) the possibility there will be long-run effects of the proposal if adopted
      whereby some reporting companies switch to semiannual reporting a significant period of time after adoption
      after observing effects on and experiences of other companies that report semiannually. Our estimate that 20%
      of reporting companies would change their reporting frequency from quarterly reporting to semiannual
      reporting does not include these potential long-run effects noted above, because we believed there is a level of
      uncertainty around such potential long-run effects that is too great to include in our estimate for paperwork
      burden purposes.

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PRA Table 3. Requested Paperwork Burden under the Proposed Amendments

              Current Burden                                             Program Change                                                                         Revised Burden



Form          Current        Current Burden       Current Cost           Change in          Number of      Estimated Increase     Estimated Increase or         Annual          Burden Hours***       Cost Burden****
              Annual         Hours                Burden                 Number of          Estimated      or (Decrease) in       (Decrease) in Cost            Responses
              Responses                                                  Annual             Affected       Burden Hours*          Burden**
                                                                         Responses          Responses

              (A)            (B)                  (C)                    (D)                (E)            (F)                    (G)                           (H) = (A) +     (I) = (B) + (F)       (J) = (C) + (G)
                                                                                                                                                                (D)

Form S-1      908            145,861              $262,550,016           0                  908            181.60                 $0                            908             146,043               $262,550,016

Form S-3      1,467          168,291              $302,923,031           0                  1,467          293.40                 $0                            1,467           168,584               $302,923,031

Form S-4      588            560,988              $675,605,379           0                  588            117.60                 $0                            588             561,106               $675,605,379

Form S-11     14             2,564                $4,614,624             0                  14             2.80                   $0                            14              2,567                 $4,614,624

Form 10       104            5,170                $9,305,712             0                  104            20.80                  $0                            104             5,191                 $9,305,712

Form 10-K     8,292          14,056,593           $2,773,166,578         0                  8,292          1,658.40               $0                            8,292           14,058,251            $2,773,166,578

Form 10-Q     19,419         2,624,187            $524,837,313           (3,585)            3,585          (484,459.06)           ($96,891,795)                 15,834          2,139,728             $427,945,518

Total         30,792         17,563,654           $4,553,002,653         (3,585)            14,958         (482,184.46)           ($96,891,795)                 27,207          17,081,470            $4,456,110,858

* The Estimated Increase or (Decrease) in Burden Hours in Column (F) is taken from Column (C) of PRA Table 2 above for Forms S-1, S-3, S-4, S-11, 10, and 10-K and, for Form 10-Q, is calculated as: (1) The Current Burden
Hours in Column (B), divided by (2) Current Annual Responses in Column (A), times (3) the Change in Number of Annual Responses in Column (D). The Estimated Increase or (Decrease) in Burden Hours for each row in
Column (F) has been rounded to the second decimal place.
** The Estimated Increase or (Decrease) in Cost Burden in Column (G) is calculated as: (1) The Current Cost Burden in Column (C), divided by (2) Current Annual Responses in Column (A), times (3) the Change in Number of
Annual Responses in Column (D).
*** Burden Hours for each row in Column (I) have been rounded to the nearest whole number. The total for Column (I) has been calculated using unrounded values in connection with all row items in Column (I) and then
rounding the total to the nearest whole number.
**** Cost Burden for each row in Column (J) has been rounded to the nearest whole number. The total for Column (J) has been calculated using unrounded values in connection with all row items in Column (J) and then rounding
the total to the nearest whole number.




                                                                                                                   148

--- page 149 ---

For purposes of the proposed new Form 10-S, we estimate the number of annual

responses based on the conservative estimate noted above that approximately 20% of reporting

companies will elect to report semiannually. Additionally, while the disclosure requirements of

proposed new Form 10-S for semiannual reporting would be substantially the same as the

disclosure requirements in current Form 10-Q, we believe the burden of Form 10-S would be

incrementally greater than Form 10-Q because it will cover a longer period. 333 Accordingly, we

estimated the burden hour and cost burden for Form 10-S by using the current burden inventory

for Form 10-Q as the starting point and have estimated that the burdens would be approximately

20% higher for Form 10-S. We specifically request comment on the reasonableness of these

estimates.

          The following PRA Table 4 summarizes the requested paperwork burden for the

collection of information for proposed new Form 10-S, including the estimated total reporting

burdens and costs.




333
      Because Form 10-S would cover a six-month period while Form 10-Q covers a three-month period, a
      semiannual filer may take more time to review the applicable period for any disclosure required to be made in
      Form 10-S (than for Form 10-Q). Also, the longer period covered in Form 10-S may mean, depending on a
      semiannual filer’s facts and circumstances—with respect to the same line items that might otherwise be
      disclosed in Form 10-Q if the registrant were a quarterly filer—that there are more instances of these line items
      to disclose in a Form 10-S, requiring the semiannual filer to spend more time preparing these disclosures in a
      Form 10-S than would be spent to prepare similar disclosures in a single Form 10-Q.

                                                               149

--- page 150 ---

PRA Table 4. Requested Paperwork Burden for the New Collection of Information
                   Requested Paperwork Burden*


Collection of      Annual Responses                               Burden Hours                                  Cost Burden
Information        (A)**                                          (B)***                                        (C)****

Form 10-S          1,195                                          193,817                                       $38,763,204

Notes:
* Numbers in this table have been rounded to the nearest whole number.
** The number of Estimated Affected Responses in Column (A) for Form 10-S (1,195) is the product of: (1) 5,976 affected reporting
companies (the number of registrants identified by CIK that filed a Form 10-K or an amendment thereto during calendar year 2024, as
discussed supra note 206 and accompanying text), times (2) 0.2 (representing the percentage of affected reporting companies we estimate
would elect to report semiannually).
*** The number of Burden Hours in Column (B) is calculated as: (1) the unrounded number in connection with Annual Responses from
Column (A) (1,195.2), times (2) the number of burden hours per Form 10-Q, which is calculated by dividing the Current Burden Hours for
Form 10-Q in Column (B) of PRA Table 3 above (2,624,187) by Current Annual Responses for Form 10-Q in Column (A) of PRA Table
3 above (19,419)), times (3) 1.2 (representing the incrementally greater burden of Form 10-S we estimate as compared to Form 10-Q).
**** The cost burden hours in Column (C) is calculated as: (1) the unrounded number in connection with Annual Responses from
Column (A) (1,195.2), times (2) $27,027 (the cost burden number per Form 10-Q, which is calculated by dividing the Current Cost
Burden for Form 10-Q in Column (C) of PRA Table 3 above ($524,837,313) by Current Annual Responses for Form 10-Q in Column (A)
of PRA Table 3 above (19,419)), times (3) 1.2 (representing the incrementally greater burden of Form 10-S we estimate as compared to
Form 10-Q).




         D. Request for Comment

         Pursuant to 44 U.S.C. 3506(c)(2)(B), we request comment in order to:

         •      Evaluate whether the proposed changes to the collections of information are

                necessary for the proper performance of the functions of the Commission, including

                whether the information will have practical utility;

         •      Evaluate the accuracy of our estimates of the additional burden hours that would

                result from adoption of the proposed amendments and new Form 10-S;

         •      Determine whether there are ways to enhance the quality, utility, and clarity of the

                information to be collected;

         •      Evaluate whether there are ways to minimize the burden of the collections of

                information on those who respond, including through the use of automated collection

                techniques or other forms of information technology; and




                                                                         150

--- page 151 ---

•   Evaluate whether the proposed amendments and new Form 10-S would have any

              effects on any other collection of information not previously identified in this section.

          Any member of the public may direct to us any comments concerning the accuracy of

these burden estimates and any suggestions for reducing these burdens. Persons submitting

comments on the collection of information requirements should direct their comments to the

OMB Desk Officer for the Securities and Exchange Commission,

[email protected], and should send a copy to, Vanessa A.

Countryman, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE,

Washington, DC 20549-1090, with reference to File No. S7-2026-15. Requests for materials

submitted to OMB by the Commission with regard to the collection of information should be in

writing, refer to File No. S7-2026-15 and be submitted to the U.S. Securities and Exchange

Commission, Office of FOIA Services, 100 F Street NE, Washington DC 20549-2736. OMB is

required to make a decision concerning the collections of information between 30 and 60 days

after publication of this release. Consequently, a comment to OMB is best assured of having its

full effect if OMB receives it within 30 days of publication.

VII.      CONGRESSIONAL REVIEW ACT

          For purposes of Subtitle E of the Small Business Regulatory Enforcement Fairness Act of

1996 (also known as the Congressional Review Act), 334 the Commission must seek OMB’s

determination as to whether a final regulation constitutes a “major” rule. Under the

Congressional Review Act, a rule is considered “major” where, if adopted, it results or is likely

to result in:

          •   An annual effect on the economy of $100 million or more;


334
      See 5 U.S.C. chapter 8.

                                                      151

--- page 152 ---

•   A major increase in costs or prices for consumers or individual industries; or

          •   Significant adverse effects on competition, investment, or innovation. 335

          To help inform OMB’s determination whether any final rule that results from the

proposal would be a “major rule,” we solicit comment and data on:

          •   The potential effect on the U.S. economy on an annual basis;

          •   Any potential increase in costs or prices for consumers or individual industries; and

          •   Any potential effect on competition, investment, or innovation.

          We request those submitting comments to provide data and other factual support for their

views to the extent possible.

VIII. INITIAL REGULATORY FLEXIBILITY ACT ANALYSIS

          The Regulatory Flexibility Act 336 requires an agency, when issuing a rulemaking

proposal, to prepare and make available for public comment an Initial Regulatory Flexibility

Analysis (“IRFA”) that describes the impact of the proposal on small entities, unless the

Commission certifies that the proposal, if adopted, would not have a significant economic impact

on a substantial number of small entities. 337 This IRFA has been prepared in accordance with the

Regulatory Flexibility Act. It relates to the proposed amendments and new Form 10-S described

in Section III above.

          A. Reasons for, and Objectives of, the Proposed Action

           The proposed amendments and new Form 10-S would provide Exchange Act reporting

companies with the option of filing interim reports on a semiannual basis rather than on a

quarterly basis. Semiannual reports would be filed on new Form 10-S in lieu of quarterly reports


335
      See 5 U.S.C. 804(2) (defining “major rule”).
336
      5 U.S.C. 601 et seq.
337
      5 U.S.C. 603(a); 5 U.S.C. 605(b).

                                                      152

--- page 153 ---

on Form 10-Q. We are also proposing various amendments to Regulation S-X, including age of

financial statement requirements, that will help enable the proposed option to report

semiannually and simplify these requirements. We are also proposing to add a check box to

indicate whether the registrant has elected to file semiannual reports pursuant to Exchange Act

Rule 13a-13(b) or 15d-13(b) to the cover page of Forms S-1, S-3, S-4, S-11, 10, and 10-K. We

are also proposing technical changes, including to various rules that currently refer to quarterly

reporting to refer to semiannual reporting or to Form 10-S and to correct references to rescinded

forms.

         The proposal, if adopted, would provide an Exchange Act reporting company with the

flexibility to determine the frequency of interim reporting that best suits its particular

circumstances. Companies that decide to report on a semiannual basis may reduce interim

reporting compliance costs of time and money. Companies that elect semiannual interim

reporting would incur these interim reporting costs only one time in connection with each fiscal

year instead of three times in connection with each fiscal year pursuant to quarterly reporting.

Providing such regulatory flexibility could reduce the regulatory burden of being a public

company, which could potentially influence a company’s decision to become a public company

and encourage more companies to become public companies.

         The proposed changes to Regulation S-X will conform the financial statement

requirements in periodic reports to the semiannual reporting frequency of semiannual filers. The

proposed changes to Regulation S-X concerning age of financial statement requirements would

also help ensure that, among other things, when semiannual filers file registration statements,

their financial statements in those registration statements are not considered “stale” under

existing rules built along a quarterly framework and would revise those age requirements for



                                                     153

--- page 154 ---

registrants that would be semiannual filers to fit with their reporting schedule. The proposed

changes to the age of financial statement rules would also simplify existing rules, including by

combining and centralizing the age requirements in a single rule and by using plain wording and

plain methods of counting the age of financial statements in order to reduce the complexity of

existing rules.

          The reasons for, and objectives of, the proposed amendments are discussed in more detail

in Section III above.

          B. Legal Basis

          We are proposing amendments and new Form 10-S under the authority set forth in

Sections 2(a), 4(a), 7, 10, 19(a), and 28 of the Securities Act; Sections 3, 12, 13, 14, 15, 23(a),

and 36 of the Exchange Act; and Section 319(a) of the Trust Indenture Act of 1939.

          C. Small Entities Subject to the Proposed Rules and Amendments

          The proposed amendments and new Form 10-S would apply to registrants that are small

entities. The Regulatory Flexibility Act defines “small entity” to mean “small business,” “small

organization,” or “small governmental jurisdiction.” 338 The regulation at 17 CFR 240.0-10(a)

(Rule 0-10(a) under the Exchange Act) defines a registrant, other than an investment company,

to be a “small business” or “small organization” for purposes of the Regulatory Flexibility Act if

it had total assets of $5 million or less on the last day of its most recent fiscal year. The

regulation at 17 CFR 270.0-10(a) (Rule 0-10(a) under the Investment Company Act of 1940

(“Investment Company Act”)) defines the terms “small business” or “small organization” for

purposes of the Regulatory Flexibility Act as an investment company that, together with other

investment companies in the same group of related investment companies, had net assets of $50



338
      5 U.S.C. 601(6).

                                                      154

--- page 155 ---

million or less as of the end of its most recent fiscal year. 339 The regulation at 17 CFR 230.157

(Rule 157 under the Securities Act) defines a registrant, other than an investment company, to be

a “small business” or “small organization” for purposes of the Regulatory Flexibility Act if it had

total assets of $5 million or less on the last day of its most recent fiscal year and is engaged or

proposing to engage in an offering of securities not exceeding $5 million.

          In connection with Exchange Act Rule 0-10(a), we estimate that there are approximately

705 registrants with a class of securities registered under Section 12 of the Exchange Act that file

reports on Form 10-Q and on Form 10-K that are small entities. 340 We expect that the proposed

amendments that provide the option to report semiannually on Form 10-S in lieu of quarterly on

Form 10-Q and the related proposed amendments to Regulation S-X will affect some reporting

companies that elect to report semiannually and are small entities under the definitions of small

entity under the Exchange Act for purposes of the Regulatory Flexibility Act. In addition, we are

proposing to add a check box to indicate whether the registrant has elected to file semiannual

reports pursuant to Exchange Act Rules 13a-13(b) or 15d-13(b) to the cover page of Form 10 and

10-K. The proposed amendments to Forms 10 and 10-K to provide this check box will affect

registrants that file registration statements on Form 10 or annual reports on Form 10-K, including

registrants that are small entities under the definition of small entity under the Exchange Act for

purposes of the Regulatory Flexibility Act.




339
      Business development companies currently file Form 10-Q quarterly reports and Form 10-K annual reports. See
      supra note 6.
340
      Our estimate is based on the number of registrants (excluding business development companies, face-amount
      certificate companies, and asset-backed securities issuers) that filed a Form 10-K in calendar year 2024 and had
      total assets of $5 million or less on the last day of the fiscal year covered in that Form 10-K filing. We provide
      an estimate for business development companies and face-amount certificate companies that would be small
      entities under the Commission’s Investment Company Act small entity definitions below. We excluded asset-
      backed securities issuers because, although they file Form 10-K, they do not file Form 10-Q.

                                                               155

--- page 156 ---

In connection with Investment Company Act Rule 0-10(a), we estimate that there are

approximately seven business development companies and one face-amount certificate company

that file reports on Form 10-Q and Form 10-K that are small entities. We expect that the

proposed amendments that provide the option to report semiannually on Form 10-S in lieu of

quarterly on Form 10-Q and the related proposed amendments to Regulation S-X will affect

some of these entities that elect to report semiannually and are small entities under the definition

of small entity under the Investment Company Act for purposes of the Regulatory Flexibility

Act. In addition, we are proposing to add a check box to indicate whether the registrant has

elected to file semiannual reports pursuant to Exchange Act Rules 13a-13(b) or 15d-13(b) to

Forms 10 and 10-K. The proposed amendments to Forms 10 and 10-K to provide this check box

will affect entities that file registration statements on Form 10 and annual reports on Form 10-K,

including registrants that are small entities under the definition under the Investment Company

Act for purposes of the Regulatory Flexibility Act.

          We estimate that there are 137 registrants that are small entities for purposes of Securities

Act Rule 157. 341 We are proposing amendments to Regulation S-X to facilitate semiannual

reporting (which would affect financial statements in registration and proxy statements as

described above). We are proposing to add a check box to indicate whether the registrant has

elected to file semiannual reports pursuant to Exchange Act Rules 13a-13(b) or 15d-13(b) to the

cover page of Forms S-1, S-3, S-4, and S-11. The proposed amendments to Regulation S-X and



341
      Our estimate is based on—out of the universe of registrants that have filed on Form 10-K for the calendar year
      2024 and had total assets of $5 million or less on the last day of the fiscal year covered by the Form 10-K—the
      number of those registrants that filed a registration statement on Form S-1, S-3, or S-11 in calendar year 2024.
      For our estimate, we have assumed the number of issuers that actually filed such registration statements in 2024
      provides a good estimate of affected registrants who would be required to complete the check box on the cover
      page of these forms and that, depending on the capital needs of the registrant, it is possible that any future
      offerings using such forms could be for $5 million or less.

                                                              156

--- page 157 ---

to these forms will affect registrants filing registration statements on these forms, including

registrants that are small entities under the definition of small entity under the Securities Act for

purposes of the Regulatory Flexibility Act.

       D. Reporting, Recordkeeping, and Other Compliance Requirements

       We expect that the proposal, which would provide Exchange Act reporting companies

with the option of filing interim reports on a semiannual basis on new Form 10-S rather than

filing Form 10-Q on a quarterly basis and would provide for related amendments to Regulation

S-X, will have a significant effect on reporting, recordkeeping, and other compliance burdens for

registrants, including small entities, if adopted. To comply with existing Form 10-Q filing

obligations, registrants commonly incur costs, including those related to the retention of

professional advisors such as lawyers and accountants, who would provide some of the types of

professional skills necessary for the preparation of the report. If the proposal is adopted,

Exchange Act reporting companies will have the option to file one semiannual report on Form

10-S for each fiscal year in lieu of filing three quarterly reports on Form 10-Q each fiscal year.

As a result, if the proposal is adopted, we expect interim reporting compliance costs for

registrants that are Exchange Act reporting companies that elect to file interim reports

semiannually (instead of quarterly) will be significantly reduced. We generally expect that the

cost reduction and benefit would be greater in absolute terms for larger companies than for

smaller companies, because larger companies may spend more time preparing their Form 10-Q

reports currently than smaller companies due to larger companies’ scope of operations and

because larger companies may incur greater costs to retain outside professionals for similar

reasons. We generally expect, however, that the cost reduction and benefit would be greater in a

relative sense for smaller companies than for larger companies, because the fixed costs of



                                                     157

--- page 158 ---

preparing periodic reports for smaller companies represent a greater percentage of revenue than

for larger companies.

       The proposed changes to Regulation S-X would revise the age of financial statement

requirements for registrants that would be semiannual filers to fit with their reporting schedule.

We expect that these proposed Regulation S-X amendments would reduce registrant costs

compared to the absence of such amendments, because, in connection with registration and

proxy statements, in the absence of such amendments, semiannual filers would be required to file

quarterly financial statements in the registration or proxy statement that they would not be

required to file otherwise under the current Exchange Act periodic reporting system. For the

same reasons discussed above in connection with proposed optional semiannual reporting, we

believe the cost reduction and benefit would be greater in an absolute sense for larger companies

than for smaller companies but that the cost reduction and benefit in a relative sense would be

greater for smaller companies than for larger companies.

       We are also proposing to add a check box to indicate whether the registrant has elected to

file semiannual reports pursuant to Exchange Act Rules 13a-13(b) or 15d-13(b) to the cover page

of Forms S-1, S-3, S-4, S-11, 10, and 10-K. If the proposal is adopted, we expect the addition of

these form check boxes will result in an incremental increase in the time all registrants, including

small entities, spend on preparing these forms for filing with the Commission. We generally

expect that this incremental increase will be the same for larger companies and for smaller

companies.

       Among small entities, we expect that the economic benefits and costs of the proposal

may be based on factors including the nature of their business, which makes it difficult to project

the economic impact on small entities with precision. The proposed amendments and new Form



                                                    158

--- page 159 ---

10-S are discussed in detail in Section III above. We discuss the economic effects, including the

estimated costs and burdens, of the proposed amendments and new Form 10-S on all registrants,

including small entities, in Section V above and discuss the paperwork burden on all registrants,

including small entities, in Section VI above.

       E. Duplicative, Overlapping or Conflicting Federal Rules

       We do not believe the proposed amendments and new Form 10-S would duplicate,

overlap, or conflict with other existing Federal rules. Proposed Form 10-S for semiannual reports

would be substantially similar to existing Form 10-Q, as discussed in Section III above, but

reporting companies would file only one form or the other for purposes of interim reporting,

depending on whether they elect to file interim reports semiannually or file quarterly.

       F. Significant Alternatives

       The Regulatory Flexibility Act directs us to consider alternatives that would accomplish

our stated objectives, while minimizing any significant adverse impact on small entities. In

connection with the proposal, we considered the following alternatives:

       •   Establishing different compliance or reporting requirements or timetables that take

           into account the resources available to small entities;

       •   Clarifying, consolidating, or simplifying compliance and reporting requirements

           under the rules for small entities;

       •   Using performance rather than design standards; and

       •   Exempting small entities from all or part of the requirements.

       The proposal would provide Exchange Act reporting companies with the option of filing

interim reports on a semiannual basis on new Form 10-S rather than filing Form 10-Q on a

quarterly basis and make related changes to financial statement requirements in Regulation S-X.

As discussed above, if the proposal is adopted, we expect interim reporting compliance costs for

                                                    159

--- page 160 ---

registrants that are Exchange Act reporting companies that elect to file interim reports

semiannually (instead of quarterly) will be significantly reduced. We have not proposed to apply

different compliance and reporting requirements or timetables for small entities or to exempt

small entities from the proposal, because we believe small entities, as with all reporting

companies, should be able to avail themselves of the benefits of the proposal in terms of cost

reduction. The proposed option to report semiannually would consolidate existing reporting

requirements (by replacing three quarterly reports with one semiannual report for semiannual

filers). The proposed option to report semiannually may add incremental complexity to existing

rules by allowing for a choice of options. We believe this complexity is minimal and is a

necessary part of the beneficial flexibility we propose providing to all registrants, including small

entities, with respect to interim reporting. While the proposal would result in this marginal

increase in complexity, we have proposed creating the optional semiannual reporting system in a

manner we believe will be simple for registrants to understand. In particular the proposed

approach would feature simplicity by: (1) maintaining existing quarterly reporting rules as the

default approach but adding an option to report semiannually in lieu thereof, and (2) requiring

the same disclosure in semiannual Form 10-S as in quarterly Form 10-Q (except Form 10-S

would cover a six-month period). This simplicity would mean registrants would not need to

adapt to an entirely different reporting system (although they would need to become familiar

with the potential new semiannual reporting option). We do not believe further simplification,

clarification, or consolidation for small entities is needed.

       Filing interim reports semiannually on Form 10-S with the Commission through its

EDGAR system is a design standard that provides uniformity that enables comparison across

registrants and centralizes the information in a way that makes it readily and freely accessible to



                                                     160

--- page 161 ---

the investing public. The alternative of a performance standard would not result in uniform,

comparable information across registrants and, therefore, in this case, would not accomplish our

objective of allowing for more flexibility while still providing information necessary for the

protection of investors.

       As described in detail above, the proposed changes to Regulation S-X would conform the

financial statement requirements in periodic reports to the semiannual reporting frequency of

semiannual filers and change the age of financial statement requirements for semiannual filers in

connection with registration and proxy statements to fit with their reporting schedule. We have

not proposed to apply different compliance and reporting requirements or timetables for small

entities or to exempt small entities from the proposed changes to Regulation S-X, because we

believe small entities, as with all reporting companies, should be able to avail themselves of the

benefits of the proposal in terms of cost reduction. The proposed changes to Regulation S-X age

of financial statement rules would clarify, consolidate, and simplify existing rules, including by

combining and centralizing the age requirements in a single rule and by using plain wording and

plain methods of counting the age of financial statements in order to reduce the complexity of

existing rules. We believe these design standards are appropriate for all registrants, including

small entities, because this required financial information provides uniformity that enables

comparison across registrants and enables the investing public to understand the financial

position and performance of the registrant based on consistent principles.

       The proposed changes to registrant forms would add a check box to indicate whether the

registrant has elected to file semiannual reports pursuant to Exchange Act Rule 13a-13(b) or 15d-

13(b) to the cover page of Forms S-1, S-3, S-4, S-11, 10, and 10-K. We have not proposed

different compliance or reporting requirements or different timetables, proposed provisions that



                                                    161

--- page 162 ---

would consolidate compliance and reporting requirements, or proposed exemptions related to

these check boxes for small entities, because we believe uniformity across all registrants is

necessary to inform investors about the frequency of the company’s disclosure, which may affect

their investment decisions. We believe these check boxes will be simple and will be clear for all

registrants, including small entities: these proposed form amendments are limited to one, short

sentence asking whether the registrant has elected to report semiannually and a check box that

the registrant would be required to check if the registrant has so elected.

       We do not believe there are existing requirements in other rules or forms that could be

consolidated in connection with the addition of the proposed new check box. We believe the

check box is a design standard that is appropriate for all registrants, including small entities,

because it is a simple, clear, and minimally burdensome method to convey the information in a

way that can be easily stored and retrieved by the Commission and the public and is simple to

find on the cover of the filed form. Unlike a performance standard, the check box would provide

a consistent approach at minimal cost.

       G. Request for Comment

       We encourage the submission of comments with respect to any aspect of this IRFA. In

particular, we request comments regarding:

       •   The number of small entities that may be affected by the proposal;

       •   The existence or nature of the potential impact of the proposal on small entities

           discussed in the analysis;

       •   How the proposal could further lower the burden on small entities; and

       •   How to quantify the impact of the proposal.

       We request that commenters describe the nature of any impact and provide empirical data

supporting the extent of the impact. Comments will be considered in the preparation of the Final

                                                     162

--- page 163 ---

Regulatory Flexibility Analysis if the proposal is adopted and will be placed in the same public

file as other comments on the proposal.

STATUTORY AUTHORITY

        We are proposing the rule and form amendments contained in this document under the

authority set forth in Sections 2(a), 4(a), 7, 10, 19(a), and 28 of the Securities Act; Sections 3, 12,

13, 14, 15, 23(a), and 36 of the Exchange Act; and Section 319(a) of the Trust Indenture Act of

1939.

        List of Subjects

        17 CFR Part 200

        Administrative practice and procedure, Authority delegations (Government agencies),

Electronic filing, Reporting and recordkeeping requirements, Securities.

        17 CFR Part 210

        Accountants, Accounting, Banks, Banking, Employee benefit plans, Holding companies,

Insurance companies, Investment companies, Oil and gas exploration, Reporting and

recordkeeping requirements, Securities, Utilities.

        17 CFR Parts 229 and 249

        Investment companies, Reporting and recordkeeping requirements, Securities.

        17 CFR Parts 230 and 239

        Reporting and recordkeeping requirements, Securities.

        17 CFR Part 232




                                                     163

--- page 164 ---

Administrative practice and procedure, Electronic Filing, Investment Companies,

Reporting and recordkeeping requirements, Securities.

       17 CFR Part 240

       Administrative practice and procedure, Brokers, Confidential business information,

Fraud, Reporting and recordkeeping requirements, Securities, Swaps.

       17 CFR Part 260

       Reporting and recordkeeping requirements, Securities, Trusts and trustees.

Text of Proposed Amendments

       PART 200—ORGANIZATION; CONDUCT AND ETHICS; AND

INFORMATION AND REQUESTS

       1. The authority citation for part 200 continues to read as follows:

       Authority: 5 U.S.C. 552, 552a, 552b, and 557; 11 U.S.C. 901 and 1109(a); 15 U.S.C.

77c, 77e, 77f, 77g, 77h, 77j, 77o, 77q, 77s, 77u, 77z-3, 77ggg(a), 77hhh, 77sss, 77uuu, 78b,

78c(b), 78d, 78d-1, 78d-2, 78e, 78f, 78g, 78h, 78i, 78k, 78k-1, 78l, 78m, 78n, 78o, 78o-4, 78q,

78q-1, 78t-1, 78u, 78w, 78ll(d), 78mm, 78eee, 80a-8, 80a-20, 80a-24, 80a-29, 80a-37, 80a-41,

80a-44(a), 80a-44(b), 80b-3, 80b-4, 80b-5, 80b-9, 80b-10(a), 80b-11, 7202, and 7211 et seq.; 29

U.S.C. 794; 44 U.S.C. 3506 and 3507; Reorganization Plan No. 10 of 1950 (15 U.S.C. 78d); sec.

8G, Pub. L. 95-452, 92 Stat. 1101 (5 U.S.C. App.); sec. 913, Pub. L. 111-203, 124 Stat. 1376,

1827; sec. 3(a), Pub. L. 114-185, 130 Stat. 538; E.O. 11222, 30 FR 6469, 3 CFR, 1964-1965

Comp., p. 36; E.O. 12356, 47 FR 14874, 3 CFR, 1982 Comp., p. 166; E.O. 12600, 52 FR 23781,

3 CFR, 1987 Comp., p. 235; Information Security Oversight Office Directive No. 1, 47 FR

27836; and 5 CFR 735.104 and 5 CFR parts 2634 and 2635, unless otherwise noted.

       * * * * *


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2. Amend § 200.800(b) by:

       a. Adding “Form 10-S” after “Form 10-Q” in the “Information collection requirement”

column in the table; and

       b. Adding “249.308b” after “249.308a” in the column for “17 CFR part or section where

identified and described” in the table.

       PART 210 – FORM AND CONTENT OF AND REQUIREMENTS FOR

FINANCIAL STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE

ACT OF 1934, INVESTMENT COMPANY ACT OF 1940, INVESTMENT ADVISERS

ACT OF 1940, AND ENERGY POLICY AND CONSERVATION ACT OF 1975

       3. The authority citation for part 210 continues to read as follows:

       Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26),

77nn(25), 77nn(26), 78c, 78j-1, 78l, 78m, 78n, 78o(d), 78q, 78u-5, 78w, 78ll, 78mm, 80a-8, 80a-

20, 80a-29, 80a-30, 80a-31, 80a-37(a), 80b-3, 80b-11, 7202 and 7262, and sec. 102(c), Pub. L.

112-106, 126 Stat. 310 (2012), unless otherwise noted.

       * * * * *

       4. Revise and republish § 210.3-01 to read as follows:

       § 210.3-01 Consolidated balance sheets and age thereof.

       (a) This section sets forth requirements for the registrant and its predecessors for the

balance sheets and the ages of annual balance sheets and of any interim balance sheet based on

the filing date. In a registration or proxy statement, the date of the most recent balance sheet

must be updated to comply with this section’s requirements as if the effective date of the

registration statement, or proposed mailing date in the case of a proxy statement, were the filing

date. The periods for which consolidated statements of comprehensive income and cash flows



                                                    165

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and changes in stockholders’ equity and noncontrolling interests are to be provided are

prescribed elsewhere in this part (see § 210.3-02 and § 210.3-04).

         (b) Annual balance sheets. File audited balance sheets as of the end of each of the two

most recently completed fiscal years, except that, for filings other than Form 10-K:

         (1) If the filing is made no more than 45 days after the end of the registrant’s most

recently completed fiscal year, the audited balance sheets may be as of the end of the two fiscal

years preceding the most recently completed fiscal year and the filing must include an additional

balance sheet as of an interim date specified in paragraph (c)(1) of this section.

         (2) If the filing is made more than 45 days but no more than 59 days (for large

accelerated filers, as defined in § 240.12b-2 of this chapter), 74 days (for accelerated filers, as

defined in § 240.12b-2 of this chapter), or 89 days (for all other registrants) after the end of the

registrant’s most recently completed fiscal year, the registrant may apply paragraph (b)(1) of this

section if the following conditions are met:

         (i) The registrant files annual reports, quarterly or semiannual reports, and other reports

pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 and all reports due have

been filed;

         (ii) For the most recently completed fiscal year, for which audited financial statements

are not yet available the registrant reasonably and in good faith expects to report income

attributable to the registrant after income taxes; and

         (iii) For at least one of the two fiscal years immediately preceding the most recently

completed fiscal year, the registrant reported income attributable to the registrant after income

taxes.




                                                     166

--- page 167 ---

(3) If the registrant was not in existence as of the end of its fiscal year, file an audited

balance sheet dated as of a date not more than 134 days before the date of filing.

        (4) Notwithstanding the requirements of this section, the filing must be updated with

audited financial statements for the most recently completed fiscal year if they become available

prior to the filing date.

        (c) Interim balance sheet. In filings other than on Form 10-K, file a balance sheet as of an

interim date:

        (1) If an audited balance sheet as of the end of the most recently completed fiscal year is

not included in the filing:

        (i) As of the end of the third fiscal quarter of the most recently completed fiscal year for

quarterly filers (as defined in § 240.12b-2 of this chapter); or

        (ii) As of the end of the first fiscal semiannual period of the most recently completed

fiscal year for semiannual filers (as defined in § 240.12b-2 of this chapter).

        (2) If an audited balance sheet as of the end of the most recently completed fiscal year is

included in a filing, as of the end of the registrant’s most recently completed fiscal quarter or

semiannual period for which a Form 10-Q or Form 10-S has been filed or is required to be filed

on or before the filing date. A registrant that is not subject to Exchange Act Section 13(a) or

15(d) must apply this paragraph as if it were required to file Form 10-Q or Form 10-S.

        (3) Any interim balance sheet provided in accordance with the requirements of this

section may be unaudited and need not be presented in greater detail than is required by §

210.10-01.

        (d) For filings by registered management investment companies, the requirements of §

210.3-18 shall apply in lieu of the requirements of this section.



                                                      167

--- page 168 ---

(e)

       (1) Any foreign private issuer, other than a registered management investment company

or an employee plan, may file the financial statements required by Item 8.A of Form 20-F (§

249.220 of this chapter) in lieu of the financial statements specified in this rule.

       (2) Financial statements of a foreign business which are furnished pursuant to § 210.3-05

or § 210.3-09 because it is an acquired business or a 50 percent or less owned person may be of

the age specified in Item 8.A of Form 20-F.

       5. Remove and reserve § 210.3-12.

       6. Amend § 210.8-03 by:

       a. Redesignating paragraph (b) as paragraph (c) and revising newly redesignated

paragraphs (c)(2) and (c)(5);

       b. Redesignating paragraph (a) as paragraph (b) and revising newly redesignated

paragraph (b)(5);

       c. Redesignating the introductory text as paragraph (a) and revising the newly

redesignated paragraph (a); and

       d. Removing Instruction 1.

       The renumbered and revised paragraphs read as follows:

       § 210.8-03 Interim financial statements.

       (a)

       (1) Interim financial statements may be unaudited; however, before filing, interim

financial statements included in quarterly reports on Form 10-Q (§ 249.308a of this chapter) or

semiannual reports on Form 10-S (§ 249.308b of this chapter) must be reviewed by an

independent public accountant using applicable professional standards and procedures for


                                                     168

--- page 169 ---

conducting such reviews, as may be modified or supplemented by the Commission. If, in any

filing, the issuer states that interim financial statements have been reviewed by an independent

public accountant, a report of the accountant on the review must be filed with the interim

financial statements.

       (2) For quarterly filers, as defined in § 240.12b-2 of this chapter, interim represents a

fiscal quarterly period, except when the section addresses a year-to-date interim period. Interim

financial statements in a Form 10-Q must include a balance sheet as of the end of the issuer’s

most recently completed fiscal quarter for which the report is being filed, a balance sheet as of

the end of the most recently completed fiscal year, and statements of comprehensive income and

statements of cash flows for the interim period up to the date of such balance sheet and the

comparable period of the preceding fiscal year. For quarterly filers, as defined in §240.12b-2 of

this chapter, where §§ 210.8-01 through 210.8-08 (Article 8 of this part) are applicable to a Form

10-Q (§ 249.308a of this chapter) and the interim period is for the second or third fiscal quarter,

statements of comprehensive income must also be provided for the most recent interim quarter

and the comparable quarter of the preceding fiscal year.

       (3) For semiannual filers, as defined in § 240.12b-2 of this chapter, interim represents a

fiscal semiannual period. Interim financial statements in a Form 10-S must include a balance

sheet as of the end of the issuer’s first fiscal semiannual period, balance sheet as of the end of the

preceding fiscal year, and statements of comprehensive income and statements of cash flows for

the interim period up to the date of such balance sheet and the comparable period of the

preceding fiscal year.

       (b) * * *




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--- page 170 ---

(5) Provide the information required by § 210.3-04 for the current and comparative year-

to-date periods, with subtotals for each quarterly period when the registrant is a quarterly filer (as

defined in § 240.12b-2).

       (c) * * *

       (2) Adjustments. Interim financial statements must include all adjustments that, in the

opinion of management, are necessary in order to make the financial statements not misleading.

An affirmative statement that the financial statements have been so adjusted must be included

with the interim financial statements.

       * * * * *

       (5) Material accounting changes. The registrant’s independent accountant must provide

a letter in the first Form 10-Q (§ 249.308a of this chapter) or Form 10-S (§ 249.308b of this

chapter) filed after the change indicating whether or not the change is to a preferable method.

Disclosure must be provided of any retroactive change to prior period financial statements,

including the effect of any such change on income and income per share.

       * * * * *

       7. Amend § 210.8-08 by:

       a. Removing the introductory text; and

       b. Revising paragraphs (a) and (b).

       The revisions read as follows:

       § 210.8-08 Age of financial statements.

       (a) Annual financial statements. In filings other than on Form 10-K, file audited annual

financial statements for the registrant and its predecessors required by § 210.8-02, except that:




                                                     170

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(1) If the effective date of a registration statement or mailing date of a proxy statement is

no more than 45 days after the end of the most recently completed fiscal year, the filing may

include audited financial statements as of the end of the two fiscal years preceding the most

recently completed fiscal year and for the years then ended and interim financial statements

required by paragraph (b)(1) of this section.

       (2) If the effective date of a registration statement or mailing date of a proxy statement is

more than 45 days but not more than 89 days after the end of the most recently completed fiscal

year, the registrant may apply paragraph (a)(1) of this section if the following conditions are met:

       (i) If the smaller reporting company is a reporting company, all reports due must have

been filed;

       (ii) For the most recently completed fiscal year, for which audited financial statements

are not yet available, the smaller reporting company reasonably and in good faith expects to

report income from continuing operations attributable to the registrant before income taxes; and

       (iii) For at least one of the two fiscal years immediately preceding the most recently

completed fiscal year, the smaller reporting company reported income from continuing

operations attributable to the registrant before income taxes.

       (3) Notwithstanding the requirements of this section, the filing must be updated with

audited financial statements for the most recently completed fiscal year if they become available

prior to the date of effectiveness of a registration statement or mailing of a proxy statement.

       (b) Interim financial statements.

       (1) In filings other than on Form 10-Q or Form 10-S, if audited financial statements for

the most recently completed fiscal year are not included in the filing:




                                                    171

--- page 172 ---

(i) file interim financial statements as of the end of the third fiscal quarter of the most

recently completed fiscal year and for the nine months then ended for quarterly filers (as defined

in § 240.12b-2 of this chapter),

        (ii) file interim financial statements as of the end of the first fiscal semiannual period of

the most recently completed fiscal year and for the semiannual period then ended for semiannual

filers (as defined in § 240.12b-2 of this chapter).

        (2) If audited financial statements for the most recently completed fiscal year are

included in a filing other than on Form 10-K, file interim financial statements for the end of the

most recently completed fiscal quarter (for quarterly filers) or semiannual period (for semiannual

filers) and for the year-to-date interim period then ended for which a Form 10-Q or Form 10-S

has been filed, or is required to be filed on or before the filing date. A registrant that is not

subject to Exchange Act Section13(a) or 15(d) must apply this paragraph as if it were required to

file Form 10-Q or Form 10-S.

        (3) Interim financial statements must be prepared and presented in accordance with §

210.8-03 of this part.

        8. Amend § 210.10-01 by revising paragraphs (a)(7) and (b)(1) and (6), the introductory

text to paragraph (c), and paragraphs (c)(1) through (4) and (d).

        The revisions read as follows:

        § 210.10-01 Interim financial statements.

        (a) * * *

        (7) Provide the information required by § 210.3-04 for the current and comparative year-

to-date periods, with subtotals for each quarterly period when the registrant is a quarterly filer (as

defined in § 240.12b-2).



                                                      172

--- page 173 ---

(b) * * *

       (1) Summarized statement of comprehensive income information shall be given

separately as to each subsidiary not consolidated or 50 percent or less owned persons or as to

each group of such subsidiaries or 50 percent or less owned persons for which separate

individual or group statements would otherwise be required for annual periods. Such

summarized information, however, need not be furnished for any such unconsolidated subsidiary

or person which would not be required pursuant to § 240.13a-13 or § 240.15d-13 of this chapter

to file quarterly or semiannual financial information with the Commission if it were a registrant.

       * * * * *

       (6) For filings on Form 10-Q (§ 249.308a of this chapter) or Form 10-S (§ 249.308b of

this chapter), a letter from the registrant’s independent accountant shall be filed as an exhibit (in

accordance with the provisions of 17 CFR 229.601 (Item 601 of Regulation S-K)) in the first

Form 10-Q or Form 10-S after the date of an accounting change indicating whether or not the

change is to an alternative principle which, in the accountant’s judgment, is preferable under the

circumstances; except that no letter from the accountant need be filed when the change is made

in response to a standard adopted by the Financial Accounting Standards Board that requires

such change.

       * * * * *

       (c) Periods to be covered. The periods for which interim financial statements are to be

provided in registration statements are prescribed elsewhere in this part (see, e.g., § 210.3-01 and

§ 210.3-02). For quarterly filers, as defined in §240.12b-2 of this chapter, interim represents a

fiscal quarterly period, except when the section addresses a year-to-date interim period, and, for




                                                     173

--- page 174 ---

semiannual filers, as defined in §240.12b-2 of this chapter, interim represents a fiscal semiannual

period.

          (1) Provide an interim balance sheet as of the end of the most recently completed fiscal

quarter and a balance sheet as of the end of the most recently completed fiscal year for Form 10-

Q. Provide an interim balance sheet as of the end of the first fiscal semiannual period and a

balance sheet as of the end of the preceding fiscal year for Form 10-S. The balance sheet as of

the end of the preceding fiscal year may be condensed to the same degree as the interim balance

sheet provided. An interim balance sheet as of the end of the corresponding fiscal quarter of the

preceding fiscal year for quarterly filers, or as of the end of the first fiscal semiannual period

from the preceding fiscal year for semiannual filers, need not be provided unless necessary for an

understanding of the impact of seasonal fluctuations on the registrant’s financial condition.

          (2) Provide interim statements of comprehensive income:

          (i) For the most recent fiscal quarter, for the period between the end of the preceding

fiscal year and the end of the most recent fiscal quarter, and for the corresponding periods of the

preceding fiscal year for Form 10-Q; or

          (ii) For the first fiscal semiannual period and the corresponding period of the preceding

fiscal year for Form 10-S.

          (iii) Such statements may also be presented for the cumulative twelve-month period

ended as of the end of the most recent fiscal quarter for Form 10-Q, or first fiscal semiannual

period for Form 10-S, and for the corresponding preceding period.

          (3) Provide interim statements of cash flows:




                                                      174

--- page 175 ---

(i) For the period between the end of the preceding fiscal year and the end of the most

recent fiscal quarter, and for the corresponding period of the preceding fiscal year for Form 10-

Q; or

        (ii) For the period between the end of the preceding fiscal year and the end of the first

fiscal semiannual period and for the corresponding period of the preceding fiscal year for Form

10-S.

        (iii) Such statements may also be presented for the cumulative twelve-month period

ended as of the last day of the most recent fiscal quarter for Form 10-Q, or first fiscal semiannual

period for Form 10-S, and for the corresponding preceding period.

        (4) Registrants engaged in seasonal production and sale of a single-crop agricultural

commodity may provide interim statements of comprehensive income and cash flows for the

twelve-month period ended as of the last day of the most recent fiscal quarter or semiannual

period and for the corresponding preceding period in lieu of the year-to-date statements specified

in paragraphs (c)(2) and (3) of this section.

        (d) Interim review by independent public accountant. Prior to filing, interim financial

statements included in quarterly reports on Form 10-Q or semiannual reports on Form 10-S must

be reviewed by an independent public accountant using applicable professional standards and

procedures for conducting such reviews, as may be modified or supplemented by the

Commission. If, in any filing, the company states that interim financial statements have been

reviewed by an independent public accountant, a report of the accountant on the review must be

filed with the interim financial statements.

        * * * * *




                                                    175

--- page 176 ---

9. Amend § 210.11-02 by revising paragraph (c)(3) and Instruction 1 to paragraph (c)(3)

to read as follows:

       § 210.11-02 Preparation requirements.

       * * * * *

       (c) * * *

       (3) * * *

       Instruction 1 to paragraph (c)(3): In circumstances where different fiscal year ends

exist, § 210.3-01 may require a registrant to include in the pro forma financial information an

acquired or to be acquired foreign business historical period that would be more current than the

periods included in the required historical financial statements of the foreign business.

       * * * * *

       10. Amend § 210.15-01 by revising paragraphs (b) and (c) to read as follows:

       § 210.15-01 Acquisitions of businesses by a shell company (other than a business

combination related shell company).

       * * * * *

       (b) Financial statements. When a registrant is a shell company (other than a business

combination related shell company) and the financial statements of a business that will be

combining with such registrant are required in a registration statement or proxy statement, such

registrant must file financial statements of the business in accordance with §§ 210.3-01 through

210.3-20 and 210.10-01 (Articles 3 and 10 of Regulation S-X) as if the filing were a Securities

Act registration statement for the initial public offering of the business’s equity securities. The

financial statements of the business may be filed pursuant to §§ 210.8-01 through 210.8-08

(Article 8) when that business would qualify to be a smaller reporting company based on its



                                                     176

--- page 177 ---

annual revenues as of the most recently completed fiscal year for which audited financial

statements are available, if it were filing a registration statement alone.

       (c) Age of financial statements. The financial statements of a business that will be

acquired by a shell company (other than a business combination related shell company) must

comply with the requirements in § 210.3-01 (§ 210.8-08 when that business would qualify to be

a smaller reporting company based on its annual revenues as of the most recently completed

fiscal year for which audited financial statements are available, if it were filing a registration

statement alone) as if the financial statements were included in an initial registration statement in

determining the age of financial statements of the business in the registration statement or proxy

statement of the registrant.

       * * * * *

       PART 229—STANDARD INSTRUCTIONS FOR FILING FORMS UNDER

SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY

POLICY AND CONSERVATION ACT OF 1975—REGULATION S-K

       11. The authority citation for part 229 continues to read as follows:

       Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26),

77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1,

78o, 78u-5, 78w, 78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c), 80a-37, 80a-

38(a), 80a-39, 80b-11 and 7201 et seq.; 18 U.S.C. 1350; sec. 953(b), Pub. L. 111-203, 124 Stat.

1904 (2010); and sec. 102(c), Pub. L. 112-106, 126 Stat. 310 (2012).

       * * * * *

       12. Amend § 229.10 by revising paragraphs (f)(2)(i)(A) and (C) and (ii)(C) to read as

follows:



                                                     177

--- page 178 ---

§ 229.10 (Item 10) General.

        * * * * *

        (f) * * *

        (2) * * *

        (i) * * *

        (A) Public float is measured as of the last business day of the issuer’s most recently

completed second fiscal quarter for a quarterly filer (as defined in § 240.12b-2 of this chapter) or

first fiscal semiannual period for a semiannual filer (as defined in § 240.12b-2 of this chapter)

and computed by multiplying the aggregate worldwide number of shares of its voting and non-

voting common equity held by non-affiliates by the price at which the common equity was last

sold, or the average of the bid and asked prices of common equity, in the principal market for the

common equity;

        * * * * *

        (C) An issuer must reflect the determination of whether it came within the definition of

smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the

next year for a quarterly filer or its semiannual report on Form 10-S for the next year for a

semiannual filer, indicating on the cover page of that filing, and in subsequent filings for that

fiscal year, whether it is a smaller reporting company, except that, if a determination based on

public float indicates that the issuer is newly eligible to be a smaller reporting company, the

issuer may choose to reflect this determination beginning with its third quarterly report on Form

10-Q for a quarterly filer or its annual report on Form 10-K for a semiannual filer, rather than

waiting until the quarterly report for the first fiscal quarter of the next fiscal year for a quarterly




                                                      178

--- page 179 ---

filer or the semiannual report for the first fiscal semiannual period of the next fiscal year for a

semiannual filer.

       * * * * *

       (ii) * * *

       (C) The issuer must reflect the determination of whether it came within the definition of

smaller reporting company in the registration statement and must appropriately indicate on the

cover page of the filing, and subsequent filings for the fiscal year in which the filing is made,

whether it is a smaller reporting company. The issuer must re-determine its status at the end of its

second fiscal quarter for a quarterly filer or first fiscal semiannual period for a semiannual filer

and then reflect any change in status as provided in paragraph (f)(2)(i)(C) of this section. In the

case of a determination based on an initial Securities Act registration statement, an issuer that

was not determined to be a smaller reporting company has the option to re-determine its status at

the conclusion of the offering covered by the registration statement based on the actual offering

price and number of shares sold.

       13. Amend § 229.101 by revising paragraph (a)(3)(iii)(A) and (B) and (e)(4)(i) to read as

follows:

       § 229.101 (Item 101) Description of business.

       (a) * * *

       (3) * * *

       (iii) * * *

       (A) If the registration statement is filed prior to the end of the registrant’s second fiscal

quarter for a quarterly filer (as defined in § 240.12b-2 of this chapter) or the end of the registrant




                                                     179

--- page 180 ---

first fiscal semiannual period for a semiannual filer (as defined in § 240.12b-2 of this chapter), a

description of the registrant’s plan of operation for the remainder of the fiscal year; or

       (B) If the registration statement is filed subsequent to the end of the registrant’s second

fiscal quarter for a quarterly filer (as defined in § 240.12b-2 of this chapter) or the end of the

registrant first fiscal semiannual period for a semiannual filer (as defined in § 240.12b-2 of this

chapter), a description of the registrant’s plan of operation for the remainder of the fiscal year

and for the first six months of the next fiscal year. If such information is not available, the

reasons for its not being available shall be stated. Disclosure relating to any plan shall include

such matters as:

       * * * * *

       (e) * * *

       (4)

       (i) Whether you make available free of charge on or through your internet website, if you

have one, your annual report on Form 10-K, quarterly reports on Form 10-Q (§ 249.308a of this

chapter), semiannual reports on Form 10-S (§ 249.308b of this chapter), current reports on Form

8-K (§ 249.308 of this chapter), and amendments to those reports filed or furnished pursuant to

Section 13(a) or 15(d) of the Exchange Act (15 U.S.C. 78m(a) or 78o(d)) as soon as reasonably

practicable after you electronically file such material with, or furnish it to, the SEC;

       * * * * *

       14. Amend § 229.103 by revising paragraph (c)(3)(iii)(B) to read as follows:

       § 229.103 (Item 103) Legal proceedings.

       * * * * *

       (c) * * *



                                                     180

--- page 181 ---

(3) * * *

       (iii) * * *

       (B) the registrant discloses (including any change thereto) in each annual, semiannual,

and quarterly report, and

       * * * * *

       15. Amend § 229.201 by revising paragraph (a)(1)(iii) to read as follows:

       § 229.201 (Item 201) Market price of and dividends on the registrant’s common

equity and related stockholder matters.

       (a) * * *

       (1) * * *

       (iii) Where there is no established public trading market for a class of common equity,

furnish a statement to that effect and, if applicable, state the range of high and low bid

information for each full quarterly period for a quarterly filer (as defined in § 240.12b-2 of this

chapter) or semiannual period for a semiannual filer (as defined in § 240.12b-2 of this chapter)

within the two most recent fiscal years and any subsequent interim period for which financial

statements are included, or are required to be included by 17 CFR 210.3-01 through 210.3-20

(Article 3 of Regulation S-X), indicating the source of such quotations. Reference to quotations

shall be qualified by appropriate explanation. For purposes of this Item the existence of limited

or sporadic quotations should not of itself be deemed to constitute an “established public trading

market.”

       * * * * *

       16. Amend § 229.302 by revising paragraph (a) to read as follows:

       § 229.302 (Item 302) Supplementary financial information.



                                                    181

--- page 182 ---

(a) Disclosure of material quarterly or semiannual changes. When there are one or more

retrospective changes to the statements of comprehensive income for any of the quarters or

semiannual periods within the two most recent fiscal years or any subsequent interim period for

which financial statements are included or are required to be included by §§ 210.3-01 through

210.3-20 of this chapter (Article 3 of Regulation S-X) that individually or in the aggregate are

material, provide an explanation of the reasons for such material changes and disclose, for each

affected fiscal quarterly period or fiscal semiannual period and the fourth fiscal quarter or second

fiscal semiannual period in the affected year, summarized financial information related to the

statements of comprehensive income as specified in § 210.1-02(bb)(1)(ii) of this chapter (Rule 1-

02(bb)(1)(ii) of Regulation S-X) and earnings per share reflecting such changes.

       * * * * *

       17. Amend § 229.303 by revising paragraph (c)(2)(ii) to read as follows:

       § 229.303 (Item 303) Management’s discussion and analysis of financial condition

and results of operations.

       * * * * *

       (c) * * *

       (2) * * *

       (ii) For quarterly filers (as defined in § 240.12b-2 of this chapter), discuss any material

changes in the registrant’s results of operations with respect to either the most recent fiscal

quarter for which a statement of comprehensive income is provided and the corresponding fiscal

quarter for the preceding fiscal year or, in the alternative, the most recent fiscal quarter for which

a statement of comprehensive income is provided and the immediately preceding sequential

fiscal quarter. For semiannual filers (as defined in § 240.12b-2 of this chapter), discuss any



                                                     182

--- page 183 ---

material changes in the registrant’s results of operations with respect to the most recent fiscal

semiannual period for which a statement of comprehensive income is provided and the

corresponding fiscal semiannual period for the preceding fiscal year or, in the alternative, the

most recent fiscal semiannual period for which a statement of comprehensive income is provided

and the immediately preceding fiscal semiannual period. If the immediately preceding sequential

fiscal quarter or semiannual period is discussed, then provide in summary form the financial

information for that immediately preceding sequential fiscal quarter or semiannual period that is

the subject of the discussion or identify the registrant’s prior filings on EDGAR that present such

information. If there is a change in the form of presentation from fiscal period to fiscal period

that forms the basis of comparison from previous fiscal periods provided pursuant to this

paragraph, the registrant must discuss the reasons for changing the basis of comparison and

provide both comparisons in the first filing in which the change is made.

       * * * * *

       18. Amend § 229.308 by revising paragraph (c) to read as follows:

       § 229.308 (Item 308) Internal control over financial reporting.

       * * * * *

       (c) Changes in internal control over financial reporting. Disclose any change in the

registrant’s internal control over financial reporting identified in connection with the evaluation

required by paragraph (d) of § 240.13a-15 or 240.15d-15 of this chapter that, for quarterly filers

(as defined in § 240.12b-2 of this chapter), occurred during the registrant’s last fiscal quarter (the

registrant’s fourth fiscal quarter in the case of an annual report) or that, for semiannual filers (as

defined in § 240.12b-2 of this chapter), occurred during the registrant’s first fiscal semiannual

period (the registrant’s second fiscal semiannual period in the case of an annual report) that has



                                                     183

--- page 184 ---

materially affected, or is reasonably likely to materially affect, the registrant's internal control

over financial reporting.

        * * * * *

        19. Amend § 229.402 by revising paragraph (x)(2)(i) to read as follows:

        § 229.402 (Item 402) Executive compensation.

        * * * * *

        (x) * * *

        (2) * * *

        (i) If, during the last completed fiscal year, the registrant awarded options to a named

executive officer in the period beginning four business days before the filing of a periodic report

on Form 10-Q (§ 249.308a of this chapter), Form 10-S (§ 249.308b of this chapter), or Form 10-

K (§ 249.310 of this chapter), or the filing or furnishing of a current report on Form 8-K (§

249.308 of this chapter) that discloses material nonpublic information (other than a current report

on Form 8-K disclosing a material new option award grant under Item 5.02(e) of that form), and

ending one business day after the filing or furnishing of such report provide the information

specified in paragraph (x)(2)(ii) of this section, concerning each such award for each of the

named executive officers in the following tabular format:

        * * * * *

        20. Amend § 229.407 by revising the instructions to paragraphs (c)(2)(ix) and (c)(3) to

read as follows:

        § 229.407 (Item 407) Corporate governance.

        * * * * *

        (c) * * *



                                                      184

--- page 185 ---

(2) * * *

        (ix) * * *

        Instructions to Item 407(c)(2)(ix). 1. For purposes of paragraph (c)(2)(ix) of this Item, the

percentage of securities held by a nominating security holder may be determined using

information set forth in the registrant’s most recent quarterly, semiannual, or annual report, and

any current report subsequent thereto, filed with the Commission pursuant to the Exchange Act

(or, in the case of a registrant that is an investment company registered under the Investment

Company Act of 1940, the registrant’s most recent report on Form N-CSR (§§ 249.331 and

274.128 of this chapter)), unless the party relying on such report knows or has reason to believe

that the information contained therein is inaccurate.

        * * * * *

        (3) * * *

        Instructions to Item 407(c)(3). 1. The disclosure required in paragraph (c)(3) of this Item

need only be provided in a registrant’s quarterly, semiannual, or annual reports.

        * * * * *

        21. Amend § 229.408 by revising the instructions to paragraph (a)(1) to read as follows:

        § 229.408 (Item 408) Insider trading arrangements and policies.

        (a) * * *

        (1) Disclose whether, for quarterly filers (as defined in § 240.12b-2 of this chapter),

during the registrant’s last fiscal quarter (the registrant’s fourth fiscal quarter in the case of an

annual report), or for semiannual filers (as defined in § 240.12b-2 of this chapter), during the

registrant’s first fiscal semiannual period (the registrant’s second fiscal semiannual period in the




                                                      185

--- page 186 ---

case of an annual report), any director or officer (as defined in § 240.16a-1(f) of this chapter)

adopted or terminated:

        * * * * *

        22. Amend § 229.601 by:

        a. Adding a column for “10-S” between the column for “10-Q” and the column for “10-

K” and revising the entries for rows (2), (3)(i) and (ii), (4), (6), (10), (13), (15), (18), (22), (23),

(24), (31), (37) through (94), (95), (99), (101) and (104) and footnote 6 to the exhibit table in

paragraph (a);

        b. Revising paragraph (a)(4), Instruction 3 to paragraph (b)(10), and paragraph (b)(4),

(13), (15), (95), (99), and (101); and

        c. Revising paragraph (b)(31)(i) to add the words “or most recent fiscal semiannual

period for registrants that report semiannually (the registrant’s second fiscal semiannual period in

the case of an annual report)” after the words “Disclosed in this report any change in the

registrant’s internal control over financial reporting that occurred during the registrant’s most

recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)”;

        Other than the revisions to paragraph (b)(31)(i), the additions and revisions read as

follows:

        § 229.601 (Item 601) Exhibits.

        (a) * * *

        (4) If a material contract or plan of acquisition, reorganization, arrangement, liquidation

or succession is executed or becomes effective during the reporting period reflected by a Form

10-Q, Form 10-S, or Form 10-K, it must be filed as an exhibit to the Form 10-Q, Form 10-S, or

Form 10-K filed for the corresponding period. Any amendment or modification to a previously



                                                       186

--- page 187 ---

filed exhibit to a Form 10, 10-K, 10-Q, or 10-S document must be filed as an exhibit to a Form

10-Q or Form 10-S and to the Form 10-K. Such amendment or modification need not be filed

where such previously filed exhibit would not be currently required.

       * * * * *

       Exhibit Table

       * * * * *




                                                  187

--- page 188 ---

Exhibit Table
                                                   Securities Act Forms                                            Exchange Act Forms
                                                                                                           8-         10-    10-              10-     ABS
                                S-1   S-3   SF-1   SF-3   S-4 1   S-8     S-11 F-1     F-3   F-4 1   10    K2         D      Q      10-S      K       -EE
                                                                        * * * * *
(2) Plan of acquisition,        X     X     X      X      X               X     X      X     X       X     X                  X       X       X
reorganization,
arrangement, liquidation or
succession
(3) (i) Articles of             X           X      X      X               X      X           X       X     X          X       X       X       X
incorporation
(ii) Bylaws                     X           X      X      X               X      X           X       X     X          X       X       X       X
(4) Instruments defining the    X     X     X      X      X       X       X      X     X     X       X     X          X       X       X       X
rights of securities holders,
including indentures, (i)
through (v)
                                                                        * * * * *
(6) [Reserved]                  N/A   N/A   N/A    N/A    N/A     N/A     N/A   N/A    N/A   N/A     N/A   N/A        N/A     N/A     N/A     N/A     N/A
                                                                        * * * * *
(10) Material contracts         X           X      X      X               X     X            X       X                X       X       X       X
                                                                        * * * * *
(13) Annual report to                                     X                                                                   X       X       X
security holders, Form 10-S
or semiannual report to
security holders, Form 10-
Q or quarterly report to
security holders 3
                                                                        * * * * *
(15) Letter re unaudited        X     X                   X       X       X     X      X     X                                X       X
interim financial
information
                                                                        * * * * *
(18) Letter re change in                                                                                                      X       X       X
accounting principles
                                                                        * * * * *
(22) Subsidiary guarantors      X     X     X      X      X               X     X      X     X       X                        X       X       X
and issuers of guaranteed
securities and affiliates
whose securities
collateralize securities of
the registrant
(23) Consents of experts        X     X     X      X      X       X       X      X     X     X             5
                                                                                                               X      5
                                                                                                                          X   5
                                                                                                                                  X   5
                                                                                                                                          X   5
                                                                                                                                                  X
and counsel
(24) Power of attorney          X     X     X      X      X       X       X     X      X     X       X     X                  X       X       X
                                                                        * * * * *
(31) (i) Rule 13a-14(a)/15d-                                                                                                  X       X       X
14(a) Certifications
(32) Section 1350                                                                                                             X       X       X
Certifications 6
                                                                        * * * * *
(37) through (94)               N/A   N/A   N/A    N/A    N/A     N/A     N/A   N/A    N/A   N/A     N/A   N/A        N/A     N/A     N/A     N/A     N/A
[Reserved]
(95) Mine Safety                                                                                                              X       X       X
Disclosure Exhibit
                                                                        * * * * *
(99) Additional exhibits        X     X     X      X      X       X       X     X      X     X       X     X          X       X       X       X
                                                                        * * * * *
(101) Interactive Data File     X     X                   X               X     X      X     X             X                  X       X       X
                                                                        * * * * *
(104) Cover Page                                                                                           X                  X       X       X
Interactive Data File




                          * * *




                                                                               188

--- page 189 ---

6
           Pursuant to §§ 240.13a-13(c)(3) and 240.15d-13(c)(3) of this chapter, asset-backed

issuers are not required to file reports on Form 10-Q or Form 10-S.

       * * * * *

       (b) * * *

       (4) * * *

       (v) With respect to Forms 8-K, 10-Q, and 10-S under the Exchange Act that are filed and

that disclose, in the text of the Forms 10-Q or 10-S, the interim financial statements, or the

footnotes thereto the creation of a new class of securities or indebtedness or the modification of

existing rights of security holders, file all instruments defining the rights of holders of these

securities or indebtedness. However, there need not be filed any instrument with respect to long-

term debt not being registered which meets the exclusion set forth in paragraph (b)(4)(iii)(A) of

this Item.

       * * * * *

       (10) * * *

       Instruction 3 to paragraph (b)(10): If a material contract is executed or becomes effective

during the reporting period reflected by a Form 10-Q, Form 10-S, or Form 10-K, it must be filed

as an exhibit to the Form 10-Q, Form 10-S, or Form 10-K filed for the corresponding period. See

paragraph (a)(4) of this Item. With respect to quarterly reports on Form 10-Q or semiannual

reports on Form 10-S, only those contracts executed or becoming effective during the most

recent period reflected in the report must be filed.

       * * * * *

   (13) Annual, semiannual, or quarterly report to security holders.




                                                       189

--- page 190 ---

(i) The registrant’s annual report to security holders for its last fiscal year or its

semiannual or quarterly report to security holders, if all or a portion thereof is incorporated by

reference in the filing. Such report, except for those portions thereof that are expressly

incorporated by reference in the filing, is to be furnished for the information of the Commission

and is not to be deemed “filed” as part of the filing. If the financial statements in the report have

been incorporated by reference in the filing, the accountant’s certificate must be manually signed

in one copy. See Rule 439 (§ 230.439 of this chapter).

       (ii) Electronic filings. If all, or any portion, of the annual, semiannual, or quarterly report

to security holders is incorporated by reference into any electronic filing, all, or such portion of

the annual, semiannual, or quarterly report to security holders so incorporated, must be filed in

electronic format as an exhibit to the filing.

       * * * * *

       (15) Letter re unaudited interim financial information. A letter, where applicable, from

the independent accountant that acknowledges awareness of the use in a registration statement of

a report on unaudited interim financial information that pursuant to Rule 436(c) under the

Securities Act (§ 230.436(c) of this chapter) is not considered a part of a registration statement

prepared or certified by an accountant or a report prepared or certified by an accountant within

the meaning of sections 7 and 11 of that Act. Such letter may be filed with the registration

statement, an amendment thereto, or a report on Form 10-Q or a report on Form 10-S which is

incorporated by reference into the registration statement.

       * * * * *

       (95) Mine Safety Disclosure Exhibit. A registrant that is an operator, or that has a

subsidiary that is an operator, of a coal or other mine must provide the information required by



                                                     190

--- page 191 ---

Item 104 of Regulation S-K (§ 229.104 of this chapter) in an exhibit to its Exchange Act annual,

semiannual, or quarterly report. For purposes of this Item:

       * * * * *

       (99) * * *

       (ii) If pursuant to Section 11(a) of the Securities Act (15 U.S.C. 77k(a)) an issuer makes

generally available to its security holders an earnings statement covering a period of at least 12

months beginning after the effective date of the registration statement, and if such earnings

statement is made available by “other methods” than those specified in paragraphs (a) or (b) of §

230.158 of this chapter, it must be filed as an exhibit to the Form 10-Q, Form 10-S, or the Form

10-K, as appropriate, covering the period in which the earnings statement was released.

       * * * * *

       (101) * * *

       (i) * * *

       (A) First is required for a periodic report on Form 10-Q (§ 249.308a of this chapter),

Form 10-S (§ 249.308b of this chapter), Form 20-F (§ 249.220f of this chapter), or Form 40-F (§

249.240f of this chapter), as applicable;

       * * * * *

       23. Amend § 229.701 by revising paragraph (e) to read as follows:

       § 229.701 (Item 701) Recent sales of unregistered securities; use of proceeds from

registered securities.

       * * * * *

       (e) Terms of conversion or exercise. If the information called for by this paragraph (e) is

being presented on Form 8-K, Form 10-Q, Form 10-S, Form 10-K, or Form 10-D under the



                                                    191

--- page 192 ---

Exchange Act (§ 249.308, § 249.308a, § 249.308b, § 240.310 or § 249.312 of this chapter), and

where the securities sold by the registrant are convertible or exchangeable into equity securities,

or are warrants or options representing equity securities, disclose the terms of conversion or

exercise of the securities.

        * * * * *

        24. Amend § 229.1010 by revising paragraph (a)(2) to read as follows:

        § 229.1010 (Item 1010) Financial statements.

        (a) * * *

        (2) Unaudited balance sheets, comparative year-to-date statements of comprehensive

income (as defined in § 210.1-02 of this chapter) and related earnings per share data, and

statements of cash flows required to be included in the company’s most recent quarterly or

semiannual report filed under the Exchange Act; and

        * * * * *

        25. Amend § 229.1100 by revising paragraph (c)(2)(ii)(F) to read as follows:

        § 229.1100 (Item 1100) General.

        * * * * *

        (c) * * *

        (2) * * *

        (ii) * * *

        (F) The third party is a U.S. Government-sponsored enterprise, has outstanding securities

held by non-affiliates with an aggregate market value of $75 million or more, and makes

information publicly available on an annual and semiannual basis (for semiannual filers, as

defined in § 240.12b-2 of this chapter) or quarterly basis (for quarterly filers, as defined in §



                                                     192

--- page 193 ---

240.12b-2 of this chapter), including audited financial statements prepared in accordance with

generally accepted accounting principles covering the same periods that would be required for

audited financial statements under §§ 210.1-01 through 210.13-02 (Regulation S-X) of this

chapter and non-financial information consistent with that required by this part (Regulation S-K).

       * * * * *

       PART 230–-GENERAL RULES AND REGULATIONS, SECURITIES ACT OF

1933

       26. The general authority citation for part 230 continues to read, in part, as follows:

       Authority: 15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss,

78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o-7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28,

80a-29, 80a-30, and 80a-37, and Pub. L. No. 112-106, sec. 201(a), sec. 401, 126 Stat. 313

(2012), unless otherwise noted.

       * * * * *

       27. Amend § 230.138 by revising paragraph (a)(2)(i)(A) to read as follows:

       § 230.138 Publications or distributions of research reports by brokers or dealers

about securities other than those they are distributing.

       (a) * * *

       (2) * * *

       (i) * * *

       (A) The issuer as of the date of reliance on this section: Is required to file reports, and has

filed all periodic reports required during the preceding 12 months (or such shorter time that the

issuer was required to file such reports) on Forms 10-K (§ 249.310 of this chapter), 10-S (§

249.308b of this chapter), 10-Q (§ 249.308a of this chapter), and 20-F (§ 249.220f of this



                                                    193

--- page 194 ---

chapter) pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (15

U.S.C. 78m or 78o(d)); or

       * * * * *

       28. Amend § 230.139 by revising paragraph (a)(1)(i)(A)(2) to read as follows:

       § 230.139 Publications or distributions of research reports by brokers or dealers

distributing securities.

       (a) * * *

       (1) * * *

       (i) * * *

       (A) * * *

       (2) As of the date of reliance on this section, has filed all periodic reports required during

the preceding 12 months on Forms 10-K (§ 249.310 of this chapter), 10-S (§ 249.308b of this

chapter), 10-Q (§ 249.308a of this chapter), and 20-F (§ 249.220f of this chapter) pursuant to

section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); or

       * * * * *

           29. Amend § 230.139b by revising paragraph (a)(1)(i)(A)(2) to read as follows:

       § 230.139b Publications or distributions of covered investment fund research

reports by brokers or dealers distributing securities.

       (a) * * *

       (1) * * *

       (i) * * *

       (A) * * *




                                                    194

--- page 195 ---

(2) If the covered investment fund is not a registered investment company under the

Investment Company Act, has been subject to the reporting requirements of section 13 or section

15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) (15 U.S.C. 78m or 78o(d))

for a period of at least 12 calendar months and has filed in a timely manner all of the reports

required to be filed for the immediately preceding 12 calendar months on Forms 10-K (§ 249.310

of this chapter), 10-S (§ 249.308b of this chapter), and 10-Q (§ 249.308a of this chapter), or 20-F

(§ 249.220f of this chapter) pursuant to section 13 or section 15(d) of the Exchange Act; and

       * * * * *

       30. Amend § 230.144 by revising paragraph (c):

       § 230.144 Persons deemed not to be engaged in a distribution and therefore not

underwriters.

       * * * * *

       (c) * * *

       Note to § 230.144(c): With respect to paragraph (c)(1), the person can rely upon:

       1. A statement in whichever is the most recent report, quarterly, semiannual, or annual,

required to be filed and filed by the issuer that such issuer has:

       * * * * *

       31. Amend § 230.158 by revising paragraph (a)(1)(i), (a)(2)(i), and (b)(2) to read as

follows:

       § 230.158 Definitions of certain terms in the last paragraph of section 11(a).

       (a) * * *

       (1)




                                                     195

--- page 196 ---

(i): In Item 8 of Form 10-K (§ 239.310 of this chapter), Item 1 of Part I of Form 10-S (§

240.308b of this chapter), Item 1 of Part I of Form 10-Q (§ 240.308a of this chapter), or Rule

14a-3(b) (§ 240.14a-3(b) of this chapter) under the Securities Exchange Act of 1934;

       * * * * *

       (2) * * *

       (i) On Form 10-K, Form 10-S, Form 10-Q, Form 8-K (§ 249.308 of this chapter), or in

the annual report to security holders pursuant to Rule 14a-3 under the Securities Exchange Act of

1934 (§ 240.14a-3 of this chapter); or

       * * * * *

       (b) * * *

       (2) Has filed its report or reports on Form 10-K, Form 10-S, Form 10-Q, Form 8-K, Form

20-F, Form 40-F, or Form 6-K, or has submitted to the Commission in electronic format, in

accordance with the EDGAR Filer Manual, its annual report sent to security holders pursuant to

Rule 14a-3(c) (§ 240.14a-3(c) of this chapter) containing such information. A registrant may use

other methods to make an earning statement “generally available to its security holders” for

purposes of the last paragraph of section 11(a).

       * * * * *

       32. Amend § 230.175 by revising paragraph (b)(1) and (2) to read as follows:

       § 230.175 Liability for certain statements by issuers.

       * * * * *

       (b) * * *

       (1) A forward-looking statement (as defined in paragraph (c) of this section) made in a

document filed with the Commission, in Part I of a quarterly report on Form 10-Q (§ 249.308a of



                                                   196

--- page 197 ---

this chapter), Part I of a semiannual report on Form 10-S (§ 249.308b of this chapter) or in an

annual report to security holders meeting the requirements of Rule 14a-3(b) and (c) or 14c-3(a)

and (b) under the Securities Exchange Act of 1934 (§§ 240.14a-3(b) and (c) or 240.14c-3(a) and

(b) of this chapter), a statement reaffirming such forward-looking statement after the date the

document was filed or the annual report was made publicly available, or a forward-looking

statement made before the date the document was filed or the date the annual report was publicly

available if such statement is reaffirmed in a filed document, in Part I of a quarterly report on

Form 10-Q, in Part I of a semiannual report on Form 10-S, or in an annual report made publicly

available within a reasonable time after the making of such forward-looking statement; Provided,

that

       * * * * *

       (2) Information that is disclosed in a document filed with the Commission, in Part I of a

quarterly report on Form 10-Q (§ 249.308a of this chapter), in Part I of a semiannual report on

Form 10-S, or in an annual report to shareholders meeting the requirements of Rules 14a-3 (b)

and (c) or 14c-3 (a) and (b) under the Securities Exchange Act of 1934 (§§ 240.14a-3(b) and (c)

or 240.14c-3(a) and (b) of this chapter) and that relates to:

       * * * * *

       33. Amend § 230.405 by:

       a.   Adding in alphabetical order a definition for the terms “quarterly filer” and

“semiannual filer”; and

       b. Revising paragraph (3)(i)(A) and (C) and (ii)(C) of the definition of “smaller

reporting company”.

       The additions and revisions read as follows:



                                                     197

--- page 198 ---

§ 230.405 Definitions of terms.

       * * * * *

       Quarterly filer. A registrant that is required to file quarterly reports on Form 10-Q,

pursuant to § 240.13a-13(a) of this part.

       * * * * *

       Semiannual filer. A registrant that is required to file semiannual reports on Form 10-S,

pursuant to § 240.13a-13(b) of this part.

       * * * * *

       Smaller reporting company.

       * * * * *

       (3) * * *

       (i) * * *

       (A) Public float is measured as of the last business day of the issuer’s most recently

completed second fiscal quarter for a quarterly filer or first fiscal semiannual period for a

semiannual filer and computed by multiplying the aggregate worldwide number of shares of its

voting and non-voting common equity held by non-affiliates by the price at which the common

equity was last sold, or the average of the bid and asked prices of common equity, in the

principal market for the common equity;

       (C) An issuer must reflect the determination of whether it came within the definition of

smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the

next year for a quarterly filer or its semiannual report on Form 10-S for the next year for a

semiannual filer, indicating on the cover page of that filing, and in subsequent filings for that

fiscal year, whether it is a smaller reporting company, except that, if a determination based on



                                                    198

--- page 199 ---

public float indicates that the issuer is newly eligible to be a smaller reporting company, the

issuer may choose to reflect this determination beginning with its third quarterly report on Form

10-Q for a quarterly filer or its annual report on Form 10-K for a semiannual filer, rather than

waiting until the quarterly report for the first fiscal quarter of the next fiscal year for a quarterly

filer or the semiannual report for the first fiscal semiannual period of the next fiscal year for a

semiannual filer.

        * * * * *

        (ii) * * *

        (C) The issuer must reflect the determination of whether it came within the definition of

smaller reporting company in the registration statement and must appropriately indicate on the

cover page of the filing, and subsequent filings for the fiscal year in which the filing is made,

whether it is a smaller reporting company. The issuer must re-determine its status at the end of its

second fiscal quarter for a quarterly filer or at the end of its first fiscal semiannual period for a

semiannual filer and then reflect any change in status as provided in paragraph (3)(i)(C) of this

definition. In the case of a determination based on an initial Securities Act registration statement,

an issuer that was not determined to be a smaller reporting company has the option to re-

determine its status at the conclusion of the offering covered by the registration statement based

on the actual offering price and number of shares sold.

        * * * * *

        34. Amend § 230.485 by revising paragraph (b)(i)(1) to read as follows:

        § 230.485 Effective date of post-effective amendments filed by certain registered

investment companies or issuers offering registered non-variable annuities.

        * * * * *



                                                      199

--- page 200 ---

(b) * * *

        (1) * * *

        (i) Bringing the financial statements up to date under section 10(a)(3) of the Securities

Act of 1933 [15 U.S.C. 77j(a)(3)] or Rules 3-01 or 3-18 of Regulation S-X [17 CFR 210.3-01

and 210.3-18];

        * * * * *

        PART 232 — REGULATION S-T — GENERAL RULES AND REGULATIONS

FOR ELECTRONIC FILINGS

        35. The general authority citation for part 232 continues to read, in part, as follows:

            Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 77sss(a), 78c(b), 78l,

78m, 78n, 78n-1, 78o(d), 78w(a), 78ll, 80a-6(c), 80a-8, 80a-29, 80a-30, 80a-37, 7201 et seq.; and

18 U.S.C. 1350, unless otherwise noted.

        * * * * *

        36. Amend § 232.11 by deleting both the first and second definitions of “related official

filing” and, in their place, adding a single revised definition of “related official filing” to read as

follows:

        § 232.11 Definition of terms used in this part.

        * * * * *

        Related Official Filing. The term Related Official Filing means the ASCII or HTML

format part of the official filing with which all or part of an Interactive Data File appears as an

exhibit or, in the case of a filing on Form N-1A (§§ 239.15A and 274.11A of this chapter), Form

N-2 (§§ 239.14 and 274.11a-1 of this chapter), Form N-3 (§§ 239.17a and 274.11b of this

chapter), Form N-4 (§§ 239.17b and 274.11c of this chapter), Form N-6 (§§ 239.17c and 274.11d



                                                      200

--- page 201 ---

of this chapter), Form N-8B-2 (§ 274.12 of this chapter), Form S-6 (§ 239.16 of this chapter),

and Form N-CSR (§ 274.128 of this chapter), and, to the extent required by § 232.405 (Rule 405

of Regulation S-T) for a business development company as defined in Section 2(a)(48) of the

Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), Form 10-K (§ 249.310 of this

chapter), Form 10-S (§ 249.308b of this chapter), Form 10-Q (§ 249.308a of this chapter), and

Form 8-K (§ 249.308 of this chapter), the ASCII or HTML format part of an official filing that

contains the information to which an Interactive Data File corresponds.

       * * * * *

       37. Amend § 232.303 by revising paragraph (b) to read as follows:

       § 232.303 Incorporation by reference.

       * * * * *

       (b) If a filer incorporates by reference into an electronic filing any portion of an annual,

semiannual, or quarterly report to security holders, it must also file the portion of the annual,

semiannual, or quarterly report to security holders in electronic format as an exhibit to the filing,

as required by Regulation S-K Item 601(b)(13) (§ 229.601(b)(13) of this chapter). If a foreign

private issuer incorporates by reference into an electronic filing any portion of an annual or other

report to security holders, or of a Form 6-K report (§ 249.306 of this chapter) filed or submitted

in paper, it also must file the incorporated portion in electronic format as an exhibit to the filing.

The requirements of this paragraph do not apply to incorporation by reference by an investment

company from an annual, semiannual, or quarterly report to security holders.

       38. Amend § 232.405 by revising Note 1 to read as follows:

       § 232.405 Interactive Data File submissions.

       * * * * *



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--- page 202 ---

Note 1 to § 232.405: Section 229.601(b)(101) of this chapter (Item 601(b)(101) of

Regulation S-K) specifies the circumstances under which an Interactive Data File must be

submitted and the circumstances under which it is permitted to be submitted, with respect to §§

239.11 of this chapter (Form S-1), 239.13 of this chapter (Form S-3), 239.25 of this chapter

(Form S-4), 239.18 of this chapter (Form S-11), 239.31 of this chapter (Form F-1), 239.33 of this

chapter (Form F-3), 239.34 of this chapter (Form F-4), 249.310 of this chapter (Form 10-K),

249.308b of this chapter (Form 10-S), 249.308a of this chapter (Form 10-Q) and 249.308 of this

chapter (Form 8-K). General Instruction F of § 249.311 of this chapter (Form 11-K) specifies the

circumstances under which an Interactive Data File must be submitted, and the circumstances

under which it is permitted to be submitted, with respect to Form 11-K. Paragraph (101) of Part

II—Information not Required to be Delivered to Offerees or Purchasers of § 239.40 of this

chapter (Form F-10) specifies the circumstances under which an Interactive Data File must be

submitted and the circumstances under which it is permitted to be submitted, with respect to

Form F-10. Paragraph 101 of the Instructions as to Exhibits of § 249.220f of this chapter (Form

20-F) specifies the circumstances under which an Interactive Data File must be submitted and the

circumstances under which it is permitted to be submitted, with respect to Form 20-F. Paragraph

B.(15) of the General Instructions to § 249.240f of this chapter (Form 40-F) and Paragraph C.(6)

of the General Instructions to § 249.306 of this chapter (Form 6-K) specify the circumstances

under which an Interactive Data File must be submitted and the circumstances under which it is

permitted to be submitted, with respect to §§ 249.240f (Form 40-F) and 249.306 (Form 6-K) of

this chapter. Note D.5 of § 240.14a-101 of this chapter (Schedule 14A) and Item 1 of § 240.14c-

101 of this chapter (Schedule 14C) specify the circumstances under which an Interactive Data

File must be submitted with respect to Schedules 14A and 14C. General Instruction L of §



                                                  202

--- page 203 ---

240.14d-100 of this chapter (Schedule TO) specifies the circumstances under which an

Interactive Data File must be submitted with respect to Schedule TO. Section 240.13a-21 of this

chapter (Rule 13a-21 under the Exchange Act) and General Instruction I to § 249.333 of this

chapter (Form F-SR) specify the circumstances under which an Interactive Data File must be

submitted, with respect to Form F-SR. §§ 242.829 and 242.831 of this chapter (Rules 829 and

831 of Regulation SE) and the Registration Instructions to § 249.1701 of this chapter (Form

SBSEF), as applicable, specify the circumstances under which an Interactive Data File must be

submitted with respect to filings made under Regulation SE. Item 601(b)(101) of Regulation S-

K, paragraph (101) of Part II—Information not Required to be Delivered to Offerees or

Purchasers of Form F-10, paragraph 101 of the Instructions as to Exhibits of Form 20-F,

paragraph B.(15) of the General Instructions to Form 40-F, and paragraph C.(6) of the General

Instructions to Form 6-K all prohibit submission of an Interactive Data File by an issuer that

prepares its financial statements in accordance with 17 CFR 210.6-01 through 210.6-11 (Article

6 of Regulation S-X). For an issuer that is a management investment company or separate

account registered under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.), a

registered non-variable annuity issuer as defined in Rule 405 under the Securities Act (17 CFR

230.405), a business development company as defined in Section 2(a)(48) of the Investment

Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), or a unit investment trust as defined in Section

4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4), General Instruction C.3.(g) of

Form N-1A (§§ 239.15A and 274.11A of this chapter), General Instruction I of Form N-2 (§§

239.14 and 274.11a-1 of this chapter), General Instruction C.3.(h) of Form N-3 (§§ 239.17a and

274.11b of this chapter), General Instruction C.3.(h) of Form N-4 (§§ 239.17b and 274.11c of

this chapter), General Instruction C.3.(h) of Form N-6 (§§ 239.17c and 274.11d of this chapter),



                                                   203

--- page 204 ---

General Instruction 2.(l) of Form N-8B-2 (§ 274.12 of this chapter), General Instruction 5 of §

239.16 of this chapter (Form S-6), and General Instruction C.4 of Form N-CSR (§§ 249.331 and

274.128 of this chapter), as applicable, specifies the circumstances under which an Interactive

Data File must be submitted. For entities subject to §§ 240.15fk-1, 240.17a-5, 240.17a-12,

240.17h-2T, or 240.18a-7 of this chapter (Rule 15fk-1, 17a-5, 17a-12, 17h-2T, or 18a-7 under

the Exchange Act), §§ 240.15fk-1(c)(2)(ii)(A), 240.17a-5(d)(6)(i), 240.17a-5(k)(2), 240.17a-

12(b)(6), 240.17a-12(k), 240.17a-12(l), 240.17a-12(m), 240.17h-2T(a)(2), and 240.18a-7(c)(6)

of this chapter (Rules 15fk-1(c)(2)(ii)(A), 17a-5(d)(6)(i), 17a-5(k)(2), 17a-12(b)(6), 17a-12(k),

17a-12(l), 17a-12(m), 17h-2T(a)(2), and 18a-7(c)(6) under the Exchange Act), as applicable,

specify the circumstances under which an Interactive Data File must be submitted. For an

exchange as defined in 15 U.S.C. 78c(a)(1) (Section 3(a)(1) of the Exchange Act), General

Instruction A of § 249.1 of this chapter (Form 1) specifies the circumstances under which an

Interactive Data File must be submitted. For a clearing agency as defined in 15 U.S.C.

78c(a)(23)(A) (Section 3(a)(23)(A) of the Exchange Act), General Instruction A of § 249.200b

of this chapter (Form CA-1) specifies the circumstances under which an Interactive Data File

must be submitted with respect to § 249.200b of this chapter (Form CA-1), and § 240.17ad-27(d)

of this chapter (Rule 17ad-27(d) under the Exchange Act) specify the circumstances under which

an Interactive Data File must be submitted with respect to the reports required under § 249.200b

of this chapter (Form CA-1) and § 240.17ad-27 of this chapter (Rule 17ad-27 under the

Exchange Act).

       39. Revise § 232.406 to read as follows:

       § 232.406 Cover Page XBRL Data Tagging.




                                                   204

--- page 205 ---

Electronic filers submitting Forms 10-K (§ 249.310 of this chapter), 10-S (§ 249.308b of

this chapter), 10-Q (§ 249.308a of this chapter), 8-K (§ 249.308 of this chapter), 20-F (§

249.220f of this chapter) or 40-F (§ 249.240f of this chapter) who are required to submit

Interactive Data Files (§ 232.11) in Inline XBRL format in accordance with this Regulation S-T

must tag in Inline XBRL electronic format, in the manner provided by the EDGAR Filer Manual,

all of the information provided by the electronic filer that is required on the cover page of these

forms.

         PART 239—FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

         40. The general authority citation for part 239 continues to read, in part, as follows:

         Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 78l, 78m,

78n, 78o(d), 78o-7 note, 78u-5, 78w(a), 78ll, 78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-

13, 80a-24, 80a-26, 80a-29, 80a-30, 80a-37, and sec. 71003 and sec. 84001, Pub. L. 114-94, 129

Stat. 1321, unless otherwise noted.

         * * * * *

         41. Amend Form S-1 (referenced in § 239.11) by:

         a. Adding on the form cover page the text “Indicate by check mark if the registrant has

elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

and

         b. Revising Item 11A.

         Note: The additions and revisions to Form S-1 read as shown in Appendix A to this

document. The text of Form S-1 does not, and the text of the amendments to Form S-1 will

not, appear in the Code of Federal Regulations.

         42. Amend Form S-3 (referenced in § 239.13) by:


                                                     205

--- page 206 ---

a. Adding on the form cover page the text “Indicate by check mark if the registrant has

elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

and

       b. Revising Item 11(a).

       Note: The additions and revisions to Form S-3 read as shown in Appendix B to this

document. The text of Form S-3 does not, and the text of the amendments to Form S-3 will

not, appear in the Code of Federal Regulations.

       43. Amend Form S-11 (referenced in § 239.18) by:

       a. Adding on the form cover page the text “Indicate by check mark if the registrant has

elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

and

       b. Revising Item 28A.

       Note: The additions and revisions to Form S-11 read as shown in Appendix C to this

document. The text of Form S-11 does not, and the text of the amendments to Form S-11

will not, appear in the Code of Federal Regulations.

       44. Amend Form S-4 (referenced in § 239.25) by:

       a. Adding on the form cover page the text “Indicate by check mark if the registrant has

elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

and

       b. Revising Item 10, 12, 13, 16, and 17.

       Note: The additions and revisions to Form S-4 read as shown in Appendix D to this

document. The text of Form S-4 does not, and the text of the amendments to Form S-4 will

not, appear in the Code of Federal Regulations.


                                                  206

--- page 207 ---

45. Amend Form F-1 (referenced in § 239.31) by revising Item 4A and 5.

       Note: The revisions to Form F-1 read as shown in Appendix E to this document. The

text of Form F-1 does not, and the text of the amendments to Form F-1 will not, appear in

the Code of Federal Regulations.

       46. Amend Form F-3 (referenced in § 239.33) by revising Item 5 and 6.

       Note: The revisions to Form F-3 read as shown in Appendix F to this document. The

text of Form F-3 does not, and the text of the amendments to Form F-3 will not, appear in

the Code of Federal Regulations.

       47. Amend Form F-4 (referenced in § 239.34) by revising Item 10, 11, 12 , 13, and 17.

       Note: The revisions to Form F-4 read as shown in Appendix G to this document.

The text of Form F-4 does not, and the text of the amendments to Form F-4 will not, appear

in the Code of Federal Regulations.

       48. Amend Form F-10 (referenced in § 239.40) by revising Part II.

       Note: The revisions to Form F-10 read as shown in Appendix H to this document.

The text of Form F-10 does not, and the text of the amendments to Form F-10 will not,

appear in the Code of Federal Regulations.

       PART 240—GENERAL RULES AND REGULATIONS, SECURITIES

EXCHANGE ACT OF 1934

       49. The general authority citation for part 240 continues to read, in part, as follows:

       Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss,

77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78j-4, 78k, 78k-1, 78l, 78m, 78n,

78n-1, 78o, 78o-4, 78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78dd, 78ll, 78mm, 80a-20,

80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, 1681w(a)(1), 6801-6809, 6825, 7201 et seq., and



                                                    207

--- page 208 ---

8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 1350; Pub. L. 111-203, 939A, 124

Stat. 1887 (2010); and sec. 503 and 602, Pub. L. 112-106, 126 Stat. 326 (2012), unless otherwise

noted.

         * * * * *

         50. Amend § 240.3a55-1 by revising paragraph (d)(7) to read as follows:

         § 240.3a55-1 Method for determining market capitalization and dollar value of

average daily trading volume; application of the definition of narrow-based security index.

* * * * *

         (d) * * *

         (7) Outstanding shares of a security means the number of outstanding shares of such

security as reported on the most recent Form 10-K, Form 10-Q, Form 10-S, or Form 20-F (17

CFR 249.310, 249.308a, 249.308b, or 249.220f) filed with the Commission by the issuer of such

security, including any change to such number of outstanding shares subsequently reported by

the issuer on a Form 8-K (17 CFR 249.308).

         * * * * *

         51. Amend § 240.3b-6 by revising paragraph (b)(1) and (2) to read as follows:

         § 240.3b-6 Liability for certain statements by issuers.

         * * * * *

         (b) * * *

         (1) A forward-looking statement (as defined in paragraph (c) of this section) made in a

document filed with the Commission, in Part I of a quarterly report on Form 10-Q (§ 249.308a of

this chapter), in Part I of a semiannual report on Form 10-S (§ 249.308b of this chapter), or in an

annual report to security holders meeting the requirements of Rules 14a-3(b) and (c) or 14c-3(a)



                                                    208

--- page 209 ---

and (b) (§ 240.14a-3(b) and (c) or § 240.14c-3(a) and (b)), a statement reaffirming such forward-

looking statement after the date the document was filed or the annual report was made publicly

available, or a forward-looking statement made before the date the document was filed or the

date the annual report was made publicly available if such statement is reaffirmed in a filed

document, in Part I of a quarterly report on Form 10-Q, in Part I of a semiannual report on Form

10-S, or in an annual report made publicly available within a reasonable time after the making of

such forward-looking statement; Provided, that:

       * * * * *

       (2) Information that is disclosed in a document filed with the Commission in Part I of a

quarterly report on Form 10-Q (§ 249.308a of this chapter), in Part I of a semiannual report on

Form 10-S (§ 249.308b of this chapter), or in an annual report to security holders meeting the

requirements of Rules 14a-3(b) and (c) or 14c-3(a) and (b) under the Act (§ 240.14a-3(b) and (c)

or § 240.14c-3(a) and (b) of this chapter) and that relates to:

       * * * * *

       52. Amend § 240.10b5-1 by revising paragraph (c)(1)(ii)(B)(1)(ii) to read as follows:

       § 240.10b5-1 Trading “on the basis of” material nonpublic information in insider

trading cases.

       * * * * *

       (c)

       (1) * * *

       (ii) * * *

       (B) * * *

       (1) * * *



                                                     209

--- page 210 ---

(ii) Two business days following the disclosure of the issuer’s financial results in a Form

10-Q (§ 249.308a of this chapter), Form 10-S (§ 249.308b of this chapter), or Form 10-K (§

249.310 of this chapter) for the completed fiscal quarter in which the plan was adopted or, for

foreign private issuers, in a Form 20-F (§ 249.220f of this chapter) or Form 6-K (§ 249.306 of

this chapter) that discloses the issuer’s financial results (but, in any event, this required cooling-

off period is subject to a maximum of 120 days after adoption of the contract, instruction, or

plan); or

        * * * * *

        53. Amend § 240.12b-2 by:

        a. Revising paragraph (1)(i), 2(i), and (3)(i) through (iv) of the definition of “accelerated

filer and large accelerated filer”;

        b. Adding definitions in alphabetical order for “quarterly filer” and “semiannual filer”;

and

        c. Revising paragraph (3)(i)(A) and (C) and (ii)(C) of the definition “smaller reporting

company”.

        The additions and revisions read as follows:

        § 240.12b-2 Definitions.

        * * * * *

        Accelerated filer and large accelerated filer—

        * * * * *

        (1) Accelerated filer. * * *

        (i) The issuer had an aggregate worldwide market value of the voting and non-voting

common equity held by its non-affiliates of $75 million or more, but less than $700 million, as of



                                                     210

--- page 211 ---

the last business day of the issuer’s most recently completed second fiscal quarter for quarterly

filers or first fiscal semiannual period for semiannual filers;

        * * * * *

        (2) Large accelerated filer. * * *

        (i) The issuer had an aggregate worldwide market value of the voting and non-voting

common equity held by its non-affiliates of $700 million or more, as of the last business day of

the issuer’s most recently completed second fiscal quarter for quarterly filers or first fiscal

semiannual period for semiannual filers;

        * * * * *

        (3) Entering and exiting accelerated filer and large accelerated filer status.

        (i) The determination at the end of the issuer’s fiscal year for whether a non-accelerated

filer becomes an accelerated filer, or whether a non-accelerated filer or accelerated filer becomes

a large accelerated filer, governs the deadlines for the annual report to be filed for that fiscal

year, the quarterly or semiannual reports, as applicable, and annual reports to be filed for the

subsequent fiscal year and all annual reports and quarterly or semiannual reports, as applicable,

to be filed thereafter while the issuer remains an accelerated filer or large accelerated filer.

        (ii) Once an issuer becomes an accelerated filer, it will remain an accelerated filer unless:

The issuer determines, at the end of a fiscal year, that the aggregate worldwide market value of

the voting and non-voting common equity held by its non-affiliates was less than $60 million, as

of the last business day of the issuer’s most recently completed second fiscal quarter for

quarterly filers or first fiscal semiannual period for semiannual filers; or it determines that it is

eligible to use the requirements for smaller reporting companies under the revenue test in

paragraph (2) or (3)(iii)(B) of the “smaller reporting company” definition in this section, as



                                                      211

--- page 212 ---

applicable. An issuer that makes either of these determinations becomes a non-accelerated filer.

The issuer will not become an accelerated filer again unless it subsequently meets the conditions

in paragraph (1) of this definition.

       (iii) Once an issuer becomes a large accelerated filer, it will remain a large accelerated

filer unless: It determines, at the end of a fiscal year, that the aggregate worldwide market value

of the voting and non-voting common equity held by its non-affiliates (“aggregate worldwide

market value”) was less than $560 million, as of the last business day of the issuer’s most

recently completed second fiscal quarter for quarterly filers or first semiannual period for

semiannual filers or it determines that it is eligible to use the requirements for smaller reporting

companies under the revenue test in paragraph (2) or (3)(iii)(B) of the “smaller reporting

company” definition in this section, as applicable. If the issuer’s aggregate worldwide market

value was $60 million or more, but less than $560 million, as of the last business day of the

issuer’s most recently completed second fiscal quarter for quarterly filers or first fiscal

semiannual period for semiannual filers, and it is not eligible to use the requirements for smaller

reporting companies under the revenue test in paragraph (2) or (3)(iii)(B) of the “smaller

reporting company” definition in this section, as applicable, it becomes an accelerated filer. If the

issuer’s aggregate worldwide market value was less than $60 million, as of the last business day

of the issuer’s most recently completed second fiscal quarter for quarterly filers or first fiscal

semiannual period for semiannual filers, or it is eligible to use the requirements for smaller

reporting companies under the revenue test in paragraph (2) or (3)(iii)(B) of the “smaller

reporting company” definition in this section, it becomes a non-accelerated filer. An issuer will

not become a large accelerated filer again unless it subsequently meets the conditions in

paragraph (2) of this definition.



                                                     212

--- page 213 ---

(iv) The determination at the end of the issuer’s fiscal year for whether an accelerated

filer becomes a non-accelerated filer, or a large accelerated filer becomes an accelerated filer or a

non-accelerated filer, governs the deadlines for the annual report to be filed for that fiscal year,

the quarterly or semiannual and annual reports to be filed for the subsequent fiscal year and all

annual and quarterly or semiannual reports to be filed thereafter while the issuer remains an

accelerated filer or non-accelerated filer.

       * * * * *

       Quarterly filer. A registrant that is required to file quarterly reports on Form 10-Q,

pursuant to § 240.13a-13(a) of this part.

       * * * * *

       Semiannual filer. A registrant that is required to file semiannual reports on Form 10-S,

pursuant to § 240.13a-13(b) of this part.

       * * * * *

       Smaller reporting company.

       * * * * *

       (3) * * *

       (i) * * *

       (A) Public float is measured as of the last business day of the issuer’s most recently

completed second fiscal quarter for a quarterly filer or first fiscal semiannual period for a

semiannual filer and computed by multiplying the aggregate worldwide number of shares of its

voting and non-voting common equity held by non-affiliates by the price at which the common

equity was last sold, or the average of the bid and asked prices of common equity, in the

principal market for the common equity;



                                                     213

--- page 214 ---

* * * * *

        (C) An issuer must reflect the determination of whether it came within the definition of

smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the

next year for a quarterly filer or semiannual report on Form 10-S for the next year for a

semiannual filer, indicating on the cover page of that filing, and in subsequent filings for that

fiscal year, whether it is a smaller reporting company, except that, if a determination based on

public float indicates that the issuer is newly eligible to be a smaller reporting company, the

issuer may choose to reflect this determination beginning with its third quarterly report on Form

10-Q for a quarterly filer or its annual report on Form 10-K for a semiannual filer, rather than

waiting until the quarterly report for the first fiscal quarter of the next fiscal year for a quarterly

filer or the semiannual report for the first fiscal semiannual period of the next fiscal year for a

semiannual filer.

        * * * * *

        (ii) * * *

        (C) The issuer must reflect the determination of whether it came within the definition of

smaller reporting company in the registration statement and must appropriately indicate on the

cover page of the filing, and subsequent filings for the fiscal year in which the filing is made,

whether it is a smaller reporting company. The issuer must re-determine its status at the end of its

second fiscal quarter for a quarterly filer or at the end of its first fiscal semiannual period for a

semiannual filer and then reflect any change in status as provided in paragraph (3)(i)(C) of this

definition. In the case of a determination based on an initial Securities Act registration statement,

an issuer that was not determined to be a smaller reporting company has the option to re-




                                                      214

--- page 215 ---

determine its status at the conclusion of the offering covered by the registration statement based

on the actual offering price and number of shares sold.

       54. Amend § 240.12b-25 by revising paragraph (a) and (b)(2)(ii) to read as follows:

       § 240.12b-25 Notification of inability to timely file all or any required portion of a

Form 10-K, 20-F, 11-K, N-CEN, N-CSR, 10-S, 10-Q, or 10-D.

       (a) If all or any required portion of an annual or transition report on Form 10-K, 20-F or

11-K (17 CFR 249.310, 249.220f or 249.311), a semiannual or transition report on Form 10-S

(17 CFR 249.308b), a quarterly or transition report on Form 10-Q (17 CFR 249.308a), or a

distribution report on Form 10-D (17 CFR 249.312) required to be filed pursuant to Section 13 or

15(d) of the Act (15 U.S.C. 78m or 78o(d)) and rules thereunder, or if all or any required portion

of a semi-annual, annual or transition report on Form N-CSR (17 CFR 249.331; 17 CFR

274.128) or Form N-CEN (17 CFR 249.330; 17 CFR 274.101) required to be filed pursuant to

Section 13 or 15(d) of the Act or section 30 of the Investment Company Act of 1940 (15 U.S.C.

80a-29) and the rules thereunder, is not filed within the time period prescribed for such report,

the registrant, no later than one business day after the due date for such report, shall file a Form

12b-25 (17 CFR 249.322) with the Commission which shall contain disclosure of its inability to

file the report timely and the reasons therefore in reasonable detail.

       (b) * * *

       (2) * * *

       (ii) The subject annual report, semiannual report or transition report on Form 10-K, 20-F,

11-K, N-CEN, or N-CSR, or portion thereof, will be filed no later than the fifteenth calendar day

following the prescribed due date; or the subject quarterly report or transition report on Form 10-

Q, subject semiannual report or transition report on Form 10-S or distribution report on Form 10-



                                                     215

--- page 216 ---

D, or portion thereof, will be filed no later than the fifth calendar day following the prescribed

due date; and

        * * * * *

        55. Amend § 240.13a-10 by revising paragraph (c), (d), (e), (f) and (j) to read as follows:

        § 240.13a-10 Transition reports.

        * * * * *

        (c) If the transition period covers a period of less than six months, in lieu of the report

required by paragraph (b) of this section, a quarterly filer (as defined in § 240.12b-2 of this

chapter) may file a report for the transition period on Form 10-Q (§ 249.308a of this chapter) and

a semiannual filer (as defined in § 240.12b-2 of this chapter) may file a report for the transition

period on Form 10-S (§ 249.308b of this chapter) not more than the number of days specified in

paragraph (j) of this section after either the close of the transition period or the date of the

determination to change the fiscal closing date, whichever is later. The report on Form 10-Q or

Form 10-S shall cover the period from the close of the last fiscal year end and shall indicate

clearly the period covered. The financial statements filed therewith need not be audited but, if

they are not audited, the issuer shall file with the first annual report for the newly adopted fiscal

year separate audited statements of income and cash flows covering the transition period. The

notes to financial statements for the transition period included in such first annual report may be

integrated with the notes to financial statements for the full fiscal period. A separate audited

balance sheet as of the end of the transition period shall be filed in the annual report only if the

audited balance sheet as of the end of the fiscal year prior to the transition period is not filed.

Schedules need not be filed in transition reports on Form 10-Q or Form 10-S.

        (d) * * *



                                                      216

--- page 217 ---

(2) * * *

       (ii) The first report required to be filed by the issuer for the newly adopted fiscal year

after the date of the determination to change the fiscal year end is a quarterly report on Form 10-

Q or semiannual report on Form 10-S; and

       (iii) Information on the transition period is included in the quarterly filer’s report on Form

10-Q for the first quarterly period (except the fourth quarter) of the newly adopted fiscal year

that ends after the date of the determination to change the fiscal year or in the semiannual filer’s

report on Form 10-S for the first semiannual period of the newly adopted fiscal year after the

date of the determination to change the fiscal year. The information covering the transition

period required by Part II and Item 2 of Part I may be combined with the information regarding

the quarter or semiannual period. However, the financial statements required by Part I, which

may be unaudited, shall be furnished separately for the transition period.

       (e) A quarterly filer that changes its fiscal year end shall apply paragraph (e)(1) of this

section. A semiannual filer that changes its fiscal year end shall apply paragraph (e)(2) of this

section.

       (1) A quarterly filer shall:

       (i) File a quarterly report on Form 10-Q within the time period specified in General

Instruction A.1. to that form for any quarterly period (except the fourth quarter) of the old fiscal

year that ends before the date on which the issuer determined to change its fiscal year end, except

that the issuer need not file such quarterly report if the date on which the quarterly period ends

also is the date on which the transition period ends;

       (ii) File a quarterly report on Form 10-Q within the time specified in General Instruction

A.1. to that form for each quarterly period of the old fiscal year within the transition period. In



                                                     217

--- page 218 ---

lieu of a quarterly report for any quarter of the old fiscal year within the transition period, the

issuer may file a quarterly report on Form 10-Q for any period of three months within the

transition period that coincides with a quarter of the newly adopted fiscal year if the quarterly

report is filed within the number of days specified in paragraph (j) of this section after the end of

such three-month period, provided the issuer thereafter continues filing quarterly reports on the

basis of the quarters of the newly adopted fiscal year;

       (iii) Commence filing quarterly reports for the quarters of the new fiscal year no later

than the quarterly report for the first quarter of the new fiscal year that ends after the date on

which the issuer determined to change the fiscal year end; and

       (iv) Unless such information is or will be included in the transition report, or the first

annual report on Form 10-K for the newly adopted fiscal year, include in the initial quarterly

report on Form 10-Q for the newly adopted fiscal year information on any period beginning on

the first day subsequent to the period covered by the issuer’s final quarterly report on Form 10-Q

or annual report on Form 10-K for the old fiscal year. The information covering such period

required by Part II and Item 2 of Part I may be combined with the information regarding the

quarter. However, the financial statements required by Part I, which may be unaudited, shall be

furnished separately for such period.

       (2) A semiannual filer shall:

       (i) File a semiannual report on Form 10-S within the time period specified in General

Instruction A.1. to that form for its first fiscal semiannual period of the old fiscal year that ends

before the date on which the issuer determined to change its fiscal year end, except that the issuer

need not file such semiannual report if the date on which the fiscal semiannual period ends also

is the date on which the transition period ends;



                                                     218

--- page 219 ---

(ii) File a semiannual report on Form 10-S within the time specified in General

Instruction A.1. to that form for the first fiscal semiannual period of the old fiscal year within the

transition period. In lieu of a semiannual report for the first fiscal semiannual period of the old

fiscal year within the transition period, the issuer may file a semiannual report on Form 10-S for

the first fiscal semiannual period within the transition period that coincides with the first fiscal

semiannual period of the newly adopted fiscal year if the semiannual report is filed within the

number of days specified in paragraph (j) of this section after the end of such semiannual period,

provided the issuer thereafter continues filing semiannual reports on the basis of the fiscal

semiannual periods of the newly adopted fiscal year;

        (iii) Commence filing semiannual reports for the first fiscal semiannual period of the new

fiscal year no later than the semiannual report for the first fiscal semiannual period of the new

fiscal year that ends after the date on which the issuer determined to change the fiscal year end.

        Note to paragraphs (c) and (e):

        If it is not practicable or cannot be cost-justified to furnish in a transition report on Form

10-Q or Form 10-S or a quarterly or semiannual report for the newly adopted fiscal year financial

statements for corresponding periods of the prior year where required, financial statements may

be furnished for the quarters or semiannual period of the preceding fiscal year that most nearly

are comparable if the issuer furnishes an adequate discussion of seasonal and other factors that

could affect the comparability of information or trends reflected, an assessment of the

comparability of the data, and a representation as to the reason recasting has not been

undertaken.

        (f) Every successor issuer with securities registered under Section 12 of this Act that has

a different fiscal year from that of its predecessor(s) shall file a transition report pursuant to this



                                                      219

--- page 220 ---

section, containing the required information about each predecessor, for the transition period, if

any, between the close of the fiscal year covered by the last annual report of each predecessor

and the date of succession. The report shall be filed for the transition period on the form

appropriate for annual reports of the issuer not more than the number of days specified in

paragraph (j) of this section after the date of the succession, with financial statements in

conformity with the requirements set forth in paragraph (b) of this section. If the transition period

covers a period of less than six months, in lieu of a transition report on the form appropriate for

the issuer’s annual reports, the report may be filed for the transition period on Form 10-Q and

Form 10-S not more than the number of days specified in paragraph (j) of this section after the

date of the succession, with financial statements in conformity with the requirements set forth in

paragraph (c) of this section. Notwithstanding the foregoing, if the transition period covers a

period of one month or less, the successor issuer need not file a separate transition report if the

information is reported by the successor issuer in conformity with the requirements set forth in

paragraph (d) of this section.

       * * * * *

       (j)

       (1) For transition reports to be filed on the form appropriate for annual reports of the

issuer, the number of days shall be:

       (i) 60 days for large accelerated filers (as defined in § 240.12b-2);

       (ii) 75 days for accelerated filers (as defined in § 240.12b-2); and

       (iii) 90 days for all other issuers; and

       (2) For transition reports to be filed on Form 10-Q (§ 249.308a of this chapter) or Form

10-S (§ 249.308b of this chapter) the number of days shall be:



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--- page 221 ---

(i) 40 days for large accelerated filers and accelerated filers (as defined in § 240.12b-2);

and

        (ii) 45 days for all other issuers.

        * * * * *

        56. Revise § 240.13a-13 to read as follows:

        § 240.13a-13 Quarterly reports on Form 10-Q (§ 249.308a of this chapter) or

semiannual reports on Form 10-S (§ 249.308b of this chapter)

        (a) Except as provided in paragraphs (b), (c), and (d) of this section, every issuer that has

securities registered pursuant to section 12 of the Act and is required to file annual reports

pursuant to section 13 of the Act on Form 10-K (§ 249.310 of this chapter) shall file a quarterly

report on Form 10-Q (§ 249.308a of this chapter) within the period specified in General

Instruction A.1. to that form for each of the first three quarters of each fiscal year of the issuer,

commencing with the first fiscal quarter following the most recent fiscal year for which full

financial statements were included in an initial registration statement, or, if the initial registration

statement included financial statements for an interim period after the most recent fiscal year end

meeting the requirements of Article 10 of Regulation S-X or Rule 8-03 of Regulation S-X for

smaller reporting companies, for the first fiscal quarter after the quarter reported upon in the

initial registration statement. The first quarterly report of the issuer shall be filed on or before

either the 45th day after the effective date of the initial registration statement or the date on

which such report would have been required to be filed if the issuer had been required to file

reports on Form 10-Q as of its last fiscal quarter, whichever is later.

        (b) Issuers that are obligated under paragraph (a) of this section to file quarterly reports

on Form 10-Q, may, in lieu thereof, file a semiannual report on Form 10-S (§ 249.308b of this



                                                      221

--- page 222 ---

chapter) by marking the semiannual reporting box on the cover page of Form 10-K or initial

registration statement, as applicable. Issuers must file the Form 10-S within the period specified

in General Instruction A.1. to that form for the first fiscal semiannual period of the fiscal year of

the issuer, commencing with the first fiscal semiannual period following the most recent fiscal

year for which full financial statements were included in the initial registration statement with

the marked semiannual reporting box, or, if the initial registration statement with the marked

semiannual reporting box included financial statements for a fiscal semiannual period subsequent

to the most recent fiscal year end meeting the requirements of Article 10 of Regulation S-X or

Rule 8-03 of Regulation S-X for smaller reporting companies, commencing with the first fiscal

semiannual period of the fiscal year that immediately follows the fiscal year reported upon in the

registration statement.

       (1) The first semiannual report of the issuer shall be filed on or before either the 45th day

after the effective date of an initial registration statement or the date on which such report would

have been required to be filed if the issuer had been required to file reports on Form 10-S as of

its last fiscal semiannual period, whichever is later.

       (2) Issuers that elected to file semiannual reports on Form 10-S in reliance on paragraph

(b) of this section by marking the semiannual reporting box on the cover page of Form 10-K

shall file a semiannual report on Form 10-S for the first fiscal semiannual period of the fiscal

year in which the Form 10-K with the election was filed.

       (3) Issuers that elected to no longer file semiannual reports on Form 10-S in reliance on

paragraph (b) of this section by unmarking the semiannual reporting box on the cover page of the

Form 10-K shall commence filing quarterly reports on Form 10-Q for the first quarter of the

fiscal year in which the Form 10-K was filed.



                                                     222

--- page 223 ---

(4) Issuers may correct an error with respect to the semiannual reporting box on the

cover page of a Form 10-K by amending the Form 10-K as soon as practicable after discovery of

the error, provided, however, issuers may not correct such errors after the deadline by which, if

the issuer were a quarterly filer, the issuer’s first quarterly report would be required to be filed

for the fiscal year in which the Form 10-K with the error was filed.

        (c) This section shall not apply to the following issuers:

        (1) Investment companies required to file reports pursuant to § 270.30a-1;

        (2) Foreign private issuers required to file reports pursuant to § 240.13a-16; and

        (3) Asset-backed issuers required to file reports pursuant to § 240.13a-17.

        (d) Part I of the quarterly reports on Form 10-Q or Part I of the semiannual reports on

Form 10-S, as applicable, need not be filed by:

        (1) Mutual life insurance companies; or

        (2) Mining companies not in the production stage but engaged primarily in the

exploration for the development of mineral deposits other than oil, gas, or coal, if all of the

following conditions are met:

        (i) The issuer has not been in production during the current fiscal year or the two years

immediately prior thereto; except that being in production for an aggregate period of not more

than eight months over the three-year period shall not be a violation of this condition.

        (ii) Receipts from the sale of mineral products or from the operations of mineral

producing properties by the issuer and its subsidiaries combined have not exceeded $500,000 in

any of the most recent six years and have not aggregated more than $1,500,000 in the most

recent six fiscal years.




                                                     223

--- page 224 ---

(e) Notwithstanding the foregoing provisions of this section, the financial information

required by Part I of Form 10-Q or Part I of Form 10-S, as applicable, shall not be deemed to be

“filed” for the purpose of Section 18 of the Act or otherwise subject to the liabilities of that

section of the Act, but shall be subject to all other provisions of the Act.

       57. Amend § 240.13a-14 by revising paragraph (a) to read as follows:

       § 240.13a-14 Certification of disclosure in annual, semiannual, and quarterly

reports.

       (a) Each report, including transition reports, filed on Form 10-Q, Form 10-S, Form 10-K,

Form 20-F or Form 40-F (§ 249.308a, § 249.308b, § 249.310, § 249.220f, or § 249.240f of this

chapter) under Section 13(a) of the Act (15 U.S.C. 78m(a)), other than a report filed by an Asset-

Backed Issuer (as defined in § 229.1101 of this chapter) or a report on Form 20-F filed under §

240.13a-19, must include certifications in the form specified in the applicable exhibit filing

requirements of such report and such certifications must be filed as an exhibit to such report.

Each principal executive and principal financial officer of the issuer, or persons performing

similar functions, at the time of filing of the report must sign a certification. The principal

executive and principal financial officers of an issuer may omit the portion of the introductory

language in paragraph 4 as well as language in paragraph 4(b) of the certification that refers to

the certifying officers’ responsibility for designing, establishing and maintaining internal control

over financial reporting for the issuer until the issuer becomes subject to the internal control over

financial reporting requirements in § 240.13a-15 or § 240.15d-15.

       * * * * *

       58. Amend § 240.13a-15 by revising paragraphs (b) and (d) to read as follows:

       § 240.13a-15 Controls and procedures.



                                                     224

--- page 225 ---

* * * * *

       (b) Each such issuer’s management must evaluate, with the participation of the issuer’s

principal executive and principal financial officers, or persons performing similar functions, the

effectiveness of the issuer’s disclosure controls and procedures, as of the end of each fiscal

quarter for a quarterly filer (as defined in § 240.12b-2 of this chapter) or the end of each fiscal

semiannual period for a semiannual filer (as defined in § 240.12b-2 of this chapter), except that

management must perform this evaluation:

       * * * * *

       (d) The management of each such issuer that either had been required to file an annual

report pursuant to section 13(a) or 15(d) of the Act (15 U.S.C. 78m(a) or 78o(d) for the prior

fiscal year or had filed an annual report with the Commission for the prior fiscal year, other than

an investment company registered under section 8 of the Investment Company Act of 1940 (15

U.S.C. 80a-8), must evaluate, with the participation of the issuer’s principal executive and

principal financial officers, or persons performing similar functions, any change in the issuer’s

internal control over financial reporting, that occurred during each of the issuer’s fiscal quarters

for a quarterly filer or fiscal semiannual periods for a semiannual filer, or fiscal year in the case

of a foreign private issuer, that has materially affected, or is reasonably likely to materially

affect, the issuer’s internal control over financial reporting.

       * * * * *

       59. Amend § 240.13a-16 by revising paragraph (a)(3) to read as follows:

       § 240.13a-16 Reports of foreign private issuers on Form 6-K (17 CFR 249.306).

       (a) * * *




                                                     225

--- page 226 ---

(3) Issuers filing periodic reports on Form 10-K, Form 10-S, and Form 10-Q, and current

reports on Form 8-K; or

       * * * * *

       60. Amend § 240.13d-1 by revising paragraph (j) to read as follows:

       § 240.13d-1 Filing of Schedules 13D and 13G.

       * * * * *

       (j) For the purpose of sections 13(d) and 13(g) of the Act, any person, in determining the

amount of outstanding securities of a class of equity securities, may rely upon information set

forth in the issuer’s most recent quarterly, semiannual, or annual report, and any current report

subsequent thereto, filed with the Commission pursuant to the Act, unless such person knows or

has reason to believe that the information contained therein is inaccurate.

       * * * * *

       61. Amend § 240.14a-5 by revising paragraph (f) to read as follows:

       § 240.14a-5 Presentation of information in proxy statement.

       * * * * *

       (f) If the date of the next annual meeting is subsequently advanced or delayed by more

than 30 calendar days from the date of the annual meeting to which the proxy statement relates,

the registrant shall, in a timely manner, inform shareholders of such change, and the new dates

referred to in paragraphs (e)(1) and (e)(2) of this section, by including a notice, under Item 5, in

its earliest possible quarterly report on Form 10-Q (§ 249.308a of this chapter) or semiannual

report on Form 10-S (§ 249.308b of this chapter), in the case of investment companies, in a

shareholder report under § 270.30d-1 of this chapter under the Investment Company Act of 1940,

or, if impracticable, any means reasonably calculated to inform shareholders.



                                                    226

--- page 227 ---

62. Amend § 240.14a-8 by revising paragraph (e)(1):

       § 240.14a-8 Shareholder proposals.

       * * * * *

       (e)

       (1) If you are submitting your proposal for the company’s annual meeting, you can in

most cases find the deadline in last year’s proxy statement. However, if the company did not

hold an annual meeting last year, or has changed the date of its meeting for this year more than

30 days from last year’s meeting, you can usually find the deadline in one of the company’s

quarterly reports on Form 10-Q (§ 249.308a of this chapter) or semiannual reports on Form 10-S

(§ 249.308b of this chapter), or in shareholder reports of investment companies under § 270.30d-

1 of this chapter of the Investment Company Act of 1940. In order to avoid controversy,

shareholders should submit their proposals by means, including electronic means, that permit

them to prove the date of delivery.

       * * * * *

       63. Amend § 240.14a-101 by revising NOTES D.4. and Item 9. (e)(1) to read as follows:

       § 240.14a-101 Schedule 14A. Information required in proxy statement.

       * * * * *

       NOTES * * *

       D. * * *

       4. Electronic filings. If any of the information required by Items 13 or 14 of this Schedule

is incorporated by reference from an annual, semiannual, or quarterly report, such report, or any

portion thereof incorporated by reference, shall be filed in electronic format with the proxy

statement. This provision shall not apply to registered investment companies.



                                                   227

--- page 228 ---

* * * * *

       Item 9. * * *

       (e)

       (1) Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last

two fiscal years for professional services rendered by the principal accountant for the audit of the

registrant’s annual financial statements and review of financial statements included in the

registrant’s Form 10-Q (17 CFR 249.308a) or Form 10-S (17 CFR 249.308b), or services that are

normally provided by the accountant in connection with statutory and regulatory filings or

engagements for those fiscal years.

       * * * * *

       64. Amend § 240.15c2-11 by revising paragraph (f)(3)(i)(C)(1):

       § 240.15c2-11 Publication or submission of quotations without specified

information.

       * * * * *

       (f) * * *

       (3) * * *

       (i) * * *

       (C) * * *

       (1) Paragraph (b)(3)(i), (iv), or (v) of this section are filed within 180 calendar days from

the end of the issuer’s most recent fiscal year, fiscal semiannual period, or fiscal quarterly

reporting period that is covered by a report required by section 13 or 15(d) of the Act, as

applicable;

       * * * * *



                                                    228

--- page 229 ---

65. Amend § 240.15d-10 by revising paragraph (c), (d), (e), (f), and (j) to read as follows:

        § 240.15d-10 Transition reports.

        * * * * *

        (c) If the transition period covers a period of less than six months, in lieu of the report

required by paragraph (b) of this section, a quarterly filer (as defined in § 240.12b-2 of this

chapter) may file a report for the transition period on Form 10-Q (§ 249.308 of this chapter) and

a semiannual filer (as defined in § 240.12b-2 of this chapter) may file a report for the transition

period on Form 10-S (§ 249.308b of this chapter) not more than the number of days specified in

paragraph (j) of this section after either the close of the transition period or the date of the

determination to change the fiscal closing date, whichever is later. The report on Form 10-Q or

10-S shall cover the period from the close of the last fiscal year end and shall indicate clearly the

period covered. The financial statements filed therewith need not be audited but, if they are not

audited, the issuer shall file with the first annual report for the newly adopted fiscal year separate

audited statements of income and cash flows covering the transition period. The notes to

financial statements for the transition period included in such first annual report may be

integrated with the notes to financial statements for the full fiscal period. A separate audited

balance sheet as of the end of the transition period shall be filed in the annual report only if the

audited balance sheet as of the end of the fiscal year before the transition period is not filed.

Schedules need not be filed in transition reports on Form 10-Q or Form 10-S.

        (d) Notwithstanding the foregoing in paragraphs (a), (b), and (c) of this section, if the

transition period covers a period of one month or less, the issuer need not file a separate

transition report if either:




                                                      229

--- page 230 ---

(1) The first report required to be filed by the issuer for the newly adopted fiscal year

after the date of the determination to change the fiscal year end is an annual report, and that

report covers the transition period as well as the fiscal year; or

       (2)

       (i) The issuer files with the first annual report for the newly adopted fiscal year separate

audited statements of income and cash flows covering the transition period; and

       (ii) The first report required to be filed by the issuer for the newly adopted fiscal year

after the date of the determination to change the fiscal year end is a quarterly report on Form 10-

Q or semiannual report on Form 10-S; and

       (iii) Information on the transition period is included in the quarterly filer’s report on Form

10-Q for the first quarterly period (except the fourth quarter) of the newly adopted fiscal year

that ends after the date of the determination to change the fiscal year or the semiannual filer’s

report on Form 10-S for the first semiannual period of the newly adopted fiscal year after the

date of the determination to change the fiscal year. The information covering the transition

period required by Part II and Item 2 of Part I may be combined with the information regarding

the quarter or semiannual period. However, the financial statements required by Part I, which

may be unaudited, shall be furnished separately for the transition period.

       (e) A quarterly filer that changes its fiscal year end shall apply paragraph (e)(1) of this

section. A semiannual filer that changes its fiscal year end shall apply paragraph (e)(2) of this

section:

       (1) A quarterly filer shall:

       (i) File a quarterly report on Form 10-Q within the time period specified in General

Instruction A.1. to that form for any quarterly period (except the fourth quarter) of the old fiscal



                                                     230

--- page 231 ---

year that ends before the date on which the issuer determined to change its fiscal year end, except

that the issuer need not file such quarterly report if the date on which the quarterly period ends

also is the date on which the transition period ends;

       (ii) File a quarterly report on Form 10-Q within the time specified in General Instruction

A.1 to that form for each quarterly period of the old fiscal year within the transition period. In

lieu of a quarterly report for any quarter of the old fiscal year within the transition period, the

issuer may file a quarterly report on Form 10-Q for any period of three months within the

transition period that coincides with a quarter of the newly adopted fiscal year if the quarterly

report is filed within the number of days specified in paragraph (j) of this section after the end of

such three month period, provided the issuer thereafter continues filing quarterly reports on the

basis of the quarters of the newly adopted fiscal year;

       (iii) Commence filing quarterly reports for the quarters of the new fiscal year no later

than the quarterly report for the first quarter of the new fiscal year that ends after the date on

which the issuer determined to change the fiscal year end; and

       (iv) Unless such information is or will be included in the transition report, or the first

annual report on Form 10-K for the newly adopted fiscal year, include in the initial quarterly

report on Form 10-Q for the newly adopted fiscal year information on any period beginning on

the first day after the period covered by the issuer’s final quarterly report on Form 10-Q or

annual report on Form 10-K for the old fiscal year. The information covering such period

required by Part II and Item 2 of Part I may be combined with the information regarding the

quarter. However, the financial statements required by Part I, which may be unaudited, shall be

furnished separately for such period.

       (2) A semiannual filer shall:



                                                     231

--- page 232 ---

(i) File a semiannual report on Form 10-S within the time period specified in General

Instruction A.1. to that form for its first fiscal semiannual period of the old fiscal year that ends

before the date on which the issuer determined to change its fiscal year end, except that the issuer

need not file such semiannual report if the date on which the fiscal semiannual period ends also

is the date on which the transition period ends;

       (ii) File a semiannual report on Form 10-S within the time specified in General

Instruction A.1. to that form for the first fiscal semiannual period of the old fiscal year within the

transition period. In lieu of a semiannual report for the first fiscal semiannual period of the old

fiscal year within the transition period, the issuer may file a semiannual report on Form 10-S for

the first fiscal semiannual period within the transition period that coincides with the first fiscal

semiannual period of the newly adopted fiscal year if the semiannual report is filed within the

number of days specified in paragraph (j) of this section after the end of such semiannual period,

provided the issuer thereafter continues filing semiannual reports on the basis of the fiscal

semiannual periods of the newly adopted fiscal year;

       (iii) Commence filing semiannual reports for the first fiscal semiannual period of the new

fiscal year no later than the semiannual report for the first fiscal semiannual period of the new

fiscal year that ends after the date on which the issuer determined to change the fiscal year end.

       Note to paragraphs (c) and (e):

       If it is not practicable or cannot be cost-justified to furnish in a transition report on Form

10-Q or 10-S or a quarterly or semiannual report for the newly adopted fiscal year financial

statements for corresponding periods of the prior year where required, financial statements may

be furnished for the quarters or semiannual period of the preceding fiscal year that most nearly

are comparable if the issuer furnishes an adequate discussion of seasonal and other factors that



                                                     232

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could affect the comparability of information or trends reflected, an assessment of the

comparability of the data, and a representation as to the reason recasting has not been

undertaken.

       (f) Every successor issuer that has a different fiscal year from that of its predecessor(s)

shall file a transition report pursuant to this section, containing the required information about

each predecessor, for the transition period, if any, between the close of the fiscal year covered by

the last annual report of each predecessor and the date of succession. The report shall be filed for

the transition period on the form appropriate for annual reports of the issuer not more than the

number of days specified in paragraph (j) of this section after the date of the succession, with

financial statements in conformity with the requirements set forth in paragraph (b) of this

section. If the transition period covers a period of less than six months, in lieu of a transition

report on the form appropriate for the issuer’s annual reports, the report may be filed for the

transition period on Form 10-Q or Form 10-S not more than the number of days specified in

paragraph (j) of this section after the date of the succession, with financial statements in

conformity with the requirements set forth in paragraph (c) of this section. Notwithstanding the

foregoing, if the transition period covers a period of one month or less, the successor issuer need

not file a separate transition report if the information is reported by the successor issuer in

conformity with the requirements set forth in paragraph (d) of this section.

       * * * * *

       (j)

       (1) For transition reports to be filed on the form appropriate for annual reports of the

issuer, the number of days shall be:

       (i) 60 days for large accelerated filers (as defined in § 240.12b-2);



                                                     233

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(ii) 75 days for accelerated filers (as defined in § 240.12b-2); and

       (iii) 90 days for all other issuers; and

       (2) For transition reports to be filed on Form 10-Q (§ 249.308 of this chapter) or Form

10-S (§ 249.308b of this chapter), the number of days shall be:

       (i) 40 days for large accelerated filers and accelerated filers (as defined in § 240.12b-2);

and

       (ii) 45 days for all other issuers.

       * * * * *

       66. Revise § 240.15d-13 to read as follows:

       § 240.15d-13 Quarterly reports on Form 10-Q (§ 249.308 of this chapter) or

semiannual reports on Form 10-S (§ 249.308b of this chapter).

       (a) Except as provided in paragraphs (b), (c) and (d) of this section, every issuer that has

securities registered pursuant to the Securities Act and is required to file annual reports pursuant

to section 15(d) of the Act on Form 10-K (§ 249.310 of this chapter) shall file a quarterly report

on Form 10-Q (§ 249.308a of this chapter) within the period specified in General Instruction A.1

to that form for each of the first three quarters of each fiscal year of the issuer, commencing with

the first fiscal quarter following the most recent fiscal year for which full financial statements

were included in an initial registration statement, or, if the initial registration statement included

financial statements for an interim period after the most recent fiscal year end meeting the

requirements of Article 10 of Regulation S-X or Rule 8-03 of Regulation S-X for smaller

reporting companies, for the first fiscal quarter after the quarter reported upon in the initial

registration statement. The first quarterly report of the issuer shall be filed on or before either the

45th day after the effective date of the initial registration statement or the date on which such



                                                     234

--- page 235 ---

report would have been required to be filed if the issuer had been required to file reports on Form

10-Q as of its last fiscal quarter, whichever is later.

        (b) Issuers that are obligated under paragraph (a) of this section to file quarterly reports

on Form 10-Q, may, in lieu thereof, file a semiannual report on Form 10-S (§ 249.308b of this

chapter) by marking the semiannual reporting box on the cover page of Form 10-K or initial

registration statement, as applicable. Issuers must file the Form 10-S within the period specified

in General Instruction A.1. to that form for the first fiscal semiannual period of the fiscal year of

the issuer, commencing with the first fiscal semiannual period following the most recent fiscal

year for which full financial statements were included in the initial registration statement with

the marked semiannual reporting box, or, if the initial registration statement with the marked

semiannual reporting box included financial statements for a fiscal semiannual period subsequent

to the most recent fiscal year end meeting the requirements of Article 10 of Regulation S-X or

Rule 8-03 of Regulation S-X for smaller reporting companies, commencing with the first fiscal

semiannual period of the fiscal year that immediately follows the fiscal year reported upon in the

registration statement.

        (1) The first semiannual report of the issuer shall be filed on or before either the 45th day

after the effective date of an initial registration statement or the date on which such report would

have been required to be filed if the issuer had been required to file reports on Form 10-S as of

its last fiscal semiannual period, whichever is later.

        (2) Issuers that elected to file semiannual reports on Form 10-S in reliance on paragraph

(b) of this section by marking the semiannual reporting box on the cover page of Form 10-K

shall file a semiannual report on Form 10-S for the first fiscal semiannual period of the fiscal

year in which the Form 10-K with the election was filed.



                                                      235

--- page 236 ---

(3) Issuers that elected to no longer file semiannual reports on Form 10-S in reliance on

paragraph (b) of this section by unmarking the semiannual reporting box on the cover page of the

Form 10-K shall commence filing quarterly reports on Form 10-Q for the first quarter of the

fiscal year in which the Form 10-K was filed.

       (4) Issuers may correct an error with respect to the semiannual reporting box on the cover

page of a Form 10-K by amending the Form 10-K as soon as practicable after discovery of the

error, provided, however, issuers may not correct such errors after the deadline by which, if the

issuer were a quarterly filer, the issuer’s first quarterly report would be required to be filed for

the fiscal year in which the Form 10-K with the error was filed.

       (c) This section shall not apply to the following issuers:

       (1) Investment companies required to file reports pursuant to § 270.30a-1;

       (2) Foreign private issuers required to file reports pursuant to § 240.15d-16; and

       (3) Asset-backed issuers required to file reports pursuant to § 240.15d-17.

       (d) Part I of the quarterly reports on Form 10-Q or Part I of the semiannual reports on

Form 10-S, as applicable, need not be filed by:

       (1) Mutual life insurance companies; or

       (2) Mining companies not in the production stage but engaged primarily in the

exploration for the development of mineral deposits other than oil, gas, or coal, if all of the

following conditions are met:

       (i) The issuer has not been in production during the current fiscal year or the two years

immediately prior thereto; except that being in production for an aggregate period of not more

than eight months over the three-year period shall not be a violation of this condition.




                                                     236

--- page 237 ---

(ii) Receipts from the sale of mineral products or from the operations of mineral

producing properties by the issuer and its subsidiaries combined have not exceeded $500,000 in

any of the most recent six years and have not aggregated more than $1,500,000 in the most

recent six fiscal years.

        (e) Notwithstanding the foregoing provisions of this section, the financial information

required by Part I of Form 10-Q or Part I of Form 10-S, as applicable, shall not be deemed to be

“filed” for the purpose of section 18 of the Act or otherwise subject to the liabilities of that

section of the Act, but shall be subject to all other provisions of the Act.

        67. Amend § 240.15d-14 by revising paragraph (a) to read as follows:

        § 240.15d-14 Certification of disclosure in annual, semiannual, and quarterly

reports.

        (a) Each report, including transition reports, filed on Form 10-Q, Form 10-S, Form 10-K,

Form 20-F or Form 40-F (§ 249.308a, § 249.308b, § 249.310, § 249.220f or § 249.240f of this

chapter) under section 15(d) of the Act (15 U.S.C. 78o(d)), other than a report filed by an Asset-

Backed Issuer (as defined in § 229.1101 of this chapter) or a report on Form 20-F filed under §

240.15d-19, must include certifications in the form specified in the applicable exhibit filing

requirements of such report, and such certifications must be filed as an exhibit to such report.

Each principal executive and principal financial officer of the issuer, or persons performing

similar functions, at the time of filing of the report must sign a certification. The principal

executive and principal financial officers of an issuer may omit the portion of the introductory

language in paragraph 4 as well as language in paragraph 4(b) of the certification that refers to

the certifying officers’ responsibility for designing, establishing and maintaining internal control




                                                     237

--- page 238 ---

over financial reporting for the issuer until the issuer becomes subject to the internal control over

financial reporting requirements in § 240.13a-15 or § 240.15d-15.

        * * * * *

        68. Amend § 240.15d-15 by revising paragraphs (b) and (d) to read as follows:

        § 240.15d-15 Controls and procedures.

        * * * * *

        (b) Each such issuer’s management must evaluate, with the participation of the issuer’s

principal executive and principal financial officers, or persons performing similar functions, the

effectiveness of the issuer’s disclosure controls and procedures, as of the end of each fiscal

quarter for a quarterly filer (as defined in § 240.12b-2 of this chapter) or the end of each fiscal

semiannual period for a semiannual filer (as defined in § 240.12b-2 of this chapter), except that

management must perform this evaluation:

        * * * * *

        (d) The management of each such issuer that previously either had been required to file

an annual report pursuant to section 13(a) or 15(d) of the Act (15 U.S.C. 78m(a) or 78o(d)) for

the prior fiscal year or previously had filed an annual report with the Commission for the prior

fiscal year, other than an investment company registered under section 8 of the Investment

Company Act of 1940 (15 U.S.C. 80a-8), must evaluate, with the participation of the issuer’s

principal executive and principal financial officers, or persons performing similar functions, any

change in the issuer’s internal control over financial reporting, that occurred during each of the

issuer’s fiscal quarters for a quarterly filer or fiscal semiannual periods for a semiannual filer, or

fiscal year in the case of a foreign private issuer, that has materially affected, or is reasonably

likely to materially affect, the issuer’s internal control over financial reporting.



                                                      238

--- page 239 ---

* * * * *

       69. Amend § 240.15d-16 by revising paragraphs (a)(2) and (3) and adding new paragraph

(a)(4) to read as follows:

       § 240.15d-16 Reports of foreign private issuers on Form 6-K (17 CFR 249.306).

       (a) * * *

       (2) Issuers of American depositary receipts for securities of any foreign issuer;

       (3) Issuers filing periodic reports on Form 10-K, Form 10-S, and Form 10-Q, and current

reports on Form 8-K; or

       (4) Asset-backed issuers, as defined in § 229.1101 of this chapter.

       * * * * *

       70. Amend § 249.322 by revising paragraph (a) to read as follows:

       § 249.322 Form 12b-25—Notification of late filing.

       (a) This form shall be filed pursuant to § 240.12b-25 of this chapter by issuers who are

unable to file timely all or any required portion of an annual or transition report on Form 10-K,

20-F, or 11-K (§ 249.310, 249.220f, or 249.311), a quarterly or transition report on Form 10-Q (§

249.308a), a semiannual or transition report on Form 10-S (§ 249.308b), or a distribution report

on Form 10-D (§ 249.312) pursuant to section 13 or 15(d) of the Act (15 U.S.C. 78m or 78o(d))

or an annual report on Form N-CEN (§ 249.330; 274.101) or a semi-annual or annual report on

Form N-CSR (§ 249.331; 274.128) pursuant to section 13 or 15(d) of the Act or section 30 of the

Investment Company Act of 1940 (15 U.S.C. 80a-29). The filing shall consist of a signed

original and three conformed copies, and shall be filed with the Commission at Washington, DC

20549, no later than one business day after the due date for the periodic report in question.




                                                    239

--- page 240 ---

Copies of this form may be obtained from “Publications,” Securities and Exchange Commission,

100 F Street, NE., Washington, DC 20549 and at our Web site at http://www.sec.gov.

        * * * * *

        PART 249—FORMS, SECURITIES EXCHANGE ACT OF 1934

        71. The authority citation for part 249 continues to read, in part, as follows:

        Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C. 5461 et seq.; 18 U.S.C.

1350; Sec. 953(b), Pub. L. 111-203, 124 Stat. 1904; Sec. 102(a)(3), Pub. L. 112-106, 126 Stat.

309 (2012); Sec. 107, Pub. L. 112-106, 126 Stat. 313 (2012), and Sec. 72001, Pub. L. 114-94,

129 Stat. 1312 (2015), and secs. 2 and 3 Pub. L. 116-222, 134 Stat. 1063 (2020), unless

otherwise noted.

            * * * * *

        72. Amend Form 10 (referenced in § 249.210) by adding on the form cover page the text

“Indicate by check mark if the registrant has elected to file semiannual reports pursuant to Rule

13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

        Note: The additions to Form 10 read as shown in Appendix I to this document. The

text of Form 10 does not, and the text of the amendments to Form 10 will not, appear in the

Code of Federal Regulations.

        73. Amend Form 6-K (referenced in § 249.306) by revising General Instruction

(C)(6)(a)(i).

        Note: The revisions to Form 6-K read as shown in Appendix J to this document. The

text of Form 6-K does not, and the text of the amendments to Form 6-K will not, appear in

the Code of Federal Regulations.

        74. Amend Form 8-K (referenced in § 249.308) by revising Item 2.02.


                                                     240

--- page 241 ---

Note: The revisions to Form 8-K read as shown in Appendix K to this document.

The text of Form 8-K does not, and the text of the amendments to Form 8-K will not,

appear in the Code of Federal Regulations.

        75. Add new Form 10-S (to be referenced in § 249.308b).

        Note: Proposed Form 10-S is attached as Appendix L to this document. The text of

Form 10-S will not appear in the Code of Federal Regulations.

        76. Amend Form 10-K (referenced in § 249.310) by:

        a. Adding on the form cover page the text: “Indicate by check mark if the registrant has

elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

        b. Revising the cover page sentence: “State the aggregate market value of the voting and

non-voting common equity held by non-affiliates computed by reference to the price at which the

common equity was last sold, or the average bid and asked price of such common equity, as of

the last business day of the registrant’s most recently completed second fiscal quarter.”; and

        c. Revising Item 3, 5, 9B, and 14.

        Note: The additions and revisions to Form 10-K read as shown in Appendix M to

this document. The text of Form 10-K does not, and the text of the amendments to Form

10-K will not, appear in the Code of Federal Regulations.

        77. Amend Form 12b-25 (referenced in § 249.322) by revising the cover page, Part II,

and Part III.

        Note: The revisions to Form 12b-25 read as shown in Appendix N to this document.

The text of Form 12b-25 does not, and the text of the amendments to Form 12b-25 will not,

appear in the Code of Federal Regulations.




                                                   241

--- page 242 ---

PART 260—GENERAL RULES AND REGULATIONS, TRUST INDENTURE

ACT OF 1939

       78. The authority citation for part 260 continues to read as follows:

       Authority: 15 U.S.C. 77c, 77ddd, 77eee, 77ggg, 77nnn, 77sss, 78ll (d), 80b-3, 80b-4, and

80b-11, unless otherwise noted.

       * * * * *

       79. Amend § 260.0-11 by revising paragraph (b)(1) and (2) to read as follows:

       § 260.0-11 Liability for certain statements by issuers.

       * * * * *

       (b) * * *

       (1) A forward-looking statement (as defined in paragraph (c) of this section) made in a

document filed with the Commission, in Part I of a quarterly report on Form 10-Q, § 249.308a of

this chapter, in Part I of a semiannual report on Form 10-S, § 249.308b of this chapter, or in an

annual report to security holders meeting the requirements of Rules 14a-3(b) and (c) or 14c-3(a)

and (b) under the Securities Exchange Act of 1934 (§ 240.14a-3(b) and (c) or § 240.14c-3(a) and

(b) of this chapter), a statement reaffirming such forward-looking statement after the date the

document was filed or the annual report was made publicly available, or a forward-looking

statement made before the date the document was filed or the date the annual report was made

publicly available if such statement is reaffirmed in a filed document, in Part I of a quarterly

report on Form 10-Q, in Part I of a semiannual report on Form 10-S, or in an annual report made

publicly available within a reasonable time after the making of such forward-looking statement;

Provided, that:

       * * * * *



                                                    242

--- page 243 ---

(2) Information relating to the effects of changing prices on the business enterprise

presented voluntarily or pursuant to Item 303 of Regulation S-K (§ 229.303 of this chapter), Item

5 of Form 20-F (§ 249.220f of this chapter), “Operating and Financial Review and Prospects,”

Item 302 of Regulation S-K (§ 229.302 of this chapter), “Supplementary Financial Information,”

or Rule 3-20(c) of Regulation S-X (§ 210.3-20(c) of this chapter), and disclosed in a document

filed with the Commission, in Part I of a quarterly report on Form 10-Q, in Part I of a semiannual

report on Form 10-S, or in an annual report to shareholders meeting the requirements of Rules

14a-3(b) and (c) or 14c-3(a) and (b) (§ 240.14a-3(b) and (c) or § 240.14c-3(a) and (b)) under the

Securities Exchange Act of 1934.

         * * * * *

By the Commission.

Dated:



May 5, 2026,

Vanessa A. Countryman, Secretary.




                                                     243

--- page 244 ---

Appendix A—Form S-1

       * * * * *

                                            FORM S-1

       * * * * *

       Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

       * * * * *

        Item 11A. Material Changes.

       If the registrant elects to incorporate information by reference pursuant to General

Instruction VII., describe any and all material changes in the registrant’s affairs which have

occurred since the end of the latest fiscal year for which audited financial statements were

included in the latest Form 10-K and that have not been described in a Form 10-Q, Form 10-S, or

Form 8-K filed under the Exchange Act.

       * * * * *




                                                    244

--- page 245 ---

Appendix B—Form S-3

       * * * * *

                                            FORM S-3

       * * * * *

       Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

       * * * * *

       Item 11. Material Changes.

       (a) Describe any and all material changes in the registrant’s affairs which have occurred

since the end of the latest fiscal year for which certified financial statements were included in the

latest annual report to security holders and which have not been described in a report on Form

10-Q (§249.308a of this chapter), Form 10-S (§249.308b of this chapter), or Form 8-K (§249.308

of this chapter) filed under the Exchange Act.

       * * * * *




                                                    245

--- page 246 ---

Appendix C—Form S-11

       * * * * *

                                           FORM S-11

       * * * * *

   Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

       * * * * *

       Item 28A. Material Changes.

       If the registrant elects to incorporate information by reference pursuant to General

Instruction H, describe any and all material changes in the registrant’s affairs which have

occurred since the end of the latest fiscal year for which audited financial statements were

included in the latest Form 10-K and which have not been described in a Form 10-Q, Form 10-S,

or Form 8-K filed under the Exchange Act.

       * * * * *




                                                   246

--- page 247 ---

Appendix D—Form S-4

       * * * * *

                                            FORM S-4

       * * * * *

       Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

       * * * * *

       Item 10. Information with Respect to S-3 Registrants.

       If the registrant meets the requirements for use of Form S-3 and elects to furnish

information in accordance with the provisions of this Item, furnish information as required below:

       (a) Describe any and all material changes in the registrant’s affairs that have occurred

since the end of the latest fiscal year for which audited financial statements were included in the

latest annual report to security holders and that have not been described in a report on Form 10-Q

(§249.308a of this chapter), Form 10-S (§249.308a of this chapter), or Form 8-K (§249.308 of

this chapter) filed under the Exchange Act.

       * * * * *

       Item 12. Information with Respect to S-3 Registrants.

       * * * * *

       (a) * * *

       (2) Provide financial and other information with respect to the registrant in the form

required by Part I of Form 10-Q as of the end of the most recent fiscal quarter (or, if applicable,

required by Part I of Form 10-S as of the end of the most recent fiscal semiannual period) which

ended after the end of the latest fiscal year for which certified financial statements were included


                                                    247

--- page 248 ---

in the latest Form 10-K or the latest report to security holders (whichever the registrant elects to

deliver pursuant to paragraph (a) of this Item), and more than forty-five days prior to the

effective date of this registration statement (or as of a more recent date) by one of the following

means:

         (i) including such information in the prospectus;

         (ii) providing without charge to each person to whom a prospectus is delivered a copy of

the registrant’s latest Form 10-Q or latest Form 10-S; or

         (iii) providing without charge to each person to whom a prospectus is delivered a copy of

the registrant’s latest quarterly report or semiannual report that was delivered to its security

holders and which included the required financial information.

         * * * * *

         (4) Describe any and all material changes in the registrant’s affairs which have occurred

since the end of the latest fiscal year for which audited financial statements were included in the

latest Form 10-K or the latest annual report to security holders (whichever the registrant elects to

deliver pursuant to paragraph of this Item) and that were not described in a Form 10-Q, Form 10-

S, or quarterly report or semiannual report delivered with the prospectus in accordance with

paragraphs (a)(2)(ii) or (iii) of this Item.

         Instruction. Where the registrant elects to deliver the documents identified in paragraph

(a) with a preliminary prospectus, such documents need not be redelivered with the final

prospectus.

         (b) * * *

         (2) * * *




                                                     248

--- page 249 ---

(i) the interim financial information required by Rule 10-01 of Regulation S-X (§210.10-

01 of this chapter) for a filing on Form 10-Q or Form 10-S;

       * * * * *

       Item 13. Incorporation of Certain Information by Reference.

       * * * * *

       (a) * * *

       (4) If the registrant elects, pursuant to Item 12(a)(2)(iii) of this Form, to provide a copy of

its latest quarterly report or latest semiannual report, as applicable, which was delivered to

security holders, financial information equivalent to that required to be presented in Part I of

Form 10-Q or Part I of Form 10-S.

       Instruction. Attention is directed to Rule 439 regarding consent to the use of

material incorporated by reference.

       (b) The registrant also may state, if it so chooses, that specifically described portions of

its annual, semiannual, or quarterly report to security holders, other than those portions required

to be incorporated by reference pursuant to paragraphs (a)(3) and (4) of this Item, are not part of

the registration statement. In such case, the description of portions that are not incorporated by

reference or that are excluded shall be made with clarity and in reasonable detail.

       (c) Electronic filings. Electronic filers electing to deliver and incorporate by reference all,

or any portion, of the quarterly, semiannual, or annual report to security holders pursuant to this

Item shall file as an exhibit such quarterly, semiannual, or annual report to security holders, or

such portion thereof that is incorporated by reference, in electronic format.

       * * * * *

       Item 16. Information with Respect to S-3 Companies.



                                                    249

--- page 250 ---

* * * * *

       (b) Electronic filings. In addition to satisfying the requirements of paragraph (a) of this

Item, electronic filers that elect to deliver and incorporate by reference all, or any portion, of the

quarterly, semiannual, or annual report to security holders of a company being acquired pursuant

to this Item shall file as an exhibit such quarterly, semiannual, or annual report to security

holders, or such portion thereof that is incorporated by reference, in electronic format.

       Item 17. Information with Respect to Companies Other Than S-3 Companies.

       * * * * *

       (b) * * *

       (8)

       (i) the quarterly financial and other information as would have been required had the

company being acquired been required to file Part I of Form 10-Q (§249.308a) for the most

recent quarter for which such a report would have been on file at the time the registration

statement becomes effective or for a period ending as of a more recent date; or

       (ii) the semiannual financial and other information as would have been required had the

company being acquired been required to file Part I of Form 10-S (§249.308b) for the most

recent semiannual period for which such a report would have been on file at the time the

registration statement becomes effective or for a period ending as of a more recent date.

       * * * * *




                                                     250

--- page 251 ---

Appendix E—Form F-1

       * * * * *

                                           FORM F-1

       * * * * *

       Item 4A. Material Changes.

       If the registrant elects to incorporate information by reference pursuant to General

Instruction VI., describe any and all material changes in the registrant’s affairs which have

occurred since the end of the latest fiscal year for which audited financial statements were

included in accordance with Item 5 of this Form and which have not been described in a report

on Form 6-K, Form 10-Q, Form 10-S, or Form 8-K filed under the Exchange Act and

incorporated by reference pursuant to Item 5 of this Form.

       * * * * *

       Item 5. Incorporation of Certain Information by Reference.

       * * * * *

       (a) * * *

       2. Any report on Form 10-Q, Form 10-S, or Form 8-K filed since the date of filing of the

annual report. The registrant may also incorporate by reference any Form 6-K meeting the

requirements of this Form.

       * * * * *




                                                   251

--- page 252 ---

Appendix F—Form F-3

       * * * * *

                                             FORM F-3

       * * * * *

       Item 5. Material Changes.

       (a) Describe any and all material changes in the registrant’s affairs that have occurred

since the end of the latest fiscal year for which certified financial statements are included in this

registration statement in accordance with Item 6 of this Form and that have not been described in

a report on Form 6-K (§249.306 of this chapter), Form 10-Q (§249.308a of this chapter), Form

10-S (§249.308b of this chapter), or Form 8-K (§249.308 of this chapter) filed under the

Exchange Act and incorporated by reference pursuant to Item 6 of this Form.

       * * * * *

       Item 6. Incorporation of Certain Information by Reference.

       (a) The registrant’s latest Form 20-F, Form 40-F, Form 10-K or Form 10 filed pursuant to

the Exchange Act shall be incorporated by reference. Any report on Form 10-Q, Form 10-S, or

Form 8-K filed since the date of filing of the annual report incorporated by reference also shall

be incorporated by reference. If capital stock is to be registered and securities of the same class

are registered under Section 12 of the Exchange Act, the description of such class of securities

which is contained in a registration statement filed under the Exchange Act, including any

amendment or reports filed for the purpose of updating such description, shall be incorporated by

reference.

       Instruction




                                                     252

--- page 253 ---

If the registrant’s latest filing on Form 20-F, Form 40-F or Form 10-K is amended to

include the information specified in Item 18 of Form 20-F, the prospectus shall state that the

Form 20-F, Form 40-F or Form 10-K has been so amended. Reference is made to the Transaction

Requirements in General Instruction I.B. that, in some cases, require the financial statements in

the Form 20-F, Form 40-F or Form 10-K to comply with Item 18 of Form 20-F as a condition for

eligibility to use Form F-3.

       (b) The prospectus shall also state that all subsequent annual reports filed on Form 20-F,

Form 40-F or Form 10-K, and all subsequent filings on Forms 10-Q, 10-S, and 8-K filed by the

registrant pursuant to the Exchange Act, prior to the termination of the offering, shall be deemed

to be incorporated by reference into the prospectus.

       * * * * *




                                                   253

--- page 254 ---

Appendix G—Form F-4

         * * * * *

                                             FORM F-4

         * * * * *

         Item 10. Information With Respect to F-3 Companies.

         If the registrant meets the requirements for use of Form F-3 and elects to furnish

information in accordance with the provisions of this Item, furnish information as required

below:

         (a) Describe any and all material changes in the registrant’s affairs that have occurred

since the end of the latest fiscal year for which audited financial statements are incorporated by

reference in accordance with Item 11 of this Form and that have not been described in a report on

Form 6-K (§249.306 of this chapter), Form 10-Q (§249.308a of this chapter), Form 10-S

(§249.308b of this chapter), or Form 8-K (§249.308 of this chapter) filed under the Exchange

Act;

         (b) If the financial statements incorporated by reference in accordance with Item 11 of

this Form are not sufficiently current to comply with Item 8.A of Form 20-F, financial statements

necessary to comply with that rule shall be presented either in the prospectus, in an amended

Form 20-F, 40-F or 10-K (in which case the prospectus shall disclose that such form has been so

amended), or in a Form 6-K, Form 10-Q, Form 10-S, or Form 8-K; and

         * * * * *

         Item 11. Incorporation of Certain Information by Reference.

         If the registrant furnishes information in accordance with the provisions of Item 10 of this

Form:



                                                     254

--- page 255 ---

(a) * * *

       Instructions

       * * * * *

       2. Where common equity securities are being issued, the information required by Item

9.A.4 of Form 20-F, nature of trading markets, should be updated, to cover any subsequent

interim periods for which interim financial statements are required to be included to comply with

Item 8.A of Form 20-F. Such updating may be made in the prospectus, in an amended Form 20-

F, Form 10-K or, in the case of registrants described in General Instruction A.(2) of Form 40-F,

Form 40-F, or in a Form 6-K, Form 10-Q, Form 10-S, or Form 8-K, as applicable.

       * * * * *

       (b) The prospectus also shall state that all annual reports on Form 20-F, on Form 10-K or,

in the case of registrants described in General Instruction A.(2) of Form 40-F, on Form 40-F and

all Forms 10-Q, Form 10-S, and 8-K, and any Form 6-K so designated, subsequently filed by the

registrant pursuant to sections 31(a), 13(c) or 15(d) of the Exchange Act, prior to one of the

following dates, whichever is applicable, shall be deemed to be incorporated by reference into

the prospectus:

       * * * * *

       Item 12. Information With Respect to F-3 Registrants.

       * * * * *

       (a) * * *

       (2) * * *

       (ii) providing without charge to whom a prospectus is delivered a copy of the registrant’s

Form 10-Q, Form 10-S, Form 8-K or Form 6-K report that contains such later information; or



                                                    255

--- page 256 ---

* * * * *

       (4) Describe any and all material changes in the registrant’s affairs that have occurred

since the end of the latest fiscal year for which audited financial statements are incorporated by

reference in accordance with Item 13 of this Form and that have not been described in a report on

Form 6-K, Form 10-Q, Form 10-S, or Form 8-K delivered with the prospectus in accordance

with paragraph (2)(ii) of this Item.

       (5) Where common equity securities are being issued, the information required by Item

9.A.4 of Form 20-F, nature of trading markets, should be updated to cover any subsequent

interim periods for which interim financial statements are required to be included to comply with

Item 8.A of Form 20-F. Such updating may be made in the prospectus, in an amended Form 20-

F, Form 10-K or Form 40-F, or in a Form 6-K, Form 10-Q, Form 10-S, or Form 8-K.

       * * * * *

       Item 13. Incorporation of Certain Information by Reference.

       * * * * *

       Instructions

       * * * * *

       2. Where common equity securities are being issued, the information required by Item

9.A.4. of Form 20-F, nature of trading markets, should be updated to cover any subsequent

interim periods for which interim financial statements are required to be included to comply with

Item 8-A of Form 20-F. Such updating may be made in the prospectus, in an amended Form 20-

F, Form 10-K or Form 40-F or in a Form 6-K, Form 10-Q, Form 10-S, or Form 8-K.

       3. The registrant may incorporate by reference and deliver with the prospectus any Form

6-K, Form 10-Q, Form 10-S, or Form 8-K containing information eligible to be incorporated by



                                                    256

--- page 257 ---

reference into Form F-1. See Rules 4-01(a)(2) and 10-01 of Regulation S-X and Item 18 of Form

20-F.

        * * * * *

        Item 17. Information With Respect to Foreign Companies Other Than F-3

Companies.

        * * * * *

        (b) * * *

        (2) Where common equity securities are being issued, the information required by Item

9.A.4 of Form 20-F, nature of trading markets, updated to cover any subsequent interim periods

for which interim financial statements are required to be included to comply with Item 8.A of

Form 20-F. Such updating may be made in the prospectus, in an amended Form 20-F, Form 10-

K or, in the case of registrants described in General Instruction A.(2) of Form 40-F, Form 40-F,

or in a Form 6-K, Form 10-Q, Form 10-S, or Form 8-K;

        * * * * *




                                                  257

--- page 258 ---

Appendix H—Form F-10

       * * * * *

                                           FORM F-10

       * * * * *

       PART II — INFORMATION NOT REQUIRED TO BE DELIVERED TO

OFFEREES OR PURCHASERS

       * * * * *

       (101) * * *

       (a) * * *

       (i) First is required for a periodic report on Form 10-Q (§249.308a of this chapter), Form

10-S (§249.308b of this chapter), Form 20-F (§249.220f of this chapter), or Form 40-F

(§249.240f of this chapter), as applicable; and

       * * * * *




                                                  258

--- page 259 ---

Appendix I—Form 10

       * * * * *

                                           FORM 10

       * * * * *

       Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

       * * * * *




                                                   259

--- page 260 ---

Appendix J—Form 6-K

       * * * * *

                                           FORM 6-K

       * * * * *

       GENERAL INSTRUCTIONS

       * * * * *

       (C) * * *

       (6) * * *

       (a) * * *

       (i) First is required for a periodic report on Form 10-Q (§249.308a of this chapter), Form

10-S (§249.308b of this chapter), Form 20-F (§249.220f of this chapter), or Form 40-F

(§249.240f of this chapter), as applicable; and

       * * * * *




                                                  260

--- page 261 ---

Appendix K—Form 8-K

       * * * * *

                                            FORM 8-K

       * * * * *

       Item 2.02 Results of Operations and Financial Condition.

       (a) If a registrant, or any person acting on its behalf, makes any public announcement or

release (including any update of an earlier announcement or release) disclosing material non-

public information regarding the registrant’s results of operations or financial condition for a

completed quarterly, semiannual, or annual fiscal period, the registrant shall disclose the date of

the announcement or release, briefly identify the announcement or release and include the text of

that announcement or release as an exhibit.

       (b) * * *

       Instructions.

       1. The requirements of this Item 2.02 are triggered by the disclosure of material non-

public information regarding a completed fiscal year, semiannual period, or quarter. Release of

additional or updated material non-public information regarding a completed fiscal year,

semiannual period, or quarter would trigger an additional Item 2.02 requirement.

       * * * * *

       3. Issuers that make earnings announcements or other disclosures of material non-public

information regarding a completed fiscal year, semiannual period, or quarter in an interim or

annual report to shareholders are permitted to specify which portion of the report contains the

information required to be furnished under this Item 2.02.




                                                    261

--- page 262 ---

4. This Item 2.02 does not apply in the case of a disclosure that is made in a quarterly

report filed with the Commission on Form 10-Q (17 CFR 249.308a), semiannual report on Form

10-S (17 CFR 249.308b), or an annual report filed with the Commission on Form 10-K (17 CFR

249.310).




                                                   262

--- page 263 ---

Appendix L—Form 10-S

                                                                                          OMB APPROVAL
                                       UNITED STATES                              OMB Number:
                                                                                  Expires:
                      SECURITIES AND EXCHANGE COMMISSION                          Estimated average burden
                                                                                  hours per response ......................
                                    Washington, D.C. 20549

                                           FORM 10-S

                                  GENERAL INSTRUCTIONS


A.    Rule as to Use of Form 10-S.

      1. Form 10-S shall be used for semiannual reports under Section 13 or
         15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
         78o(d)), filed pursuant to Rule 13a-13 (17 CFR 240.13a-13) or Rule
         15d-13 (17 CFR 240.15d-13). A semiannual report on this Form
         pursuant to Rule 13a-13 or Rule 15d-13 shall be filed within the
         following period after the end of the first semiannual period of each
         fiscal year, but no report need be filed for the second semiannual period
         of any fiscal year:

           a.      40 days after the end of the first semiannual period of a
                   fiscal year for large accelerated filers and accelerated
                   filers (as defined in 17 CFR § 240.12b-2); and

           b.      45 days after the end of the first semiannual period of a fiscal year for all other
                   registrants.

B.    Application of General Rules and Regulations.

      1.        The General Rules and Regulations under the Act contain certain
                general requirements which are applicable to reports on any form.
                These general requirements should be carefully read and observed in
                the preparation and filing of reports on this Form.

      2.        Particular attention is directed to Regulation 12B which contains
                general requirements regarding matters such as the kind and size of
                paper to be used, the legibility of the report, the information to be
                given whenever the title of securities is required to be stated, and the
                filing of the report. The definitions contained in Rule 12b-2 (17 CFR
                240. 12b-2) should be especially noted. See also Regulations 13A and
                15D.

C.    Preparation of Report.

                                                    263

--- page 264 ---

1.   This is not a blank form to be filled in. It is a guide copy to be used in
            preparing the report in accordance with Rules 12b-11 (17 CFR
            240.12b-11) and 12b-12 (17 CFR 240.12b-12). The Commission does
            not furnish blank copies of this Form to be filled in for filing.

       2.   These general instructions are not to be filed with the report. The
            instructions to the various captions of the Form are also to be
            omitted from the report as filed.




SEC   Potential persons who are to respond to the collection of information

      contained in this Form are not required to respond unless the Form displays a

      currently valid OMB control number.




                                                 264

--- page 265 ---

D.   Incorporation by Reference.

     1.    If the registrant makes available to its stockholders or otherwise publishes, within the
           period prescribed for filing the report, a document or statement containing
           information meeting some or all of the requirements of Part I of this Form, the
           information called for may be incorporated by reference from such published
           document or statement, in answer or partial answer to any item or items of Part I of
           this Form, provided copies thereof are filed as an exhibit to Part I of the report on this
           Form.

     2.    Other information may be incorporated by reference in answer or partial answer to
           any item or items of Part II of this Form in accordance with the provisions of Rule
           12b-23 (17 CFR 240.12b-23).

     3.    If any information required by Part I or Part II is incorporated by reference into an
           electronic format document from the semiannual report to security holders as
           provided in General Instruction D, any portion of the semiannual report to security
           holders incorporated by reference shall be filed as an exhibit in electronic format, as
           required by Item 601(b)(13) of Regulation S-K.

E.   Integrated Reports to Security Holders.

      Semiannual reports to security holders may be combined with the required information
of Form 10-S and will be suitable for filing with the Commission if the following conditions
are satisfied:

     1.    The combined report contains full and complete answers to all items required by Part
           I of this Form. When responses to a certain item of required disclosure are separated
           within the combined report, an appropriate cross-reference should be made.

     2.    If not included in the combined report, the cover page, appropriate responses to Part
           II, and the required signatures shall be included in the Form 10-S. Additionally, as
           appropriate, a cross-reference sheet should be filed indicating the location of
           information required by the items of the Form.

     3.    If an electronic filer files any portion of a semiannual report to security holders in
           combination with the required information of Form 10-S, as provided in this
           instruction, only such portions filed in satisfaction of the Form 10-S requirements
           shall be filed in electronic format.

F.   Filed Status of Information Presented.
     1.   Pursuant to Rule 13a-13(e) and Rule 15d-13(e), the information presented in
          satisfaction of the requirements of Items 1, 2 and 3 of Part I of this Form, whether
          included directly in a report on this Form, incorporated therein by reference from a
          report, document or statement filed as an exhibit to Part I of this Form pursuant to
          Instruction D(1) above, included in an integrated report pursuant to Instruction E
          above, or contained in a statement regarding computation of per share earnings or a
          letter regarding a change in accounting principles filed as an exhibit to Part I pursuant
                                                    265

--- page 266 ---

to Item 601 of Regulation S-K (§ 229.601 of this chapter), except as provided by
                Instruction F(2) below, shall not be deemed filed for the purpose of Section 18 of the
                Act or otherwise subject to the liabilities of that section of the Act but shall be subject
                to the other provisions of the Act.

      2.        Information presented in satisfaction of the requirements of this Form other than
                those of Items 1, 2 and 3 of Part I shall be deemed filed for the purpose of Section 18
                of the Act; except that, where information presented in response to Item 1 or 2 of Part
                I (or as an exhibit thereto) is also used to satisfy Part II requirements through
                incorporation by reference, only that portion of Part I (or exhibit thereto) consisting of
                the information required by Part II shall be deemed so filed.

G.    Signature and Filing of Report.

      If the report is filed in paper pursuant to a hardship exemption from electronic filing (see
Item 201 et seq. of Regulation S-T (17 CFR 232.201 et seq.), three complete copies of the report,
including any financial statements, exhibits or other papers or documents filed as a part thereof,
and five additional copies which need not include exhibits must be filed with the Commission.

      At least one complete copy of the report, including any financial statements, exhibits or
other papers or documents filed as a part thereof, must be filed with each exchange on which any
class of securities of the registrant is registered. At least one complete copy of the report filed
with the Commission and one such copy filed with each exchange must be manually signed on
the registrant’s behalf by a duly authorized officer of the registrant and by the principal financial
or chief accounting officer of the registrant. (See Rule 12b-11(d) (17 CFR 240.12b-11(d).)
Copies not manually signed must bear typed or printed signatures. In the case where the principal
executive officer, principal financial officer or chief accounting officer is also duly authorized to
sign on behalf of the registrant, one signature is acceptable provided that the registrant clearly
indicates the dual responsibilities of the signatory.

H.    Omission of Information by Certain Wholly-Owned Subsidiaries.

      If on the date of the filing of its report on Form 10-S, the registrant meets the conditions
specified in paragraph (1) below, then such registrant may omit the information called for in the
items specified in paragraph (2) below.

      1.        Conditions for availability of the relief specified in paragraph (2) below:

           a.       All of the registrant’s equity securities are owned, either directly or indirectly, by
                    a single person which is a reporting company under the Act and which has filed
                    all the material required to be filed pursuant to Section 13, 14 or 15(d) thereof, as
                    applicable;
           b.       During the preceding thirty-six calendar months and any subsequent period of
                    days, there has not been any material default in the payment of principal, interest,
                    a sinking or purchase fund installment, or any other material default not cured
                    within thirty days, with respect to any indebtedness of the registrant or its
                    subsidiaries, and there has not been any material default in the payment of rentals
                    under material long-term leases; and
                                                          266

--- page 267 ---

c.      There is prominently set forth, on the cover page of the Form 10-S, a statement
             that the registrant meets the conditions set forth in General Instruction H(1)(a) and
             (b) of Form 10-S and is therefore filing this Form with the reduced disclosure
             format.

2.        Registrants meeting the conditions specified in paragraph (1) above are entitled to the
          following relief:

     a.      Such registrants may omit the information called for by Item 2 of Part I,
             Management’s Discussion and Analysis of Financial Condition and Results of
             Operations, provided that the registrant includes in the Form 10-S a
             management’s narrative analysis of the results of operations explaining the
             reasons for material changes in the amount of revenue and expense items between
             the fiscal semiannual period presented and the corresponding semiannual period
             in the preceding fiscal year. Explanations of material changes should include, but
             not be limited to, changes in the various elements which determine revenue and
             expense levels such as unit sales volume, prices charged and paid, production
             levels, production cost variances, labor costs and discretionary spending
             programs. In addition, the analysis should include an explanation of the effect of
             any changes in accounting principles and practices or method of application that
             have a material effect on net income as reported.

     b.      Such registrants may omit the information called for in the following Part II
             Items: Item 2, Changes in Securities; Item 3, Defaults Upon Senior Securities.

     c.      Such registrants may omit the information called for by Item 3 of Part I,
             Quantitative and Qualitative Disclosures About Market Risk.




                                                  267

--- page 268 ---

UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                                 Washington, D.C. 20549

                                              FORM 10-S

    (Mark One)

    [ ] SEMIANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

    For the semiannual period ended

                                                                   or



    [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934



    For the transition period from                            to

Commission File Number:




                          (Exact name of registrant as specified in its charter)




   (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)




      (Address of principal executive offices)                                          (Zip Code)




                        (Registrant’s telephone number, including area code)
                                                  268

--- page 269 ---

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


  Title of each class     Trading Symbol(s)        Name of each exchange on which registered




SEC Potential persons who are to respond to the collection of information contained in this

      Form are not required to respond unless the Form displays a currently valid OMB control

      number.




                                                   269

--- page 270 ---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.                               ☐ Yes      ☐ No

       Indicate by check mark whether the registrant has submitted electronically every Interactive
Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files).                                                       ☐ Yes      ☐ No

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
"emerging growth company" in Rule 12b-2 of the Exchange Act.

                         Large accelerated filer ☐                Accelerated filer ☐

                         Non-accelerated filer ☐                  Smaller reporting company ☐

                                                                  Emerging growth company ☐

        If an emerging growth company, indicate by check mark if the registrant has elected not to
use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐

       Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).

                                                                                ☐ Yes      ☐No

        APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                        DURING THE PRECEDING FIVE YEARS:

        Indicate by check mark whether the registrant has filed all documents and reports required to
be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.

                                                                               ☐ Yes      ☐No

                          APPLICABLE ONLY TO CORPORATE ISSUERS:

        Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date.

                                      PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.


                                                        270

--- page 271 ---

Provide the information required by Rule 10-01 of Regulation S-X (17 CFR Part 210). A
smaller reporting company, defined in Rule 12b-2 (§ 240.12b-2 of this chapter) may provide the
information required by Article 8-03 of Regulation S-X (§ 210.8-03 of this chapter).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

       Furnish the information required by Item 303 of Regulation S-K (§ 229.303 of this chapter).

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

       Furnish the information required by Item 305 of Regulation S-K (§ 229.305 of this chapter).

Item 4. Controls and Procedures.

       Furnish the information required by Item 307 of Regulation S-K (§ 229.307 of this chapter)
and Item 308(c) of Regulation S-K (§229.308(c) of this chapter).

                                      PART II—OTHER INFORMATION

         Instruction. The report shall contain the item numbers and captions of all applicable items
of Part II, but the text of such items may be omitted provided the responses clearly indicate the
coverage of the item. Any item which is inapplicable or to which the answer is negative may be
omitted and no reference thereto need be made in the report. If substantially the same information
has been previously reported by the registrant, an additional report of the information on this Form
need not be made. The term “previously reported” is defined in Rule 12b-2 (17 CFR 240. 12b-2).
A separate response need not be presented in Part II where information called for is already
disclosed in the financial information provided in Part I and is incorporated by reference into Part
II of the report by means of a statement to that effect in Part II which specifically identifies the
incorporated information.

Item 1. Legal Proceedings.

        Furnish the information required by Item 103 of Regulation S-K (§ 229.103 of this
chapter). As to such proceedings which have been terminated during the period covered by the
report, provide similar information, including the date of termination and a description of the
disposition thereof with respect to the registrant and its subsidiaries.

       Instruction. A legal proceeding need only be reported in the Form 10-S filed for the
semiannual period in which it first became a reportable event and in subsequent semiannual periods
in which there have been material developments.

Item 1A. Risk Factors.

      Set forth any material changes from risk factors as previously disclosed in the registrant’s
Form 10-K (§249.310) in response to Item 1A. to Part 1 of Form 10-K. Smaller reporting
companies are not required to provide the information required by this item.




                                                       271

--- page 272 ---

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Furnish the information required by Item 701 of Regulation S-K (17 CFR 229.701) as to all
    equity securities of the registrant sold by the registrant during the period covered by the report
    that were not registered under the Securities Act. If the Item 701 information previously has
    been included in a Current Report on Form 8-K (17 CFR 249.308), however, it need not be
    furnished.

(b) If required pursuant to Rule 463 (17 CFR 230.463) of the Securities Act of 1933, furnish the
    information required by Item 701(f) of Regulation S-K (§ 229.701(f) of this chapter).

(c) Furnish the information required by Item 703 of Regulation S-K (§ 229.703 of this chapter) for
    any repurchase made in the semiannual period covered by the report. Provide disclosures
    covering repurchases made on a monthly basis. For example, if the semiannual period began
    on January 16 and ended on July 15, the chart would show repurchases for the months from
    January 16 through February 15, February 16 through March 15, March 16 through April 15,
    April 16 through May 15, May 16 through June 15, and June 16 through July 15.

Instruction. Working capital restrictions and other limitations upon the payment of dividends are to
    be reported hereunder.

Item 3. Defaults Upon Senior Securities.

(a) If there has been any material default in the payment of principal, interest, a sinking or purchase
fund installment, or any other material default not cured within 30 days, with respect to any
indebtedness of the registrant or any of its significant subsidiaries exceeding 5 percent of the total
assets of the registrant and its consolidated subsidiaries, identify the indebtedness and state the
nature of the default. In the case of such a default in the payment of principal, interest, or a sinking
or purchase fund installment, state the amount of the default and the total arrearage on the date of
filing this report.

Instruction. This paragraph refers only to events which have become defaults under the governing
instruments, i.e., after the expiration of any period of grace and compliance with any notice
requirements.

(b) If any material arrearage in the payment of dividends has occurred or if there has been any other
material delinquency not cured within 30 days, with respect to any class of preferred stock of the
registrant which is registered or which ranks prior to any class of registered securities, or with
respect to any class of preferred stock of any significant subsidiary of the registrant, give the title of
the class and state the nature of the arrearage or delinquency. In the case of an arrearage in the
payment of dividends, state the amount and the total arrearage on the date of filing this report.

Instructions to Item 3.

   1. Item 3 need not be answered as to any default or arrearage with respect to any class of
securities all of which is held by, or for the account of, the registrant or its totally held subsidiaries.




                                                          272

--- page 273 ---

2. The information required by Item 3 need not be made if previously disclosed on a
report on Form 8-K (17 CFR 249.308).

Item 4. Mine Safety Disclosures.

        If applicable, provide a statement that the information concerning mine safety violations or
other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in exhibit
95 to the semiannual report.

Item 5. Other Information.

(a) The registrant must disclose under this item any information required to be disclosed in a report
on Form 8-K during the period covered by this Form 10-S, but not reported, whether or not
otherwise required by this Form 10-S. If disclosure of such information is made under this item, it
need not be repeated in a report on Form 8-K which would otherwise be required to be filed with
respect to such information or in a subsequent report on Form 10-S.

(b) Furnish the information required by Item 407(c)(3) of Regulation S-K (§ 229.407 of this
chapter).

(c) Furnish the information required by Item 408(a) of Regulation S-K (17 CFR 229.408(a)).

Item 6. Exhibits.

       Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).




                                                       273

--- page 274 ---

SIGNATURES


        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.




                                                                                 (Registrant)




     Date                                                                (Signature) *




       Date                                                              (Signature) *



         * Print name and title of the signing officer under the signing officer’s signature.




                                                274

--- page 275 ---

Appendix M—Form 10-K

        * * * * *

                                            FORM 10-K

        * * * * *

        Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

        * * * * *

        State the aggregate market value of the voting and non-voting common equity held by

non-affiliates computed by reference to the price at which the common equity was last sold, or

the average bid and asked price of such common equity, as of the last business day of the

registrant’s most recently completed second fiscal quarter (or first semiannual period if the

registrant elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the

Act).

        * * * * *

        Item 3. Legal Proceedings.

        * * * * *

        (b) As to any proceeding that was terminated during the fourth quarter of the fiscal year

(or the second semiannual period of the fiscal year if the registrant elected to file semiannual

reports) covered by this report, furnish information similar to that required by Item 103 of

Regulation S-K (§ 229.103 of this chapter), including the date of termination and a description of

the disposition thereof with respect to the registrant and its subsidiaries.

        * * * * *




                                                 275

--- page 276 ---

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and

Issuer Purchases of Equity Securities.

       (a) Furnish the information required by Item 201 of Regulation S-K (17 CFR 229.201)

and Item 701 of Regulation S-K (17 CFR 229.701) as to all equity securities of the registrant

sold by the registrant during the period covered by the report that were not registered under the

Securities Act. If the Item 701 information previously has been included in a Quarterly Report on

Form 10-Q, Semiannual Report on Form 10-S, or in a Current Report on Form 8-K (17 CFR

249.308), it need not be furnished.

       * * * * *

       (c) Furnish the information required by Item 703 of Regulation S-K (§ 229.703 of this

chapter) for any repurchase made in a month within the fourth quarter of the fiscal year (or the

second semiannual period of the fiscal year if the registrant elected to file semiannual reports)

covered by the report. Provide disclosures covering repurchases made on a monthly basis. For

example, if the fourth quarter began on January 16 and ended on April 15, the chart would show

repurchases for the months from January 16 through February 15, February 16 through March

15, and March 16 through April 15.

       * * * * *

       Item 9B. Other Information.

       (a) The registrant must disclose under this item any information required to be disclosed

in a report on Form 8-K during the fourth quarter of the fiscal year (or the second semiannual

period of the fiscal year if the registrant elected to file semiannual reports) covered by this Form

10-K, but not reported, whether or not otherwise required by this Form 10-K. If disclosure of

such information is made under this item, it need not be repeated in a report on Form 8-K which




                                                276

--- page 277 ---

would otherwise be required to be filed with respect to such information or in a subsequent

report on Form 10-K.

       * * * * *

       Item 14. Principal Accountant Fees and Services.

       Furnish the information required by Item 9(e) of Schedule 14A (§ 240.14a-101 of this

chapter).

       (1) Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last

two fiscal years for professional services rendered by the principal accountant for the audit of the

registrant’s annual financial statements and review of financial statements included in the

registrant’s Form 10-Q (17 CFR 249.308a) or Form 10-S (17 CFR 249.308b) or services that are

normally provided by the accountant in connection with statutory and regulatory filings or

engagements for those fiscal years.

       * * * * *




                                                277

--- page 278 ---

Appendix N—Form 12b-25

       * * * * *

                                          FORM 12b-25

                             NOTIFICATION OF LATE FILING


 (Check            ☐ Form 10-K         ☐ Form 20-F         ☐ Form 11-K
 one):
                   ☐ Form 10-Q         ☐ Form 10-S    ☐ Form 10-D             ☐ Form N-
                                                      ☐ Form N-                 CSR
                                                         CEN
                       For Period Ended: _______________________
                       ☐   Transition Report on Form 10-K
                       ☐   Transition Report on Form 20-F
                       ☐   Transition Report on Form 11-K
                       ☐   Transition Report on Form 10-Q
                       ☐   Transition Report on Form 10-S
                       For the Transition Period Ended: _______________________

       * * * * *

       PART II — RULES 12b-25(b) AND (c)

       ☐ If the subject report could not be filed without unreasonable effort or expense and the

registrant seeks relief pursuant to Rule 12b-25(b), the following should be completed. (Check

box if appropriate)

       (a) * * *

       (b) The subject annual report, semi-annual report, transition report on Form 10-K, Form

20-F, Form 11-K, Form N-CEN or Form N-CSR, or portion thereof, will be filed on or before

the fifteenth calendar day following the prescribed due date; or the subject quarterly report or

transition report on Form 10-Q, subject semiannual report or transition report on Form 10-S, or




                                                278

--- page 279 ---

subject distribution report on Form 10-D, or portion thereof, will be filed on or before the fifth

calendar day following the prescribed due date; and

       (c) The accountant’s statement or other exhibit required by Rule 12b-25(c) has been

attached if applicable.

       PART III — NARRATIVE

       State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-S, 10-D, N-

CEN, N-CSR, or the transition report or portion thereof, could not be filed within the prescribed

time period.

       (Attach extra sheets if needed.)




                                                279

--- page 1 ---

Conformed to Federal Register Version




SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 200, 210, 229, 230, 232, 239, 240, 249, and 260

Release Nos. 33-11414; 34-105368; 39-2563; IC-36140; File No. S7-2026-15

RIN 3235-AN58

Semiannual Reporting

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

SUMMARY: The Securities and Exchange Commission (“Commission”) is proposing

amendments to allow companies to file semiannual reports on new Form 10-S in lieu of quarterly

reports on Form 10-Q to meet their interim reporting obligations under the Securities Exchange

Act of 1934 (“Exchange Act”). The Commission is also proposing changes to the financial

statement requirements of Regulation S-X to facilitate semiannual reporting and to simplify rules

regarding the age of financial statements.

DATES: Comments should be received on or before July 6, 2026.

ADDRESSES: Comments may be submitted by any of the following methods:

       Electronic comments:

   •   Use the Commission’s Internet comment form

       (https://www.sec.gov/rules/submitcomments.htm).

   •   Send an email to [email protected]. Please include File Number S7-2026-15 on the

       subject line.

       Paper comments:

--- page 2 ---

•     Send paper comments to Vanessa A. Countryman, Secretary, Securities and Exchange

         Commission, 100 F Street NE, Washington, DC 20549-1090.

         All submissions should refer to File Number S7-2026-15. This file number should be

included on the subject line if email is used. To help the Commission process and review your

comments more efficiently, please use only one method of submission. The Commission will

post all comments on the Commission’s website https://www.sec.gov/rules-regulations/public-

comments/s7-2026-15. Do not include personally identifiable information in submissions; you

should submit only information that you wish to make available publicly. The Commission may

redact in part or withhold entirely from publication submitted material that is obscene or subject

to copyright protection.

         Studies, memoranda, or other substantive items may be added by the Commission or staff

to the comment file during this rulemaking. A notification of the inclusion in the comment file of

any such materials will be made available on the Commission’s website. To ensure direct

electronic receipt of such notifications, sign up through the “Stay Connected” option at

www.sec.gov to receive notifications by email.

         A summary of the proposal of not more than 100 words is posted on the Commission’s

website https://www.sec.gov/rules-regulations/2026/05/s7-2026-15.

FOR FURTHER INFORMATION CONTACT: Mark Saltzburg, Senior Special Counsel,

Office of Rulemaking, Division of Corporation Finance, at (202) 551-3430, or Ryan Milne,

Associate Chief Accountant, Office of Chief Accountant, Division of Corporation Finance, at

(202) 551-3400, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC

20549.




                                                    2

--- page 3 ---

SUPPLEMENTARY INFORMATION: The Commission is proposing to amend or add the

following rules and forms:

    Commission Reference                 Name            17 CFR Citation
    Securities Act of 1933 1             Rule 138        § 230.138
                                         Rule 139        § 230.139
                                         Rule 139b       § 230.139b
                                         Rule 144        § 230.144
                                         Rule 158        § 230.158
                                         Rule 175        § 230.175
                                         Rule 405        § 230.405
                                         Rule 485        § 230.485
                                         Form S-1        § 239.11
                                         Form S-3        § 239.13
                                         Form S-11       § 239.18
                                         Form S-4        § 239.25
                                         Form F-1        § 239.31
                                         Form F-3        § 239.33
                                         Form F-4        § 239.34
                                         Form F-10       § 239.40
    Securities Exchange Act of 1934 2    Rule 3a55-1     § 240.3a55-1
                                         Rule 3b-6       § 240.3b-6
                                         Rule 10b5-1     § 240.10b5-1
                                         Rule 12b-2      § 240.12b-2
                                         Rule 12b-25     § 240.12b-25
                                         Rule 13a-10     § 240.13a-10
                                         Rule 13a-13     § 240.13a-13
                                         Rule 13a-14     § 240.13a-14
                                         Rule 13a-16     § 240.13a-16
                                         Rule 13d-1      § 240.13d-1
                                         Rule 14a-5      § 240.14a-5
                                         Rule 14a-8      § 240.14a-8

1
      15 U.S.C. 77a et seq.
2
      15 U.S.C. 78a et seq.

                                        3

--- page 4 ---

Commission Reference                  Name           17 CFR Citation
                                      Schedule 14A   § 240.14a-101
                                      Rule 15c2-11   § 240.15c2-11
                                      Rule 15d-10    § 240.15d-10
                                      Rule 15d-13    § 240.15d-13
                                      Rule 15d-14    § 240.15d-14
                                      Form 10        § 249.210
                                      Form 6-K       § 249.306
                                      Form 8-K       § 249.308
                                      Form 10-S      § 249.308b
                                      Form 10-K      § 249.310
                                      Form 12b-25    § 249.322
Regulation S-K                        Item 10        § 229.10
(17 CFR 229.10 through 229.1610)
                                      Item 101       § 229.101
                                      Item 103       § 229.103
                                      Item 201       § 229.201
                                      Item 302       § 229.302
                                      Item 303       § 229.303
                                      Item 308       § 229.308
                                      Item 402       § 229.402
                                      Item 407       § 229.407
                                      Item 408       § 229.408
                                      Item 601       § 229.601
                                      Item 701       § 229.701
                                      Item 1100      § 229.1100
Regulation S-X                        Rule 3-01      § 210.3-01
(17 CFR 210.1-01 through 210.15-01)
                                      Rule 3-12      § 210.3-12
                                      Rule 8-03      § 210.8-03
                                      Rule 8-08      § 210.8-08
                                      Rule 10-01     § 210.10-01
                                      Rule 11-02     § 210.11-02
                                      Rule 15-01     § 210.15-01
Regulation M-A                        Item 1010      § 229.1010
(17 CFR 229.1000 through 229.1016)


                                      4

--- page 5 ---

Commission Reference                           Name        17 CFR Citation
    Regulation S-T                                 Rule 11     § 232.11
    (17 CFR 232.10 through 232.501)
                                                   Rule 303    § 232.303
                                                   Rule 405    § 232.405
                                                   Rule 406    § 232.406
    Trust Indenture Act of 1939 3                  Rule 0-11   § 260.0-11
    OMB Control Numbers Assigned Pursuant to the   Rule 800    § 200.800
    Paperwork Reduction Act (17 CFR 200.800)




3
      15 U.S.C. 77aaa et seq.

                                                   5

--- page 6 ---

TABLE OF CONTENTS
I.    INTRODUCTION............................................................................................................. 7
II.   BACKGROUND ............................................................................................................... 8
III.  DISCUSSION OF PROPOSED
      AMENDMENTS ............................................................................................................. 16
A.    Proposed Amendments for Semiannual Reporting ............................................................25
B.    Proposed Amendments to Regulation S-X ........................................................................44
C.    Proposed Amendments Regarding Transition Reports ......................................................61
D.    Proposed Technical Amendments......................................................................................62
E.    General Request for Comment...........................................................................................64
IV.   OTHER MATTERS ....................................................................................................... 64
V.    ECONOMIC ANALYSIS .............................................................................................. 65
A.    Introduction ........................................................................................................................65
B.    Broad Economic Considerations........................................................................................68
C.    Baseline ..............................................................................................................................78
D.    Costs and Benefits..............................................................................................................98
E.    Anticipated Effects on Efficiency, Competition, and Capital Formation ........................130
F.    Reasonable Alternatives...................................................................................................134
G.    Request for Comment ......................................................................................................140
VI.   PAPERWORK REDUCTION ACT
      ANALYSIS .................................................................................................................... 143
A.    Summary of the Collections of Information ....................................................................143
B.    Estimated Paperwork Burden Effects of the Proposed Amendments ..............................145
C.    Incremental and Aggregate Burden and Cost Estimates..................................................145
D.    Request for Comment ......................................................................................................150
VII. CONGRESSIONAL REVIEW ACT .......................................................................... 151
VIII. INITIAL REGULATORY FLEXIBILITY
      ACT ANALYSIS ........................................................................................................... 152
A.    Reasons for, and Objectives of, the Proposed Action......................................................152
B.    Legal Basis .......................................................................................................................154
C.    Small Entities Subject to the Proposed Rules and Amendments .....................................154
D.    Reporting, Recordkeeping, and Other Compliance Requirements ..................................157
E.    Duplicative, Overlapping or Conflicting Federal Rules ..................................................159
F.    Significant Alternatives ...................................................................................................159
G.    Request for Comment ......................................................................................................162
STATUTORY AUTHORITY .................................................................................................. 163




                                                                            6

--- page 7 ---

I.       INTRODUCTION

         We are proposing amendments to provide all companies subject to reporting obligations

under Exchange Act Section 13(a) or 15(d) (“Exchange Act reporting companies”) 4 that file

quarterly reports the option of filing interim reports on a semiannual basis. Currently, Exchange

Act reporting companies must file quarterly reports on Form 10-Q pursuant to 17 CFR 240.13a-

13 (“Exchange Act Rule 13a-13”) or 17 CFR 240.15d-13 (“Exchange Act Rule 15d-13”), with

certain exceptions. 5 Pursuant to these rules, Exchange Act reporting companies file with the

Commission three quarterly reports on Form 10-Q each fiscal year, with the fourth fiscal quarter

subsumed within the reporting company’s annual report on Form 10-K. The proposed

amendments to Exchange Act Rules 13a-13 and 15d-13, if adopted, would allow Exchange Act

reporting companies electing to do so to file semiannual reports on new Form 10-S in lieu of

quarterly reports on Form 10-Q. Our proposal would provide an Exchange Act reporting

company with the flexibility to determine the frequency of interim reporting that best suits its

particular circumstances, such as its ability to bear the costs of preparing the quarterly reports,

the stage of its business development, and the expectations of its investors, without undermining

fundamental investor protections. Providing such regulatory flexibility could reduce the


4
     For purposes of this release, with respect to the terms “Exchange Act reporting company” or “Exchange Act
     reporting companies” (or, where the context is clear, abbreviated terms “reporting company” and “reporting
     companies”): (A) unless otherwise noted, we use these terms interchangeably with the terms “registrant” or
     “registrants” in the context of registrants with a reporting obligation under Exchange Act Section 13(a) or 15(d)
     but, in the context of companies that are “in registration” (i.e., have filed a registration statement that has not yet
     become effective), we use the term “registrant” to include these companies as well, and (B) we generally limit
     the use of these terms in this release to those companies that are subject to a requirement to file Form 10-Q
     quarterly reports, unless the context clearly indicates all Exchange Act reporting companies are referred to. See
     infra note 5 for discussion of Exchange Act reporting companies that are excluded from Form 10-Q reporting
     requirements.
5
     Exchange Act Rules 13a-13 and 15d-13 exempt investment companies that are required to file reports pursuant
     to 17 CFR 270.30a-1 (which includes open-end management investment companies, closed-end management
     investment companies other than business development companies, and unit investment trusts), foreign private
     issuers, and asset-backed issuers (as defined in Item 1101 of Regulation AB) from the quarterly reporting
     obligations imposed by these rules.

                                                                  7

--- page 8 ---

regulatory burden of being a reporting company, which could potentially influence a company’s

decision to become or remain a reporting company and encourage more companies to go or

remain public. These proposed amendments would not substantively affect investment

companies except for business development companies and face-amount certificate companies. 6

          We are also proposing amendments to the financial statement requirements of 17 CFR

Part 210 (“Regulation S-X”)—including to 17 CFR 210.3-01 (“Rule 3-01”), 17 CFR 210.3-12

(“Rule 3-12”), and 17 CFR 210.8-08 (“Rule 8-08”)—to facilitate semiannual reporting and to

simplify rules regarding the age of financial statements in registration statements and other

Commission filings.

II.       BACKGROUND

          Companies subject to Exchange Act Sections 13(a) and 15(d) must file periodic and other

reports as prescribed in Commission rules. Exchange Act reporting companies have been

required to file annual reports on Form 10-K since 1935 7 as well as current reports on Form 8-K

for certain material events since 1936. 8 In 1946, the Commission required certain reporting

companies to file quarterly reports on Form 8-K to disclose, among other things, the dollar




6
      See 17 CFR 240.13a-13(b)(3) and 17 CFR 270.30a-1 (together exempting registered investment companies that
      file Investment Company Act annual reports from the requirement to file a quarterly Form 10-Q). Business
      development companies currently file Form 10-Q quarterly reports and Form 10-K annual reports. See 17 CFR
      240.13a-1 (requiring Exchange Act Section 12 registrants to file annual reports); 15 U.S.C. 80a-2(a)(48)
      (defining business development company); 15 U.S.C. 80a-53 (making the election to be subject to certain
      provisions of the Investment Company Act conditional on registration under Exchange Act Section 12). Face-
      amount certificate companies are a type of registered investment company that is not required to file reports
      pursuant to 17 CFR 270.30a-1 and thus is required to file periodic reports pursuant to Exchange Act Section 13.
      See Investment Company Reporting Modernization, Investment Company Act Release No. 32314 (Oct. 13,
      2016) [81 FR 81870 (Nov. 18, 2016)], at n.757.
7
      Rule Adopting Form 10-K, Release No. 34-445 (Dec. 20, 1935) [not published in the Federal Register]. An
      annual report requirement for Section 12 registrants remains in place today pursuant to 17 CFR 240.13a-1. See
      also 17 CFR 240.15d-1 (annual report requirement for Securities Act registrants).
8
      Rule Adopting Form 8–K, Release No. 34-925 (Nov. 11, 1936) [not published in the Federal Register].

                                                               8

--- page 9 ---

amount of gross sales (less discounts, returns, and allowances) and operating revenue. 9 In 1953,

the Commission ended this quarterly reporting requirement, 10 and, in 1955, it adopted rules

requiring semiannual interim reports pursuant to Rules X-13A-13 and X-15D-13. 11 These rules

required one semiannual report to be filed each fiscal year by Exchange Act reporting companies

on a new Form 9-K. 12 Semiannual reports on Form 9-K, which were due 45 days after the end of

the reporting period, did not require the narrative disclosures mandated by Form 10-Q and

provided only limited disclosures typically associated with an income statement. 13

         After 15 years of this semiannual reporting system, the Commission rescinded

semiannual reports on Form 9-K in 1970 and instead required quarterly reporting pursuant to

amended Rules 13a-13 and 15d-13. 14 The rules required Exchange Act reporting companies to


9
     See, e.g., Current Reports to be Filed and Requirements of Quarterly Reports by Certain Companies, 11 FR
     3393 (Apr. 2, 1946) and Current Reports and Instructions for Use Thereof, 11 FR 3394 (Apr. 2, 1946) (together
     requiring quarterly reports pursuant to Item 11 of Form 8-K to be filed not more than 45 days after the close of a
     quarter by certain issuers, including those that file annual reports on Form 10-K, but exempting insurance
     companies, investment companies, common-carriers, and public utility companies). See also Adoption of New
     and Revised Forms, Release No. 34-4340 (Nov. 2, 1949), 1949 SEC LEXIS 71 (adopting new quarterly report
     form, Form 9-K, to replace Item 11 of Form 8-K but not making any substantial change in the quarterly
     reporting requirements).
10
     See Rescission of Form 9-K and Rules X-13A-13 and X-15D-13, Release No. 34-4949 (Oct. 9, 1953), 1953 SEC
     LEXIS 30 (rescinding the quarterly reporting requirements and Form 9-K); Notice of Proposed Adoption of
     Form 9-K and Rules X-13A-13 and X-15D-13, Release No. 34-5129 (Jan. 27, 1955) [20 FR 771 (Feb. 4, 1955)]
     (“In October 1952, the Commission proposed revised rules calling for quarterly statements of profit and loss
     and earned surplus. These rules were not adopted and about a year later the requirement of quarterly reports of
     sales and revenues was discontinued.”).
11
     Adoption of Form 9-K and Rules X-13A-13 and X-15D-13, Release No. 33-3553 (June 23, 1955) [20 FR 4816
     (July 7, 1955)].
12
     Certain issuers were excepted from these requirements. The rules provided exemptions from required
     semiannual reporting for: (1) banks and bank holding companies, (2) investment companies, (3) certain
     insurance companies, (4) certain public utilities and common carriers filing reports with certain Federal
     agencies, (5) certain single-crop agricultural commodity producers, (6) certain promotional or development
     stage companies, and (7) foreign issuers other than private issuers domiciled in a North American country or
     Cuba.
13
     Specifically, semiannual Form 9-K required items including: (i) gross sales (less discounts, returns, and
     allowances), (ii) operating revenues, (iii) extraordinary items and special items, (iv) net income before tax, (v)
     provision for tax, (vi) net income, and (vii) earned surplus. Semiannual Form 9-K did not require a detailed
     balance sheet, statement of stockholders’ equity, or statement of cash flows.
14
     Adoption of Form 10-Q, Rescission of Form 9-K and Amendment of Rules 13a-13 and 15d-13, Release No. 34-
     9004 (Oct. 28, 1970) [35 FR 17537 (Nov. 14, 1970)].

                                                                9

--- page 10 ---

file three quarterly reports on Form 10-Q each fiscal year. 15 When it proposed the quarterly

report on Form 10-Q, the Commission explained that the new report would “provide detailed

information as a back-up to information released pursuant to timely disclosure policies” and

would provide “uniform standards” for all Exchange Act reporting companies. 16 The

Commission’s move towards a quarterly reporting requirement was also consistent with the

recommendation of the 1969 Wheat Report, which concluded “that a regular, quarterly report

would be more useful than the present, irregular 8-K report.” 17 Although the Commission has

amended Form 10-Q and requirements in connection with quarterly reporting over time, 18 the

Commission has not changed this cadence of quarterly interim reporting since it was adopted in

1970.

         Form 10-Q today requires more detailed information than the rescinded semiannual

report on Form 9-K. Form 10-Q requires financial statements (inclusive of footnote disclosures)

for the covered quarterly period that are prepared in accordance with United States (“U.S.”)

generally accepted accounting principles (“U.S. GAAP”), 19 have been reviewed by an



15
     Certain exemptions were provided for: (1) certain investment companies, (2) certain real estate companies, (3)
     certain foreign private issuers, (4) certain life insurance companies, (5) certain public utilities, common carriers,
     and pipeline carriers filing reports with certain Federal agencies, and (6) certain promotional or development
     stage companies.
16
     Proposal to Adopt Form 10-Q Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
     and to Rescind Forms 8-K and 9-K Under That Act, Release No. 34-8683 (Sept. 15, 1969) [34 FR 14239, 14239
     (Sept. 10, 1969)].
17
     Disclosure to Investors—A Reappraisal of Federal Administrative Policies Under the ’33 and ’34 Acts (The
     Wheat Report) 332 (1969). The Wheat Report was a product of a review of the periodic reporting system from
     1967 to 1969 conducted by Commissioner Francis Wheat and staff members of the Commission.
18
     See, e.g., Audit Committee Disclosure, Release No. 34-42266 (Dec. 22, 1999) [64 FR 73389 (Dec. 30, 1999)]
     (requiring interim financial statements included in Form 10-Q to be reviewed by an independent public
     accountant).
19
     Foreign private issuers may voluntarily file on domestic forms, including Form 10-Q, and include financial
     statements for the covered quarterly period that are prepared in accordance with: (a) International Financial
     Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) without
     reconciliation to U.S. GAAP or (b) home-country GAAP with reconciliation to U.S. GAAP.

                                                                10

--- page 11 ---

independent public accountant (but are not required to be audited), 20 and are data tagged using

inline XBRL. 21 It also requires narrative disclosures regarding:

         •    Management’s discussion and analysis of financial condition and results of operations

              (“MD&A”); 22

         •    Market risk; 23

         •    Effectiveness of disclosure controls and procedures and material changes in internal

              control over financial reporting; 24

         •    Legal proceedings; 25

         •    Material changes in risk factors; 26

         •    Unregistered equity security sales and use of proceeds; 27


20
     The regulation at 17 CFR 210.10-01(d) (Rule 10-01(d) of Regulation S-X) requires that, prior to filing, interim
     financial statements included in quarterly reports on Form 10-Q “must be reviewed by an independent public
     accountant using applicable professional standards and procedures for conducting such reviews, as may be
     modified or supplemented by the Commission.” See also 17 CFR 210.8-03. Public Company Accounting
     Oversight Board (“PCAOB”) Auditing Standard 4105 sets forth the auditing standard that currently applies to
     an independent public accountant conducting a review of interim financial statements and explains that “the
     objective of a review of interim financial information pursuant to this section is to provide the accountant with a
     basis for communicating whether he or she is aware of any material modifications that should be made to the
     interim financial information for it to conform with generally accepted accounting principles.” See PCAOB
     Auditing Standard 4105, Reviews of Interim Financial Information, ¶ .07. That standard further explains that the
     objective of such review “differs significantly from that of an audit conducted in accordance with the standards
     of the PCAOB” because “[a] review of interim financial information does not provide a basis for expressing an
     opinion about whether the financial statements are presented fairly, in all material respects, in conformity with
     generally accepted accounting principles” as an auditor would do when expressing an unqualified opinion in an
     audit of the financial statements. Id. See also PCAOB Auditing Standard 1000, General Responsibilities of the
     Auditor in Conducting an Audit, ¶ .18 (setting forth the standard for an auditor to express an unqualified opinion
     in an audit of the financial statements).
21
     See Form 10-Q, Part I, Item 1; 17 CFR 210.10-01 (Regulation S-X Rule 10-01); 17 CFR 210.8-03 (Regulation
     S-X Rule 8-03); Form 10-Q, Part II, Item 6; 17 CFR 229.601(b)(101)(i)(A).
22
     See Form 10-Q, Part I, Item 2; 17 CFR 229.303 (17 CFR Part 229 (“Regulation S-K”) Item 303).
23
     See Form 10-Q, Part I, Item 3; 17 CFR 229.305 (Regulation S-K Item 305).
24
     See Form 10-Q, Part I, Item 4; 17 CFR 229.307 (Regulation S-K Item 307); 17 CFR 229.308(c) (Regulation S-
     K Item 308(c)).
25
     See Form 10-Q, Part II, Item 1; 17 CFR 229.103 (Regulation S-K Item 103).
26
     See Form 10-Q, Part II, Item 1A; 17 CFR 229.105 (Regulation S-K Item 105).
27
     See Form 10-Q, Part II, Item 2; 17 CFR 229.701 (Regulation S-K Item 701).

                                                               11

--- page 12 ---

•    Defaults on senior securities; 28

         •    Material changes to the procedures by which security holders may recommend

              nominees to the registrant’s board of directors; 29

         •    Disclosure of director or officer adoptions or terminations of certain plans for the

              purchase or sale of registrant securities; 30

         •    Exhibits required under Item 601 of Regulation S-K; 31 and

         •    Certifications by the principal executive and financial officers as exhibits. 32

         Form 10-Q reports are filed electronically with the Commission through its EDGAR

system. The deadline for filing Form 10-Q with the Commission is 40 or 45 days after the end of

a fiscal quarter, depending on the filer status of the reporting company. 33

         Finally, securities exchange listing standards generally do not mandate a particular

frequency of interim reporting. Instead, they refer generally to compliance with Commission

rules requiring interim reports (with at least one exchange making specific reference to quarterly




28
     See Form 10-Q, Part II, Item 3.
29
     See Form 10-Q, Part II, Item 5(b); 17 CFR 229.407(c)(3) (Regulation S-K Item 407(c)(3)).
30
     See Form 10-Q, Part II, Item 5(c); 17 CFR 229.408(a) (Regulation S-K Item 408(a)).
31
     See Form 10-Q, Part II, Item 6; 17 CFR 229.601 (Regulation S-K Item 601).
32
     See Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 302, 116 Stat. 745, 777 (2002); 17 CFR 240.13a-14;
     17 CFR 240.15d-14; 17 CFR 229.601(b)(31) (Regulation S-K Item 601(b)(31)) (exhibits regarding
     certifications that include those related to internal controls, untrue statements of material facts, and material
     omissions); Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 906, 116 Stat. 745, 806 (2002), 17 CFR
     229.601(b)(32) (Regulation S-K Item 601(b)(32)) (exhibits regarding certifications related to financial condition
     and results of operations).
33
     Large accelerated filers and accelerated filers, as defined in 17 CFR 240.12b-2 (“Exchange Act Rule 12b-2”),
     must file Form 10-Q within 40 days after the end of a fiscal quarter and all other Exchange Act reporting
     companies must file Form 10-Q within 45 days after the end of a fiscal quarter. See Form 10-Q, General
     Instruction A.

                                                              12

--- page 13 ---

reports on Form 10-Q), 34 require availability of interim reports, 35 or require quick dissemination

of quarterly earnings information to the market. 36

         Certain companies that are not subject to Section 13(a) or Section 15(d) already report on

a semiannual basis under the Commission’s rules, 37 and certain other companies are exempt

from quarterly reporting but furnish semiannual information pursuant to other requirements such




34
     See, e.g., Nasdaq Stock Market Rule 5250(c)(1) (providing that a company shall timely file all required periodic
     financial reports with the Commission through the EDGAR system); NYSE Listed Company Manual §
     802.01ESEC (providing that, for purposes of remaining listed on the exchange, a company will incur a late
     filing delinquency and be subject to the procedures set forth in Section 802.01E on the date on which any of
     several events occurs, including where the company fails to file its annual report (Forms 10-K, 20-F, 40-F or N-
     CSR) or its quarterly report on Form 10-Q with the SEC by the date such report was required to be filed by the
     applicable form).
35
     See, e.g., Nasdaq Stock Market Rule 5250(d)(3)(A) (providing that each company that is not a limited
     partnership and is subject to Rule 13a-13 under the Exchange Act shall make available copies of quarterly
     reports including statements of operating results to shareholders either prior to or as soon as practicable
     following the company’s filing of its Form 10-Q with the Commission).
36
     See, e.g., NYSE Listed Company Manual § 202.05 (providing that a listed company is expected to release
     quickly to the public any news or information which might reasonably be expected to materially affect the
     market for its securities); NYSE Listed Company Manual § 203.02 (providing that any company with voting or
     non-voting common securities listed on the exchange that is required to file interim financial statements with
     the Commission is required to disseminate in a manner consistent with the exchange’s immediate release policy
     an interim earnings release as soon as its interim financial statements are available and citing Section 202.06 for
     the exchange’s immediate release policy); NYSE Listed Company Manual § 202.06 (providing that annual and
     quarterly earnings are examples of news items that should be handled on an immediate release basis).
37
     For example, issuers that sell up to $75 million of securities within a 12-month period under the Regulation A
     exemption (“Tier 2 issuers”) are required to file a Form 1-SA semiannual report with the Commission within 90
     days after the end of the first semiannual period of the issuer’s fiscal year and an annual report on Form 1-K
     within 120 days after fiscal year end. 17 CFR 230.257(b)(3). Semiannual reports on Form 1-SA require interim
     financial statements and MD&A disclosures. The financial statements are not required to be reviewed (which
     differs from the requirement that Form 10-Q financial statements be reviewed by an independent public
     accountant). In adopting the semiannual reporting requirement for Tier 2 issuers, the Commission found that a
     semiannual, rather than a quarterly, reporting requirement strikes an appropriate balance between the need to
     provide information to the market and the cost of compliance for smaller issuers. Amendments for Small and
     Additional Issues Exemption under the Securities Act, Release No. 33-9741 (Mar. 25, 2015) [80 FR 21806,
     21847 (Apr. 20, 2015)]. Based on our analysis of Tier 2 issuer filings on Form 1-SA and amendments thereto on
     the Commission’s EDGAR system, we estimate that there were 470 unique filers of such forms in calendar year
     2024 and 448 unique filers of such forms in calendar year 2025.

                                                               13

--- page 14 ---

as exchange listing standards. 38 Several foreign jurisdictions also require semiannual reporting of

financial information (but not quarterly reporting). 39

         Over the years, the Commission at times has reassessed the current periodic reporting

system, its impact on Exchange Act reporting companies, and potential alternatives including

semiannual reporting. Most recently, as part of the Commission’s disclosure effectiveness

review, the Commission issued two releases that addressed and requested public comment on the

frequency of interim reporting. 40 In July 2019, the Commission also held a roundtable that


38
     Foreign private issuers, as defined in 17 CFR 230.405 (“Securities Act Rule 405”) and 17 CFR 240.3b-4(c), are
     effectively required by a combination of Commission and securities exchange rules to file with the Commission
     one semiannual report on Form 6-K (due no later than six months following second fiscal quarter end) for each
     fiscal year. See 17 CFR 240.13a-16 (requiring every foreign private issuer which is subject to 17 CFR 240.13a-
     1 to make reports on Form 6-K, with certain exceptions); 17 CFR 15d-16 (requiring every foreign private issuer
     which is subject to 17 CFR 240.15d-1 to make reports on Form 6-K, with certain exceptions); General
     Instruction B of Form 6-K (requiring foreign private issuers to furnish to the Commission whatever reports that:
     they make public pursuant to the law of their jurisdiction of domicile or organization; they file or are required to
     file with a stock exchange on which their securities are traded and that are made public by that exchange; or
     they distribute or are required to distribute to security holders); NYSE Listed Company Manual § 203.03
     (requiring that an NYSE-listed foreign private issuer file with the Commission a Form 6-K that includes (i) an
     interim balance sheet as of the end of its second fiscal quarter and (ii) a semiannual income statement that
     covers its first two fiscal quarters); Notice of Filing and Immediate Effectiveness of Proposed Rule Change
     Amending the NYSE Listed Company Manual to Adopt a Requirement that Listed Foreign Private Issuers Must,
     at a Minimum, Submit a Form 6-K to the Securities and Exchange Commission Containing Semi-Annual
     Unaudited Financial Information, Release No. 34-77198 (Feb. 19, 2016) [81 FR 9563 (Feb. 25, 2016)]; Nasdaq
     Stock Market Rule 5250(c)(2) (providing for similar semiannual report requirements for foreign private issuers
     as in NYSE Listed Company Manual § 203.03); Self-Regulatory Organizations; National Association of
     Securities Dealers, Inc.; Order Approving Proposed Rule Change and Amendments Nos. 1 and 2 Thereto to
     Require Semi-annual Financial Reporting by Foreign Private Issuers, Release No. 34-52192 (Aug. 2, 2005) [70
     FR 46241 (Aug. 9, 2005)].
39
     For example, the securities regulations in the European Union (“EU”), the United Kingdom (“UK”), Hong
     Kong, and Japan provide for such semiannual reporting. Both the EU and the UK transitioned from quarterly to
     semiannual reporting in the 2010s. See, e.g., Directive 2013/50/EU Amending Directive 2004/109/EC on the
     Harmonisation of Transparency Requirements in Relation to Information About Issuers Whose Securities are
     Admitted to Trading on a Regulated Market (Oct. 22, 2013), available at https://eur-
     lex.europa.eu/eli/dir/2013/50/oj/eng; Removing the Transparency Directive’s Requirement to Publish Interim
     Management Statements, Financial Conduct Authority (Nov. 2014), available at
     https://www.fca.org.uk/publication/policy/ps14-15.pdf. See also Section 13.46 to 13.50B of the Listing Rules
     and Guidance of the Hong Kong Exchange Main Board, available at https://en-
     rules.hkex.com.hk/rulebook/main-board-listing-rules and Article 24-5 and the changes to the Japanese securities
     regulations in the Financial Instruments and Exchange Act (Act No. 25 of 1948), available at
     https://www.japaneselawtranslation.go.jp/en/laws/view/4633#je_ch2at48 (the revision from quarterly to
     semiannual reporting was enacted in 2024).
40
     Business and Financial Disclosure Required by Regulation S-K, Release No. 33-10064 (Apr. 13, 2016) [81 FR
     23916 (Apr. 22, 2016)] (“2016 Regulation S-K Concept Release”); Request for Comment on Earnings Releases


                                                               14

--- page 15 ---

discussed issues including the frequency of periodic reporting. 41 The Commission received

significant public feedback as a result of these recent efforts, including from companies and their

representative organizations, asset managers and institutional investors, investor groups and

individual investors, accounting firms, law firms, and other market participants. 42 Commenters

expressed a wide variety of views about the frequency of interim reporting requirements, 43 with

some supporting the current frequency but others recommending less-frequent interim reporting,

such as semiannual reports, due to concerns about compliance costs and short-termism. 44 Finally,



     and Quarterly Reports, Release No. 33-10588 (Dec. 18, 2018) [83 FR 65601 (Dec. 21, 2018)] (“2018 Request
     for Comment on Quarterly Earnings and Reporting”).
41
     Roundtable on Short-Term/Long-Term Management of Public Companies, Our Periodic Reporting System and
     Regulatory Requirements, U.S. Sec. & Exch. Comm’n (July 18, 2019) (“2019 Periodic Reporting Roundtable”),
     available at https://www.sec.gov/newsroom/meetings-events/071819-roundtable-short-term-long-term-
     management-public-companies.
42
     Additionally, separate from public comments on these releases and the roundtable, the Commission received a
     petition for rulemaking in 2025 that requested the Commission provide public companies the option to file
     interim reports semiannually instead of quarterly and that the Commission: issue a notice of proposed
     rulemaking to amend Rule 13a-13, Rule 15d-13, and Form 10-Q; consider additional conforming amendments
     to related rules as necessary; and “take such other action as the Commission deems appropriate to address the
     harmful effects of mandatory quarterly reporting on long-term value creation.” See Long Term Stock Exchange,
     Inc., Petition for Rulemaking to Amend Quarterly Reporting Requirements Under the Securities Exchange Act
     of 1934, File No. 4-872 (Sept. 30, 2025), available at https://www.sec.gov/files/rules/petitions/2025/petn4-
     872.pdf.
43
     See comments on 2016 Regulation S-K Concept Release, available at https://www.sec.gov/comments/s7-06-
     16/s70616.htm; comments on 2018 Request for Comment on Quarterly Earnings and Reporting, available at
     https://www.sec.gov/comments/s7-26-18/s72618.htm. One commenter provided survey data from 183 listed
     public companies that indicated 75% of those companies supported a move to semiannual reporting. Letter from
     Nasdaq, Inc. (Mar. 21, 2019) (“Nasdaq 2019”) (responses by 183 listed companies to the question “Do you
     believe that your company and/or your investors would benefit from moving to a semi-annual reporting
     model?” indicated: Yes: 75%; No: 25%). In this release, generally comment letters cited that are dated 2018 or
     2019 are comments received in response to the 2018 Request for Comment on Quarterly Earnings and
     Reporting and comment letters cited that are dated 2016 are comments received in response to the 2016
     Regulation S-K Concept Release; we generally do not provide individual hypertext links for each comment but
     the comment letters can be found at the links provided above. Comment letters in response to the 2019 Periodic
     Reporting Roundtable are found at the same link above as the comments in response to the 2018 Request for
     Comment on Quarterly Earnings and Reporting.
44
     Short-termism is an expression commonly used to refer generally to a focus on short-term results instead of
     long-term business strategies and short-term actions by a company that can have a negative long-term impact on
     the company; such actions can include: reducing capital expenditure (including investment in intangible assets
     and research and development); deferring needed maintenance; forgoing opportunities with long-term net
     present value; reducing advertising; delaying new hires; and earnings management. For examples of comments
     regarding short-termism, see generally comments on the 2018 Request for Comment on Quarterly Earnings and
     Reporting, supra note 43.

                                                            15

--- page 16 ---

the concept of semiannual reporting was recently discussed at: a meeting of the Commission’s

Investor Advisory Committee; 45 the Commission’s 45th Annual Small Business Forum (and the

prior year’s forum); 46 and the Commission’s 2025 Small Cap Policy Roundtable. 47

III.       DISCUSSION OF PROPOSED AMENDMENTS

           Interim reports provide investors with material information about the financial

performance of their companies during a fiscal year. Yet quarterly reporting may not be the ideal

interim reporting frequency for every Exchange Act reporting company, given the varied

circumstances each company faces. We are proposing rule and form amendments to provide all

Exchange Act reporting companies with the option of filing semiannual reports on new Form 10-

S in lieu of quarterly reports on Form 10-Q. The flexibility provided under our proposed

amendments would enable all Exchange Act reporting companies to choose the reporting

frequency that would best serve the company and its investors. Companies that elect semiannual

interim reporting may see a reduction in compliance costs of time and money, as they would

incur these interim reporting costs only one time in connection with each fiscal year instead of

three times in connection with each fiscal year pursuant to quarterly reporting. 48 These

companies could then choose to dedicate any compliance cost and resource savings to their

business growth. Other potential benefits of semiannual reporting include: less distraction from

running the day-to-day business; reallocation of attention from interim reporting to company


45
       U.S. Sec. & Exch. Comm’n, Panel Discussion: Public Company Disclosure Reform, in Meeting of the Inv.
       Advisory Comm., 2026 03 12 Investor Advisory Committee Part 01, YouTube (Mar. 12, 2026), available at
       https://www.youtube.com/watch?v=y0ZrTZ-uUg0.
46
       45th Annual Small Business Forum, U.S. Sec. & Exch. Comm’n (Mar. 9, 2026), available at
       https://www.sec.gov/files/transcript-45th-sb-forum.pdf; 44th Annual Small Business Forum, U.S. Sec. & Exch.
       Comm’n (Apr. 10, 2025), available at https://www.sec.gov/files/2025-SBF-508-Transcript.pdf.
47
       Small Cap Policy Roundtable: Reassessing the Framework for Small Public Companies, U.S. Sec. & Exch.
       Comm’n (July 22, 2025), available at https://www.sec.gov/files/small-cap-policy-roundtable-transcript.pdf;
48
       See infra economic analysis discussion in Section V.E.

                                                                16

--- page 17 ---

strategy; additional time spent on new product development; and ability to engage in transactions

that might not be possible when management is focused on preparing interim reports. 49 To the

extent that companies could not previously do so due to quarterly reporting, companies electing

semiannual reporting may employ business strategies that may help ensure these companies’

long-term viability. In particular, emerging growth companies 50 and smaller reporting

companies 51 may value having the flexibility to select the interim reporting requirement that is

most appropriate for them and their investors. 52 Additionally, reducing the compliance costs

associated with quarterly reporting may contribute to more private companies deciding to enter

the public markets and more companies deciding to remain public. Further, the flexibility

provided in the proposal may appeal to companies in certain industries where investors may




49
     The economic analysis discussion in Section V.E further discusses opportunity costs. See infra note 229 and
     accompanying text.
50
     In 2012, the Jumpstart Our Business Startups Act (Pub. L. No. 112-106, 126 Stat. 306 (2012)) amended the
     Securities Act and Exchange Act to add provisions regarding and to define an “emerging growth company.”
     Commission rules also define an “emerging growth company.” Pursuant to Securities Act Rule 405 and
     Exchange Act Rule 12b-2, the term “emerging growth company” means an issuer that had total annual gross
     revenues of less than $1.235 billion during its most recently completed fiscal year. Pursuant to these rules, if an
     issuer qualifies as an “emerging growth company” on the first day of its fiscal year, it maintains that status until
     the earliest of: (i) the last day of the fiscal year of the issuer during which it had total annual gross revenues of
     $1.235 billion or more; (ii) the last day of its fiscal year following the fifth anniversary of the first sale of its
     common equity securities pursuant to an effective registration statement under the Securities Act; (iii) the date
     on which the issuer has, during the previous three-year period, issued more than $1 billion in nonconvertible
     debt; or (iv) the date on which the issuer is deemed to be a “large accelerated filer” (as defined in Exchange Act
     Rule 12b-2).
51
     For the definition of smaller reporting company, see 17 CFR 229.10(f)(1); 17 CFR 230.405; and 17 CFR
     240.12b-2. Under these rules, “smaller reporting company” is defined as an issuer that is not an investment
     company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting
     company and that: (1) had a public float of less than $250 million; or (2) had annual revenues of less than $100
     million and either: (i) no public float; or (ii) a public float of less than $700 million.
52
     Letter from Society for Corporate Governance (Apr. 19, 2019) (survey of 130 public companies who responded
     to the question “Regardless of any other proposed changes to the reporting scheme, do you think that emerging
     growth companies or smaller reporting companies should be permitted to elect a semi-annual reporting
     frequency?” indicated the following results: Yes: 45%; No: 22%; Unsure: 34%).

                                                                17

--- page 18 ---

focus more on certain business, product, or regulatory developments than interim financial

results. 53

         Under the proposal, companies would have the option to elect on an annual basis to

comply with the semiannual reporting requirements. Exchange Act reporting companies could

continue to file quarterly reports on Form 10-Q under the proposal. Companies might continue to

report quarterly, for example, where they determine that quarterly frequency is best for the

company and its investors or due to factors such as expectations of investors and securities

analysts, disclosure practices in a particular industry, contractual obligations, or other regulatory

requirements. 54 It is also possible some companies may view semiannual reporting as increasing

the length of time that the company’s directors or employees possess non-public information that

may be subject to the company’s closed trading windows and see quarterly reporting as a better

approach for the company, because it may provide more frequent open trading windows for the

company’s directors and employees.

         Although one result of the proposal will be a reduction in the frequency of interim reports

for some Exchange Act reporting companies, we expect certain material information about these

companies between interim semiannual reports and annual reports will continue to be disclosed



53
     For example, a pre-revenue biotechnology company could find semiannual reporting best serves the company
     and its investors where investors’ primary focus is on progress in product development and applicable
     regulatory approvals and where investors find semiannual reports to be sufficient. See, e.g., Remarks of Charles
     Baltic, Member, Advisory Comm. on Small & Emerging Cos., in Meeting of the Advisory Comm. on Small and
     Emerging Cos., U.S. Sec. & Exch. Comm’n 64-65 (Sept. 23, 2015), available at
     https://www.sec.gov/info/smallbus/acsec/acsec-transcript-092315.pdf (remarking that emerging-growth, small
     capitalization biotechnology companies do not trade on their financial quarterly reporting but trade on their
     fundamental clinical development events and regulatory events, that these events follow their own non-quarterly
     cycle and are captured in Form 8-K filings, and that most capital-intensive companies (in technology generally
     as well as biotechnology) trade most significantly on basic business developments such as new products as
     opposed to incremental revenues or earnings on a quarterly basis). See also infra note 141 and accompanying
     text.
54
     For additional discussion of factors that may provide incentives for companies to elect to continue to file
     quarterly reports, see the economic analysis in this release, infra Section V.D.

                                                               18

--- page 19 ---

either voluntarily or as a result of other requirements. Significant regulatory enhancements have

occurred since 1970 with regard to disclosure of certain material events during interim periods.

Investors currently have access to information through the current reporting system on Form 8-K

regarding certain material events that is far more robust and timely than in 1970 when

semiannual reports on Form 9-K were last required. Since that time, the Commission

significantly accelerated that era’s Form 8-K filing deadline of 10 days after the end of the month

in which the applicable event occurred to the current general deadline of within four business

days of the event. 55

         In addition to shortening the filing deadlines, the Commission over time significantly

expanded the list of events that would trigger a filing obligation under Form 8-K and prescribed

standardized disclosures that must be provided upon the occurrence of the material event,

including through amendments in 2003 and 2004. 56 In fact, several of the Form 10-Q disclosure

requirements largely duplicate the Form 8-K requirements. 57 Importantly, in 2003, the

Commission added Item 2.02 as a Form 8-K filing trigger event for the furnishing of earnings

releases and other material information about companies’ results of operations and financial

condition for a completed interim period. 58 Current Item 2.02 requires reporting companies

generally to furnish their quarterly earnings releases as an exhibit to Form 8-K on the




55
     Release No. 34-13156 (Jan. 13, 1977) [43 FR 4424 (Jan. 25, 1977)] (adopting the general Form 8-K filing
     deadline of 15 calendar days after the event); Additional Form 8-K Disclosure Requirements and Acceleration
     of Filing Date, Exchange Act Release No. 49424 (Mar. 16, 2004) [69 FR 15594 (Mar. 30, 2004)] (“2004
     Amended Form 8-K Adopting Release”) (adopting the general Form 8-K filing deadline of four business days
     after the event).
56
     See Conditions for Use of Non-GAAP Financial Measures, Release No 34-47226 (Jan. 22, 2003) [68 FR 4820
     (Jan. 30, 2003)] (“2003 Amended Form 8-K Adopting Release”); 2004 Amended Form 8-K Adopting Release.
57
     For example, both Form 8-K and Form 10-Q require disclosures of recent sales of unregistered securities, mine
     safety, and defaults on debt securities.
58
     2003 Amended Form 8-K Adopting Release.

                                                            19

--- page 20 ---

Commission’s EDGAR system. 59 Many Exchange Act reporting companies hold a conference

call in connection with their earnings releases. Item 2.02 provides the conference call does not

need to be furnished with Form 8-K subject to certain conditions, including that the call occur

within 48 hours of the earnings release, the call be accessible to the public, and the call and dial-

in information be announced in advance to the public. 60 In practice, many public companies

make recordings of the call freely available on their website. Recordings of the calls are also

commonly freely available on third-party platforms.

         We believe that the requirements of Form 8-K elicit important disclosures about material

events on a more timely basis than quarterly reports on Form 10-Q. We acknowledge, however,

that quarterly earnings releases furnished with an Item 2.02 Form 8-K differ from Form 10-Q

financial information because they are not required to be reviewed by an independent public

accountant or to comply with the Commission’s interim financial statement requirements or

certain other requirements in Form 10-Q. 61 We also acknowledge that, if a company elects to

take advantage of semiannual reporting and stops reporting quarterly earnings or having

quarterly earnings release conference calls, then the disclosures elicited by Item 2.02 of Form 8-

K would not be available. We expect that a company’s individual characteristics, facts, and



59
     The term “earnings release” as used in this release means a public announcement or release by a company, or
     person acting on its behalf, of material non-public information regarding a company’s results of operations or
     financial condition for a completed fiscal year or interim period. The requirements of Item 2.02 of Form 8-K are
     triggered by the disclosure of this information, with the earnings releases furnished under the cover of Form 8-
     K. Forward-looking information provided by a company to its investors on a quarterly basis in a method other
     than Form 8-K or Form 10-Q is referred to as “forward-looking earnings guidance” or “earnings guidance.” The
     non-GAAP financial measure rules in 17 CFR 244.100 through 17 CFR 244.102 (“Regulation G”) and 17 CFR
     229.10, along with the antifraud provisions of the Federal securities laws (such as Exchange Act Section 10(b)
     and 17 CFR 240.10b-5 (Exchange Act Rule 10b-5)), apply to earnings releases and earnings guidance.
60
     Form 8-K, Item 2.02(b).
61
     In addition, the information furnished under Item 2.02 of Form 8-K is not required to be prepared in accordance
     with GAAP (although it is subject to requirements concerning non-GAAP financial measures in Regulation G
     and 17 CFR 229.10(e)(i)), is not required to be data tagged, and is not required to include disclosures or
     certifications related to disclosure controls and procedures or internal control over financial reporting.

                                                             20

--- page 21 ---

circumstances will determine whether it would make quarterly earnings releases or

announcements after electing to report semiannually. 62

         Regulation FD, adopted in 2000, was another significant development in the evolution of

disclosure requirements for Exchange Act reporting companies. Regulation FD requires that any

material non-public information selectively shared with certain enumerated persons be promptly

(in the case of unintentional disclosure) or simultaneously (in the case of intentional disclosure)

disclosed to the market by either furnishing or filing a Form 8-K report or disseminating the

information through another method that is reasonably designed to provide broad, non-

exclusionary distribution. 63 In connection with Regulation FD, Exchange Act reporting

companies may disclose material information during a fiscal year through Item 7.01 of Form 8-

K. 64 Regulation FD seeks to promote full and fair disclosure and may cause a company to

disclose material information—whether on Form 8-K or through other means—at various points



62
     While specific registrants may base decisions on their specific circumstances, the experience in foreign
     jurisdictions may be broadly illustrative. A 2017 CFA Research Institute study said, “When quarterly reporting
     was no longer required of UK companies in 2014, less than 10% stopped issuing quarterly reports (as of the end
     of 2015).” Robert Pozen, Suresh Nallareddy & Shivaram Rajgopal, The Impact on Reporting Frequency on UK
     Public Companies (Mar. 2017) (“2017 CFA Study of UK”), available at
     https://rpc.cfainstitute.org/sites/default/files/-/media/documents/article/rf-brief/rfbr-v3-n1-1-pdf.pdf. Our
     interpretation of the 2017 CFA Study of UK is that where the study refers to “issuing quarterly reports,” the
     study is referring to voluntary earnings releases, because companies no longer file quarterly reports with the UK
     Financial Conduct Authority. See 2018 Request for Comment on Quarterly Earnings and Reporting, at 65602–
     65603 (discussing required UK semiannual reporting and the elimination of quarterly reporting). For additional
     discussion of semiannual filers that may voluntarily release quarterly earnings if the proposal is adopted, see the
     economic analysis in this release, infra Section V.D.
63
     17 CFR 243.100(b)(1); 17 CFR 243.101(e). Regulation FD restricts selective disclosure of material, non-public
     information to persons including: broker-dealers; investment advisers; investment companies; and
     securityholders if it is reasonably foreseeable they will trade on the information. If a company or person covered
     by the rule intentionally discloses material nonpublic information to a covered recipient, then the company must
     make simultaneous public disclosure and, if the disclosure to a covered recipient is unintentional, then public
     disclosure must be prompt. See also Selective Disclosure and Insider Trading, Release No. 34-43154 (Aug. 15,
     2000) [65 FR 51715 (Aug. 24, 2000)].
64
     A study in 2021 that took a sample of 2,108 public companies found that a public company, on average, files
     six to eight Form 8-K reports per year, and, among those filings, files one Item 7.01 (Regulation FD disclosure)
     Form 8-K filing per year. Azi Ben-Rephael et al., Who Pays Attention to SEC Form 8-K?, at 14 (Aug. 20,
     2021), available at https://academicweb.nd.edu/~zda/8k.pdf.

                                                               21

--- page 22 ---

during a fiscal year, depending on the company and its circumstances (such as whether the

company seeks to communicate previously material non-public information to analysts or other

persons covered by Regulation FD). Such disclosure results in greater investor access to material

information disclosed outside quarterly reports on Form 10-Q. Regulation FD and current Form

8-K disclosure requirements were either not present or less robust when the Commission last

required the limited form of semiannual reporting during the period from 1955 to 1970.

         Although we are proposing to amend our rules regarding frequency of interim reporting,

our proposal does not include any general changes to the current regulatory requirements

governing: (1) earnings releases, other than proposed technical amendments to Item 2.02 of

Form 8-K to include references to semiannual periods, or (2) earnings guidance practices.

Federal securities laws do not impose general duties upon Exchange Act reporting companies to

announce or publish earnings, conduct earnings calls, or issue earnings guidance. 65 We received

public feedback on earnings releases and earnings guidance practice in connection with the

Commission’s 2016 Regulation S-K Concept Release and 2018 Request for Comment on

Quarterly Earnings and Reporting, with commenters expressing a variety of views on these

practices and on a wide range of related topics. Our proposal is focused on the more specific

issue of the frequency of interim reporting as mandated by the Federal securities laws, with the

goal of providing more flexibility with respect to this mandated disclosure. Although the

proposal is not intended to change the regulatory framework for voluntary practices regarding

earnings releases and guidance, we welcome comments on the impact of our proposal on these

voluntary practices.


65
     Certain regulatory requirements that apply to Form 10-Q, however, do not apply to earnings releases. See supra
     note 61 and accompanying text. When earnings information is selectively disclosed to certain covered persons,
     however, Regulation FD requires disclosure in a Form 8-K filing or another method that is reasonably designed
     to provide broad, non-exclusionary distribution.

                                                             22

--- page 23 ---

We believe our proposal represents a balanced approach of maintaining a reporting

system that elicits material, timely, and regular disclosures in a manner that best suits the needs

of both the company and its investors, promoting efficiency by reducing compliance costs, and

maintaining robust investor protections. The proposal is one step in a broader Commission effort

to encourage more companies to go and remain public by reducing the costs and burdens

associated with Exchange Act reporting. A robust public capital market—with more emerging

companies and small businesses choosing to become public companies through initial public

offerings or other paths—benefits companies and investors alike. Becoming a public company

provides companies with access to the public markets that allows them to raise capital to grow

their businesses, a broader set of potential investors who may purchase their securities in the

secondary trading market, and the benefits of transparent valuations by public markets and of a

market following. For investors, public companies represent opportunities to participate in the

future growth of promising companies. Initial public offerings represent liquidity opportunities

for early-stage investors. Investors in public companies are protected by mandated disclosures

and by liability provisions of the Federal securities laws that apply to public companies’

disclosures, such as Securities Act Section 11 and Exchange Act Section 18. 66

         We are also proposing amendments to Regulation S-X. Our proposed amendments would

incorporate provisions applicable to registrants that elect semiannual reporting frequency into the



66
     Securities Act Section 11 provides for liability for an untrue statement of a material fact in a Securities Act
     registration statement and for an omission to state a material fact required to be stated therein or necessary to
     make the statements therein not misleading. Many public companies commonly make registered offerings of
     securities and thus are subject to potential Section 11 liability. Exchange Act Section 18 provides for liability
     for a false or misleading statement with respect to a material fact in an Exchange Act report. Interim reports on
     Form 10-Q are not subject to Section 18 liability with respect to Items 1, 2, and 3 of Part I of Form 10-Q
     (respectively relating to financial statements, management’s discussion and analysis of financial condition and
     results of operations, and quantitative and qualitative disclosures about market risk). See Form 10-Q, General
     Instruction F.1. Proposed semiannual reporting Form 10-S would similarly provide that Items 1, 2, and 3 of Part
     I of the form are not subject to Section 18 liability. See proposed Form 10-S, General Instruction F.1.

                                                              23

--- page 24 ---

financial statement requirements for periodic reports. We are also proposing changes to the age

of financial statement requirements in Regulation S-X to ensure that financial statements in

registration statements filed by semiannual filers would not be considered “stale” under existing

rules, which were built along a quarterly reporting framework, and to revise those age

requirements for semiannual filers to fit with their reporting schedule. The proposed changes to

the age of financial statement rules would also simplify existing rules, including by consolidating

the age requirements into a single rule.

         Finally, we recognize that, if the proposal is adopted, in order to comport with

semiannual reporting by public companies, it is possible that changes may be necessary or

appropriate to the rules of securities exchanges 67 or to various accounting or auditing

standards. 68 If the proposal is adopted, to facilitate any such changes, we expect the Commission

staff would coordinate with accounting and auditing standard-setters, securities exchanges, and

other market participants. To help inform those efforts, we are soliciting comment in this release

on what changes to accounting or auditing standards or rules of securities exchanges should be

made to comport with semiannual reporting. 69


67
     See, e.g., letter from NYSE Group, Inc. (Mar. 21, 2019) (“If the Commission elected to make reporting
     requirements less frequent, giving public issuers the option to report two or three times a year, the NYSE
     Exchanges believe we could comply with our regulatory duties by adapting our rules and practices
     accordingly.”).
68
     See supra note 20 and infra notes 92, 93, 188, 191, 214 and accompanying text for discussion of certain
     auditing standards relevant to quarterly and proposed optional semiannual reporting.
69
     We are also aware that the regulations of some Federal agencies contain references to quarterly reports filed
     with the Commission. These agencies may wish to consider whether they should revise their law to reflect
     semiannual reporting if the proposal is adopted. See, e.g., 12 CFR 16.6 (providing the Comptroller of the
     Currency will deem offers or sales of national bank or Federal savings association issued nonconvertible debt to
     be in compliance with certain regulations if a number of requirements are met, including that each purchaser
     receives an offering document that contains, among other things, the national bank’s, Federal savings
     association’s, or the holding company’s (where the national bank or Federal savings association is a subsidiary
     of a holding company with securities registered under the Exchange Act) Forms 10-K, 10-Q, and 8-K filed
     under the Exchange Act); 13 CFR 315.7 (requiring companies petitioning the Economic Development
     Administration, which is part of the U.S. Department of Commerce, for eligibility for trade adjustment


                                                              24

--- page 25 ---

Our proposal is discussed in greater detail below. We welcome interested parties to

submit comments on any aspects of the proposed rule and form amendments. When

commenting, please include the reasoning in support of your position or recommendation and

provide any supporting documentation or data.

         A. Proposed Amendments for Semiannual Reporting

         We are proposing amendments to Exchange Act Rules 13a-13 and 15d-13 (and other

relevant rules and forms that we discuss below) to change the current quarterly reporting

requirements for Exchange Act reporting companies to a more flexible system that permits

Exchange Act reporting companies to elect to file semiannual reports instead of quarterly

reports. 70 Under the proposal, an Exchange Act reporting company that elects semiannual

reporting would be required to file one semiannual report and one annual report for each fiscal

year. Semiannual filers would file their interim report on new Form 10-S. This form would

require the same narrative disclosures and financial information as existing Form 10-Q but

would cover a six-month period (rather than a fiscal quarter). The deadline for filing Form 10-S

would be 40 or 45 days (depending on the company’s filer status) after the fiscal year’s first

semiannual period end—the same as with current Form 10-Q’s fiscal quarter end deadline, which

would not change—while the second semiannual period would be subsumed in the annual period

presented in the annual report on Form 10-K. 71 Reporting companies that do not elect to report



     assistance to provide information, including the most recent Form 10–K annual reports (or Form 10–Q quarterly
     reports, as appropriate) filed with the Commission for the entire period covered by the petition); 10 CFR 50.71
     (creating an exemption for companies licensed by the U.S. Nuclear Regulatory Commission from providing an
     annual financial report if they submit a Form 10-Q filed with the Commission). See also Section VI.C
     (discussing Federal agency regulations and discussing State law that refers to quarterly filings with the
     Commission).
70
     Proposed Rule 13a-13(b) and Rule 15d-13(b).
71
     We are not proposing to require that semiannual filers present separately the second semiannual period interim
     financial information in Form 10-K but request comment on whether we should require semiannual filers to


                                                             25

--- page 26 ---

on a semiannual basis—thereby effectively opting to report on a quarterly basis under the default

rules that would apply—would continue to be required to file three quarterly reports on Form 10-

Q and one annual report on Form 10-K for each fiscal year as under the current system for

reporting companies. We are proposing to add a check box to the cover page of Form 10-K as

the sole means by which a reporting company would indicate annually whether it is selecting a

semiannual interim reporting frequency (by checking the semiannual box) or quarterly reporting

(by not checking the semiannual box) and by which the reporting company would disclose the

selected frequency to investors and other market participants.

         We are also proposing amendments to add a similar check box concerning the

semiannual reporting election to the cover page of Securities Act registration statements on

Forms S-1, S-3, S-4, and S-11 and Exchange Act registration statements on Form 10. Companies

that have yet to file Exchange Act reports, such as private companies conducting initial public

offerings, would make initial elections to use semiannual reporting by checking the box on the

cover page of the registration statement filed. 72 This election would determine what financial

statements are required in the registration statement 73 and indicate the company’s planned




     break out the second semiannual period in their annual reports on Form 10-K and similarly require quarterly
     filers to break out their fourth fiscal quarter in their annual report on Form 10-K.
72
     While the check box on the registration statement forms would be the method by which private companies in
     registration indicate their planned reporting frequency, there may be other situations where registration
     statement forms that would contain the new check box are filed by a reporting company. In those other
     situations, the reporting company would check or leave unchecked the box consistent with the reporting
     company’s prior election on its most recent Form 10-K or, in the case of a newly public reporting company that
     has not yet filed a Form 10-K, on its registration statement form where it made its election in connection with
     becoming a public company. A reporting company filing a registration statement form would not be able to
     respond differently to this check box than it has indicated in such most recent Form 10-K or, for a newly public
     company, such registration statement, because, as we discuss below, mid-fiscal-year changes in reporting
     frequency would not be permitted.
73
     An election to use semiannual reporting made in an initial registration statement would not preclude a registrant
     from providing financial statements more current than otherwise required.

                                                              26

--- page 27 ---

interim reporting frequency to investors and other market participants. 74 Similar to current

requirements for the first quarterly report for companies that have newly become Exchange Act

reporting companies, 75 the first semiannual report on Form 10-S would be due the later of 45

days after the effective date of the registration statement or the date that Form 10-S would

otherwise have been due had the company been an Exchange Act reporting company. 76

         In connection with our proposed optional semiannual reporting approach, we are

proposing to add two new definitions—“quarterly filer” and “semiannual filer”— to 17 CFR

240.12b-2 (and to add two identical definitions to 17 CFR 230.405) to facilitate a number of

amendments we are proposing, including a number of technical amendments to insert references

to semiannual reporting in rules that currently refer to quarterly-reporting-related concepts. A

“quarterly filer” would be defined as a registrant that is required to file quarterly reports on Form

10-Q, pursuant to 17 CFR 240.13a-13(a). A “semiannual filer” would be defined as a registrant

that is required to file semiannual reports on Form 10-S, pursuant to 17 CFR 240.13a-13(b).

         Under our proposed optional semiannual reporting approach, we are proposing to permit

a change in interim reporting frequency—either from quarterly to semiannually or vice versa—to

be indicated on a Form 10-K by checking the box on the cover page to file semiannually or

leaving the box unchecked to file quarterly. As proposed, the determination to report

semiannually or quarterly would therefore be made on an annual basis and may not be changed




74
     A company that is not a reporting company and that is in registration in connection with an initial registration
     statement may change its check box answer with respect to semiannual reporting until the initial registration
     statement becomes effective. Once the initial registration statement becomes effective, the company becomes a
     reporting company and, as with existing reporting companies, can change its interim reporting frequency in
     accordance with the proposed amendments to Rules 13a-13 and 15d-13.
75
     17 CFR 240.13a-13(a); 17 CFR 240.15d-13(a).
76
     Proposed Rules 13a-13(b)(1) and 15d-13(b)(1).

                                                              27

--- page 28 ---

until the next Form 10-K annual report is filed. 77 Companies would then be required to file

interim reports based on the chosen frequency, beginning with the report for the first interim

period (semiannual or quarterly) of the fiscal year in which the Form 10-K with the election was

filed. 78

     •      For example, an Exchange Act reporting company reporting quarterly with a December

            31 fiscal year-end wants to file semiannual reports on Form 10-S for the next fiscal year.

            The company would file its Form 10-K for fiscal year 2026 in March 2027. Under the

            proposal, the company would have to make its election to switch to semiannual reporting

            for fiscal year 2027 by checking the box for semiannual reporting on the cover page of its

            Form 10-K for fiscal year 2026. With this election made in fiscal year 2027 (i.e., when

            the Form 10-K for fiscal year 2026 was filed), the company would be required to report

            semiannually and would begin semiannual reporting by filing in August 2027 its Form

            10-S for the first six-month period (ended June 30, 2027) of fiscal year 2027. 79




77
     Companies that leave an unmarked box on Form 10-K would be deemed to have opted for quarterly reporting
     and therefore be required to file quarterly reports on Form 10-Q for the next fiscal year (i.e., the fiscal year for
     which the election is being made which, for the avoidance of doubt, is the fiscal year that follows the fiscal year
     covered by that Form 10-K). This means that semiannual filers that wish to continue to file on a semiannual
     basis in future fiscal years must make the election again each year on their Form 10-K. Otherwise, if these
     companies do not make the election on Form 10-K, they would be required to resume filing quarterly reports
     beginning with the first quarter of the fiscal year in which the Form 10-K with the election is filed.
78
     Proposed Rules 13a-13(b)(2) and (3); proposed Rules 15d-13(b)(2) and (3).
79
     In this example, in its Form 10-S for fiscal year 2027, the reporting company would be required to present
     statements of comprehensive income, cash flows, and changes in stockholders’ equity for the first six months of
     the preceding fiscal year (2026)—in addition to these statements for the first six months of 2027. The company
     would have previously filed a first quarter Form 10-Q covering January to March 2026 and a second quarter
     Form 10-Q covering April to June 2026. In the second quarter 2026 Form 10-Q, the company would have been
     required to file year-to-date (i.e., January to June 2026) statements of comprehensive income, cash flows, and
     changes in stockholders’ equity. Therefore, a reporting company would not need to take extra steps to prepare
     those preceding year financial statements (covering January to June 2026) when changing its reporting
     frequency from quarterly reporting to semiannual reporting (in contrast to the situation discussed below where a
     company changes from semiannual reporting to quarterly reporting, where extra steps may be required).

                                                                28

--- page 29 ---

•   Similarly, for example, an Exchange Act reporting company with a December 31 fiscal

         year-end that previously chose to file semiannual reports on Form 10-S as indicated in its

         Form 10-K for the fiscal year ended December 31, 2026 wishes to switch to quarterly

         reporting. The company will file its Form 10-K for fiscal year 2027 in March 2028. The

         reporting company would change its interim reporting frequency by leaving the box

         unchecked for semiannual reporting on the cover page of its Form 10-K for fiscal year

         2027. With this election made in fiscal year 2028 (i.e., when the Form 10-K for 2027 was

         filed), the company would be required to report quarterly and would begin quarterly

         reporting by filing in May 2028 its Form 10-Q for the first quarter (ended March 31,

         2028) of fiscal year 2028. In its Form 10-Q for the first quarter of fiscal year 2028, the

         company would be required to present statements of comprehensive income, cash flows,

         and changes in stockholders’ equity for the first quarter of the preceding fiscal year

         (2027). 80 These first quarter 2027 financial statements would have been subsumed within

         (but would not have been required to be separately presented in) the semiannual financial

         statements included in the previously filed Form 10-S covering January to June 2027.

         Therefore, in changing the election by leaving the box unchecked (thereby choosing to

         file quarterly reports on Form 10-Q for fiscal year 2028), the reporting company may

         need to take additional steps to prepare the financial statements for the comparable 2027

         quarterly periods, including ensuring that an independent public accountant has reviewed

         the comparable quarterly periods for fiscal year 2027. 81


80
     Proposed Rules 8-03(a)(2), 8-03(a)(5),10-01(a)(7), and 10-01(c) of Regulation S-X.
81
     Registrants must provide MD&A disclosure pursuant to Part I, Item 2 of Form 10-Q. With respect to results of
     operations, 17 CFR 229.303(c)(2)(ii) requires registrants to compare the most recent quarter to either: (1) the
     corresponding quarter for the preceding fiscal year or (2) the immediately preceding sequential quarter. That
     regulation also requires, where the comparison is made to the preceding sequential quarter, that financial


                                                              29

--- page 30 ---

Once an Exchange Act reporting company has elected its interim reporting frequency, it

would be committed to that reporting frequency for the remainder of that fiscal year. This

proposed approach would avoid potential investor confusion that could result if Exchange Act

reporting companies were permitted to switch interim reporting frequency in the midst of a fiscal

year, such as confusion over when the companies would file interim reports.

         We recognize the possibility that a company may mistakenly leave the check box

unmarked or incorrectly mark the check box (for example, a company mistakenly checking the

box for semiannual reporting when it intended to be a quarterly filer or a company mistakenly

leaving the check box unmarked when it intended to be a semiannual filer). We therefore

propose to amend Rule 13a-13(b) and Rule 15d-13(b) to permit companies to amend their Form

10-K to correct any such inadvertent mistakes. Such corrective amendments would be required to

be filed as soon as practicable after discovery of the mistake but no later than the due date by

which the company’s first Form 10-Q report would be required to be filed for the fiscal year in

which the initial Form 10-K with the erroneous election was filed. 82 For example, a quarterly

filer with a December 31 fiscal year-end wants to continue filing quarterly reports on Form 10-Q.

The company filed its Form 10-K for fiscal year 2026 in March 2027. It mistakenly marked the

check box on the cover page of its Form 10-K for fiscal year 2026, thereby electing to switch to


     information for such sequential quarter be presented in summary form or identified in prior EDGAR filings. In
     this example, if the company chose to compare results of operations for the first quarter of fiscal year 2028 to
     the results for the fourth quarter of fiscal year 2027, then the company would need to take further additional
     steps to include information for the fourth quarter of fiscal year 2027 in summary form in its Form 10-Q for the
     first quarter of fiscal year 2028.
82
     Proposed Rules 13a-13(b)(4) and 15d-13(b)(4). If a company were to amend Form 10-K for the sole purpose of
     correcting a check box error under the proposal, we would not expect the company to refile the certifications
     required under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (discussed supra note 32). See also 17
     CFR 240.12b-15. Where such an error was made and is being timely corrected, a company would file a Form
     10-K/A indicating the number of the amendment and provide the amended cover page, an explanatory note, the
     exhibit list, and signatures. Electing to file semiannual reports in compliance with this rule and the filing of this
     corrective amendment would not impact the company’s timeliness for the purposes of determining eligibility to
     file short form registration statements (e.g. Form S-3).

                                                                30

--- page 31 ---

semiannual reporting for fiscal year 2027. The company would be able to correct this error by

amending its Form 10-K no later than the due date for its Form 10-Q for the first quarter of fiscal

year 2027. 83

         Proposed Form 10-S would require the same information as currently required by Form

10-Q but for the covered six-month period instead of a quarter. 84 Required disclosures would

include, among other things, MD&A, legal proceedings, material changes in risk factors,

unregistered equity security sales and use of proceeds, defaults on senior securities, director

nomination procedures, disclosure of director or officer adoptions or terminations of certain

plans for the purchase or sale of registrant securities, and exhibits required under Item 601 of

Regulation S-K. The financial statements for the covered semiannual period would be required to

be prepared in accordance with U.S. GAAP 85 and reviewed by an auditor (but not required to be

audited). 86 They would also be required to be data tagged using Inline XBRL. The current

disclosure and certifications requirements for disclosure controls and procedures, as well as for

internal control over financial reporting, would apply to proposed Form 10-S. 87 Non-GAAP




83
     The filing of Form 12b-25 in accordance with 17 CFR 240.12b-25 to provide notification of an inability to
     timely file a Form 10-Q would not affect a company’s error correction deadline, which would remain the
     original due date for the company’s Form 10-Q.
84
     Form 10-S is not proposed to be substantively different from Form 10-Q (other than the reporting period
     covered). Scaled disclosure would be available to smaller reporting companies on proposed Form 10-S as with
     Form 10-Q. See, e.g., proposed Form 10-S, Item 1 (permitting smaller reporting companies to provide financial
     information required by 17 CFR 210.8-03); Item 3 (which requires quantitative and qualitative disclosures of
     market risk pursuant to 17 CFR 229.305, which provides that smaller reporting companies are not required to
     provide the information otherwise required).
85
     But see supra note 19 regarding a foreign private issuer’s election to voluntarily file on domestic forms and
     ability to apply accounting standards other than U.S. GAAP in its financial statements.
86
     A semiannual filer would not be precluded from voluntarily providing quarterly financial information in a Form
     10-S in addition to the required semiannual financial information. If the quarterly financial information is
     presented in the financial statements, the quarterly financial information would be subject to review by an
     auditor.
87
     See 17 CFR 229.307 (Regulation S-K Item 307); 17 CFR 229.308(c) (Regulation S-K Item 308(c)).

                                                              31

--- page 32 ---

financial measures presented in proposed Form 10-S would be subject to the current

requirements of Regulation G and Item 10(e) of Regulation S-K.

Request for Comment

1.     The proposed amendments would allow Exchange Act reporting companies to elect to file

       interim reports on a semiannual basis in lieu of quarterly reports on Form 10-Q. Should

       companies have this option, or should all companies continue to be required to file Form

       10-Q? What types of companies are likely to elect the option to file semiannual reports?

       Are companies in certain industries more likely than those in other industries to elect to file

       semiannual reports?

2.     We are proposing amendments that would permit, but not require, all Exchange Act

       reporting companies that file Form 10-Q today to file semiannual reports. Should we

       instead require all companies to file semiannual reports? What would be the benefits and

       costs of such a mandatory approach? Would mandatory semiannual reporting, with the

       option to file quarterly reports, lead to more companies electing to forgo quarterly

       reporting?

3.     Our proposal would permit semiannual reports for all Exchange Act reporting companies

       that file Form 10-Q today, regardless of filer status, revenues, market capitalization, or

       other criteria. Should the option for semiannual reporting be available only for Exchange

       Act reporting companies that satisfy certain criteria? If so, what criteria should be imposed

       and why? For example, should only emerging growth companies or smaller reporting

       companies be allowed to report semiannually? 88 Should only companies below alternative


88
     See definition of “emerging growth company” supra note 50 (containing a total annual gross revenue threshold
     of $1.235 billion) and definition of “smaller reporting company” supra note 51 (containing a public float
     threshold of less than $250 million under one prong of the definition and a public float threshold of less than
     $700 million under the second prong of the definition).

                                                             32

--- page 33 ---

quantitative or monetary thresholds be allowed to report semiannually? Should the

     Commission consider a pilot program to permit optional semiannual reporting for a subset

     of reporting companies and, if so, what would be the benefits of such a pilot program?

     What types of companies should be included in the pilot program?

4.   Under the proposal, reporting companies currently required to file Form 10-Q would have

     the option instead to file semiannual reports on Form 10-S. Should any types of companies

     that currently file Form 10-Q be excluded from the option of electing semiannual reporting,

     such as business development companies?

5.   We are proposing that the filing deadlines for semiannual reports on Form 10-S be the

     same as for quarterly reports on Form 10-Q. Should the filing deadline for semiannual

     reports on Form 10-S be longer or shorter than proposed? If so, what would be an

     appropriate filing deadline? Do companies need more time to prepare semiannual reports

     than quarterly reports and if so, why? Should smaller public companies, newly public

     companies, or emerging growth companies be afforded a longer filing deadline for Form

     10-S to allow for additional time to consult with their accountants and advisers?

6.   If adopted, would semiannual reporting have an impact on investors’ ability to compare

     same-company performance over time? Why or why not?

7.   What effect would our proposal have on investors’ ability to compare the relative peer

     company financial performance of a quarterly filer to a semiannual filer? For example, can

     an investor reasonably compare a quarterly filer to a semiannual filer where the companies

     have the same fiscal year and the comparison is sought to be made in the second quarter

     (when first quarter information that would be subsumed in the semiannual filer’s

     semiannual report on Form 10-S is not yet available) or made in the fourth quarter (when



                                                   33

--- page 34 ---

third quarter information that would be subsumed in the semiannual filer’s annual report on

      Form 10-K is not yet available)?

8.    Should the check box that indicates a company has elected semiannual reporting be added

      to registration statements on Forms 10, S-1, S-3, S-4, and S-11 and annual reports on Form

      10-K as proposed? Should we add a similar check box to any other forms, including Forms

      1-A or 8-A? If so, why?

9.    Under our proposal, companies that want to file semiannual reports instead of quarterly

      reports would make their election by checking a box on the cover page of their annual

      report on Form 10-K for the most recently completed fiscal year. For investors and other

      market participants, this would mean that the first indication that a company will file only

      semiannual reports going forward will be when the company files its most recent Form 10-

      K. For example, under our proposal, a December 31 fiscal year-end company that files its

      Form 10-K for fiscal year 2026 in March 2027 would be able to cease filing quarterly

      reports immediately, with its next interim report being its first Form 10-S for the first six

      months of fiscal year 2027. Would investors and other market participants benefit from

      earlier notice of a company’s intent to file semiannual reports instead of quarterly reports?

      If so, how would investors and others benefit and what would be the magnitude of any

      benefit? If so, what should the mechanism be for a company to provide earlier notice of

      intent to file semiannual reports?

10.   Our proposal would require Exchange Act reporting companies that elect to file semiannual

      reports to continue with that interim reporting frequency for the rest of the fiscal year in

      which the election was made. Therefore, companies would not be allowed to file a

      semiannual report on Form 10-S for the first six months of a fiscal year and then file a



                                                     34

--- page 35 ---

quarterly report for the third quarter for that fiscal year. Likewise, companies would not be

      allowed to file a quarterly report on Form 10-Q for the first quarter of a fiscal year, file a

      semiannual report on Form 10-S for the first six months for that fiscal year, and not file a

      quarterly report on Form 10-Q for the third fiscal quarter. Would this proposed approach

      help avoid potential confusion that could be caused by changes in interim reporting

      frequency during a fiscal year? Is it necessary to add any language to the proposed rules to

      make more explicit the requirement to maintain the selected frequency for the full fiscal

      year? Rather than the proposed approach, should we allow: (1) semiannual filers and

      quarterly filers to make a change in interim reporting frequency during the fiscal year, or

      (2) only semiannual filers to switch to filing quarterly reports during the fiscal year?

      Should issuers that elect semiannual reporting be required to commit to that disclosure

      frequency for a certain period of time? Why or why not?

11.   Do companies that have newly become a public company (e.g., through an initial public

      offering, de-SPAC transaction, or direct listing) need to have greater flexibility for

      switching interim reporting frequency within a fiscal year? For example, a private company

      that elected semiannual reporting in a Form S-1 for an initial public offering could

      subsequently decide that quarterly reporting is preferable (e.g., to promote greater trading

      liquidity by increasing the frequency of its interim reporting) and wish to switch to

      quarterly reporting for the rest of the fiscal year. Should we allow such newly public

      companies to switch the interim reporting frequency within a fiscal year?

12.   Should correction of errors with respect to the Form 10-K check box related to semiannual

      reporting be permitted as we propose? Are the proposed time limits on when an error

      correction may be made appropriate? In addition to allowing error correction in an



                                                      35

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amended Form 10-K—or in lieu thereof—should we allow check box error correction

      through a Form 8-K filing?

13.   We are proposing a new Form 10-S for companies that elect to file semiannual reports. Is

      the proposed new form needed? Should there be one form for all interim reports, regardless

      of whether they are for a fiscal quarter or a semiannual period? If so, why?

14.   Proposed Form 10-S would mandate the same narrative and financial information as Form

      10-Q, albeit for semiannual periods rather than quarterly periods. Should Form 10-S

      require narrative or financial information that differs from what is required in Form 10-Q?

      If so, please specify what information should be different and why this information is or is

      not needed in Form 10-S. Are there any disclosure items, such as mine safety violations, in

      proposed Form 10-S that should be required instead to be disclosed in other forms, such as

      Form 10-K, Form 8-K, or Form SD?

15.   As an alternative to the proposal for optional semiannual reporting, should we instead

      revise the disclosure requirements of Form 10-Q to reduce the burden on reporting

      companies of filing this form, such as amending the current rules for the required interim

      financial statement review by an independent public accountant, XBRL data tagging,

      MD&A, information about unregistered sales of registrant securities pursuant to 17 CFR

      229.701 (Item 701 of Regulation S-K), or year-to-date comparisons involving financial

      statements and MD&A? How should these requirements, or any other requirements of

      Form 10-Q, be revised? What aspects of Form 10-Q’s current reporting framework are

      most burdensome for reporting companies?

16.   What impact would the flexibility to file semiannual reports on Form 10-S, instead of

      quarterly reports on Form 10-Q, have on a private company’s decision to become an



                                                    36

--- page 37 ---

Exchange Act reporting company? Would more companies choose to go public under the

      proposed flexible approach to interim reporting? What impact would the proposed flexible

      approach have on existing Exchange Act reporting companies’ desire to remain public

      companies?

17.   What impact would the proposed option to file semiannual reports on Form 10-S have on

      Exchange Act reporting companies’ ability to focus on: (1) business operations, (2) growth,

      or (3) long-term business strategies? Please provide any data on the amount of employee

      and director time spent on preparing a quarterly report on Form 10-Q.

18.   What is the likelihood that companies that elect semiannual reporting will continue to issue

      quarterly earnings releases (to the extent they did so previously when they reported

      quarterly)? Why would semiannual filers still issue earnings releases on a quarterly basis?

      Would this practice create any new or heightened investor protection concerns? For

      example, would there be any new investor protection concerns if an Exchange Act

      reporting company with a December 31 year-end elects to file semiannual reports and

      issues an earnings release for the first quarter of the fiscal year, with the semiannual report

      for the first six months of the fiscal year (which includes that first quarter) not due until

      months later (e.g., in August of that fiscal year)? Would companies that currently issue

      quarterly earnings releases but elect to become semiannual filers change their earnings

      release practices either: (1) to issue earnings releases semiannually, or (2) to cease issuing

      earnings releases? Please provide any data or analysis regarding any experience with

      earnings releases in foreign jurisdictions where issuers report semiannually.

19.   Our proposal generally would not change the current Item 2.02 Form 8-K furnishing

      requirement for earnings releases (but we are proposing technical amendments to include



                                                      37

--- page 38 ---

references to semiannual periods). Should we change these requirements generally for

      semiannual filers? For example, should we amend the Form 8-K requirements so that Item

      2.02 Form 8-K submissions are “filed,” not “furnished,” for semiannual filers thereby

      subjecting the earnings release to additional liability provisions, such as Exchange Act

      Section 18 (and Securities Act Section 11 if incorporated into a Securities Act registration

      statement), given that investors could rely more heavily on earnings releases by semiannual

      filers due to the less frequent interim reporting by such filers as compared to quarterly

      filers? If we require the filing (not furnishing) of earnings releases for semiannual filers,

      should we require the incorporation by reference of earnings releases into Securities Act

      registration statements of those semiannual filers? Would requirements for semiannual

      filers to file (not furnish) earnings releases discourage semiannual filers from issuing

      earnings releases? Would requirements for semiannual filers to file (not furnish) earnings

      releases have an impact on companies’ decisions about whether to elect quarterly or

      semiannual reporting? Are there particular reasons or need for the information provided in

      an Item 2.02 Form 8-K submission by a semiannual filer to be treated differently than a

      similar Item 2.02 Form 8-K submission by a quarterly filer?

20.   In connection with any adoption of the proposal, should there be a new requirement for

      semiannual filers that announce or release earnings for the first or third quarters of their

      fiscal year (i.e., the periods that would later be subsumed in Forms 10-S and 10-K but for

      which there would be no quarterly report filed with the Commission)—that financial

      information in any first or third quarter earnings releases be reviewed by an independent

      public accountant? If so, would any changes to current auditing standards (e.g., governing

      reviews) be required?



                                                      38

--- page 39 ---

21.     For companies that issue earnings releases, would the proposed flexible approach to interim

        reporting have any effect on how quickly these releases would be issued after the end of the

        reporting period?

22.     Would the option for semiannual reporting result in an overall reduction in material

        information for investors? Or would other regulatory requirements, such as Form 8-K filing

        requirements and Regulation FD, elicit sufficient information to offset the less-frequent

        interim reports and address any investor protection concerns? Would market forces or

        demands on a company’s business—such as contractual obligations, investor expectations,

        and potential for shareholder activism—encourage semiannual filers to: (1) voluntarily

        disclose more information than required, (2) disclose information more frequently than is

        required, or (3) opt not to become semiannual filers at all?

23.     With semiannual reporting, would there be an impact on investors or other market

        participants as a result of less frequent certifications by management relating to internal

        control over financial reporting and disclosure controls and procedures, as well as less

        frequent disclosures of changes in such controls? 89

24.     Would the nature and extent of procedures that an independent public accountant performs

        during a review change depending upon whether the independent public accountant is

        performing a review over a fiscal semiannual period or a fiscal quarterly period? Would

        independent public accountants conducting reviews do the same amount of work for a

        fiscal semiannual period as they currently do for two quarterly fiscal periods on a combined

        basis? Would an independent public accountant experience any impact on efficiency or



89
      See 17 CFR 229.308(c) (requiring disclosure of any change in the registrant’s internal control over financial
      reporting during the period that has materially affected, or is reasonably likely to materially affect, the
      registrant’s internal control over financial reporting).

                                                               39

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economies of scale when conducting reviews and annual audits under semiannual reporting

      versus under quarterly reporting for the same company? Would any changes to independent

      public accountants’ review or audit procedures or any impact on efficiency or economies of

      scale result in changes in costs to companies? If so, describe the impact and whether the

      impact could vary depending upon the size of the registrant subject to the review.

25.   Would companies that elect semiannual reporting retain their independent public

      accountant to perform a review of their financial statements at the end of each quarter

      either to: (1) support financial information that is used for purposes of a quarterly earnings

      release (notwithstanding that, as noted above, there is no Commission requirement for a

      quarterly earnings release to be reviewed by an independent public accountant), or (2)

      guard against the possible need for a quarterly review to be performed should the company

      decide to change back to quarterly reporting in a future period (where that period would

      require comparative quarterly data for the prior year)?

26.   For semiannual filers, what impact would a shift to semiannual reporting have on: (1)

      companies’ disclosure controls and procedures, (2) companies’ internal control over

      financial reporting, and (3) independent public accountants’ strategy and approach for the

      annual audit of companies’ internal control over financial reporting or financial statements?

      With semiannual reporting, is there a potential for a material increase in the risk that

      material misstatements (either due to error or fraud) or control deficiencies are not timely

      detected by or communicated to the independent public accountant thereby limiting

      potential remediation of these issues by the issuer? Please provide any data related to these

      questions.




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27.     Would there be reduced securities analyst coverage of Exchange Act reporting companies

        that elect the semiannual reporting option as compared to quarterly filers? Would

        underwriters’ requests for independent public accountants to provide “comfort letters” 90 in

        securities offerings (to support potential due diligence defenses) 91 lead semiannual filers to

        continue to retain independent public accountants to conduct quarterly financial statement

        reviews? If so, are changes needed to PCAOB Auditing Standards (regarding reviews by

        independent public accountants)? 92 For example, to comport with semiannual reporting, are

        changes needed to PCAOB Auditing Standard 6101, Letters for Underwriters and Certain

        Other Requesting Parties, to permit independent public accountants to provide comfort

        letters expressing negative assurance on changes subsequent to the date and period of the

        latest financial statements included (or incorporated by reference) in the registration




90
      “Comfort letters” (which provide negative assurance) commonly state that: (1) the auditor’s review of unaudited
      financial statements found nothing indicating information is not presented fairly in all material respects in
      accordance with U.S. GAAP, (2) certain specified auditor procedures found nothing in the information derived
      from the financial statements (e.g., MD&A) indicating the information is not in agreement in all material
      respects with the financial statements, and (3) certain auditor procedures found nothing indicating certain
      financial items changed (e.g., increases in net sales, increases in long-term debt) from the end of the last audited
      or reviewed period to an established cut-off date in a manner that is inconsistent with the disclosure in the
      registration statement (i.e., “subsequent change” comfort).
91
      Underwriters may seek to defend against potential registration statement-based Securities Act Section 11
      liability claims by: (1) with respect to the unexpertized portions of the registration statement, relying on the
      comfort letter to show they conducted a reasonable investigation to form a reasonable belief the unexpertized
      portions are not inaccurate or misleading, and (2) with respect to the expertized portions of the registration
      statement, that they relied on the expert (e.g., an auditor) and had no reasonable grounds to believe the
      expertized portions were inaccurate or misleading. Underwriters may also seek to defend against potential
      prospectus-based Securities Act Section 12(a)(2) liability by relying on the comfort letter to show they did not
      know and, in the exercise of reasonable care, could not have known of any misstatement or omission. The
      degree to which comfort letters help to establish these defenses depends on the particular facts and
      circumstances.
92
      See PCAOB Auditing Standard 4105, Reviews of Interim Financial Information; PCAOB Auditing Standard
      6101, Letters for Underwriters and Certain Other Requesting Parties, ¶ .37 (providing that, when accountants
      have not conducted a review in accordance with AS 4105, they may not comment in the form of negative
      assurance and are, therefore, limited to reporting the procedures performed and findings obtained). See also
      PCAOB Auditing Standard 4101, Responsibilities Regarding Filings Under Federal Securities Statutes. For
      additional discussion of PCAOB Auditing Standards, see the discussion of baseline conditions in the economic
      analysis in this release, infra notes 188 through 191 and accompanying text.

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statement? 93 If semiannual filers would continue to prepare quarterly financial information

        or to retain independent public accountants to conduct quarterly reviews, should the

        Commission make any rule changes or take any other steps to address this issue?

28.     Would our proposal have any impact on a semiannual filer’s application of relevant

        accounting standards to prepare financial statements in accordance with U.S. GAAP, IFRS,

        or home-country GAAP? How? Are any changes to accounting standards, including U.S.

        GAAP or IFRS, necessary or appropriate to effectuate semiannual reporting (e.g., changes

        to the guidance on annual impairment testing, lag reporting, earnings per share, or other

        topics of authoritative guidance)?

29.     Are any changes to rules of securities exchanges necessary or appropriate to effectuate

        semiannual reporting?

30.     Should we require the second semiannual period financial information (for semiannual

        filers) or the fourth quarter financial information (for quarterly filers) to be included in

        Form 10-K so investors do not need to back out this information if companies do not

        voluntarily provide it? Would having a longer period (six months for semiannual reports

        versus three months for quarterly reports) make it more difficult for investors to back out

        this information? Relatedly, should we require semiannual filers to break out financial

        statement information for the six-month period covered by Form 10-S into two three-month

        periods and provide similarly broken-out three-month information for the fiscal year

        covered by Form 10-K?




93
      See PCAOB Auditing Standard 6101, Letters for Underwriters and Certain Other Requesting Parties, ¶ .46
      (permitting negative assurance as to subsequent changes in specified financial statement items as of a date less
      than 135 days from the end of the most recent period for which the accountants have performed an audit or a
      review).

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--- page 43 ---

31.     Many public companies have standalone insider trading policies or insider trading policies

        that are part of the company’s code of ethics, 94 and these policies may provide for trading

        windows. 95 What impact would optional semiannual reporting have on company insider

        trading policies, including trading windows? For example, would companies impose longer

        trading blackout periods at the beginning of a semiannual period or towards the end of a

        semiannual period than they would impose if reporting quarterly? Even if these periods are

        longer, would the total number of blackout days be fewer each fiscal year for semiannual

        filers compared to quarterly filers given that semiannual filers would report less frequently?

        To the extent that there are longer blackout periods or fewer total blackout period days each

        year, what effects would these changes have on semiannual filers? Under our proposal,

        semiannual filers are allowed to voluntarily issue quarterly earnings releases. How would

        this affect current trading windows practices, if at all? Where a company elects to be a

        semiannual filer, would this be likely to have an effect on trading plans that may be

        adopted by companies or insiders (e.g., company directors, officers, or employees) for

        purposes of 17 CFR 240.10b5-1 (Exchange Act Rule 10b5-1)? If so, what are the effects?




94
      The regulations found at 17 CFR 229.406 and 17 CFR 229.408(b) require registrants to disclose whether they
      have adopted a code of ethics and whether they have adopted an insider trading policy, respectively, and are
      both incorporated into Form 10-K. See Item 10 of Form 10-K. For foreign private issuers, similar requirements
      are incorporated into Form 20-F. See Items 16B and 16J of Form 20-F. The rules of securities exchanges require
      listed companies to adopt a code of ethics. See, e.g., NYSE Listed Company Manual § 303A.10 (Code of
      Business Conduct and Ethics); Nasdaq Stock Market Rule 5610.
95
      Generally, trading windows are periods under company insider trading policies when there are no blackout
      periods in effect and covered persons (such as company directors, employees, and consultants) are permitted to
      transact in the securities of the company if they do not possess material non-public information. Company
      policies often use fixed blackout periods to reduce the risk that covered persons may trade while in possession
      of material non-public information at times when it is more likely that a covered person may possess it. Many
      company policies impose these fixed blackout periods that prohibit trading around the close of a fiscal quarter
      until after earnings for a fiscal quarter or year are released. Collectively, these fixed blackout periods can mean
      that at many public companies, trading windows each fiscal quarter are only open for two or three weeks around
      the middle of that fiscal quarter. In addition to these fixed blackout periods, companies also may impose event-
      specific blackout periods, such as around product developments or major company transactions.

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--- page 44 ---

32.   Would there be an increased risk of insider trading at companies that elect to report on a

      semiannual basis? If so, please provide the basis for this view, as well as data. Could

      companies enhance their insider trading policies or improve their self-enforcement of these

      policies to help address this concern? What other actions could companies or the

      Commission take to mitigate any increase in the risk of insider trading?

33.   How would the proposed flexible approach to semiannual reporting affect the

      competitiveness of U.S. reporting companies vis-a-vis foreign competitors? For Exchange

      Act reporting foreign companies that would not be foreign private issuers (which report

      semiannually as discussed above) and that would report quarterly under the current system,

      would the proposed option to report semiannually make these foreign companies more

      likely to list on a U.S. exchange? What would be the competitive implications of the

      proposed optional semiannual reporting approach between U.S. reporting companies

      (which report quarterly under the current system) and foreign private issuers (which report

      semiannually under the current system as a practical matter)? Should there be different

      periodic reporting for foreign private issuers compared to domestic issuers? Why or why

      not?

34.   If the proposal is adopted, what should be the compliance date for the proposed

      amendments? If the proposal is adopted, is there a need for a transition period and, if so,

      what should be the length of the period?

       B. Proposed Amendments to Regulation S-X

       We are proposing amendments to various rules in Regulation S-X that would incorporate

semiannual reporting and simplify the rules with respect to the age of financial statements.

Specifically, the proposed amendments would:



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--- page 45 ---

•   simplify Rule 3-01 and Rule 8-08 by reorganizing each and consolidating the

             requirements of Rule 3-12 regarding the age of financial statements in a registration

             or proxy statement into the balance sheet requirements of Rule 3-01;

         •   revise the age requirements to incorporate semiannual reporting through the

             introduction of a revised model for determining the age of interim financial

             statements; and

         •   revise other rules in Regulation S-X to incorporate semiannual reporting.

             1. Streamlining Age of Financial Statements Requirements

         To simplify our rules and effectuate our proposed optional semiannual reporting

approach, we are proposing amendments to Rules 3-01 and 8-08 of Regulation S-X so that each

amended rule clearly sets forth the requirements for annual financial statements and interim

financial statements. The proposed amendments would consolidate the requirements of Rule 3-

12 into Rule 3-01 and eliminate Rule 3-12.

         Currently, Rule 3-01 governs the date of audited and interim balance sheets required to

be included in filings as of the filing date. 96 The requirements for statements of comprehensive

income, cash flows, and changes in stockholders’ equity—set out in current 17 CFR 210.3-02

(Rule 3-02 of Regulation S-X) and 17 CFR 210.3-04 (Rule 3-04 of Regulation S-X)—are

derived from dates of annual and interim balance sheets required by Rule 3-01. 97 While current



96
     Registered management investment companies apply the requirements of Rule 3-18 of Regulation S-X instead
     of Rule 3-01. Foreign private issuers are not necessarily subject to Rule 3-01. Rather, they may apply the
     requirements in Form 20-F. See current Rules 3-01(g) and (h), which we are proposing to reorder as paragraphs
     (h) and (i).
97
     Rule 3-02 requires that the filing include audited statements of comprehensive income and cash flows for two or
     three fiscal years preceding the date of the most recent audited balance sheet being filed as well as interim
     statements for the period between the latest audited balance sheet and the date of the most recent interim
     balance sheet and for the corresponding period of the preceding fiscal year. Rule 3-04 requires that the filing
     include an analysis of changes in stockholders’ equity and noncontrolling interests in the form of a


                                                             45

--- page 46 ---

Rule 3-01 addresses the dates of the balance sheets as of the filing date, current Rule 3-12

addresses the age of financial statements as of the effective date of a registration statement or

mailing of a proxy statement. 98 Notwithstanding this difference, application of the two rules

currently results in age requirements that are aligned: if a registrant were to apply current Rule 3-

01’s filing date age requirements to a registration statement at the date of effectiveness (or a

proxy statement at the mailing date), the resulting financial statement requirements would be no

different than if Rule 3-12 were applied. Our proposed consolidation of Rules 3-01 and 3-12

would streamline Regulation S-X, making the age of financial statement requirements easier to

apply. To clarify the dual purpose of Rule 3-01 as proposed to be revised, we are proposing new

Rule 3-01(a), which would provide that the date of the most recent balance sheet included in a

registration or proxy statement must be updated to comply with that section’s requirements as if

the effective date of the registration statement, or proposed mailing date in the case of a proxy

statement, were the filing date.

         Further, we are proposing several amendments to streamline and reorganize Rule 3-01 as

well as integrate Rule 3-12 into Rule 3-01.

     •   We are proposing to place the rules regarding annual balance sheets in Rule 3-01(b). We

         do not propose any substantive amendments to the rules regarding annual balance sheets.

         Proposed Rule 3-01(b) would require audited balance sheets as of the end of the two most

         recently completed fiscal years, which would be the same as current Rule 3-01(a).




     reconciliation of the beginning balance to the ending balance for each period for which a statement of
     comprehensive income is required to be filed.
98
     The Commission, in connection with the adoption of Rule 3-12, stated that the rule ensures “that interim data
     provided in registration statements under the Securities Act is at least as current as the data already filed under
     the Exchange Act.” See Uniform Instructions as to Financial Statements – Regulation S-X, Release No. 33-6234
     (Sept. 2, 1980) [45 FR 63682, 63684 (Sept. 25, 1980)] (“1980 Regulation S-X Adopting Release”).

                                                               46

--- page 47 ---

•   The current exceptions to current Rule 3-01(a) applicable to filings other than on Form

         10-K would be included in proposed Rules 3-01(b)(1) and (b)(2).

              o Proposed Rule 3-01(b)(1), which would be the same as current Rules 3-01(b) and

                   3-12(b), would permit that if the filing is made no more than 45 days after the end

                   of the registrant’s fiscal year, the audited balance sheets may be as of the end of

                   the two fiscal years preceding the most recently completed fiscal year and must

                   include an additional balance sheet as of an interim date specified in proposed

                   paragraph (c)(1), as described further below.

              o Proposed Rule 3-01(b)(2), which would be the same as current Rules 3-01(c) and

                   3-12(b), would permit that—if the filing is made more than 45 days but no more

                   than 59 days (for large accelerated filers, as defined in § 240.12b-2 of this

                   chapter), 74 days (for accelerated filers, as defined in § 240.12b-2 of this chapter),

                   or 89 days (for all other registrants) after the end of the registrant’s most recently

                   completed fiscal year—so long as three conditions are met, the registrant may

                   apply proposed paragraph (b)(1), which means that, in this situation, the audited

                   balance sheets may also be as of the end of the two fiscal years preceding the

                   most recently completed fiscal year and the filing must include an additional

                   balance sheet as of an interim date specified in proposed paragraph (c)(1). 99 We

                   do not propose any changes to the three conditions.




99
     The three conditions would be set out in proposed Rules 3-01(b)(2)(i) through (iii) and continue to provide: (i)
     the registrant is subject to Exchange Act reporting and has filed all required reports; (ii) for the most recently
     completed fiscal year for which audited financial statements are not yet available, the registrant reasonably and
     in good faith expects to report income attributable to the registrant after income taxes; and (iii) for at least one
     of the two fiscal years immediately preceding the most recently completed fiscal year, the registrant reported
     income attributable to the registrant after income taxes.

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--- page 48 ---

•   Proposed Rule 3-01(b)(3), which would be similar to the second sentence of current Rule

          3-01(a), would require the filing of an audited balance sheet dated as of a date not more

          than 134 days before the date of the filing if the registrant was not in existence as of the

          end of its fiscal year.

      •   Proposed Rule 3-01(b)(4), which would be the same as Rules 3-01(b) and 3-12(c), 100

          would require that, notwithstanding the requirements of this section, the filing must be

          updated with audited financial statements for the most recently completed fiscal year if

          they become available prior to the filing date.

          The proposed amendments to Rules 3-01 and 8-08 reflect the replacement of references

to filing dates from the current text of “within” a certain number of days after a milestone (e.g.,

filing date or end of the fiscal year or quarter) to “more than” or “no more than” a certain number

of days. 101 We believe this change will clarify the filing requirements and ensure alignment of

financial statement updating dates with the Forms 10-K, 10-Q, and 10-S filing deadlines. A

registration or proxy statement filed on the same date a periodic report is due would be required

to include the financial statements required in that periodic report. We are making similar

clarifying amendments to Exchange Act Rules 13a-13 and 15d-13.

          We are proposing to place the rules regarding an interim balance sheet in Rule 3-01(c).

      •   Proposed Rule 3-01(c)(1) would require that, when an audited balance sheet for the most

          recently completed fiscal year is not included in the filing, the interim balance sheet must


100
      While current Rule 3-01(b) does not explicitly state this requirement as Rule 3-12(c) does and as proposed Rule
      3-01(b)(4) would do, this requirement is implicit in current Rule 3-01(b). We believe it is clearer to registrants
      to set this requirement out explicitly.
101
      See proposed Rule 3-01(b)(1), (2), and (3) and Rule 8-08(a)(1) and (2). For example, current Rule 3-01(c)(1)
      references filings “made after 45 days but within the number of days of the end of the registrant's fiscal year
      specified in paragraph (i) of this section.” Instead, proposed rule 3-01(b)(2) references filings “made more than
      45 days but no more than 59 days (for large accelerated filers, as defined in § 240.12b-2 of this chapter), 74
      days (for accelerated filers, as defined in § 240.12b-2 of this chapter), or 89 days (for all other registrants).”

                                                                48

--- page 49 ---

be as of the end of the third fiscal quarter of the most recently completed fiscal year for

       quarterly filers or as of the end of the first fiscal semiannual period of the most recently

       completed fiscal year for semiannual filers. This proposed rule would be similar to

       current Rule 3-01(b) and Rule 3-12(b), except that it would require a semiannual filer to

       file an interim balance sheet as of the end of its semiannual period.

   •   Proposed Rule 3-01(c)(2) would set forth requirements for an interim balance sheet when

       an audited balance sheet for the most recently completed fiscal year is included in the

       filing. We discuss proposed Rule 3-01(c)(2)’s requirements for an interim balance sheet

       for the current fiscal year in detail in Section III.B.2 below on determining the age of

       interim financial statements.

   •   Proposed Rule 3-01(c)(3) would be substantively unchanged from current requirements

       in Rules 3-01(f) and 3-12(a) and would provide that an interim balance sheet provided in

       accordance with proposed Rule 3-01(c) need not be audited and need not be presented in

       greater detail than is required by § 210.10-01.

       We are proposing to renumber current Rule 3-01(g), regarding registered management

investment companies, as Rule 3-01(d). Likewise, we are proposing to renumber current Rule 3-

01(h), regarding foreign private issuers, as Rule 3-01(e)(1). We are proposing to incorporate

current Rule 3-12(f) regarding financial statements of a foreign business into proposed Rule 3-

01(e)(2).

       We are proposing to delete current Rule 3-01(d), which requires—when filings are made

after 45 days but within a number of days of the end of the registrant’s fiscal year based on its

filer status and the three conditions in Rule 3-01(c) are not met—that balance sheets for the two

most recently completed fiscal years must be included. We believe current Rule 3-01(d) is



                                                     49

--- page 50 ---

redundant with current Rule 3-01(a) and is unnecessary to include in Rule 3-01 as proposed to be

revised, because we believe it is clear if the required conditions in current Rule 3-01(c) are not

met, then the registrant must provide the balance sheet for the two most recently completed fiscal

years as required by current Rule 3-01(a) and as would be required by proposed Rule 3-01(b)(2).

          We do not propose to integrate current Rule 3-12(d) into Rule 3-01 as proposed to be

revised, as we believe it would be redundant with proposed Rule 3-01(b). Current Rule 3-12(d)

requires the age of the registrant’s most recent audited financial statements included in a

registration statement filed under the Securities Act or filed on Form 10 under the Exchange Act

to be no more than one year and 45 days old at the date the registration statement becomes

effective if the registration statement relates to the security of an issuer that was not subject,

immediately before the time of filing the registration statement, to the reporting requirements of

Exchange Act Section 13 or 15(d). Because a registrant in this situation would not satisfy the

first of the three conditions in proposed Rule 3-01(b)(2), it would be required to file an annual

balance sheet for the most recently completed fiscal year, which would be as of a date more

current than one year and 45 days.

          Because proposed Rule 3-01 would integrate current Rule 3-12, as described above, we

are proposing to eliminate Rule 3-12. We are also proposing technical amendments to rules that

currently refer to Rule 3-12 to reflect its integration into Rule 3-01. 102

          Smaller reporting companies apply Rule 8-08 to determine the age of financial

statements. We are proposing amendments to Rule 8-08 to conform its organization to proposed

Rule 3-01, as described above.



102
      See proposed amendments to replace references to Rule 3-12 with references to Rule 3-01 in: Instruction 1 to 17
      CFR 210.11-02(c)(3); 17 CFR 210.15-01(c); and 17 CFR 230.485; proposed amendments to 17 CFR 210.15-
      01(b) to replace reference to Rule 3-12 with reference to 17 CFR 210.3-20 (Rule 3-20 of Regulation S-X).

                                                              50

--- page 51 ---

With respect to annual financial statements, we are proposing to eliminate the

introductory text of Rule 8-08 and revise paragraph (a) to address annual financial statements.

Consistent with proposed Rule 3-01(b), proposed paragraph (a) of Rule 8-08 would require a

registrant to file, in filings other than on Form 10-K, audited annual financial statements for the

registrant and its predecessors, as required by Rule 8-02. We are also proposing to move current

paragraph (a) to paragraph (a)(1) of Rule 8-08 and revise the rule to require that if the effective

date of a registration statement or anticipated mailing date of a proxy statement is no more than

45 days after the end of the most recently completed fiscal year, the filing may include financial

statements as of the end of the two fiscal years preceding the most recently completed fiscal year

and for the years then ended and must include interim financial statements, the requirements for

which we propose to move to a revised paragraph (b). We are proposing to move the

requirements in current paragraph (b) of Rule 8-08, that address the requirements when the

effective date of a registration statement or mailing date of a proxy statement is more than 45

days but not more than 90 days after the end of the most recently completed fiscal year, to a new

proposed paragraph (a)(2) of Rule 8-08. The proposed amendments would not change the age of

annual financial statements requirements for a smaller reporting company.

       With respect to interim financial statements, we are proposing to revise paragraph (b) of

Rule 8-08 to include the interim financial statement requirements. Proposed paragraph (b)(1) of

Rule 8-08 would require that, if audited financial statements for the most recently completed

fiscal year are not included in the filing, a quarterly filer must file interim financial statements as

of the end of the third fiscal quarter of the most recently completed fiscal year and for the nine

months then ended and a semiannual filer must file interim financial statements as of the end of

the first fiscal semiannual period of the most recently completed fiscal year and for the



                                                      51

--- page 52 ---

semiannual period then ended. Proposed paragraph (b)(2) of Rule 8-08 would require that, if

audited financial statements for the most recently completed fiscal year are included in a filing,

the registrant must file interim financial statements as of the end of the most recently completed

fiscal quarter (for quarterly filers) or semiannual period (for semiannual filers) and for the year-

to-date interim period then ended that has been filed, or is required to be filed on or before the

filing date, in a Form 10-Q or Form 10-S. A registrant that is not subject to Exchange Act

Section 13(a) or 15(d) would apply this rule as if it were required to file Form 10-Q or Form 10-

S.

       These proposed interim requirements in Rule 8-08 would replicate the requirements in

proposed Rules 3-01(c)(1) and (2). Proposed paragraph (b)(3) of Rule 8-08 would require that

interim financial statements must be prepared and presented in accordance with Rule 8-03, which

would replicate proposed Rule 3-01(c)(3).

           2. Determining Age of Interim Financial Statements

       As noted in Section III.B.1 above, proposed Rule 3-01(c)(2) would address age

requirements for interim financial statements (and proposed Rule 8-08(b)(2) would address age

requirements for smaller reporting companies). These proposed amendments would revise how

the date of an interim balance sheet is determined in registration or proxy statements. Currently,

Rule 3-01(e) requires that, for filings made after 129 days or 134 days (depending on filer status)

after fiscal year end, the filing must include a balance sheet as of an interim date within 130 days

or 135 days of the date of filing (depending on filer status). Rule 3-12 similarly requires that, if

the financial statements in a filing are as of a date 130 days or 135 days (depending on filer

status) or more before the date the filing is expected to become effective, or the proposed mailing

date in the case of a proxy statement, the financial statements must be updated with a balance

sheet as of an interim date within 130 days or 135 days (depending on filer status). Rule 8-08

                                                     52

--- page 53 ---

contains a similar age requirement for the filing of interim financial statements in a registration

or proxy statement.

          Under the proposed amendments, a registrant would no longer assess the number of days

from the filing date or from the effective date of the registration statement (or mailing date of a

proxy statement) to the date of the most recent balance sheet to determine if the balance sheet

falls within 130 days or 135 days, as applicable. Rather, under the proposed amendments to

Rules 3-01(c)(2) and 8-08(b)(2), a registrant, in determining if interim financial statements are

required when audited financial statements for the most recently completed fiscal year are

included in the filing, would include the interim financial statements as of the end of the most

recently completed fiscal quarter (for quarterly filers) or semiannual period (for semiannual

filers) that has been filed, or is required to be filed on or before the filing date, in a Form 10-Q or

Form 10-S. 103 A registrant that is not subject to Exchange Act Section 13(a) or 15(d) would

apply this rule as if it were required to file Form 10-Q or Form 10-S. In this regard, for a non-

reporting company that filed a registration statement that has not yet become effective, these

provisions of proposed Rules 3-01(c)(2) and 8-08(b)(2) (regarding the interim financial

statements that would have been required in a Form 10-Q or Form 10-S) would mean that the

non-reporting company must file in a registration statement the interim financial statements that

would have been required in periodic reports if that non-reporting company were an Exchange

Act reporting company. 104 For example, the Form 10-Q or proposed Form 10-S for a company


103
      The filing of Form 12b-25 in accordance with 17 CFR 240.12b-25 to provide notification of an inability to
      timely file a Form 10-K, 10-S, or 10-Q would not impact when financial statements are required to be updated
      in a registration or proxy statement.
104
      This simplified approach in the proposed rules is similar to the approach in current Rule 8-08’s introductory
      text, which requires that financial statements not be less current than the financial statements that would be
      required in Forms 10-K and 10-Q if such reports were required to be filed. In this manner, Rule 8-08 would
      continue to use this same approach except, in connection with our proposed revisions of Rule 8-08, the


                                                                53

--- page 54 ---

that is a large accelerated filer or accelerated filer would be due 40 days after the end of the

interim period (or 45 days for all other registrants). For an interim period ending on June 30, the

Form 10-Q or proposed Form 10-S would be due by August 10 for a large accelerated or

accelerated filer (August 14 for all other registrants). Under the proposed amendments, a

registration statement filed by a large accelerated or accelerated filer on August 10 (or August 14

for all other registrants) would be required to include financial statements for the interim period

ended June 30.

          We are proposing this change to simplify the updating requirements in current rules and

to align the date upon which the interim financial statements of a quarterly filer’s second quarter

would be required to be updated with that of a semiannual filer’s first semiannual period. In this

regard, with respect to semiannual filers, if we were to simply add 90 days to the existing 135-

day window, based on the application of current Rule 3-12 of Regulation S-X, the date upon

which a semiannual filer would have to update its interim financial statements for the semiannual

financial statements could differ by one or two days compared to the date upon which a quarterly

filer would have to update its second quarter financial statements. 105 The proposed amendments

to Rule 3-01(c)(2) and 8-08(b)(2) would avoid disparate treatment between semiannual filers and

quarterly filers with respect to the age of the interim financial statements requirements.




      introductory text would be eliminated and this requirement would be found in Rule 8-08(b)(2). Current Rule 3-
      01 does not use this approach, so the proposed revisions to Rule 3-01 would differ compared to that current rule
      and instead employ the approach currently found in Rule 8-08.
105
      For example, a quarterly filer with a February 28 fiscal year would be required to update a registration
      statement with interim financial statements as of the end of the second quarter of August 31 on October 13 (or
      135 days from the end of the first quarter of May 31). If we were to instead add 90 days to the 135-day interval,
      then a semiannual filer with the same February 28 fiscal year end would be required to update a registration
      statement with semiannual financial statements as of October 11 (or 225 days from the Feb 28 fiscal year end),
      two days earlier than October 13 for the quarterly filer.

                                                               54

--- page 55 ---

The 1980 Regulation S-X Adopting Release stated that Rule 3-12 would result in

requirements for the age of financial statements in registration statements that “correspond with

the requirements for quarterly data under the 1934 Act on Form 10-Q.” 106 While the

requirements correspond, they are not identical: Rule 3-12 requires updated financial statements

to be as of a date within 130 days or 135 days of effectiveness (depending on filer status); while

a Form 10-Q is due 40 days or 45 days after the end of the fiscal quarter (depending on filer

status). As a result of this difference, under current rules, the financial statements in a registration

statement or proxy statement may be required to be updated one or two days before those same

financial statements are required to be filed on Form 10-Q. Such a difference results from the

number of days in a quarter that exceeds 90 days. 107 Our proposed rule would align the financial

statement age requirements of registration statements (and proxy statements) with the filing

deadlines of Form 10-Q and Form 10-S, eliminating such one- or two-day differences. Proposed

Rule 3-01(c)(2) results in both quarterly filers and semiannual filers having the same date on

which the financial statements would be required to be updated because both filers would

determine the date from the end of their most recently completed interim period as opposed to,

for example, the quarterly filer’s determination being from the end of the first quarter and the

semiannual filer’s determination being from the end of the fiscal year.

          Under the proposed amendments to Rule 3-01(c), the interim financial statement period

required in a registration or proxy statement would be as of the end of a registrant’s fiscal

quarterly or semiannual period, as applicable. This would differ from current Rule 3-12, which


106
      1980 Regulation S-X Adopting Release, at 63685.
107
      For example, assume a calendar year registrant that is a non-accelerated filer that files a registration statement
      on August 13. The second quarter Form 10-Q would be due on August 14. However, a registration statement
      filed on August 13 would require updated financial statements, for the quarter ended June 30, in order to
      comply with current Rule 3-12. This difference of one day between August 14 and August 13 is due to April,
      May, and June containing 91 days instead of the 90-day quarterly period implicit in the 135 days.

                                                                 55

--- page 56 ---

permits interim financial statements as of any date so long as they cover a period within the

prescribed number of days from the date of effectiveness or mailing date. We observe that

virtually all registrants file interim financial statements as of the end of a quarter, since those

financial statements would be filed in future Exchange Act reports on Form 10-Q. Further,

registrants who wish to file interim financial statements as of a date that does not align with a

quarterly or semiannual period may request a substitution of financial statements under 17 CFR

210.3-13 (Rule 3-13 of Regulation S-X). As a result, we do not expect that this aspect of the

proposed amendments would result in any change in today’s practice. 108

          When interim financial statements for a semiannual filer are required in a registration or

proxy statement, proposed Rule 3-01(c)(2) would require those interim financial statements to be

for a semiannual period. Under the proposed rules, depending on when the registration statement

becomes effective or the proxy statement is mailed, an investor in a registrant that is a

semiannual filer may not receive interim financial statements that are as current as would be

required today. For example, if a non-reporting registrant with a calendar fiscal year that elects

semiannual reporting files a registration statement as late as August 13, proposed Rule 3-01(c)(2)

would not require any interim financial statements to be included in the registration statement. In

contrast, under the current requirements and under the proposal for those registrants that continue

to report quarterly, the filing would include interim financial statements for the first fiscal

quarter. As discussed in Section I, we are proposing these amendments that may result in less

current interim financial statements in a registration statement to reduce regulatory burden and




108
      The proposed amendments would not have any effect on the accommodations available for issuers that submit
      draft registration statements for nonpublic review.

                                                            56

--- page 57 ---

align the requirements for updating interim financial statements with the requirements for

periodic reporting under the Exchange Act, including the proposed semiannual reporting option.

              3. Other Proposed Amendments to Regulation S-X

          We are proposing amendments to Rules 10-01 and 8-03 of Regulation S-X to reflect that

registrants would have the option to report semiannually on Form 10-S. Specifically, we are

proposing to amend Rules 10-01(c) and 8-03 to clarify that “interim” for quarterly filers

represents a fiscal quarterly period (except when the rule addresses a year-to-date interim period)

and that “interim” for semiannual filers represents a fiscal semiannual period. To facilitate these

changes, the proposed revisions to Rules 10-01 and 8-03 would refer to the new proposed

definitions of quarterly filer and semiannual filer discussed above.

          Under the proposed amendments to Rule 10-01, where required, a semiannual filer would

provide an interim balance sheet as of the end of the first semiannual period and a balance sheet

as of the end of the preceding fiscal year. A balance sheet as of the end of the first semiannual

period from the preceding fiscal year would not be required unless necessary for an

understanding of the impact of seasonal fluctuations on the registrant’s financial condition.

Under the proposed amendments to Rule 10-01, where required, a semiannual filer would

provide interim statements of comprehensive income and cash flows for the first semiannual

period and the corresponding period of the preceding fiscal year; a semiannual filer would also

have the option to present these statements for the cumulative twelve-month period ending as of

the end of the semiannual period. 109




109
      We are also proposing technical amendments to Rules 10-01(c)(2) through (4) to change “twelve month period
      ended during…” to “twelve-month period ending as of the end of…”

                                                            57

--- page 58 ---

Under the proposed amendments to Rule 8-03, 110 where required, a semiannual filer

would provide in Form 10-S a balance sheet as of the end of the issuer’s first semiannual period,

a balance sheet as of the end of the preceding fiscal year, and statements of comprehensive

income and statements of cash flows for the interim period up to the date of the interim balance

sheet date and the comparable period of the preceding fiscal year.

          We are also proposing related technical amendments to Rules 10-01(b)(6), 10-01(d), and

8-03(b)(5) (which as renumbered would become 8-03(c)(5)) to indicate that the rules apply to

Form 10-S, in addition to Form 10-Q. We are proposing amendments to Rules 8-03(a)(5) (which

as renumbered would become Rule 8-03(b)(5)) and 10-01(a)(7) to change “interim” to

“quarterly” and clarify that the requirement to disclose subtotals in the statement of changes in

stockholders’ equity for each quarterly period applies only to quarterly filers. We are proposing

to relocate current Instruction 1 to Rule 8-03, which requires that statements of comprehensive

income for the most recent quarter and the comparable quarter of the preceding fiscal year be

provided when the year-to-date interim period is more than one quarter, to Rule 8-03(a)(2) to

enhance its prominence.

          Lastly, we are proposing a technical amendment to reinsert Instruction 2 to Rule 8-03

concerning management adjustments to financial statements that was inadvertently deleted in a

2018 adopting release, except this provision would be reinserted as paragraph (c)(2) of Rule 8-

03. 111

Request for Comment



110
      For Rule 8-03, we are proposing to renumber the introductory text as paragraph (a), renumber paragraph (a) as
      paragraph (b), and renumber paragraph (b) as paragraph (c).
111
      Disclosure Update and Simplification, Release No 34-83875 (Aug. 17, 2018) [83 FR 50148 Oct. 4, 2018)]
      (adopting amendments to Rule 8-03, including to Instruction 1, and indicating through the use of five asterisks
      at the end of Instruction 1 that Instruction 2 was not amended).

                                                               58

--- page 59 ---

35.   Should the Commission adopt the proposed amendments to Regulation S-X to effectuate

      semiannual reporting? Are there any other changes beyond those proposed that the

      Commission should make to Regulation S-X to effectuate semiannual reporting?

36.   In connection with registration and proxy statements, are the proposed changes to

      Regulation S-X necessary to take into account semiannual reporting? If the proposed

      changes to Regulation S-X were not made and the relevant rules remained structured

      around quarterly reporting, would this have a negative impact on semiannual filers

      seeking to raise capital or solicit proxies?

37.   What impact would the proposal have on the ability of semiannual filers to conduct

      public offerings? Would reporting companies that elect to become semiannual filers

      nonetheless decide to include quarterly or more recent financial information in Securities

      Act registration statements or prospectuses based on market practices or liability

      concerns and, if so, would that reduce the cost savings that would otherwise be generated

      by less frequent interim reporting? For example, would semiannual filers continue to

      retain independent public accountants to review their financial statements on a quarterly

      basis to facilitate capital-raising by the company in offerings registered under the

      Securities Act?

38.   Should we change how the age of financial statements in a registration statement is

      determined in order to precisely align with the deadlines of Exchange Act reporting

      requirements as proposed? Would our proposed changes to consolidate Rule 3-12 into

      Rule 3-01 help to streamline Regulation S-X’s requirements so that they are easier for

      registrants to apply?




                                                     59

--- page 60 ---

39.       Should we have the deadlines that apply at the time of filing and that apply at the time of

          effectiveness (for registration statements) or mailing (for proxy statements) centrally

          located in the same rule as we propose? Why or why not? With respect to this dual role

          the revised Rule 3-01 would serve, does new paragraph (a) make clear to registrants

          that—in considering what age requirements apply with respect to effectiveness or

          mailing—they should substitute effectiveness or mailing dates for the filing dates

          explicitly mentioned in the rule?

40.       Instead of the amendments we propose, should we retain the current 135-day age

          requirement for quarterly filers and adopt a 225-day age requirement for semiannual

          filers—even if that means semiannual filers may have to update one or two days sooner

          than quarterly filers? 112 Why or why not?

41.       As discussed above, the proposed elimination of the 135-day provisions of the current

          rules would mean that registrants could no longer provide a mid-period dated financial

          statement but would need to provide financial statements that coincide with fiscal interim

          period ends or annual fiscal year end. Are there any registrants who employ the 135-day

          provision to provide mid-period financial statements today? If so, why and under what

          circumstances do registrants do this? Does providing this ability for some registrants

          justify the added complexity these provisions may create for other registrants?

42.       Are there any other changes needed to simplify the age of financial statement

          requirements? Are there any other changes we should make to reduce the compliance

          burdens associated with Regulation S-X’s requirements in connection with proposed

          optional semiannual reporting?


112
      See supra note 107 and accompanying text (providing an example of a one-day difference).

                                                            60

--- page 61 ---

43.    Should we adopt changes to Rule 10-01 and Rule 8-03 regarding the contents of interim

       financial statements as proposed? Do the proposed amendments appropriately incorporate

       the reporting of semiannual periods on Form 10-S without changing how the interim

       financial statement rules apply to a registrant reporting on Form 10-Q?

44.    When a registrant acquires a significant business, financial statements of that business are

       required to be filed on Form 8-K and must comply with the age requirements of Rule 3-

       01 at the date the initial Form 8-K reporting the acquisition is filed. Depending on the

       timing of the acquisition, pre-acquisition interim financial information for upwards of six

       to nine months may never be required to be filed by semiannual filers. Should we require

       other financial information (e.g., summarized financial information) to inform investors

       of pre-acquisition results of operations, financial condition, and cash flows of the

       acquiree beyond the information that would be required under Rule 3-01 as proposed to

       be amended?

       C. Proposed Amendments Regarding Transition Reports

       We are proposing amendments to Exchange Act Rules 13a-10 and 15d-10, which set

forth the Commission’s requirements with respect to transition reports upon a change in fiscal

year, to incorporate the proposed semiannual reporting option. Specifically, we are proposing to

amend Rule 13a-10(e) and Rule 15d-10(e) to place the requirements applicable to quarterly

filers, which are unchanged, in a new subparagraph (1) and place the requirements applicable to

semiannual filers in a new subparagraph (2). New proposed Rule 13a-10(e)(2)) and Rule 15d-

10(e)(2) for semiannual filers would mirror the rules applicable to quarterly filers.

       We do not propose to replicate current Rule 13a-10(e)(4), which addresses the reporting

of a “gap period” by quarterly filers who change their fiscal year closing date. A “gap period” is

the period of one or two months between the latest quarter end under the old fiscal year and the

                                                     61

--- page 62 ---

start of the quarterly reporting period under the new fiscal year. Because such a “gap period”

would not arise due to a change in fiscal year by a semiannual filer, we are not proposing an

analog for semiannual filers.

          We are also proposing related technical changes to Rules 13a-10 and 15d-10 to indicate

that the relevant rules apply to Form 10-S in addition to Form 10-Q. 113

Request for Comment

45.       Should the Commission make any other changes to transition reports under Rules 13a-10

          and 15d-10 to effectuate semiannual reporting?

          D. Proposed Technical Amendments

          We are proposing a number of technical amendments to conform existing rules and forms

to the proposed flexible approach to interim reporting by inserting references to semiannual

reporting or new Form 10-S and to make corrective deletions of references to previously

rescinded forms. These proposed amendments include:

      •   changes to several items in Regulation S-K, 114 an item in Regulation M-A, 115 and several

          proxy rules; 116




113
      See proposed amendments to Rule 13a-10(c), Rule 13a-10(d)(2)(ii), Rule 13a-10(d)(2)(iii), Note to Rule 13a-
      10(c) and (e), Rule 13a-10(f), Rule 13a-10(j)(2), Rule 15d-10(c), Rule 15d-10(d)(2)(ii) and (iii), Note to Rule
      15d-10(c) and (e), and Rule 15d-10(f).
114
      17 CFR 229.10 (General); 17 CFR 229.101 (Description of business); 17 CFR 229.103 (Legal proceedings); 17
      CFR 229.201 (Market price of and dividends on the registrant’s common equity and related stockholder
      matters); 17 CFR 229.302 (Supplementary financial information); 17 CFR 229.303 (Management’s discussion
      and analysis of financial condition and results of operations); 17 CFR 229.308 (Internal control over financial
      reporting); 17 CFR 229.402 (Executive compensation); 17 CFR 229.407 (Corporate governance); 17 CFR
      229.408 (Insider trading arrangements and policies); 17 CFR 229.601 (Exhibits); 17 CFR 229.701 (Recent sales
      of unregistered securities; use of proceeds from registered securities); 17 CFR 229.1100 (General).
115
      17 CFR 229.1010 (Financial statements).
116
      17 CFR 240.14a-5 (Presentation of information in proxy statement); 17 CFR 240.14a-8 (Shareholder
      proposals); 17 CFR 240.14a-101 (Schedule 14A. Information required in proxy statement).

                                                               62

--- page 63 ---

•   changes to rules regarding determination of market capitalization, among other things, 117

          and rules providing definitions; 118 and

      •   changes to rules regarding research reports, 119 underwriter status, 120 and liability under

          the securities laws. 121

          We are proposing the same types of technical amendments to rules related to several

aspects of the process of filing forms and schedules with the Commission regarding

incorporation by reference; 122 data tagging; 123 definitions; 124 late filing; 125 certifications; 126

disclosure controls and internal control over financial reporting; 127 foreign private issuers; 128 and

beneficial ownership schedules. 129 We are also proposing such technical amendments to a rule




117
      17 CFR 240.3a55-1 (Method for determining market capitalization and dollar value of average daily trading
      volume; application of the definition of narrow-based security index).
118
      17 CFR 230.158 (Definitions of certain terms in the last paragraph of section 11(a)); 17 CFR 230.405
      (Definitions of terms); 17 CFR 232.11 (Definition of terms used in this part).
119
      17 CFR 230.138 (Publications or distributions of research reports by brokers or dealers about securities other
      than those they are distributing); 17 CFR 230.139 (Publications or distributions of research reports by brokers
      or dealers distributing securities); 17 CFR 230.139b (Publications or distributions of covered investment fund
      research reports by brokers or dealers distributing securities).
120
      17 CFR 230.144 (Persons deemed not to be engaged in a distribution and therefore not underwriters).
121
      17 CFR 230.175 (Liability for certain statements by issuers); 17 CFR 240.3b-6 (Liability for certain statements
      by issuers); 17 CFR 240.10b5-1 (Trading “on the basis of” material nonpublic information in insider trading
      cases); 17 CFR 260.0-11 (Liability for certain statements by issuers).
122
      17 CFR 232.303 (Incorporation by reference).
123
      17 CFR 232.405 (Interactive Data File submissions); 17 CFR 232.406 (Cover Page XBRL Data Tagging).
124
      17 CFR 240.12b-2 (Definitions).
125
      17 CFR 240.12b-25 (Notification of inability to timely file all or any required portion of a Form 10-K, 20-F, 11-
      K, N-CEN, N-CSR, 10-Q, or 10-D).
126
      17 CFR 240.13a-14 (Certification of disclosure in annual and quarterly reports); 17 CFR 240.15d-14
      (Certification of disclosure in annual and quarterly reports).
127
      17 CFR 240.13a-15 (Controls and procedures); 17 CFR 240.15d-15 (Controls and procedures).
128
      17 CFR 240.13a-16 (Reports of foreign private issuers on Form 6-K (17 CFR 249.306)); 17 CFR 240.15d-16
      ((Reports of foreign private issuers on Form 6-K (17 CFR 249.306))..
129
      17 CFR 240.13d-1 (Filing of Schedules 13D and 13G).

                                                               63

--- page 64 ---

regarding Office of Management and Budget (“OMB”) control numbers. 130 Finally, we are

proposing such technical amendments to several Commission forms. 131

Request for Comment

46.       Should the Commission make any other technical, conforming, clarifying, or

          implementing changes to effectuate semiannual reporting?

47.       We are not proposing any technical amendments to references to “quarter” in Forms F-8

          and F-80 (related to the calculation of U.S. holders), because companies that use those

          forms are foreign private issuers, which do not report quarterly currently. Is there any

          need for technical amendments to those forms to include references to semiannual

          reporting?

          E. General Request for Comment

          We request and encourage any interested person to submit comments on any aspect of

our proposal, other matters that might have an impact on the proposed amendments, and any

suggestions for additional changes. With respect to any comments, we note that they are of

greatest assistance to our rulemaking initiative if accompanied by supporting data and analysis of

the issues addressed in those comments and by alternatives to our proposal where appropriate.

IV.       OTHER MATTERS

          This proposing release is an economically significant regulatory action under Section

3(f)(1) of Executive Order 12866, as amended, and has been reviewed by OMB. This action, if

finalized as proposed, is expected to be an Executive Order 14192 deregulatory action.



130
      17 CFR 200.800 (OMB control numbers assigned pursuant to the Paperwork Reduction Act).
131
      17 CFR 239.11 (Form S-1); 17 CFR 239.13 (Form S-3); 17 CFR 239.18 (Form S-11); 17 CFR 239.25 (Form S-
      4); 17 CFR 239.31 (Form F-1); 17 CFR 239.33 (Form F-3); 17 CFR 239.34 (Form F-4); 17 CFR 239.40 (Form
      F-10); 17 CFR 249.306 (Form 6-K); 17 CFR 249.308 (Form 8-K); 17 CFR 249.310 (Form 10-K); 17 CFR
      249.322 (Form 12b-25—Notification of late filing).

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V.        ECONOMIC ANALYSIS

          We are attentive to the costs that would be imposed by and the benefits that would be

obtained from the proposed amendments. 132 The discussion below addresses the potential

economic effects of the proposed amendments, including the likely benefits and costs, as well as

the likely effects on efficiency, competition, and capital formation. We also analyze the potential

costs and benefits of reasonable alternatives to the amendments.

          A. Introduction

          As discussed in Section III, the proposed amendments would provide companies subject

to reporting obligations under Exchange Act Section 13(a) or 15(d) with the option of filing

interim reports on a semiannual basis rather than on a quarterly basis. This flexibility would

allow reporting companies to choose the reporting frequency that best aligns with their business

needs and investor expectations.

          Currently, Exchange Act reporting companies must file quarterly reports on Form 10-Q.

These interim reports can be costly to prepare and provide. Reporting companies dedicate time

and resources for preparing quarterly reports and associated voluntary disclosures (i.e., earnings

announcements and management guidance), for independent public accountant’s reviews of

quarterly financial statements, and for related investor engagements such as earnings conference

calls. Further, more frequent disclosure increases the risk of disclosing proprietary information




132
      Securities Act Section 2(b) and Exchange Act Section 3(f) require us, when engaging in rulemaking that
      requires us to consider or determine whether an action is necessary or appropriate in the public interest, to
      consider, in addition to the protection of investors, whether the action will promote efficiency, competition, and
      capital formation. 15 U.S.C. 77b(b), 78c(f). Exchange Act Section 23(a)(2) requires us, when making rules
      under the Exchange Act, to consider the impact that the rules would have on competition and prohibits the
      Commission from adopting any rules that would impose a burden on competition not necessary or appropriate
      in furtherance of the purposes of the Exchange Act. 15 U.S.C. 78w(a)(2).

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that could benefit competitors to the detriment of the reporting company. 133 Reporting

companies that reduce their reporting frequency could potentially redirect resources towards

strategic priorities and other business needs while reducing the risk of disclosing proprietary

information.

          Conversely, the efficiency of financial markets rests on material information becoming

public in a timely fashion. In addition to protecting investors, greater availability of material

information allows securities prices to better reflect their issuers’ fundamental value and

ultimately promotes capital formation as issuers have access to lower cost of capital and

investors in those issuers’ securities have access to higher liquidity, as discussed in detail below.

A reduction in the frequency of interim reporting could result in delayed disclosure of material

information, reduced comparability, and some lost information. Therefore, there exists a tradeoff

between reducing regulatory burdens so that reporting companies can reallocate their resources

to potentially more value enhancing activities, which would ultimately benefit investors, and

promoting efficient financial markets through timely disclosure. The optimal reporting frequency

may differ across reporting companies and industries, depending on their size, business model,

investor base, and other factors. Under the proposed rules, reporting companies could choose the

frequency of reporting that best fits their circumstances. This flexibility is intended to allow

reporting companies to make firm-specific choices that reflect the unique needs and preferences

of their investors. Barring significant agency costs, this could lead to a more efficient, firm

specific choice for reporting frequency that would benefit both issuers and investors.




133
      The proposed amendments would not change what is required to be disclosed in the interim reports, simply the
      frequency. The impact of the proposed rules on the disclosure of proprietary information would be limited to
      instances where delaying competitively sensitive information contained in the interim reports or aggregating
      quarterly information into semiannual information decreases the value of the information to competitors.

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Reporting companies that would choose to report on a semiannual basis could also decide

whether to supplement with voluntary information on a quarterly basis. For instance, these

companies may still voluntarily provide earnings announcements or similar disclosures during

the first or third quarter or both. 134 Reporting companies that would be impacted by the proposed

rules would fall into three broad groups: (1) companies that would file a Form 10-S semiannual

report and choose not to voluntarily provide information for the first and third quarters; (2)

companies that would continue to file Form 10-Q quarterly reports; and (3) companies that

would file a Form 10-S semiannual report and choose to voluntarily provide information for the

first or third quarter or both. 135 For purposes of our analyses, we discuss these groups separately

and refer to the first group of issuers as semiannual reporters, the second group of issuers as

quarterly reporters, and the third group of issuers as hybrid reporters.

          Overall, the impact of the proposed rules would depend on the number and type of

reporting companies that decide to provide interim reports on a semiannual basis instead of a

quarterly basis and the extent to which those companies supplement with voluntary disclosure.

Because the decision to switch reporting frequency is voluntary and firm-specific, the aggregate

effects will reflect a range of company and investor preferences. While we are unable to quantify

the number of companies that would switch to semiannual reporting, we discuss factors that

likely would influence reporting frequency decisions in Section V.D.4 below.




134
      See supra note 61 and accompanying text for a discussion of quarterly earnings releases and the fact that there
      is no requirement that they be reviewed by an independent public accountant or prepared in accordance with
      U.S. GAAP, among other regulatory requirements that apply to quarterly reports filed with the Commission on
      Form 10-Q.
135
      There is a wide range of information that these issuers could choose to disclose voluntarily for the first or third
      quarter or both. The economic effects of the proposed rules would therefore vary based on the amount of
      information these issuers provide and the costs of producing this information. Specifically, both the benefits and
      costs for an issuer would generally be reduced as more information is voluntarily disclosed.

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B. Broad Economic Considerations

          This section summarizes a number of broad economic considerations regarding the

frequency of periodic disclosures to provide context for the more detailed analysis of potential

outcomes and the associated economic costs and benefits that follow.

          The production of financial reports and disclosures on a periodic basis is a significant

undertaking by reporting companies, involving internal staff time as well as the use of external

service providers and requiring the attention of management. Additional voluntary efforts to

engage with investors on some or all of the content of the disclosures, such as through earnings

releases and conference calls, 136 may increase the burden of periodic reporting on company

resources and, in particular, on management time. Periodic disclosures may also affect a

company’s value by increasing proprietary costs of revealing information that has competitive

value to rival companies. 137 Reducing the frequency of periodic disclosures can, for some

companies, provide savings of time and cash flow for other purposes. For companies that face

financing constraints or limited managerial capacity, such savings may be directed to potentially

more productive uses, such as strategic planning or capital investments. In other cases, savings

may be returned to shareholders. A reduced burden of periodic disclosures on reporting issuers

could also be a positive factor in encouraging additional companies to raise capital through

registered securities offerings or to become or remain a public company. 138


136
      These disclosures generally exist because of the interim reports. While the proposed rules would not directly
      impact such voluntary disclosure, the proposed rules would have an indirect impact, at least to the extent that
      semiannual filers would forgo providing such voluntary disclosure for quarters for which they would no longer
      file interim reports.
137
      See, e.g., Robert E. Verrecchia, Discretionary Disclosure, 5 J. Acct. & Econ. 179 (1983) (showing,
      theoretically, how proprietary costs can result in a manager withholding information when disclosure is
      discretionary).
138
      Studies have found that costs associated with mandated reporting may affect companies’ going public decision
      as well as the decision to exit public markets. For example, there is some evidence of favorable effects of


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On the other hand, reducing the frequency of periodic disclosures may delay the public

disclosure of material information about a company. Such decreased transparency may make it

more difficult for investors to make well-informed decisions and may increase the expected

return (i.e., the cost of capital) that they demand for holding a company’s securities. In particular,

less frequent disclosures may result in a higher cost of capital if investors receive less precise

information about a company’s cash flows and how they covary with other companies’ cash

flows 139 and/or if there is an increased risk of information asymmetry across investors as a result


      emerging growth company accommodations on IPO activity, see, e.g., Michael Dambra et al., The JOBS Act
      and IPO Volume: Evidence that Disclosure Costs Affect the IPO Decision, 116 J. Fin. Econ. 121 (2015). There
      is also evidence suggesting that costs associated with the Sarbanes-Oxley Act regulations encouraged
      companies to exit U.S. public stock markets. See, e.g., Francesco Bova et al., The Sarbanes-Oxley Act and Exit
      Strategies of Private Firms, 31 Contemp. Acct. Rsch. 818 (2014) (finding that “SOX appears to have shifted the
      preferences of private firms from going public to exiting the private market via acquisition by a public
      acquirer”); Ellen Engel et al., The Sarbanes–Oxley Act and Firms’ Going-Private Decisions, 44 J. Acct. &
      Econ. 116 (2007) (finding that “the quarterly frequency of going-private transactions has increased after the
      passage of SOX”); Christian Leuz et al., Why do Firms Go Dark? Causes and Economic Consequences of
      Voluntary SEC Deregistrations, 45 J. Acct. & Econ. 181 (2008), (“document[ing] a spike in going dark that is
      largely attributable to the Sarbanes–Oxley Act. Firms experience large negative abnormal returns when going
      dark. We find that many firms go dark due to poor future prospects, distress and increased compliance costs
      after SOX”). While savings associated with the proposed amendments may be one factor in a company’s
      decision to go public (or to stay public), we also acknowledge that non-regulatory factors may play a more
      significant role in driving initial public offering activity. Some academic research has found that regulatory
      costs have likely played only a limited role in the decrease in the number of public companies in the U.S. after
      the 1990s. See, e.g., Michael Ewens et al., Regulatory Costs of Being Public: Evidence from Bunching
      Estimation, 153 J. Fin. Econ. 103775 (2024) (estimating that regulatory costs may explain about 7% of the
      decline in the likelihood of initial public offerings after 2000, and stating that non-regulatory factors, such as
      abundant private equity financing, changing economies of scale and scope, and changing acquisition behavior,
      are likely to have played a more important role); Xiaohui Gao et al., Where Have All the IPOs Gone? 48 J. Fin.
      & Quantitative Econ. 1663 (2013) (documenting various patterns in initial public offering activity, small firm
      profitability, mergers and acquisitions activity, and other trends that the authors find to be inconsistent with a
      regulatory costs explanation for the decline in initial public offerings after 2000 but consistent with increases in
      the importance of economies of scope over time).
139
      See, e.g., Richard Lambert et al., Accounting Information, Disclosure, and the Cost of Capital, 45 J. Acct. Rsch.
      385 (2007) (“Lambert et al. 2007 Study”) (finding that higher quality disclosures reduce investors’ assessed
      covariances of the firm’s cash flows with other firms’ cash flows, thereby reducing the proportion of non-
      diversifiable risk in these cash flows and, thereby, the firm’s cost of capital); Puneet Handa & Scott C. Linn,
      Arbitrage Pricing with Estimation Risk, 28 J. Fin. & Quantitative Analysis 81 (1993) (finding that assets for
      which a greater amount of information is available should, ceteris paribus, trade at higher prices, i.e., reflect a
      lower cost of capital, due to the reduction in estimation risk borne by investors); Xiaofei Zhao, Does
      Information Intensity Matter for Stock Returns? Evidence from Form 8-K Filings, 63 Mgmt. Sci. 1382 (2017)
      (finding that a greater frequency of current reports on Form 8-K is associated with a lower cost of capital and
      attributing this reduced return demanded by investors to reduced uncertainty). The Lambert et al. 2007 Study
      also identifies indirect effects on the cost of capital to the extent that the quality of disclosures affect decisions
      made by management, which in turn affect the distribution (and covariances) of the issuer’s cash flows.

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of the increased time gaps between public disclosures. 140 A higher cost of capital, in turn, may

discourage companies from raising funds for new investments.

          It is unclear what frequency of periodic reporting would strike the best balance between

the potential benefits related to lower company reporting burdens and reduced disclosure of

competitive sensitive information on the one hand, and the potential costs related to a reduction

or delay of information to investors on the other hand, and such an optimal frequency may vary

across issuers. Fundamentally, in a discounted cash flow valuation framework, both the savings

from reduced reporting costs and potential productivity gains from reallocating managerial and

other resources would have a positive effect on an issuer’s valuation by increasing the expected

cash flows it is able to generate from its business and new investments. In contrast, any resulting

increase in the cost of capital would negatively affect the valuation by increasing the discount

factor that would apply to produce the total value investors are willing to place on those expected

cash flows today.

          Allowing issuers to choose their own frequency of interim reporting would mitigate some

of the risk of a suboptimal tradeoff between the opposing economic effects discussed above by

allowing individual issuers to weigh which effects are likely to dominate in their unique

situation. An issuer whose quarterly reports would not tend to reflect any material changes

beyond those already made public in current reports may determine that the costs of producing

quarterly reports would outweigh the benefit of providing these reports to investors and thus

choose to report semiannually. For example, commenters have noted that pre-revenue



140
      See, e.g., Douglas W. Diamond & Robert E. Verrecchia, Disclosure, Liquidity, and the Cost of Capital, 46 J.
      Fin. 1325 (1991); David Easley & Maureen O’Hara, Information and the Cost of Capital, 59 J. Fin. 1553
      (2004). These articles, however, also describe limited theoretical circumstances under which greater disclosure
      could lead to a higher cost of capital, such as in the case where public disclosures are so extensive that they
      reduce incentives for market making.

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biotechnology companies’ securities may trade more based on the outcome of clinical

developments and regulatory events than their quarterly financial reporting. 141 Conversely,

companies in other industries or with different investor bases may find that more frequent

reporting better serves their needs. Issuers can best estimate their own costs of more frequent

reporting and should be incentivized to evaluate the impact of more frequent reporting on

investors and other market participants. For instance, if investors demand more frequent interim

reporting and issuers fail to meet that demand, the issuers could experience negative market

effects such as higher cost of capital or lower liquidity. 142 Under the proposed optional

semiannual reporting approach, individual issuers would be able to make a more tailored trade-

off between the costs and the benefits of reporting frequency for interim reports, which they do

not have the ability to do under the current system of mandated quarterly reporting. Because

issuers are incentivized to consider how their frequency of interim reports would impact

investors, having the option to choose between quarterly reporting and semiannual reporting

could lead to a more optimal reporting frequency for both the issuers and investors.

          That said, there are various reasons why issuers may be likely to provide less disclosure

when given optionality in their reporting frequency than would be optimal for investors and the

market as a whole. For example, there is substantial literature discussing circumstances in which

the incentives of managers are not perfectly aligned with those of their shareholders. 143 There




141
      See supra note 53. See also letter from Davis Polk & Wardwell LLP (Mar. 21, 2019) (“Davis Polk 2019”).
142
      See supra notes 139 and 140 (all sources).
143
      See, e.g., Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs
      and Ownership Structure, 3 J. Fin. Econ. 305 (1976). More specifically, career concerns or certain
      compensation arrangements may incentivize managers to conceal bad news, particularly when facing limited
      litigation risk. See, e.g., S. P. Kothari, et al., Do Managers Withhold Bad News? 47 J. Acct. Rsch. 241 (2009);
      Iván Marinovic & Felipe Varas, No News is Good News: Voluntary Disclosure in the Face of Litigation, 47
      Rand J. Econ. 822 (2016).

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may also be numerous additional costs and benefits for investors and issuers associated with the

frequency of periodic reporting and also associated with any variation in this frequency across

issuers, many of which may not be fully accounted for by managers when making these tradeoffs

for a particular issuer.

          For example, researchers have found that longer gaps between issuer disclosures increase

information asymmetry between investors, because some investors are more able than others to

access or process information from alternative, often third-party, channels that provide indirect

insight into an issuer’s financial status or performance. 144 Recent advancements in alternative

data collection, surveillance, and data processing technologies may exacerbate such information

asymmetry. 145 Information asymmetry, in turn, is associated with reduced liquidity and increased

transactions costs for investors. 146 Widespread information asymmetry can also diminish

perceptions of fairness, which can erode trust in markets and reduce capital market

participation. 147 To the extent these potential negative externalities borne by market participants

from increased information asymmetry may not be fully internalized by individual companies


144
      See, e.g., Robert Stoumbos, The Growth of Information Asymmetry Between Earnings Announcements and Its
      Implications for Reporting Frequency, 69 Mgmt. Sci. 1901 (2023) (“Robert Stoumbos 2023”) (finding that
      information asymmetry grows steadily between earnings announcements, until a new earnings announcement
      causes it to fall, and that semiannual reporting is associated with greater information asymmetry than quarterly
      reporting in the second half of each semiannual period). For theoretical work in this area, see, e.g., Nils H.
      Hakansson, Interim Disclosure and Public Forecasts: An Economic Analysis and a Framework for Choice, 52
      Acct. Rev. 396 (1977) (“Hakansson 1977 Study”) and Baruch Lev, Toward a Theory of Equitable and Efficient
      Accounting Policy, 63 Acct. Rev. 1 (1988). See also 17 CFR 243.100 through 17 CFR 243.103 (Regulation FD)
      (generally prohibiting public companies from disclosing nonpublic, material information to selected parties
      unless the information is distributed to the public first or simultaneously).
145
      See, e.g., Zsolt Katona et al., On the Capital Market Consequences of Big Data: Evidence from Outer Space, 60
      J. Fin. & Quantitative Analysis 551 (2025) (“Katona et al. 2025 Study”) (studying the introduction of access to
      satellite imagery data for certain sophisticated investors and finding that such access led to increased
      information asymmetry and lower stock liquidity around the reports of retailers with satellite coverage).
146
      See, e.g., Lawrence R. Glosten & Paul R. Milgrom, Bid, Ask, and Transaction Prices in a Specialist Market
      with Heterogeneously Informed Investors, 14 J. Fin. Econ. 71 (1985). (As noted above, increased information
      asymmetry can also increase an issuer’s cost of capital.) See supra note 140 (discussing studies by Douglas W.
      Diamond & Robert E. Verrecchia and David Easley & Maureen O’Hara) and accompanying text.
147
      See, e.g., Luigi Guiso et al., Trusting the Stock Market, 63 J. Fin. 2557 (2008).

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when choosing semiannual reporting under the proposed amendments, it could result in less

disclosure than optimal for the market.

          Less frequent periodic disclosures may also result in securities prices that deviate for

longer periods of time from their issuers’ fundamental value. 148 Reduced information about an

issuer can result in deviations not only in the market prices of its own securities but also in the

prices of other issuers’ securities and other traded assets, given the interdependence of asset

valuations on the risk and return profiles of other investible assets. 149 Increasing the delay before

information is released thereby risks obscuring the attractiveness of investment opportunities and

impeding the direction of capital to its most productive uses. In effect, the delayed incorporation

of information into pricing can result in suboptimal investor portfolios and a misallocation of

capital at the market level. These pricing effects may also result in increased “jump” volatility

(given that prices may update by larger amounts under a less frequent periodic disclosure

schedule, rather than more incrementally across multiple shorter disclosure cycles) which may

reduce liquidity. 150 Less frequent financial reporting by an issuer may also reduce the efficiency

of production if managers of that issuer or of other issuers thereby have access to less data (i.e.,

less informative market prices and less frequent information from peer companies) on which to

base their operating and investing decisions. 151 The aforementioned negative effects on market


148
      See, e.g., Jeff L. McMullin et al., Increased Mandated Disclosure Frequency and Price Formation: Evidence
      from the 8-K Expansion Regulation, 24 Rev. Acct. Stud. 1 (2019).
149
      See, e.g., Lambert et al. 2007 Study.
150
      See letter from Alon Kalay (Mar. 18, 2019), available at https://www.sec.gov/comments/s7-26-18/s72618-
      5144730-183368.pdf (attaching revised copy of Dan Amiram, et al., The Information Environment, Volatility
      Structure, and Liquidity (Colum. Bus. Sch., Rsch. Paper No. 15-62, Feb. 21, 2019), available at
      https://ssrn.com/abstract=2618424 (retrieved from SSRN Elsevier database).
151
      See, e.g., Shane Heitzman & Mengjie Huang, Internal Information Quality and the Sensitivity of Investment to
      Market Prices and Accounting Profits, 36 Contemp. Acct. Rsch. 1699 (2019); Darren Bernard et al.,
      Information Flows Among Rivals and Corporate Investment, 136 J. Fin. Econ. 760 (2020); Brad Badertscher et
      al., Externalities of Public Firm Presence: Evidence from Private Firms’ Investment Decisions, 109 J. Fin.


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dynamics from less frequent reporting are additional examples of potential negative externalities

borne by market participants that may not be internalized by an individual issuer when choosing

its reporting frequency under the proposed amendments.

          These asymmetric information effects and market pricing and volatility effects may be

mitigated by the presence of alternative sources of information, 152 including private information

collection and analysis or by market discipline. Such mitigation is most likely in situations where

alternate data is available, significant incentives for private collection of such data are present,

and the market is efficient at incorporating such information into prices. 153 For example, with

large companies, investors may have abundant and lucrative opportunities for private data

collection and analysis, which creates opportunities to trade on the basis of the resulting

information, which may result in the incorporation of significant amounts of information into

these issuers’ security prices even in the absence of public disclosure. Even in such cases,

however, the extent of price discovery may be less complete than in the case of public




      Econ. 682 (2013); Thierry Foucault & Laurent Fresard, Learning from Peers’ Stock Prices and Corporate
      Investment, 111 J. Fin. Econ. 554 (2014).
152
      See, e.g., Dan Givoly & Dan Palmon, Timeliness of Annual Earnings Announcements: Some Empirical
      Evidence, 57 Acct. Rev. 486 (1982) (finding a reduction in the market reaction to annual earnings
      announcements when the reporting lag between the end of the period in question and the disclosure date is
      lengthy and suggesting this implies that the information in more lagged disclosures becomes partially available
      through other channels, including possible leaks or the disclosures of other issuers in the same industry).
153
      Under some circumstances, reduced public disclosures could increase the incentives for private information
      collection sufficiently that price discovery could even be improved rather than impaired. See, e.g., Itav
      Goldstein & Liyan Yang, Information Disclosure in Financial Markets, 9 Ann. Rev. Fin. Econ. 101 (2017),
      available at https://doi.org/10.1146/annurev-financial-110716-032355.

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disclosure 154 and the process of price discovery may be less efficient (e.g., because of the

resources directed towards information collection rather than other productive purposes). 155

          Less frequent periodic disclosures may also have implications for the ability of investors

and other market participants to hold corporate management accountable. For example, less

frequent disclosures may reduce the ability of investors and other market participants to monitor

the issuer and its management because they would receive less frequent signals about issuer

performance and managerial decision-making. Such a reduced frequency of information

revelation can delay investors from intervening when they are concerned with management’s

choices, whether through direct engagement with management or by making their views known

through their trading activity and thus market prices. 156 These delays can result in poor

management decisions compounding into bigger issues (e.g., poor investments, deficient

business strategies, or inefficient operations) before investors can react. Reduced disclosure also

could reduce the incentives of analysts to cover an issuer and thus reduce this source of scrutiny



154
      Private information collection may not fully replicate the information that the issuer could disclose publicly.
      See, e.g., Jack Hirshleifer, The Private and Social Value of Information and the Reward to Inventive Activity, 61
      Amer. Econ. Rev. 561 (1971) (demonstrating that relying on private, individual incentives to collect
      information can result in a level of information collection that diverges significantly from the optimal level of
      public information for the economy). Further, the availability of information to selected market participants and
      their strategic trading on the basis of that information does not guarantee that it is incorporated into prices in a
      timely manner. See, e.g., Katona et al. 2025 Study (studying the introduction of access to satellite imagery data
      for certain sophisticated investors and finding limited evidence of any acceleration of price discovery as a result
      of the availability of this data to select investors).
155
      See, e.g., Douglas W. Diamond, Optimal Release of Information by Firms, 40 J. Fin. 1071 (1985) (discussing
      the “savings of real resources which would be devoted to private information acquisition if public information
      were not released”); Hakansson 1977 Study (discussing the “social disutility of having a subset of investors
      forego ‘productive’ employment in favor of time-consuming but profitable private search for information”).
156
      See, e.g., Benedikt Downar et al., The Monitoring Effect of More Frequent Disclosure, 35 Contemp. Acct. Rsch.
      2058 (2018) (finding evidence consistent with the argument that more frequent disclosure provides shareholders
      with the opportunity for timelier monitoring and the ability to better constrain managers from misusing
      corporate resources); Frank Gigler et al., How Frequent Financial Reporting Can Cause Managerial Short-
      Termism: An Analysis of the Costs and Benefits of Increasing Reporting Frequency, 52 J. Acct. Rsch. 357
      (2014) (“Gigler et al. 2014 Study”) (showing, theoretically, that periodic disclosures enable market prices to
      impose discipline on the firm’s choices, thereby limiting the initiation of negative net present value projects,
      and that greater reporting frequency provides more effective discipline).

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and its associated benefits, 157 such as enhanced liquidity for the issuer’s securities. 158 To the

extent a reduced frequency of interim disclosure is accompanied by fewer interim reviews and

less interim testing by independent public accountants to support their annual financial statement

or integrated audit, the independent auditors may be slower to identify certain accounting

misstatements and deficiencies in internal control, which could negatively impact the timeliness

and reliability of the audited annual financial statements. 159 This impact could be more prevalent

for smaller reporting companies, particularly for those with fewer qualified accounting staff or

other resources available to them.

          Less frequent periodic disclosures may affect management incentives. If less frequent

disclosure reduces scrutiny of issuers as discussed above, then this could reduce potential

managerial incentives to overly focus on short-term outcomes to the detriment of long-term

performance. 160 Survey evidence has found that management feels pressure to meet short-term

earnings benchmarks, with a majority reporting a willingness to make corporate investment or

operating decisions that smooth earnings (i.e., reduce their volatility), even if such decisions




157
      See, e.g., Mark H. Lang & Russell J. Lundholm, Corporate Disclosure Policy and Analyst Behavior, 71 Acct.
      Rev. 467 (1996); Alexander Dyck, et al., Who Blows the Whistle on Corporate Fraud?, 65 J. Fin. 2213 (2010);
      Bryan Kelly & Alexander Ljungqvist, Testing Asymmetric-Information Asset Pricing Models, 25 Rev. Fin.
      Stud, 1366 (2012); Tao Chen, et al., Do Analysts Matter for Governance? Evidence from Natural Experiments,
      115 J. Fin. Econ. 383 (2015); François Derrien et al., The Real Effects of Financial Shocks: Evidence from
      Exogenous Changes in Analyst Coverage, 68 J. Fin. 1407 (2013); Jeong-Bon Kim et al., Analyst Coverage and
      Expected Crash Risk: Evidence from Exogenous Changes in Analyst Coverage, 94 Acct. Rev. 345 (2019).
158
      See, e.g., Darren. T. Roulstone, Analyst Following and Market Liquidity, 20 Contemp. Acct. Rsch. 552 (2003);
      Karthik Balakrishnan et al., Shaping Liquidity: On the Causal Effects of Voluntary Disclosure, 69 J. Fin. 2237
      (2014).
159
      See, e.g., Brant. E. Christensen et al., Archival Evidence on the Audit Process: Determinants and Consequences
      of Interim Effort, 38 Contemp. Acct. Rsch. 942 (2021).
160
      See, e.g., Gigler et al., 2014 Study (showing, theoretically, that more frequent reporting can increase the
      probability of inducing managerial short-termism).

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would reduce long-term value by a small amount. 161 Still, reductions in the reporting frequency

are less likely to affect decision-making regarding long-horizon outcomes, such as investment

decisions that are intended to generate profits five or ten years down the road. Further, other

factors may play a larger role in short-termism concerns than the periodic disclosure cycle, such

as executive compensation design or messaging to investors through, for example, earnings

guidance.

          Overall, the economic tradeoffs involved in the choice of interim disclosure frequency

are complex and difficult to measure, 162 and the ideal frequency may differ across companies and

industries. Allowing issuers the flexibility to report either semiannually or quarterly may help to

better balance certain issuer-specific benefits against the issuer-specific costs of interim

disclosure. The discussion above, however, identifies externalities borne by investors, other

issuers, and the economy resulting from interim disclosure frequency that an individual issuer is

unlikely to consider when selecting its own frequency of interim disclosure. 163 The existence of

flexibility in interim disclosure frequency may itself result in additional concerns. For example,

such flexibility may reduce the efficiency by which investors digest and use disclosures, because

issuers disclosing at different frequencies may complicate comparative evaluations and analyses.

The ability of an issuer to change its interim disclosure frequency in the future may also make it


161
      See, e.g., John R. Graham et al., The Economic Implications of Corporate Financial Reporting, 40 J. Acct. &
      Econ. 3 (2005) (finding, based on a survey of 400 executives, that managers place a great deal of importance on
      meeting earnings benchmarks, with 78% of the surveyed executives indicating a willingness to sacrifice at least
      a small amount of long-term value to smooth earnings).
162
      See, e.g., Christian Leuz & Peter D. Wysocki, The Economics of Disclosure and Financial Reporting
      Regulation: Evidence and Suggestions for Future Research, 54 J. Acct. Rsch. 525 (2016) (stating that
      researchers “generally lack evidence on market-wide effects and externalities from regulation, yet such
      evidence is central to the economic justification of regulation” and acknowledging that “the identification of
      such market-wide effects and externalities is even more difficult than the identification of direct economic
      consequences on individual firms”).
163
      See, e.g., Anat R. Admati & Paul Pfleiderer, Forcing Firms to Talk: Financial Disclosure Regulation and
      Externalities, 13 Rev. Fin. Stud. 479 (2000).

                                                               77

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difficult for issuers who select a more frequent disclosure frequency to credibly convey to the

market that they will continue to disclose at that frequency. This lack of a commitment device

could reduce the benefits of an issuer choosing greater transparency because of uncertainty about

their future transparency. That said, investor pressure and the development of market norms

could help to address some of these concerns.

          Ultimately, the costs and benefits of the proposed amendments will depend on how

issuers use the accorded flexibility, and the potential outcomes and their effects are explored in

depth in the more detailed sections that follow.

          C. Baseline

          The baseline against which the costs, benefits, and the effects on efficiency, competition,

and capital formation of the proposed amendments are measured consists of the current state of

the market, Form 10-Q filers’ current practices, and the current regulatory framework. 164

               1. Regulatory Baseline

                            a) Commission Regulations

Requirements for Quarterly and Transition Reporting

          Companies subject to Exchange Act Sections 13(a) and 15(d) must file periodic and other

reports in accordance with such rules and regulations as the Commission may prescribe as

necessary or appropriate in the public interest or for the protection of investors. 165 The




164
      See, e.g., Nasdaq v. SEC, 34 F.4th 1105, 1111–14 (D.C. Cir. 2022). This baseline approach also follows
      Commission staff guidance on economic analysis for rulemaking. See Current Guidance on Economic Analysis
      in SEC Rulemaking 6 (Mar. 16, 2012), available at
      https://www.sec.gov/divisions/riskfin/rsfi_guidance_econ_analy_secrulemaking.pdf (‘‘The economic
      consequences of proposed rules (potential costs and benefits including effects on efficiency, competition, and
      capital formation) should be measured against a baseline, which is the best assessment of how the world would
      look in the absence of the proposed action.’’); id. at 7 (‘‘The baseline includes both the economic attributes of
      the relevant market and the existing regulatory structure.’’).
165
      15 U.S.C. 78m(a), 78o(d).

                                                               78

--- page 79 ---

Commission has prescribed Form 10-Q for issuers to use for quarterly reports under Exchange

Act Sections 13 and 15(d), 166 and to use for certain transition and quarterly reports when they

change their fiscal closing dates. 167

          Pursuant to Regulation S-X, Form 10-Q must include interim financial statements

(inclusive of footnote disclosures) prepared in accordance with U.S. GAAP 168 and must be

reviewed by (but are not required to be audited by) an independent public accountant. 169 Parts I

and II of Form 10-Q require narrative disclosures regarding certain information, including

MD&A and market risk. 170 Form 10-Q must be filed with exhibits required under Item 601 of

Regulation S-K, 171 including certifications by principal executive and financial officers. 172

          Certain registrants have scaled reporting obligations. Smaller reporting companies, as

defined in Exchange Act Rule 12b-2, 173 can elect to apply the form and content requirements in

Article 8 of Regulation S-X and need not apply the form and content required by Regulation S-X

for other reporting companies with certain enumerated exceptions. 174 Smaller reporting

companies may omit reporting material changes from risk factors previously disclosed. 175



166
      17 CFR 240.13a-13; 17 CFR 240.15d-13; 17 CFR 249.308a(a).
167
      17 CFR 240.13a-10; 17 CFR 240.15d-10; 17 CFR 249.308a(b).
168
      As an exception, foreign private issuers that voluntarily file on domestic forms, including Form 10-Q, may
      include financial statements prepared in accordance with either IFRS (without reconciliation to U.S. GAAP) or
      home-country GAAP (with reconciliation to U.S. GAAP). See supra note 19.
169
      See Form 10-Q, Part I, Item 1; 17 CFR 210.8-03 and 10-01 (Regulation S-X Rules 8-03, 10-01).
170
      See Form 10-Q, Part I, Items 2 through 4; Part II, Items 1, 1A, 2, 3, 5(b), 5(c); 17 CFR 229.103; 17 CFR
      229.105; 17 CFR 229.303; 17 CFR 229.305; 17 CFR 229.307; 17 CFR 229.308(c); 17 CFR 229.407(c)(3); 17
      CFR 229.408(a); 17 CFR 229.701; supra Section II.
171
      See Form 10-Q, Part II, Item 6; 17 CFR 229.601 (Regulation S-K Item 601).
172
      See 17 CFR 240.13a-14; 17 CFR 240.15d-14; 17 CFR 229.601(b)(31) and (32) (Regulation S-K Items
      601(b)(31) and (32).
173
      17 CFR 240.12b-2.
174
      See Form 10-Q, Part I, Item 1; 17 CFR 210.8-01 through 210.8-08 (Article 8 of Regulation S-X).
175
      See Form 10-Q, Part II, Item 1A.

                                                             79

--- page 80 ---

Certain wholly-owned subsidiaries that do not have a history of material defaults may substitute

the MD&A analysis with a more streamlined analysis of the results of operations and may omit

reporting changes in securities, defaults on senior securities, and quantitative and qualitative

disclosures about market risk. 176

          Form 10-Q reports are filed electronically with the Commission through its EDGAR

system, 177 and reporting companies must structure certain portions of Form 10-Q, including the

financial statements and cover page information, in Inline XBRL. 178 The deadline for filing

Form 10-Q with the Commission is within 40 or 45 days after the end of a fiscal quarter,

depending on the filer status of the reporting company. 179

Age of Financial Statements Requirements

          Registrants are also subject to age of financial statements requirements, under which they

must update the financial statements provided in their registration and proxy statements. In

general, the most recent balance sheet in a registration or proxy statement must be as of a date no

more than 134 days for nonaccelerated filers (or 129 days for accelerated and large accelerated

filers) before the effective date of the registration statement (or date the proxy statement is

mailed). 180 The audited annual financial statements for the most recently completed fiscal year,

however, are not required to be included in a registration statement that goes effective (or proxy

statement that is mailed) no more than 45 days after the end of the most recently completed fiscal

year, provided interim financial statements as of the end of the third quarter of the most recently


176
      See Form 10-Q, General Instruction H; Form 10-Q, Part I, Items 2 and 3 and Part II, Items 2 and 3.
177
      See 17 CFR 232.101(a) (Regulation S-T Rule 101(a)).
178
      See 17 CFR 229.601(b)(101) and (104) (Regulation S-K Items 601(b)(101) and (104)); 17 CFR 232.405 and 17
      CFR 232.406 (Regulation S-T Rules 405 and 406).
179
      See Form 10-Q, General Instructions; 17 CFR 249.308a(a).
180
      17 CFR 210.3-12(a); 17 CFR 210.8-08.

                                                              80

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completed fiscal year are included. 181 Further, if the registrant meets certain conditions, 182 then

those interim financial statements would be timely through the 59th day, 74th day, or 89th day

(depending on filer status) after the most recently completed fiscal year end. 183

Other Commission Rules and Information Collections

          Requirements for quarterly reporting on Form 10-Q are referenced in other Commission

rules and information collections. For example, registration statements on Form S-1 or S-3

require the issuer’s prospectus to describe material changes which have occurred since the end of

the latest fiscal year for which certified financial statements were included in the latest annual

report to security holders and which have not been described in a Form 10-Q or Form 8-K. 184

                            b) National Securities Exchanges and PCAOB Standards

          National securities exchanges and the PCAOB have rules and standards that incorporate

or otherwise reflect the requirement to file quarterly reports on Form 10-Q and would not be

amended by the proposed amendments. 185 The standards may affect entities’ incentives to

continue filing quarterly reports on Form 10-Q instead of semiannual reports on proposed Form

10-S.




181
      17 CFR 210.3-01(b); 17 CFR 210.8-08(a).
182
      See supra note 99 (describing the conditions in current rules which would be continued in the proposed rules
      but renumbered).
183
      17 CFR 210.3-12(b); 17 CFR 210.3-01(c); 17 CFR 210.8-08(b).
184
      Form S-1, Part I, Item 11A; Form S-3, Part I, Item 11(a).
185
      National securities exchanges establish and amend their listing standards by filing proposed rule changes,
      pursuant to Section 19(b) of the Exchange Act and Rule 19b-4 thereunder, for Commission review, and certain
      proposed rule changes must be approved by the Commission before they can go into effect. See Exchange Act
      Section 19(b), 15 U.S.C. 78s(b). The Commission’s approval is also required before the PCAOB may
      promulgate or amend a rule or standard. See Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 107(b), 15
      U.S.C. 7217(b).

                                                                  81

--- page 82 ---

The exchanges’ listing standards generally do not mandate a particular frequency of

interim reporting. 186 In some cases, however, the exchanges’ listing standards explicitly

reference Commission requirements for quarterly reporting on Form 10-Q, for example by

requiring listed companies to make quarterly reports available to shareholders prior to or as soon

as practicable after filing Form 10-Q or by subjecting listed companies to delinquency

procedures for filing Form 10-Q late. 187

          The regulatory baseline of the proposed amendments also includes PCAOB Auditing

Standard 4105, 188 which addresses the requirement in Regulation S-X Rules 10-01(d) 189 and 8-

03 190 for a registrant to engage an independent public accountant to review the registrant’s

interim financial statements before the registrant files its quarterly report on Form 10-Q. Under

PCAOB Auditing Standard 6101, less frequent periodic reviews performed in accordance with

Auditing Standard 4105 affect auditors’ ability to furnish comfort letters to underwriters

expressing negative assurance without performing additional interim reviews under AS 4105. 191




186
      See supra Section II.
187
      See supra note 34 (citing NYSE Listed Company Manual § 802.01ESEC) and note 35 (citing Nasdaq Stock
      Market Rule 5250(d)(3)(A)).
188
      See PCAOB Auditing Standard 4105, Reviews of Interim Financial Information, supra note 20, at ¶ .03.
189
      17 CFR 210.10-01(d).
190
      17 CFR 210.8-03.
191
      See PCAOB Auditing Standard 6101, Letters for Underwriters and Certain Other Requesting Parties, supra
      note 93, at ¶ .37 (“[w]hen the accountants have not conducted a review in accordance with AS 4105, the
      accountants may not comment in the form of negative assurance and are, therefore, limited to reporting
      procedures performed and findings obtained”); id. at ¶ .46 (permitting negative assurance “as to subsequent
      changes in specified financial statement items as of a date less than 135 days from the end of the most recent
      period for which the accountants have performed an audit or a review”). See also letters from BDO USA, LLC
      (Mar. 21, 2019) (“BDO 2019”); Marcum LLP (Mar. 21, 2019) (“Marcum 2019”).

                                                              82

--- page 83 ---

c) Other Federal Agency Regulations

          Other Federal agencies have incorporated Form 10-Q filing requirements into their own

regulatory requirements affecting discrete sectors of the economy. The proposed amendments

would not revise these other requirements.

          For example, the Federal Deposit Insurance Corporation (“FDIC”) requires State

nonmember banks and State savings associations with one or more classes of securities subject to

the registration provisions of Section 12(b) or 12(g) of the Exchange Act to file, with the FDIC,

“[t]he applicable forms for annual, quarterly, current, and other reports . . . codified in 17 CFR

part 249. . . . titled with the name of the FDIC instead of the SEC” (emphasis supplied). 192 The

Federal Housing Finance Administration requires a Federal housing enterprise to make certain

public disclosures “no later than 10 business days after an Enterprise files its corresponding

Annual Report on SEC Form 10-K at the end of a fiscal year or its corresponding Quarterly

Report on SEC Form 10-Q at the end of other calendar quarters.” 193 The Office of the

Comptroller of the Currency 194 will deem offers or sales of national bank or Federal savings

association issued nonconvertible debt to be in compliance with certain regulations if a number

of requirements are met, including that each purchaser receives an offering document that

contains, among other things, the national bank’s, the Federal savings association’s, or the

holding company’s (where the national bank or Federal savings association is a subsidiary of a

holding company with securities registered under the Exchange Act) Forms 10-K, 10-Q, and 8-K

filed under the Exchange Act.




192
      12 CFR 335.311(a).
193
      12 CFR 1240.62; 12 CFR 1240.205.
194
      12 CFR 16.6(a)(5).

                                                     83

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Outside of regulations specific to the financial services industry, the Department of

Commerce requires a firm petitioning for certification of eligibility for trade adjustment

assistance to submit information, including its most recent Forms 10-Q or 10-K, as appropriate,

for the entire period covered by the petition. 195 The Nuclear Regulatory Commission provides

that certain licensees and permit holders that submit Form 10-Q are not subject to other filing

requirements. 196

                            d) State Law

          Several states have adopted laws (statutes or administrative regulations) referring to Form

10-Q. In some cases, Form 10-Q is listed as one of a number of forms that must be submitted to

the state, if required to be filed with the Commission, 197 or the law requires submission of either

the 10-Q or substitute information. 198 In other cases, State laws permit entities to submit Form

10-Q to avoid other State financial reporting requirements, 199 or the timing of State law

requirements or exemptions is linked to the timing of entities’ Form 10-Q filings. 200 Other State




195
      13 CFR 315.7(b)(5).
196
      10 CFR 50.71(b); 10 CFR 72.80(b).
197
      See, e.g., 239 Mass. Code Regs. 239.04 (operator must maintain records of “any securities filings . . . including,
      but not limited to . . . forms S-1, 8-K, 10-Q, and 10-K, proxy or information statements and all registration
      statements”); 26 Del. Admin. Code § 1002D-3.0 (applicant for approval to issue securities must file most recent
      Form 10-K and 10-Q “if the applicant is required to make such filings by the Securities and Exchange
      Commission”).
198
      See, e.g., Va. Code Ann. § 56-539 (applicant for certificate of authority must provide Forms 10-K and 10-Q or
      “other financial information demonstrating . . . financial fitness”); Conn. Agencies Regs. § 16-47-2 (application
      must include most recent Forms 10-K and 10-Q “or comparable information if the applicant is not required to
      submit the identified document” to the Commission).
199
      See, e.g., N.H. Rev. Stat. § 361-A19 (retail sales finance company or retail seller may submit Form 10-Q and
      10-K “in lieu of” prescribed financial statements); Fla. Admin. Code r. 25-8.003 (public utility may provide,
      inter alia, financial statements and accompanying footnotes from most recent Form 10-Q “in lieu of” prescribed
      financial statements).
200
      See, e.g., Mo. Code Regs. Ann. tit. 15, § 30-54.220 (exemption from certain State securities law requirements
      where the issuer makes available quarterly reports “prior to or as soon as practicable following the company’s
      filing of its Form 10-Q with the SEC”).

                                                                84

--- page 85 ---

laws categorize entities based on the contents of their Form 10-Q filings, 201 affirmatively require

entities to submit Form 10-Q in connection with State approvals (or to submit the more recent of

Form 10-Q or 10-K), 202 or make the submission of Form 10-Q a condition for obtaining a

regulatory exemption or safe harbor. 203 These provisions of State law might affect reporting

companies’ incentives to continue filing quarterly reports on Form 10-Q instead of semiannual

reports on proposed Form 10-S. Over time, however, states may revise their corporate law

requirements to accommodate for semiannual reporting.

               2. Affected Parties

          The proposed amendments would directly affect Exchange Act reporting companies that

currently must file quarterly reports on Form 10-Q pursuant to Exchange Act Rule 13a-13 or

Exchange Act Rule 15d-13, 204 which excludes investment companies other than business

development companies and face-amount certificate companies, foreign private issuers filing

annual reports on Form 20-F or Form 40-F, and asset-backed issuers. 205 We estimate that 5,976

Exchange Act reporting companies, including 133 business development companies and 2 face-



201
      See, e.g., Del. Code Ann. tit. 30, § 1901 (for State law purposes, a “worldwide headquarters corporation” is one
      that has recorded the site of its principal executive office within the state on Form 10-Q).
202
      See, e.g., 30 Tex. Admin. Code § 305.50 (applicant for permit, if a publicly traded entity, shall submit “a copy
      of . . . Form 10-Q for the most recent quarter”); La. Admin. Code tit. 42, pt. III, § 2525 (shelf application based
      on a publicly traded company’s stock equity “as reported in its most recent report on Form 10-K or Form 10-Q”
      filed with the Commission); Nev. Gaming Reg. § 16.115 (application for approval of a continuous or delayed
      public offering based on stockholder’s equity as reported in entity’s “most recent report on Form 10-K or Form
      10-Q”); 02-031 Me. Code R. Ch. 730, § 8 (insurer must submit its “most recent Form 10-K (and Forms 10-Q
      since the date of the 10-K) and proxy statement” if registered with the Commission).
203
      See, e.g., Ga. Code Ann. § 7-1-1001 (exemption from mortgage lender licensing requirements based, in part, on
      market capitalization “disclosed in the most recent Form 10-Q” filed with the Commission); Tex. Admin. Code
      § 25.271 (safe harbor for certain investments where a holding company adheres to a covenant to file a quarterly
      report of aggregate investments “from the company’s most recent SEC form 10-Q”).
204
      We note that, because Exchange Act reporting companies are owned by investors, any effects on reporting
      companies as a result of the proposed amendments would ultimately accrue to investors.
205
      Besides current reporting companies, non-reporting companies that are planning or considering registered
      securities offerings and thereby would become Exchange Act reporting companies upon effectiveness of the
      registration statement would also be affected by the proposed amendments.

                                                                85

--- page 86 ---

amount certificate companies, filed on domestic forms during calendar year 2024 (“CY2024”)

and are required to file quarterly reports on Form 10-Q. 206 Affected parties also include

independent public accountants that review the financial statements in connection with quarterly

report filings; investors that use the information in the quarterly reports to inform investment

decisions; and other market participants and intermediaries (e.g., financial analysts, investment

advisers, underwriters, government agencies) that process and analyze quarterly reports to

produce research reports, ratings, or other datasets used by issuers or investors. The proposed

amendments could also affect other parties, such as companies who are competitors of Exchange

Act reporting companies currently required to file Form 10-Q. In addition, the proposed

amendments would directly affect filers of certain Securities Act and Exchange Act registration

statements as they would be required to check a box to indicate whether they have elected to file

semiannual reports. In CY 2024, we estimate that 933 Forms S-1 were filed, 1,574 Forms S-3

were filed, 193 Forms S-4 were filed, 13 Forms S-11 were filed, and 87 Forms 10 were filed. 207

          Among the affected Exchange Act reporting companies, we expect there is heterogeneity

in terms of both costs of and demand for quarterly financial information due to, for example,

differences in regulatory environment, exchange listing status, industry, or other company

characteristics. For example, if there is a significant fixed cost component of quarterly reporting




206
      This number of registrants is estimated as the number of unique registrants, identified by Central Index Key
      (CIK), that filed a Form 10-K, or an amendment thereto during calendar year 2024, which we see as an
      appropriate estimate of the companies with ongoing reporting duties that would be required to file interim
      reports on either Form 10-Q or the proposed Form 10-S. We recognize that registrants that have filed effective
      registration statements but not yet filed a Form 10-K would also have interim reporting duties and that
      registrants that have deregistered following their Form 10-K filing would cease to have interim reporting duties,
      but, because the inflow and outflow of companies with reporting duties is a continuous process, we view the
      number of companies that have filed a 10-K as a reasonable estimate of the number of companies that would be
      affected by the proposed amendments.
207
      Estimates are based on the number of unique registered offerings filed on EDGAR in CY 2024.

                                                               86

--- page 87 ---

costs, smaller companies, such as smaller reporting companies, 208 may face a disproportionate

compliance burden compared to larger companies. On the other hand, due to the smaller size of

operations, smaller companies may face lower costs associated with gathering, processing,

verifying, and integrating information from across their operations as compared to the costs for

larger companies. Smaller reporting companies can also take advantage of certain scaled

disclosure requirements when filing Form 10-Q, which incrementally could reduce the costs of

Form 10-Q reporting for smaller reporting companies compared to other reporting companies. 209

          Because of differences in regulation and other market characteristics (such as investor

composition), Exchange Act reporting companies that are listed on a national securities exchange

may be differentially affected compared to reporting companies whose securities trade only over-

the-counter (or, in some cases, are not traded at all). For example, exchange-listed companies are

likely to have more widespread professionally managed fund ownership and greater coverage by

financial analysts, and, as result, may face greater demand by financial professionals for the

quarterly information currently provided in Form 10-Q, even though the proposal would permit

these companies to elect to report semiannually on Form 10-S. 210 We estimate that around 4,300

(72%) of the CY2024 Exchange Act reporting companies had securities listed on either Nasdaq


208
      We estimate that 2,933 (49.1%) of the CY2024 Exchange Act reporting companies required to file quarterly
      reports are smaller reporting companies. This estimate is based on reporting companies’ self-reported smaller
      reporting company status on the cover pages of their CY2024 annual filings. There were five reporting
      companies for which there was not sufficient information provided on the cover page of their CY2024 annual
      filings to determine their smaller reporting company status.
209
      See supra notes 174 and 175 and associated text.
210
      Consistent with demand among institutional asset managers and analysts for the information disclosed in Form
      10-Q, even in the presence of earning releases, a 2019 CFA Institute survey of its global membership found that
      50% of respondents (N=705) strongly agreed or agreed that “quarterly reports are more important to investors
      than earnings releases” (while 37% strongly disagreed or disagreed and 13% had no opinion) and 91% of
      respondents strongly agreed or agreed that “quarterly reports are important to investors because they include
      incremental financial statement disclosures and management discussion and analysis.” See Mohini Singh &
      Sandra Peters, The Case for Quarterly and Environmental, Social, and Governance Reporting (2019) (“2019
      CFA Survey”), available at https://rpc.cfainstitute.org/sites/default/files/-/media/documents/survey/financial-
      reporting-quarterly-and-esg-2019.pdf.

                                                              87

--- page 88 ---

or NYSE exchanges. In addition, current Nasdaq and NYSE listing standards explicitly reference

quarterly financial reporting. 211

          Currently, a company raising external capital in a securities offering (whether registered

or exempt) may face demand for quarterly financial information from underwriters and other

requesting parties. 212 Underwriters or other requesting parties also frequently request a comfort

letter from an independent public accountant prior to offers or sales of securities. 213 Under

current PCAOB standards, the independent public accountant is required to have performed an

audit or interim review in order to provide negative assurance in the comfort letter regarding the

interim financial information, and the independent public accountant can only provide negative

assurance level of comfort on other subsequent period information that is as of a date less than

135 days from the end of the most recent period audited or reviewed. 214 Given this practice, even

if only semiannual reporting is required, depending on the timing of the offering during the fiscal

year, an underwriter may request a review of more recent interim financial statements than those

included in the last semiannual or annual report in order to obtain negative assurance comfort in

a timely manner (or delay the offering until negative assurance can be obtained from the next set




211
      See supra section V.C.1. We estimate that more than 1,750 (29%) of the CY2024 Exchange Act reporting
      companies had securities listed on NYSE. Some of these companies may decide not to switch to semiannual
      reporting under the proposed amendments until NYSE makes conforming changes to its listing standards by
      filing a proposed rule change, pursuant to Section 19(b) of the Exchange Act and Rule 19b-4 thereunder, for
      Commission review.
212
      See, e.g., letter from New York City Bar (Apr. 10, 2019) (“NY Bar 2019”) ( “[W]e suspect that investors would
      continue to demand quarterly reporting, even if the Commission’s rules allowed for semi-annual reporting. We
      note by way of analogy that the Rule 144A debt markets generally require quarterly financial reporting as a
      contractual matter, even though many debt issuers are not subject to the periodic reporting requirements of the
      Securities Exchange Act of 1934, as amended.”).
213
      See supra note 90 for a description of such “comfort letters.”
214
      See supra note 191 and associated text.

                                                                88

--- page 89 ---

of financial statements scheduled to be filed under the periodic reporting requirements). 215 Thus,

companies needing to raise external capital in a securities offering may have incentives to

continue to file Form 10-Q under the proposed amendments to meet underwriting process

demands, as discussed in more detail below.

          In addition, companies issuing notes or bonds or raising other types of debt may face a

contractual demand for quarterly financial information during the lifetime of the bond or loan, 216

and such demand may persist also under the proposed amendments. Syndicated loans almost

invariably include loan covenants based on financial information and may require firms to

submit Commission filings to the lenders. Recent evidence suggests that financial information is

becoming more informative to debt markets. Specifically, one study finds that financial numbers

(e.g., earnings, liabilities, etc.) are increasingly capable of predicting bond valuation and returns,

and concludes that this greater association implies greater relevance of financial disclosures for

lenders in recent years. 217 Some studies, however, have found that lender reliance on financial

information declines when the quality of information declines, and, when this happens, debt

contract design shifts to rely on other sources of risk mitigation, such as external credit ratings

over which managers have less direct control. 218 Thus, reporting companies with significant debt




215
      See, e.g., letters from Grant Thornton LLP (Mar. 15, 2019); PriceWaterhouseCoopers LLP (Mar. 18, 2019);
      Center for Audit Quality (Mar. 20, 2019); Crowe LLP (Mar. 20, 2019) (“Crowe 2019”); BDO 2019; Marcum
      2019; KPMG LLP (Mar. 21. 2019) (“KPMG 2019”).
216
      See, e.g., letter from CIT Group Inc. (Mar. 21, 2019) (stating, “In our view, benefits of quarterly reporting in
      comparison to semi-annual reporting include:…(iii) the provision of financial data for quarterly updates
      required by certain private and public debt facility agreements.”).
217
      See, e.g., Dan Givoly et al., The Changing Relevance of Accounting Information to Debt Holders over Time, 22
      Rev. Acct. Stud. 64 (2017) (finding R2 values of accounting based bond valuation models increase significantly
      from 1975 through 2013, and that this increase in association is likely related to accounting standards becoming
      more conservative and shifting towards more fair value emphasis on the balance sheet).
218
      See, e.g., Anna M. Costello & Regina Wittenberg-Moerman, The Impact of Financial Reporting Quality on
      Debt Contracting: Evidence from Internal Control Weakness Reports, 49 J. Acct. Rsch. 97 (2011).

                                                                89

--- page 90 ---

financing needs may have incentives to provide quarterly financial statements, even if not

mandated under the Exchange Act.

          As discussed above, other Federal agency regulations or State laws may reduce the

incentives to switch to semiannual reporting under the proposed amendments for companies for

which those specific provisions are applicable unless conforming changes are made. 219 For

example, we estimate that 143 CY2024 Exchange Act reporting companies are national banks or

Federal savings institutions chartered and regulated by the Office of the Comptroller of the

Currency (“OCC”), 220 and, therefore OCC regulations that deem certain information to be

provided when Form 10-Q filings are included in offering documents in connection with sales of

non-convertible debt are relevant to these firms. 221

          In addition, Exchange Act reporting companies in different industries could be

differentially affected by the proposed amendments due to differences in industry characteristics

that may affect the propensity to continue to provide disclosures of quarterly financial

information on Form 10-Q. For example, commenters have noted that pre-revenue biotechnology

companies’ securities may trade more based on the outcome of clinical developments and

regulatory events than their quarterly financial reporting. 222 Conversely, companies in other

industries or with different investor bases may find that more frequent reporting better serves

their needs.




219
      See supra Section V.C.1.
220
      This estimation is based on the reporting companies’ self-reported SIC codes provided in their annual filings,
      i.e., whether they report having SIC codes of 6021 (National Commercial Banks) or 6035 (Savings Institution,
      Federally Chartered).
221
      See supra note 194 and associated text.
222
      See supra note 141.

                                                              90

--- page 91 ---

3. Compliance Costs of Form 10-Q Requirement

          Commenters have highlighted several categories of costs of complying with the current

Form 10-Q requirement, such as: (1) overall internal resources expended on interim report

preparation (including time spent by employees and board members and employment of

dedicated staff for reporting), 223 (2) specific timing issues and burdens of closing the accounting

books for the period, 224 (3) legal counsel fees, 225 (4) external accounting advice fees, 226 (5)




223
      See, e.g., letters from Arthur Gallagher & Co. (Mar. 14, 2019) (“the most significant cost, which is more
      difficult to quantify, is the time and effort expended by our colleagues, management team, and Board
      members.”); Society for Corporate Governance (Apr. 19, 2019) (“Society for Corporate Governance 2019”)
      (member survey responses to a question asking how quarterly reporting may be burdensome or complex said:
      (1) “Each quarter, the quarterly earnings process consumes a significant amount of our company’s legal and
      accounting resources.”; (2) “It takes a large team of accountants a long time to put together all the financial
      statements, notes, MD&A…”; (3) “Time consuming; involving lots of companies/functions/departments.”; (4)
      “Finance team takes several weeks to draft and finalize the 10Q, facilitate auditors’ review, circulate draft to
      Audit Committee, etc.”; (5) “Requires significant manhours and coordination amongst various internal groups
      (segment finance, corporate finance, tax, legal, [investor relations]).”; (6) “Requires a dedicated team of five
      full time employees, plus an internal review team of eight employees, plus the review time of the Disclosure
      Committee (13 employees).”; (7) “Substantial data collection and analysis requires headcount that is not
      productive (doesn’t add to revenues and represents cost without concomitant value)”); U.S. Chamber of
      Commerce Center for Capital Markets Competitiveness (Mar. 21, 2019) (“Chamber of Commerce 2019”)
      (“Assembling a Form 10-Q is an arduous task, even at the largest public companies. Time and attention of
      senior management and the board of directors that could be devoted to other pursuits are instead diverted to the
      preparation and review of the filing.”).
224
      See, e.g., Society for Corporate Governance 2019 (member survey responses to a question asking how quarterly
      reporting may be burdensome or complex said: (1) “Struggles of very short period to close books to produce the
      information to report both earnings and file 10-Q”; (2) “Consumes a large amount of resources to close
      books…”; (3) “Constant pressure to promptly close books to prepare the releases and 10-Q”).
225
      See, e.g., letters from Biotechnology Innovation Organization (Mar. 21, 2019) (“Biotechnology Innovation
      2019”); James Angel (Mar. 22, 2019); Society for Corporate Governance 2019.
226
      See, e.g., Biotechnology Innovation 2019 (quarterly reporting costs include “external consulting assistance on
      technical accounting matters”).

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auditor review fees, 227 (6) costs for XBRL data tagging, 228 and (7) distraction and opportunity

costs (i.e., valuable actions forgone because of time and money spent on interim reports). 229

          Commenters have also provided specific cost estimates. In particular, one stock exchange

provided cost estimates from a survey of a sample of listed companies as of March 2019. 230 In

terms of time spent by the survey respondents’ employees on complying with quarterly reporting



227
      See, e.g., letters from Biotechnology Innovation 2019 (quarterly reporting costs include “significant costs for
      external legal and independent auditor reviews”); Pacira Pharmaceuticals, Inc. (Mar. 18, 2019) (“Pacira
      Pharmaceuticals 2019”) (noting that auditor review costs include “significant supporting documentation
      required by the PCAOB and in turn by our auditors” and that there are “significant costs for the review of the
      10‐Q by the Company’s independent accounting firm on a quarterly basis”); Society for Corporate Governance
      2019.
228
      Letters from Biotechnology Innovation 2019 (“XBRL data is little-used by biotech investors, yet the costs of
      preparing the data remain significant for smaller registrants. Thus, the cost of XBRL requirements are high for
      small and emerging biotech companies, while the benefits are low for investors.”); Chamber of Commerce 2019
      (suggesting the Commission should “reevaluate the entities it requires to report using eXtensible Business
      Reporting Language (XBRL),” noting that “the cost-benefit of this requirement hasn’t been fully realized,
      particularly for smaller and newly public companies who bear the reporting burden in this technical format
      more disproportionately,” and noting that burdens associated with XBRL include “cost, personnel, additional
      liability, and increased time and documentation to conduct extensive reviews” before submitting filings);
      Nasdaq 2019; SIFMA (Mar. 21, 2019) (“SIFMA 2019”) (suggesting that “the Commission should eliminate its
      XBRL requirements, including its recently adopted Inline XBRL [iXBRL] requirements” and noting that “we
      do not believe that iXBRL sufficiently addresses concerns that the time and expense of preparing XBRL data
      may outweigh its benefit to investors”).
229
      See, e.g., letters from Ball Corporation (Feb. 25, 2019) (“The cycle of preparing quarterly 10-Q
      filings…distracts management from activities that would generate returns for investors.”); Biotechnology
      Innovation 2019 (“Investors, companies, and other market participants would benefit from management teams
      and company personnel to focus their attention on strategic efforts to grow the business rather than
      administering frequent reporting obligations. In addition, companies would incur reduced costs in preparing and
      obtaining legal and auditor review of those quarterly filings, which would enable them to repurpose funds into
      other strategic investments to grow the company and improve outcomes for investors.”); Chamber of
      Commerce 2019 (“Semi-annual reporting would afford more time for the organization, especially its financial
      and management teams, to spend on value adding activities and projects.”); Pacira Pharmaceuticals 2019
      (discussing that the costs of preparing interim financial statements and of auditor review are “both a financial
      cost and an opportunity cost in the time and dollars which could be directed towards other value‐added
      activities.”); Society for Corporate Governance 2019 (member survey responses to a question asking how
      quarterly reporting may be burdensome or complex said: (1) “The quarterly close/filing process requires the
      attention/focus on too many employees. It makes it difficult to do any other transaction during the same
      period.”; (2) “Imposition [on] Board of Directors who could otherwise use the time to support company’s
      strategic development”; (3) “Management focus / distraction from running the business”; (4) “Time consuming,
      diverts time from management of operations and strategy planning and execution.”).
230
      See study provided in Nasdaq 2019. The study is based on responses from a sample of up to 187 companies (the
      number or respondents varied across questions) that responded to the commenter’s solicitation of feedback on
      topics relating to the quarterly disclosure process. The study did not provide any characteristics of the
      companies that provided survey responses.

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requirements each quarter, the survey results indicated an average of 853 hours and median of

300 hours spent, with a maximum of 20,000 hours spent. 231

          In terms of monetary costs, the survey results indicated average monetary compliance

costs (direct and indirect costs) each quarter of $334,698 and median of $75,000, with a

maximum cost of $7,000,000. 232 Adjusting these cost estimates for inflation would be equivalent

to average (median) costs of approximately $426,700 ($95,600) and the maximum cost reported

would be approximately $8,923,500, as of December 2025. 233 The survey also provided

monetary cost estimates specifically for XBRL data tagging. The survey respondents reported

average (median) XBRL tagging costs of $20,412 ($7,500), with a maximum reported cost of

$350,000, as of March 2019. Adjusted for inflation the average (median) reported XBRL tagging

cost would be approximately $26,000 ($9,600) and the maximum reported cost would be

approximately $446,200, as of December 2025. 234




231
      See Nasdaq 2019 (responses by 164 listed companies to a question “approximately how many hours would you
      estimate your employees spend each quarter in total to comply with quarterly reporting requirements”). See also
      letters from Daktronics (March 19, 2019) (“Daktronics 2019”) (“Daktronics expends over 1,000 hours…per
      quarter complying with quarterly 10-Q requirements.” (emphasis omitted)); Arthur Gallagher 2019 (“Every
      three months, our company spends thousands of hours gathering, analyzing, and preparing information for our
      mandatory periodic disclosures.”).
232
      See Nasdaq 2019 (estimates based on responses by 151 listed companies to a question “approximately how
      much money (direct and indirect costs) do you estimate your company spends each quarter to comply with
      quarterly reporting requirements (i.e. outside counsel, vendors, etc.)”). See also Daktronics 2019 (“Daktronics
      expends…approximately $100,000 dollars per quarter complying with quarterly 10-Q requirements.” (emphasis
      omitted)).
233
      We adjust the estimates for inflation by inflating the originally reported estimates by the proportional increase
      in the Consumer Price Index for All Urban Consumers from March 2019 (the month of release of the NASDAQ
      survey) through December 2025 (the latest available data point at the time of this calculation). The Consumer
      Price Index for All Urban Consumers is the statistical metric developed by the Bureau of Labor Statistics of the
      Department of Labor to monitor the change in the price of a set list of products. This index represents changes
      in prices of all goods and services purchased for consumption by urban households. See U.S. Bureau Lab. Stat.,
      Consumer Price Index (Feb. 9, 2026), available at https://www.bls.gov/cpi. The actual change in the
      compliance costs over this time period may be different and these inflation adjusted estimates are provided
      solely for illustrative purposes.
234
      See supra note 233.

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To our knowledge, there are no readily available estimates of the incremental cost of the

mandated auditor review of Form 10-Q. 235 One academic study, however, using data from

Canada, where auditor review of interim financial statements of public companies is voluntary,

compared total disclosed annual audit fees between companies providing quarterly reviews and

those that did not, and estimated that audit fees were 18 percent higher for firms with interim

reviews, controlling for the decision to purchase interim reviews and for variables associated

with annual audit fees. 236 Taking this finding at face value, that difference implies that each

quarterly review on average cost 6% (18% divided over three quarters) of the cost of the annual

audit, which means a company on average could potentially save a monetary amount equivalent

to 12% of the cost of the annual audit by switching to semiannual reporting. Such cost savings

would be reduced to the extent that review costs for fiscal quarters one and three would transfer

to the semiannual review or annual audit.

               4. Earnings Release Practices and Prevalence

          Exchange Act reporting companies required to file Form 10-Q may also voluntarily

communicate certain quarterly financial results through earnings releases. Many academic




235
      In connection with the solicitation of proxies related to the election of directors and the election, approval or
      ratification of a registrant’s accountant, a registrant’s proxy statement must include, among other things, the
      disclosure of the “aggregate fees” billed for each of the last two fiscal years for the audit of the registrant’s
      financial statements and the review of interim financial statements included in Form 10-Q (or services that are
      normally provided in connection with statutory and regulatory filings). See Schedule 14A, Item 9(e)(1). There is
      no requirement to separately disclose the fees billed for the review of the interim financial statements. The fees
      related to the review of interim financial statements included in Form 10-Q typically do not make up a
      significant portion of a registrant’s total audit fees, however, there may be some variation in proportion
      depending upon the size of the registrant.
236
      See Jean Bédard & Lucie Courteau, Benefits and Costs of Auditor’s Assurance: Evidence from the Review of
      Quarterly Financial Statements 32 Contemp. Acct. Rsch. 308 (2015). See also Keren Bar-Hava, Switching to
      Semi-annual Financial Statement Reports - Market Reaction, Audit Fee and Corporate Governance Quality, 9
      J. Fin. & Acct. 249 (2021), available at https://doi.org/10.11648/j.jfa.20210906.15 (finding a significant
      decrease of 19.8% in the number of external auditing hours and a significant decrease of 16% in the annual
      external total audit fee for small cap firms publicly traded on the Tel-Aviv stock exchange that switched to
      semiannual reporting following a rule change allowing a switch from quarterly to semiannual reporting).

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studies have found that markets react strongly to the information released in these voluntary

disclosures, even more so when the releases also contain other information such as managerial

forecasts or guidance, or when accompanied by an earnings related conference call. 237 Some

studies have compared the market responses around earnings releases with those around the

filing of the associated interim reports for the same period, finding that markets generally react to

the information when it is first disclosed, but less so when it is subsequently repeated. 238 For

example, there might be a significant reaction to news in the earnings release but not to the Form

10-Q filed a week later, even though they both reflect the same financial information. As

discussed in more detail in Section II above, current Item 2.02 of Form 8-K requires earnings

releases to be furnished to the Commission under the cover of Form 8-K.

          Table 1 below shows statistics on the frequency of such earnings releases associated with

Form 10-Q and Form 10-K filings for the sub-sample of CY2024 Exchange Act reporting

companies that had a complete set of quarterly filings for their latest reported fiscal year in



237
      See, e.g., Linda Smith Bamber, Unexpected Earnings, Firm Size, and Trading Volume around Quarterly
      Earnings Announcements, 62 Acct. Rev. 510 (1987) (finding that significant abnormal trading volume around
      quarterly earnings announcements is positively related to the magnitude of unexpected earnings, implying
      markets react to the novel financial information disclosed); Wayne Landsman & Edward Maydew, Has the
      Information Content of Quarterly Earnings Announcements Declined in the Past Three Decades? 40 J. Acct.
      Rsch. 797 (2002) (finding that information content in quarterly earnings announcements, as measured by both
      abnormal trading volume and return volatility, has increased over the latter half of the 20th century); William H.
      Beaver et al., Increased Market Response to Earnings Announcements in the 21st Century: An Empirical
      Investigation, 69 J. Acct. & Econ. 101244 (2020) (finding that market responses to earnings announcements
      have increased over the 2001 to 2016 period, and attributing this to the concomitant increase in the practice of
      firms including management guidance, analyst forecasts, and disaggregated financial statement line items with
      their announcements); Dawn Matsumoto et al., What Makes Conference Calls Useful? The Information Content
      of Managers’ Presentations and Analysts’ Discussion Sessions, 86 Acct. Rev. 1383 (2011) (finding that markets
      react to the increasingly common practice of firms hosting a conference call in conjunction with their earnings
      announcement, and that both the prepared remarks and Q&A sections of such calls contain novel information to
      which markets respond).
238
      See, e.g., Edward Xuejun Li & K. Ramesh, Market Reaction Surrounding the Filing of Periodic SEC Reports,
      84 Acct. Rev. 1171 (2009) (“Edward Xuejun Li & K. Ramesh 2009”) (finding that markets do not significantly
      react to Form 10-Q filings when those filings are preceded by an earnings release, implying that earnings
      releases convey sufficient information to markets such that there is no average remaining reaction when the
      interim report is filed later).

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CY2024 (i.e., those who filed a Form 10-Q for the first through third fiscal quarters prior to their

CY2024 10-K filing). As shown in Table 1, reporting companies issue earnings releases in

association with almost three quarters of all quarterly or annual reports. The data also shows that

there is not a significant difference in propensity to issue earnings releases across quarters.

Comparing smaller reporting companies to other (larger) reporting companies, Table 1 shows

that smaller reporting companies issue earnings releases in conjunction with around 56% of

Form 10-Q filings, whereas other (larger) reporting companies’ issue earnings releases in

conjunction with over 90% of their Form 10-Q filings. This difference may indicate that there is

less demand from investors for these voluntary earnings releases for smaller companies. It could

also indicate that smaller reporting companies face greater costs of such disclosures compared to

their larger peers.

Table 1: Frequency of Earnings Releases Around Filings of Quarterly and Annual
Reports 239
                                                           Smaller Reporting        Other (Larger) Reporting
                        All Reporting Companies              Companies                     Companies
                                   Percentage of                  Percentage of               Percentage of
                       Number      Filings with an   Number      Filings with an   Number     Filings with an
                          of         Associated         of         Associated         of        Associated
                       Filings   Earnings Release    Filings    Earnings Release   Filings   Earnings Release
 All quarters           21,820        74.55%          10,680        56.00%         11,140        92.33%
 1st Fiscal Quarter     5,455         74.65%          2,670         56.25%         2,785         92.28%
 2nd Fiscal Quarter     5,455         74.65%          2,670         56.18%         2,785         92.35%
 3rd Fiscal Quarter     5,455         74.87%          2,670         56.59%         2,785         92.39%
 4th Fiscal Quarter     5,455         74.04%          2,670         54.98%         2,785         92.32%
 (Annual Report)




              5. Empirical Evidence on the Informational Value of Form 10-Q Disclosures

          The informational value of quarterly filings has been broadly studied, with results

generally suggesting that the quantitative financial information and qualitative descriptive


239
      The data on earnings releases comes from Calcbench.

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information contained in Form 10-Q filings are both informative but are often preceded by other

disclosures, such as earnings releases. Earnings releases will vary in how much information they

contain relative to Form 10-Q filings. Further, earnings releases do not always reflect

information in the same manner as quarterly filings, for example, by conveying the information

in a more optimistic tone. 240 Consequently, assessing the informational role that quarterly filings

provide requires differentiating between the types and timing of information contained therein.

          Quarterly filings have been found to provide markets with novel information in certain

circumstances. For example, studies find that investors react strongly to abnormally high levels

of “discretionary” accruals in quarterly financial information, to firms updating their quarterly

disclosure of risk factors, and to quarterly reports that contain specific financial information

(e.g., a specific GAAP measure) that is not included in their associated earnings release. 241

Together, this suggests that whether quarterly filings are perceived by markets to contain novel

information likely depends on the specific firms’ facts and circumstances.




240
      See Angela K. Davis & Isho Tama-Sweet, Managers’ Use of Language Across Alternative Disclosure Outlets:
      Earnings Press Releases Versus MD&A, 29 Contemp. Acct. Rsch. 804 (2012).
241
      See, e.g., Steven Balsam et al., Accruals Management, Investor Sophistication, and Equity Valuation: Evidence
      from 10-Q Filings, 40 J. Acct. Rsch. 987 (2002) (finding that firms with higher levels of unexpected
      discretionary accruals, calculated from Form 10-Q financial information, experience lower abnormal stock
      returns, implying that markets react to the novel information in those filings); Joshua J. Filzen, The Information
      Content of Risk Factor Disclosures in Quarterly Reports, 29 Acct. Horizons 887 (2015) (finding firms that
      update the set of risk factors disclosed in their Form 10-Q filings experience lower abnormal stock returns when
      forms are filed, implying that markets react to the novel information in those filings); Raluca Chiorean et al.,
      Investor Reaction to Information Generated Over the Reporting Cycle (Dec. 8, 2025), available at
      https://ssrn.com/abstract=5885082 (retrieved from SSRN Elsevier database) (finding that firms with more
      significant changes to the text of their Form 10-Q filings experience lower stock returns both around the time of
      the filing and over the subsequent quarter. The study concludes that Form 10-Q filings “convey valuable
      information…yet investors often ignore it.”); Yifan Li et al., Opportunity Knocks But Once: Delayed Disclosure
      of Financial Items in Earnings Announcements and Neglect of Earnings News, 25 Rev. Acct. Stud. 159 (2020)
      (finding that firms with proportionately more financial statement items disclosed in Form 10-Q filings that are
      not also disclosed in a separate earnings announcement have relatively larger market reactions to the filings of
      those forms compared to the reaction of those earnings announcements). We view the Yifan Li et al. findings as
      implying that markets are reacting to the financial information when it is learned, whether that be in an earnings
      announcement or a Form 10-Q filing.

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Most of these studies find that the filing of quarterly reports is on average associated with

a significant market return, which suggests that the market is reacting, on average, to novel

information in the filing. Given the common firm practice of reporting earnings separately, in

many cases before the quarterly report is filed, one study, however, cautions against drawing

conclusions about the information in the quarterly report broadly without separating out specific

financial information disclosed in earnings announcements. 242 This study finds that markets only

react to filed quarterly reports when no earnings announcement is disclosed previously. This

suggests that the average market response to quarterly report filings that studies have observed

may be primarily a reaction to the first disclosure of financial information (typically the primary

content of earnings announcements) rather than a reaction to the totality of the information that a

quarterly report comprises, both quantitative and qualitative. Overall, this evidence suggests that,

on average, quarterly filings may not provide markets with novel information, except to the

extent they are the first report of financial performance.

              6. Empirical Evidence on Interim Reporting Frequency

          The evidence on the informational value of Form 10-Qs and associated earnings releases

we discussed in the previous sections does not directly speak to the issue of what reporting

frequency would be optimal for investors and companies. Even if Form 10-Q disclosures have

incremental informational value per se, investors and the reporting companies they own could

still be better off with semiannual reporting. Because all Exchange Act reporting companies have

been mandated to file Form 10-Q quarterly interim reports for more than five decades, it is

difficult to empirically estimate the counterfactual value of semiannual reporting. 243 Some


242
      See Edward Xuejun Li & K. Ramesh 2009, supra note 238.
243
      We discuss broader economic considerations regarding the optimality of different interim reporting frequencies
      in Section V.B.

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studies have attempted to address this issue by examining historical U.S. disclosures prior to and

around the time that mandatory quarterly interim reports took effect in 1970. When considering

the evidence from these studies, we consider that there are limitations to inferences that can be

drawn from such historical U.S. studies due to dramatic changes in institutional investor

participation, technology, market structure, and market competition that have occurred since

then—together, composing a potentially different information environment for reporting

companies today.

          Using the U.S. historical setting, one study examined whether increasing reporting

frequency improves earnings timeliness (i.e., the speed with which accounting information is

reflected in security prices). 244 Differentiating between voluntary changes (firms switching from

semiannual to quarterly reporting) and mandatory changes (Commission mandates), the study

found that firms that voluntarily increased reporting frequency experienced improved earnings

timeliness, whereas there was no significant evidence of improved earnings timeliness for those

companies that were obligated to move to quarterly reporting following the 1970 Commission

mandate of quarterly interim reports. By contrast, another study using a similar historical sample

(1951–1973) covering voluntary and mandatory shifts in U.S. reporting frequency, found that

higher reporting frequency is significantly associated with lower information asymmetry

(measured by bid-ask spread and price impact) and a lower cost of equity capital (measured

using realized returns and factor models), which supports the informational benefits

hypothesized for more frequent disclosure, even when mandated. 245 Other studies have used the


244
      See Marty Butler et al., The Effect of Reporting Frequency on the Timeliness of Earnings: The Cases of
      Voluntary and Mandatory Interim Reports, 43 J. Acct & Econ. 181 (2007) (examining “a [US] sample of
      28,824 reporting-frequency observations from 1950 to 1973”).
245
      See Renhui Fu et al., Financial Reporting Frequency, Information Asymmetry, and the Cost of Equity, 54 J.
      Acct. & Econ. 132 (2012) (“[u]sing hand-collected data on [US] firms’ interim reporting frequency from 1951


                                                             99

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same historical U.S. setting to analyze the relationship between reporting frequency and

corporate investment and innovation and have found that higher reporting frequency is

negatively associated with both investments and innovation and found that this result is

consistent with higher frequency financial reporting inducing myopic corporate behavior. 246

          Other studies provide evidence on how reporting frequency affects firms’ information

environments, market outcomes, and managerial behavior by examining international

jurisdictions that have experienced regulatory changes in the frequency of interim financial

reporting. These studies provide evidence from more recent regulatory changes, but there are

limitations to consider when making inferences from these studies. There are significant

regulatory and institutional differences between the U.S. and the countries examined in these

studies that may alter how companies and market participants respond to changes in reporting

requirements. 247 One of these regulatory differences is that there are significant differences in the

level of information provided in the interim reports across jurisdictions. For example, the type of

quarterly reports that were required in the UK (Interim Management Statements) differed

significantly from Form 10-Qs. In contrast to the requirements of Form 10-Q described above in

Section II, the Interim Management Statements only needed to provide an explanation of


      to 1973” and finding that “higher reporting frequency reduces information asymmetry and the cost of equity,
      and they are robust towards considerations of the endogenous nature of firms’ reporting frequency choice. We
      obtain similar results when we focus on mandatory changes in reporting frequency. Our results suggest the
      benefits of increased reporting frequency.”)
246
      Regarding investments, see Arthur G. Kraft et al., Frequent Financial Reporting and Managerial Myopia, 93
      Acct. Rev. 249 (2018) (“[u]sing the transition of U.S. firms from annual reporting to semiannual reporting and
      then to quarterly reporting over the period 1950–1970” and finding that “increased reporting frequency is
      associated with an economically large decline in investments” and that “the decline in investments is most
      consistent with frequent financial reporting inducing myopic management behavior”). Regarding innovation,
      see Renhui Fu et al., Financial Reporting Frequency and Corporate Innovation, 63 J. Law & Econ. 501 (2020)
      (finding that higher reporting frequency significantly reduces innovation output, consistent with the hypothesis
      that frequent reporting induces managerial myopia).
247
      We refer to “institutional differences” to encompass those differences that do not directly stem from differences
      in regulatory form or functions. Examples of such differences include general market practices, investor
      preferences and behaviors, and levels of engagement.

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material events and transactions that took place during the period and to give a general

description of a firm’s financial position and performance. In fact, one study reported that many

UK firms failed to disclose any sales or earnings figures in their quarterly reports. 248

          While regulatory differences and institutional differences limit direct comparisons to U.S.

markets, the international experience may still highlight potential economic mechanisms relevant

to changes in reporting frequency. Evidence from the EU suggests that reductions in the

mandated frequency of interim reporting can weaken the information environment, for example,

by leading to more selective disclosures. 249 Related research shows lower financial reporting

frequency may increase investors’ reliance on alternative sources of information (e.g., third party

information intermediaries and peer companies), but those sources may not fully offset the

informational loss associated with less frequent reporting. 250

          International evidence also indicates that reporting frequency affects analyst behavior.

Leveraging the UK’s introduction and subsequent relaxation of mandatory quarterly reporting in

2007 and 2014, respectively, studies find that higher frequency of mandatory interim reporting is

associated with increased analyst coverage. 251 Similarly, another study examines firms in Taiwan



248
      Suresh Nallareddy et al., Consequences of More Frequent Reporting: The UK Experience, 6 J. Law, Fin. &
      Acct. 51 (2021).
249
      See, e.g., Tobias Bornemann et al., The Consequences of Abandoning the Quarterly Reporting Mandate in the
      Prime Market Segment, 34 Eur. Acct. Rev. 89 (2025) (finding in the Austrian sample that while only a few
      firms terminated quarterly reporting entirely following the deregulation of quarterly reporting, most firms
      reduced the content of quarterly reports by omitting the notes disclosures).
250
      See, e.g., Salman Arif & Emmanuel De George, The Dark Side of Low Financial Reporting Frequency:
      Investors’ Reliance on Alternative Sources of Earnings News and Excessive Information Spillovers, 95 Acct.
      Rev. 6 (2020) (concluding that “investors are unable to successfully offset the information loss arising from low
      reporting frequency, thus impairing their ability to value firms and adversely affecting the quality of financial
      markets”).
251
      See, e.g., letter from CFA Institute (Mar. 28, 2019) (“CFA Institute 2019”) (noting that a CFA Research
      Institute Report—the 2017 CFA Study of UK, supra note 62—found that analyst following increased after
      imposition of mandatory quarterly reporting in 2007, and that companies that moved to semiannual reporting
      after 2014 without supplementing with voluntary quarterly reports experienced a reduction in analyst coverage).

                                                              101

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and finds that firms that voluntarily disclose monthly earnings attract more analysts and have

more accurate and less dispersed analyst earnings forecasts. 252 One study that uses evidence

across numerous countries shows that mandatory quarterly reporting is associated with lower

analyst forecast errors and lower analyst forecast dispersion relative to semiannual regimes,

particularly in settings with higher information acquisition costs. 253

          There is some evidence that decreasing reporting frequency could reduce short termism.

Overall, however, the effects of reporting frequency on real corporate decisions are mixed.

Evidence from the EU suggests that increasing reporting frequency can exacerbate managerial

short-termism by increasing their manipulation of real business activities. 254 In contrast, studies

using data from the UK and Singapore find little evidence that changes in reporting frequency

materially affect firms’ investment decisions. 255

          D. Benefits and Costs

          The proposed amendments would provide Exchange Act reporting companies with

flexibility regarding the frequency of mandatory periodic reporting by permitting issuers to elect


252
      Shou-Min Tsao et al., Voluntary Monthly Earnings Disclosures and Analyst Behavior, 71 J. Banking & Fin. 37
      (2016).
253
      See, e.g., Andrei Filip et al., Shaping the Information Environment: International Evidence on Financial
      Reporting Frequency and Analysts’ Earnings Forecast Errors, 39 J. Acct., Auditing & Fin. 754 (2024). This
      study uses data from 49 countries to show that a mandatory quarterly reporting regime (as compared to
      semiannual) is associated with lower analysts’ annual earnings forecast errors. Consistent with an improvement
      in the information environment, this study’s findings are more pronounced for firms and analysts subject to
      higher information acquisition costs and in countries where the institutional setting is less able to meet analysts’
      information needs.
254
      See, e.g., Jürgen Ernstberger et al., The Real Effects of Mandatory Quarterly Reporting, 92 Acct. Rev. 33 (2017)
      (finding an increase in real activities manipulations—a measure capturing over-production and a reduction of
      discretionary expenses—for firms mandated to switch from semiannual to quarterly reporting. They conclude
      “this finding is in line with the notion of higher managerial short-termism resulting from increased reporting
      frequency requirements”).
255
      See, e.g., CFA 2017 Study of UK (finding that the imposition of mandatory quarterly reporting had no
      statistically significant impact on firms’ investment decisions); Peter Kajüter et al., The Effect of Mandatory
      Quarterly Reporting on Firm Value, 94 Acct. Rev. 251 (2019) (exploiting a regression discontinuity in
      Singapore, finding that mandatory quarterly reporting reduced firm value for smaller firms but did not generate
      clear informational benefits or induce myopic investment behavior around the reporting threshold).

                                                                102

--- page 103 ---

whether to continue filing quarterly reports on Form 10-Q or to shift to a semiannual reporting

cadence using a new Form 10-S. 256 We do not expect issuers to respond homogeneously to this

flexibility, since they will make reporting decisions based on how they assess the relative costs

and benefits of more or less frequent periodic reporting in their particular circumstances, such as

size, industry, stage of business development, financing needs, contractual obligations, investor

expectations, and other regulatory requirements. 257

          For purposes of our analyses, we distinguish among three categories of issuers based on

how they could respond to the proposed rules. This categorization is intended to facilitate a

clearer assessment of how the incidence and magnitude of costs and benefits may vary across

issuers and market participants.

          Some issuers may elect to provide mandatory periodic disclosures on a semiannual basis,

without systematically providing voluntary disclosure for the first and third quarters. We refer to

these issuers as semiannual reporters. For these issuers, the proposed amendments would

meaningfully alter both the frequency and timing of mandatory and likely voluntary disclosures

relative to the baseline.

          Other issuers may elect to continue filing quarterly reports notwithstanding the

availability of semiannual reporting. These issuers, referred to as quarterly reporters, may do so




256
      The proposed amendments to Regulation S-X would conform the financial statement requirements in periodic
      reports to the semiannual reporting frequency of semiannual filers and help ensure that, among other things,
      when semiannual filers file registration statements, their financial statements in those registration statements are
      not considered “stale” under existing rules built along a quarterly framework and would revise those age
      requirements for registrants that would be semiannual filers to fit with their reporting schedule. We do not
      expect the proposed amendments to Regulation S-X to have an economic impact beyond removing frictions that
      otherwise would have limited the ability of certain reporting companies to transition to semiannual reporting.
257
      See, e.g., Peter Kajüter et al., Consequences of Interim Reporting: A Literature Review and Future Research
      Directions, 31 Eur. Acct. Rev. 209 (2022) (surveying the literature on interim reporting including reporting
      frequency and concluding that while investors perceive interim reports to be useful, there is no clear evidence
      for strong capital market-based benefits of higher reporting frequency, such as increases in liquidity).

                                                                103

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because they perceive limited compliance cost savings from reducing reporting frequency or

because they face investor, contractual, or regulatory expectations favoring quarterly disclosure.

They may also view more frequent reporting as improving the liquidity of their stock, the

valuation of their stock, or their access to capital and not worth the cost savings associated with

less frequent reporting. 258

          Finally, some issuers may elect semiannual reporting for purposes of mandatory periodic

disclosure while continuing to provide voluntary disclosure of information on a quarterly basis

through other channels, such as earnings releases, earnings guidance, or conference calls. They

could even voluntarily provide quarterly financial information in a Form 10-S. 259 These issuers,

referred to as hybrid reporters, occupy an intermediate position between the first two groups. For

these issuers, the proposed amendments may reduce some regulatory compliance costs while

preserving aspects of the quarterly information environment through voluntary disclosures.

          This section discusses the potential economic benefits and costs of the proposed

amendments relative to the baseline of mandatory quarterly reporting for all affected issuers. The

economic effects of the proposed amendments depend in part on issuer reporting choices. As

such, this analysis is organized by issuer reporting category to reflect heterogeneity in issuer

responses as well as to clarify how costs and benefits may accrue differently to issuers, investors,

and other market participants. It is important to note that reporting companies would likely

choose the reporting category (i.e., semiannual reporter, quarterly reporter, or hybrid reporter)

that is optimal for them after weighing the perceived benefits and costs that they would

experience as a result of their decision.



258
      See supra notes 139 and 140.
259
      See supra note 86.

                                                     104

--- page 105 ---

While it is difficult to predict which reporting category particular issuers will choose, we

discuss factors that could potentially affect issuers’ choice of reporting frequency in Section

V.D.4 below. With that in mind, on average, for each issuer that switches to semiannual

reporting, we estimate annual direct compliance costs per issuer associated with filing three

Form 10-Q’s to be $330,000 260 and the annual compliance costs per issuer associated with filing

one Form 10-S to be $132,000. 261 Hence, for issuers that choose to provide semiannual reports in


260
      The $330,000 estimate is calculated by multiplying the compliance costs associated with filing a single Form
      10-Q by 3. We estimate that direct compliance costs associated with filing each Form 10-Q is $110,000 rounded
      to the nearest thousand and is based on the following calculations: 135.14 burden hours per response (Form 10-
      Q Current Burden Hours (2,624,187) divided by Form 10-Q Current Annual Responses (19,419), rounded to the
      second decimal place) x $616 per hour + $27,027 external costs per response (Form 10-Q Current Cost Burden
      ($524,837,313) divided by Form 10-Q Current Annual Responses (19,419)). For additional details on estimates
      of burden hours, see infra Section VI (Paperwork Reduction Act analysis). The $616 per hour rate reflects our
      current estimate of the blended hourly rate for lawyers ($744), accountants and auditors ($348), financial
      managers ($731), and general and operations managers ($666). We expect that the types of individuals, the rates
      for those individuals, and the proportion of each individual’s contributions would vary among issuers and could
      differ depending on which specific form an issuer is completing. Nonetheless, for purposes of this economic
      analysis, we believe the $616 per hour rate is a reasonable estimate of the hourly cost of completing Form 10-Q
      and Form 10-S. To calculate the occupational hourly rates used in this release, we used occupational mean
      hourly wage data from the Occupational Employment and Wage Statistics (OEWS) program of the U.S. Bureau
      of Labor Statistics (BLS) for the private sector. See Occupational Employment and Wage Statistics, U.S.
      Bureau of Labor Statistics, available at https://www.bls.gov/oes/. See also Standard Occupational
      Classification, U.S. Bureau of Labor Statistics, available at https://www.bls.gov/soc/ (describing occupational
      classification system used by BLS); OMB, North American Industry Classification System (2022), available at
      https://www.census.gov/naics/reference_files_tools/2022_NAICS_Manual.pdf (describing the industry
      classification system used by BLS and other agencies). The mean hourly wage for each occupation is adjusted
      for changes in the seasonally adjusted employment cost index for private wages and salaries between the data
      reference period and when the data are released by BLS. See Employment Cost Index, U.S. Bureau of Labor
      Statistics, available at https://www.bls.gov/eci/. The adjusted mean hourly wage is then multiplied by a factor
      that accounts for nonwage costs borne by employers, such as bonuses, benefits, and overhead. This factor is
      calculated as an average over the 10 most recently available years of data of the ratio of the Bureau of
      Economic Analysis’s annual gross output data for the private sector to total annual wages across all occupations
      for the private sector in the OEWS data. See Gross Output by Industry, U.S. Bureau of Economic Analysis,
      available at https://www.bea.gov/data/industries/gross-output-by-industry; Occupational Employment and
      Wage Statistics, supra. The final product is the occupational hourly rate. See generally U.S. Securities and
      Exchange Commission Staff, Updated Methodology for Calculating Occupational Hourly Rates (Dec. 19,
      2025), available at https://www.sec.gov/files/method-occupational-hourly-rates.pdf.
261
      The $132,000 estimate is rounded to the nearest thousand and is based on the following calculations: 162.18
      burden hours per response (Requested Form 10-S Burden Hours (193,808) divided by Requested Annual
      Responses (1,195), rounded to the second decimal place) x $616 per hour + $32,432 external costs per response
      (calculated as: $27,027 (the cost burden number per Form 10-Q—which is calculated as the Form 10-Q Current
      Cost Burden ($524,837,313) divided by Form 10-Q Current Annual Responses (19,419)) times 1.2
      (representing the incrementally greater burden of Form 10-S we estimate as compared to Form 10-Q). For
      additional details on estimates of burden hours, see infra Section VI (Paperwork Reduction Act analysis). For
      additional details on occupations involved, see supra note 260.

                                                              105

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lieu of quarterly reports, we estimate a net reduction in direct compliance costs equal to

$198,000 per fiscal year. As discussed below, there are additional cost savings that could not

reasonably be quantified. In addition to these cost savings, all filers of certain Securities Act and

Exchange Act registration statements and of Form 10-K would incur the cost of either checking

or not checking the semiannual box on the associated forms. We estimate that the direct

compliance cost per filing of completing the semiannual box when filing Securities Act

registration statements on Forms S-1, S-3, S-4, and S-11, Exchange Act registration statements

on Form 10, and annual reports on Form 10-K to be $123. 262

               1. Semiannual Reporters

                            a) Potential Benefits

          Issuers that elect to shift from quarterly to semiannual reporting are expected to realize

direct compliance cost savings from forgoing the preparation, review, and filing of quarterly

reports on Form 10-Q for the first and third quarters. These savings may include reductions in

internal staff time (including time spent by employees and board members) devoted to gathering,

processing, and presenting interim financial information, as well as investor relations and post-

earnings release events such as quarterly earnings conference calls. The savings may also include

lower expenditures on external legal counsel, accounting advisors, and other professional service

providers. Semiannual reporters may also avoid certain costs associated with auditor reviews of

interim financial statements and with structured data tagging requirements applicable to Form

10-Q filings. A detailed discussion of costs of complying with the current Form 10-Q




262
      The $123 estimate is rounded to the nearest dollar and is based on the following calculation: 0.2 burden hours
      per response x $616 per hour. For additional details on estimates of burden hours, see infra Section VI
      (Paperwork Reduction Act analysis). For additional details on occupations involved, see supra note 260.

                                                              106

--- page 107 ---

requirement, and therefore potential direct compliance cost savings for issuers that elect to shift

from quarterly to semiannual reporting can be found in Section V.C.3 above.

          In response to the Commission’s 2018 Request for Comment on Quarterly Earnings and

Reporting, several commenters expressed the view that smaller issuers should be able to provide

disclosure less frequently. 263 To the extent that ongoing compliance costs include a fixed

component, the relative impact of these savings may be greater for smaller issuers and issuers

with simpler operations. Other commenters, however, argued that more frequent reporting is

critical for smaller companies as well as emerging growth companies given that their information

environment is generally more opaque. 264

          Semiannual reporters may also realize indirect benefits. Reducing the frequency of

mandatory periodic reporting may lessen managerial distraction associated with quarterly



263
      See, e.g., letters from Ernst & Young LLP (Mar. 21, 2019) (“Ernst & Young 2019”) (smaller reporting
      companies that are not listed on an exchange should be required to file semiannual interim reports, not
      quarterly); KPMG 2019 (“We believe the Commission could include a scalable frequency model in its
      regulatory framework where periodic information required to be filed by a registrant is commensurate with its
      issuer status. This could be accomplished using the existing issuer categories and provide [emerging growth
      companies] and [smaller reporting companies] an option to furnish interim disclosures on a less frequent
      basis.”); Davis Polk 2019 (“it would make sense to reduce the quarterly reporting requirement to a semi-annual
      requirement for pre-commercial enterprises that do not yet have significant product revenue, such as young
      biotech companies”).
264
      See, e.g., letters from Bloomberg LP (July 21, 2016) (“Quarterly reporting is as important for smaller reporting
      companies as for market leaders, if not more so given that small companies receive less attention from analysts.
      Problems in [smaller reporting companies] are likely to elude attention for longer periods of time than highly
      liquid companies that receive a lot of market attention.”); Investment Company Institute (Mar. 21, 2019) (“ICI
      2019”) (opposing semiannual reporting for smaller companies as it “would frustrate…comparisons and even
      create disincentives for investors to invest their capital in smaller companies” and stating “investors are likely to
      want more frequent reporting by smaller companies because their business prospects are less certain and likely
      to change more quickly over time as compared to larger companies”); Marcum 2019 (“[Smaller reporting
      companies] tend to have less robust internal controls over financial reporting, as they have less resources. The
      same often holds true for [emerging growth companies], as they are newly reporting entities that are still
      establishing effective, consistent financial reporting routines. For these reasons, [smaller reporting companies
      and emerging growth companies] require more discipline, rigor and accountability, not less. Reducing required
      auditor involvement from four-times to two-times per year will likely reduce the emphasis many [smaller
      reporting companies and emerging growth companies] will place on the financial reporting process. Quarterly
      reporting requires finance departments to maintain a constant vigilance. Six month gaps between financial
      reporting will likely cause them to take their focus off of the external financial reporting process, negatively
      impacting quality, and increasing the likelihood of financial reporting errors or fraud”).

                                                                107

--- page 108 ---

reporting cycles and investor engagement activities that are closely tied to Form 10-Q filings. To

the extent that quarterly reporting contributes to managerial focus on short-term financial metrics

at the expense of long-term value creation, 265 reduced reporting frequency could mitigate this

behavior and associated resource misallocation, although the academic literature is mixed on

whether quarterly reporting is a primary driver of such behavior. 266

          In addition, to the extent there is proprietary information that companies are required to

or have an incentive to disclose in quarterly reporting, less frequent mandatory reporting may

reduce or at least delay the disclosure of competitively sensitive information and lead to a better

competitive environment from the perspective of the reporting firms. 267 The proposed

amendments would not change what is required to be disclosed in the interim reports, simply the

frequency of those reports. Still, instead of providing financial information for each quarter,

semiannual reports would likely aggregate the financial information over six-month periods,

which could potentially obfuscate information that would have been useful to competitors if



265
      See, e.g., Ernstberger et al., supra note 254 (finding higher managerial short-termism resulting from increased
      reporting frequency requirements in a EU setting); John R. Graham et al., Value Destruction and Financial
      Reporting Decisions, 62 Fin. Analysts J. 27, (2006) (finding, based on a survey of 401 senior U.S. financial
      executives, that executives may be willing “to routinely sacrifice shareholder value to meet earnings
      expectations or to smooth reported earnings”); Jeremy C. Stein, Efficient Capital Markets, Inefficient Firms: A
      Model of Myopic Corporate Behavior, 104 Q. J. Econ. 665 (1989) (modeling managerial myopia and linking it
      to stock market pressure arising from short-term performance evaluation when the market cannot perfectly
      observe managerial decisions).
266
      See, e.g., CFA 2017 Study of UK (found that the imposition of mandatory quarterly reporting had virtually no
      impact on firms’ investment decisions and that it “did not change the time horizon that UK public company
      management considers when making long-term investment decisions”); Peter Kajüter, et al., supra note 246
      (exploiting a regression discontinuity in Singapore, finding that mandatory quarterly reporting reduced firm
      value for smaller firms but did not generate clear informational benefits or induce myopic investment behavior
      around the reporting threshold); Frank Gigler et al., How Frequent Financial Reporting Can Cause Managerial
      Short-Termism: An Analysis of the Costs and Benefits of Increasing Reporting Frequency, 52 J. Acct. Rsch. 357
      (2014).
267
      See, e.g., Robert E. Verrecchia, supra note 137; Rachel M. Hayes & Russell Lundholm, Segment Reporting to
      the Capital Market in the Presence of a Competitor, 34 J. Acct. Rsch. 261 (1996); Jesse A. Ellis et al.,
      Proprietary Costs and the Disclosure of Information About Customers, 50 J. Acct. Rsch. 685 (2012); Yinghua
      Li et al., Trade Secrets Law and Corporate Disclosure: Causal Evidence on the Proprietary Cost Hypothesis,
      56 J. Acct. Rsch. 265 (2018).

                                                              108

--- page 109 ---

disclosed for each quarter. 268 Thus, the impact of the proposed amendments on reducing

proprietary costs would be limited to instances where aggregating financial information over six

months reduces the amount of competitively sensitive information that could have been gleaned

if financial information were presented for each quarter as well as instances where delaying the

disclosure of interim reports by three months would reduce its usefulness to competitors.

Moreover, some semiannual reporters may voluntarily provide quarterly financial information in

a Form 10-S which could further limit the impact of the proposed amendments on reducing the

disclosure of competitively sensitive information. 269

          For some issuers, however, the magnitude of realized compliance cost savings may be

attenuated by private contractual reporting obligations. Debt agreements, lending arrangements,

and other creditor contracts frequently require the provision of quarterly or even monthly

financial information to the lender, often irrespective of the frequency of mandatory reporting

under the Federal securities laws. As a result, some issuers that elect semiannual reporting for

purposes of reports under Exchange Act Sections 13(a) and 15(d) may nonetheless continue to

prepare quarterly financial information internally or obtain interim auditor reviews to satisfy

creditor monitoring, covenant compliance, or to facilitate raising capital (at least until contracts

or agreements are renegotiated to reflect different reporting frequencies). In such cases,

reductions in Form 10-Q filing obligations may not translate into commensurate reductions in

overall reporting-related costs. 270




268
      See infra note 280 and accompanying text.
269
      See supra note 86.
270
      See, e.g., Crowe 2019 (noting that lending and regulatory regimes applicable to certain issuers may continue to
      require quarterly financial information notwithstanding changes to Commission reporting requirements); NY
      Bar 2019, supra note 212.

                                                              109

--- page 110 ---

b) Potential Costs

          Potential costs for semiannual reporters and investors arise primarily from a reduction in

the frequency and timeliness of standardized public disclosures. Longer intervals between

mandatory reports may delay the dissemination of material information about an issuer’s

financial condition and operating performance, including through other market participants and

intermediaries, increasing information asymmetry among market participants. 271 Such effects

may disproportionately affect less sophisticated or less resourced investors who may rely more

heavily on periodic reports for their investment decisions.

          Increases in information asymmetry resulting from a reduction in reporting frequency

could be mitigated or exacerbated based on whether and how information intermediaries respond

to changes in reporting frequency. On the one hand, some information intermediaries (e.g.,

financial analysts) could provide information that substitutes for at least some of the information

that would have been included in the interim quarterly reports (i.e., Q1 and Q3), which could

mitigate potential increases in information asymmetry. On the other hand, studies of foreign

markets have found a positive correlation between reporting frequency and analyst following. 272

To the extent that a reduction in reporting frequency reduces analyst following for an issuer, the

incremental information that would have been provided by the discontinuing analysts would be

lost as well, further increasing information asymmetry. 273




271
      See, e.g., Robert Stoumbos 2023, supra note 144 (finding that information asymmetry grows steadily between
      earnings announcements and that semiannual reporting is associated with greater information asymmetry than
      quarterly reporting in the second half of each semiannual period).
272
      See supra notes 251 and 252.
273
      But see Jie (Jack) He & Xuan Tian, The Dark Side of Analyst Coverage: The Case of Innovation, 109 J. Fin.
      Econ. 856 (2013) (finding that firms covered by a larger number of analysts generate fewer patents and patents
      with lower impact, consistent with the hypothesis that analysts exert too much pressure on managers to meet
      short-term goals, impeding firms' investment in long-term innovative projects).

                                                             110

--- page 111 ---

Increased information asymmetry may, in turn, adversely affect market outcomes.

Academic literature and commenters have linked higher information asymmetry to lower

liquidity, higher transaction costs, reduced price informativeness, and a higher cost of capital. 274

Some commenters also expressed concern that less frequent reporting could impair investors’

ability to identify trends, 275 value securities, 276 and detect emerging problems in a timely

manner, 277 particularly for smaller or less followed issuers. Some commenters argued that the

elimination of quarterly reporting may increase stock price volatility, particularly around

earnings announcements. 278 Less frequent interim reports could also increase the degree to which

investors rely on other required disclosures (e.g., Form 8-K, Form 4, etc.) that are issued during



274
      See, e.g., Easley and O’Hara (2004); Christine A. Botosan, Disclosure and the Cost of Capital: What Do We
      Know?, 36 Acct. Bus. Rsch. 31 (2006 Special Issue) (stating that greater disclosure reduces cost of capital);
      Douglas W. Diamond & Robert E. Verrecchia, Disclosure, Liquidity and the Cost of Capital, 46 J. Fin. 1325
      (1991) (showing that revealing public information to reduce information asymmetry can reduce a firm’s cost of
      capital by attracting increased demand from large investors due to increased liquidity of its securities); Richard
      Lambert, et al., Accounting Information, Disclosure and the Cost of Capital, 45 J. Acct. Rsch. 385 (2007)
      (showing, in a conceptual framework, that “increasing the quality of mandated disclosures should in general
      move the cost of capital closer to the risk-free rate” and should “generally reduce the cost of capital for each
      firm in the economy” and further noting that “the benefits of mandatory disclosures are likely to differ across
      firms.”).
275
      See, e.g., letters from Hank Mishima (Jan. 20, 2019) (“Trends in performance can be discovered more easily
      [with quarterly statements] than reports with less frequency. Less frequent statements are potentially detrimental
      to the interests of stakeholders outside the organization like vendors and debt and equity holders to make
      decisions that may impact the relationship with the entity.”); XBRL US (Mar. 21, 2019) (“Quantitative analysis,
      which relies on time series data and analyzes trends, would be negatively affected by a move to semi-annual
      reporting.”).
276
      See, e.g., letters from Better Markets (Mar. 21, 2019) (“[quarterly financial] reports allow for more
      sophisticated investors to create forecast and valuation models and make informed decisions regarding
      allocation of capital across their portfolios.”); ICI 2019 (“Semi-annual reporting would diminish the amount and
      timeliness of information available to investors and inhibit their ability [to] assess the fundamental value of
      securities.”).
277
      See, e.g., Ernst & Young 2019 (quarterly reporting “also helps reduce risks in the corporate financial reporting
      system by facilitating timely identification and resolution of potential accounting and reporting issues.”)
278
      See, e.g., letters from ICI 2019 (expressing concern that “semi-annual reporting would impede price discovery
      and contribute to increased volatility in security prices”); R.G. Associates, Inc. (Feb. 24, 2019) (“security prices
      would become more volatile and incorporate a larger premium for uncertainty if interim reporting were
      reduced”); T. Rowe Price Associates, Inc. (Mar. 20, 2019) (expressing concern that a flexible system that
      allows registrants to report less frequently would produce negative effects that include “potential adverse
      impacts on price formation and increased volatility”).

                                                                111

--- page 112 ---

the quarters without quarterly interim reports, resulting in greater price movements following

those disclosures and a potentially higher cost of processing information for investors. 279

          Beyond delaying the dissemination of information, a reduction in reporting frequency

could also result in an overall loss in information provided to the public. Specifically, for

semiannual reporters, there would be a loss in the granularity of financial information across

time. Financial statements would no longer provide accounting information at the quarterly level,

instead aggregating two quarters into a single semiannual number. Investors may value

information on how companies change quarter over quarter and how certain quarters compare

across issuers. Such information would likely be more relevant to issuers with more seasonal

business operations and performance. 280 To the extent that more granular quarterly information

is valuable for investors’ decision-making, losing such granularity could exacerbate the issues

related to information asymmetry discussed above.

          The proposed rules could also reduce comparability of financial statements both across

issuers and across time. It may be difficult to compare semiannual reports to quarterly reports

and even to certain semiannual reports that have different fiscal periods. For instance, a

semiannual report with a fiscal year end in December would cover different periods from a

semiannual report with a fiscal year end in March. The first would report financial information




279
      See Elizabeth Blankespoor et. al., Disclosure Processing Costs, Investors’ Information Choice and Equity
      Market Outcomes, 70 J. Acct. Econ. 101344 (2020) (surveying the literature on disclosure processing costs,
      including costs of monitoring for, acquiring, and analyzing firm disclosure).
280
      More technically, reducing the frequency of periodic reporting to twice in a fiscal year would result in the loss
      of ability to observe quarterly seasonality. For firms opting not to voluntarily provide quarterly information, this
      would mean it would not be possible to differentiate between quarterly and half-yearly performance (e.g., six
      months of strong sales or just a holiday surge). This inability to differentiate is formalized in the Nyquist-
      Shannon Sampling Theorem, which states that in order to measure a periodic event, one must measure at least
      twice per period. For example, to detect a high/low sales pattern that occurs twice per year (i.e., a half-year
      period), semiannual reporting would not be sufficient, because it could not capture both the high and low
      portions of the period; to do so would require at least quarterly reporting.

                                                                112

--- page 113 ---

for January through June and for July through December while the other would report financial

information for April through September and for October through March. 281 Such lack of

comparability would be more severe for semiannual reporters with seasonal variation in

operations. Academic studies that examine other aspects of comparability provide evidence that

reductions in comparability could lead to lower liquidity, lower investor engagement, larger

analyst forecast errors, greater analyst forecast dispersion, and less institutional ownership. 282

          Of the 5,976 Exchange Act reporting companies that filed a domestic annual report

during calendar year 2024, 4,813 (81%) ended their fiscal year in December (calendar quarter 4);

236 (4%) ended their fiscal year in September (calendar quarter 3); 253 (4%) ended their fiscal

year in June (calendar quarter 2); 179 (3%) ended their fiscal year in March (calendar quarter 1);

and 495 (8%) ended their fiscal year in a month that did not coincide with the end of a calendar

quarter. Reduced comparability between semiannual reporters will be limited to issuers that do

not have the same fiscal period and have fiscal end dates that are more or less than six months

apart. For example, roughly 85% of the reporting companies have a fiscal end date in December

or June. Comparability between any of these issuers that move to semiannual reporting should

not be impacted by the proposed rules. Potential impacts of reduced comparability between


281
      Such lack of comparability currently exists to the extent that companies have fiscal quarters that end in different
      months within a given calendar quarter. For companies that lack comparability in the timing of their quarterly
      interim reports, the periods covered in their reports should only be off by one month. In contrast, companies that
      lack comparability in the timing of their semiannual interim reports could cover periods that differ by up to 3
      months. Further, roughly 92% of our population of affected reporting companies ended their fiscal year at the
      end of a calendar quarter (i.e., March, June, September, or December).
282
      See, e.g., Gus De Franco et al., The Benefits of Financial Statement Comparability, 49 J. Acct. Rsch. 895
      (2011); Donal Byard et al., The Effect of Mandatory IFRS Adoption on Financial Analysts’ Information
      Environment, 49 J. Acct. Rsch. 69 (2011); Mark Lang & Lorien Stice-Lawrence, Textual Analysis and
      International Financial Reporting: Large Sample Evidence, 60 J. Acct. Econ. 110 (2015); Kyle Peterson et al.,
      The Earnings Quality and Information Processing Effects of Accounting Consistency, 90 Acct. Rev. 2483
      (2015); Holger Daske et al., Mandatory IFRS Reporting Around the World: Early Evidence on the Economic
      Consequences, 46 J. Acct. Rsch. 1085 (2008); Hongping Tan et al., Analyst Following and Forecast Accuracy
      After Mandated IFRS Adoptions, 49 J. Acct. Rsch. 1307 (2011); Gwen Yu & Aida Sijamic Wahid, Accounting
      Standards and International Portfolio Holdings, 89 Acct. Rev. 1895 (2014).

                                                               113

--- page 114 ---

semiannual reports should be mitigated further to the extent that companies that are more likely

to be compared to each other (e.g., firms in the same industry or sector) are more likely to have

similar fiscal reporting periods. 283

          Reduced reporting frequency may also affect corporate accountability and financial

reporting quality. Several commenters noted that interim auditor reviews associated with

quarterly reporting can facilitate the early identification of accounting issues and internal control

deficiencies and that less frequent reviews could delay the resolution of such issues. 284

          The information asymmetry between insiders and outside investors generally decreases

following the disclosure of interim reports or associated earnings announcements. 285 A move to

semiannual reporting would generally delay the disclosure of information that would have been

contained in interim reports for the first and third quarters and therefore increase the length of

time for which information asymmetry between corporate insiders and outside investors is

higher. A potential additional cost may arise if insiders engage in trading on the information that

has not yet been released or if investors perceive that to be more likely 286—even though trading


283
      For example, companies in the retail industry may favor a January 31 year-end to better capture holiday sales
      and returns in their annual reports.
284
      See, e.g., letters from Marcum 2019 (“An auditor’s quarterly review procedures increase the likelihood that
      investors will receive timely information about material changes in [internal control over financial reporting]”);
      Center for Audit Quality (Mar. 20, 2019) (“There is a risk that a change in frequency of interim reporting could
      result in certain controls (e.g., financial closing and reporting controls) being performed less frequently. In
      addition, in instances where relevant controls fail and there are no compensating controls in place, there may be
      fewer opportunities to timely identify or remediate control deficiencies if these controls are performed less
      frequently.”).
285
      Paul M. Healy & Krishna G. Palepu, Information Asymmetry, Corporate Disclosure and the Capital Markets: A
      Review of the Empirical Disclosure Literature, 31 J. Acct. Econ. 405 (2001); Richard Frankel & Xu Li,
      Characteristics of a Firm’s Information Environment and the Information Asymmetry Between Insiders and
      Outsiders, 37 J. Acct. & Econ. 229 (2004); Steven Huddart, et al., Jeopardy, Non-Public Information, and
      Insider Trading Around SEC 10-K and 10-Q Filings, 43 J. Acct. Econ. 3 (2007).
286
      See, e.g., Steven J. Huddart & Bin Ke, Informational Asymmetry and Cross-sectional Variation in Insider
      Trading, 24 Contemp. Acct. Rsch.195 (2007) (finding that the presence of better informed insiders that trade on
      the basis of material non-public information may lead to adverse selection problems; decrease investor
      confidence in the issuer, the willingness of investors to trade the issuer’s shares, the liquidity of the issuer’s


                                                               114

--- page 115 ---

on the basis of material non-public information would be, among other things, a violation of

Exchange Act Section 10(b) and a violation of Rule 10b-5. Moreover, as part of internal

compliance, many companies monitor insider transactions as well as voluntarily implement

“blackout periods” or windows during which corporate insiders are prohibited from purchasing

or selling shares of the company. 287 One study documents that that the mean (median) window

for a blackout period begins roughly 46 (47) days before an earnings announcement and extends

until one day after the announcement. 288 Companies that move to semiannual reporting could

choose to incorporate, preserve, or extend such blackout periods to alleviate the potential

concerns described above. Some research, however, has found that companies may need to

compensate corporate insiders for restricting their trading activities. 289

          Finally, companies choosing to become semiannual reporters would incur switching costs

as they transition from quarterly reporting to semiannual reporting. Issuers generally have

systems, procedures, and controls in place to gather, process, review, and disclose information in

a Form 10-Q and relevant voluntary disclosures. Semiannual reporters would therefore incur

initial switching costs to update their systems, procedures, and controls. Such costs are likely to



      shares, and the overall market efficiency; have negative effects on capital formation (including increased cost of
      capital and decreased ability to raise capital) and the issuer’s ability to fund investments; and potentially distort
      the incentives of insiders (resulting in a loss of shareholder value)). For a comprehensive discussion of the
      economics of trading on the basis of material non-public information and the evidence on its implications for
      investors and the capital markets, see Insider Trading Arrangements and Related Disclosures, Release No. 33-
      11138, at 118-27 (Dec. 14, 2022) [87 FR 80362, 80394-97 (Dec. 29, 2022)].
287
      J.C. Bettis, et al., Corporate Policies Restricting Trading by Insiders, 57 J. Fin. Econ. 191 (2000); Darren T.
      Roulstone, The Relation Between Insider-Trading Restrictions and Executive Compensation, 41 J, Acct. Rsch.
      525 (2003); Inmoo Lee, et al., Do Voluntary Corporate Restrictions on Insider Trading Eliminate Informed
      Insider Trading?, 29 J. Corp. Fin. 158 (2014); Alan D. Jagolinzer, et al., Corporate Governance and the
      Information Content of Insider Trades, 49 J. Acct. Rsch. 1249 (2011); Wayne R. Guay, et al., Determinants of
      Insider Trading Windows, (Apr. 17, 2023) (unpublished manuscript), available at
      https://ssrn.com/abstract=3844986 (retrieved from SSRN Elsevier database).
288
      See Jagolinzer et al. (2011).
289
      See, e.g., Roulstone (2003) (finding that companies that implement blackout periods pay a premium in
      executive compensation relative to companies that do not have similar restrictions).

                                                                115

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be higher for larger firms with complex operations. Additionally, some semiannual reporters

would need to expend time and resources to renegotiate contracts or other agreements that relied,

at least to some degree, on quarterly reports. These could include, among other things, debt

contracts that rely on quarterly financial metrics for maintenance covenants as well as incentive-

based executive compensation contracts that rely on quarterly performance metrics.

              2. Quarterly Reporters

                            a) Potential Benefits

          Issuers that elect to continue filing quarterly reports are not expected to experience

material changes in their direct reporting costs or disclosure practices as a result of the proposed

amendments. For these issuers, a potential benefit of the proposal is the availability of flexibility

should their circumstances change in the future. The option to adjust reporting frequency may

have value even if it is not exercised immediately.

          Quarterly reporters may also benefit indirectly from market-level effects if the proposal

alters competitive dynamics or reporting norms among peer firms. For example, if some

competitors reduce reporting frequency, issuers that continue quarterly reporting may

differentiate themselves by signaling a commitment to transparency, which could be valued by

investors. 290 Additionally, maintaining quarterly reporting may help these issuers meet the

expectations of certain investors, analysts, or contractual partners who prefer or require more

frequent disclosure.

                            b) Potential Costs

          The proposed rules could also alter competitive dynamics in a way that increases the

relative costs for quarterly reporters. Quarterly reporters would continue to bear the direct and



290
      See, e.g., Robert E. Verrecchia, Essays on Disclosure, 32 J. Acct. & Econ. 97 (Dec. 2001).

                                                             116

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indirect costs associated with quarterly reporting, including internal preparation costs, external

professional fees, auditor review costs, and investor relations activities while peer firms that

move to semiannual reporting would experience these costs less frequently. In addition, peer

firms who report semiannually could benefit from spillover effects of information provided by

the quarterly reporters. Such factors could result in a competitive disadvantage for quarterly

reporters as they bear the cost of certain disclosures that could inadvertently benefit their

competitors. Still, these issuers may view such costs as justified by the potential benefits of more

frequent disclosure, including enhanced liquidity, lower cost of capital, and alignment with

investor and analyst expectations. Some issuers, however, may effectively be constrained to

continue quarterly reporting due to contractual obligations, debt covenants, bank regulatory

requirements, or listing standards imposed by self-regulatory organizations. 291

          The proposed rules could reduce comparability of quarterly reporters as well. It may be

difficult to compare quarterly financial statements from quarterly reporters to semiannual

financial statements. For example, investors would have to aggregate quarterly reports to

compare with semiannual reports and may have difficulty extracting quarter-level information

from the semiannual reports, depending on how the reports are structured. 292 This lack of




291
      See, e.g., Crowe 2019 (noting depository institutions may be required to file quarterly financial information
      under other law and may not see a reduced administrative burden from a Commission change to reporting
      frequency); BDO 2019 (“Certain stock exchanges and regulated industries also require quarterly reporting.
      Accordingly, the compliance and administrative relief intended by reducing the frequency of reporting for SEC
      rules may not be realized, or as significant, for all registrants.”); SIFMA 2019 (“The reporting requirements of
      other applicable regulatory authorities (e.g., banking regulators, stock exchanges, other SROs) currently require
      quarterly reporting of much of the same information that is included in a Form 10-Q. Failure to harmonize these
      requirements would at best effectively maintain the status quo and at worst increase costs to reporting
      companies or create conflicting requirements.”).
292
      Semiannual reporters could present quarter-level information in their reports but would not be required to do so.

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comparability could increase the cost of acquiring information, which could negatively impact

market factors such as liquidity, analyst following, and forecast accuracy. 293

              3. Hybrid Reporters

                            a) Potential Benefits

          Hybrid reporters—issuers that elect semiannual mandatory reporting while continuing to

provide certain quarterly voluntary disclosures—would benefit from the same compliance costs

savings as semiannual reporters as they would have the same reporting obligations. The effective

overall cost savings for hybrid reporters would be mitigated, however, to the extent that they

choose to prepare and provide additional voluntary disclosure. By forgoing Form 10-Q filings for

the first and third quarters, these issuers would reduce costs and time associated with the

preparation and review of full interim financial statements, but may incur (or continue to incur)

costs associated with voluntarily engaging in quarterly earnings communications that meet

investor expectations. Practically, the impact on this group of moving to semiannual reporting

under the proposed amendments while continuing to provide voluntary interim disclosures would

range somewhere between the impact on the quarterly reporters and the semiannual reporters

(both discussed above) depending on the amount of voluntary information provided and the

degree to which the perceived reliability of the voluntary disclosure matches that of mandatory

disclosure. 294

          Such issuers may preserve aspects of the quarterly information environment, potentially

mitigating increases in information asymmetry relative to semiannual reporters. The hybrid




293
      See supra note 282.
294
      See supra note 60.

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approach may therefore represent a middle ground for issuers seeking to balance cost savings

with market demand for more frequent information.

                            b) Potential Costs

          At the same time, the hybrid reporting approach may introduce distinct costs. Voluntary

quarterly disclosures may differ from Form 10-Q filings in scope, standardization, structured

data requirements, and associated litigation risk. For example, earnings releases are typically

furnished rather than filed and are not subject to the same liability provisions as Form 10-Q

filings, which some commenters suggested could affect their credibility and informational

value. 295

          Like semiannual reporters, hybrid reporters would have less frequent interim auditor

reviews. An independent public accountant’s review of a registrant’s interim financial statements

required as part of quarterly reporting can facilitate the early identification of accounting

misstatements and internal control deficiencies, especially for smaller firms. Less frequent

reviews could delay the identification and resolution of such issues. Relative to semiannual

reporters, however, this concern could be mitigated to the extent that hybrid reporters’ voluntary

quarterly financial disclosures are reviewed by their independent public accountants.

          Hybrid reporting may also increase processing and comparability costs for investors and

information intermediaries. If quarterly voluntary information is provided in less standardized

formats or on varying timelines across issuers, then analysts and investors may incur additional




295
      See, e.g., ICI 2019 (noting that “earnings releases typically are considered to be ‘furnished’ to the SEC and thus
      are not subject to liability under Section 18 of the Securities Exchange Act of 1934,” that “Form 10-Q filings,
      on the other hand, are ‘filed’ with the SEC and subject to Section 18 liability,” that “[a]lthough earnings
      releases are subject to the antifraud provisions of the securities laws, the Commission does not regulate their
      content or structure,” and that “unlike with Form 10-Q, the information presented in earnings releases varies
      from issuer to issuer.”). But see supra note 66 (discussing the parts of Form 10-Q that are not subject to Section
      18 liability, including financial statements).

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costs to retrieve, standardize, and compare such information. To the extent that hybrid practices

become prevalent, these effects could reduce comparability across firms and over time. This cost

could be mitigated if issuers establish and follow common practices with standardized voluntary

disclosure across peers.

          The voluntary disclosure would not be subject to XBRL requirements and therefore,

unless voluntarily tagged, would not provide the benefits that derive from structured data.

Research has shown XBRL requirements improve the information environment for market

participants by increasing disclosure processing efficiency. 296 Such research indicates this has

led to benefits for individual companies and for the market as a whole, such as reduced

information asymmetry, 297 greater stock price reflectiveness of public disclosures, 298 enhanced

market competition, 299 increased liquidity, 300 decreased cost of capital, 301 more accurate




296
      See U.S. Sec. & Exch. Comm’n, Semi-Annual Report to Congress Regarding Public and Internal Use of
      Machine-Readable Data for Corporate Disclosures (Dec. 2025), available at https://www.sec.gov/files/fdta-
      report-1-2026.pdf.
297
      See, e.g., Xin Luo et al., Initial Evidence on the Market Impact of the iXBRL Adoption, 37 Acct. Horizons 143
      (2023).
298
      See, e.g., Yuyun Huang et al., Information Processing Costs and Stock Price Informativeness: Evidence from
      the XBRL Mandate, 46 Austl. J. Mgmt. 110 (2021); Ju-Chun Yen & Tawei Wang, The Association Between
      XBRL Adoption and Market Reactions to Earnings Surprises, 29 J. Info. Sys. 51 (2015); Yi Dong et al., Does
      Information-Processing Cost Affect Firm-Specific Information Acquisition? Evidence from XBRL Adoption, 51
      J. Fin. & Quant. Analysis 435 (2016); Yanan Zhang et al., XBRL Adoption and Expected Crash Risk, 38 J. Acct.
      & Pub. Pol’y 31 (2019); Jap Efendi et al., Do XBRL Filings Enhance Informational Efficiency? Early Evidence
      from Post-earnings Announcement Drift, 67 J. Bus. Rsch. 1099 (2014).
299
      See, e.g., Bing Li et al., The Impact of XBRL Adoption on Local Bias: Evidence from Mandated US Filers, 39 J.
      Acct. & Pub. Pol’y 6 (2020).
300
      See, e.g., Wafa Sassi et al., The Impact of Mandatory Adoption of XBRL on Firm’s Stock Liquidity: A Cross-
      Country Study, 19 J. Fin. Reporting & Acct. 299 (2021).
301
      See Chae-Won Ra & Ho-Young Lee, XBRL Adoption, Information Asymmetry, Cost of Capital, and Reporting
      Lags, 10 iBusiness, 93 (2018); Syou-Ching Lai et al., XBRL Adoption and Cost of Debt, Int’l. J. Acct. & Info.
      Mgmt. 199 (2015); Tienshih Hsieh & Jean C. Bedard, Impact of XBRL on Voluntary Adopters’ Financial
      Reporting Quality and Cost of Equity Capital, 15 J. Emerging Tech. Acct. 45 (2018); Marcin Jaskowski &
      Daniel Rettl, Information Acquisition Costs and Credit Spreads, 149 J. Banking Fin. 106775 (2023).

                                                             120

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financial analysis, 302 enhanced artificial intelligence capabilities, 303 and others. 304 To the extent

the magnitude of these effects varies with the frequency of XBRL data availability, these

benefits may be reduced as a whole given the lack of quarterly XBRL-tagged financial data from

semiannual and hybrid reporters.

          Hybrid reporters that disclose voluntary quarterly information may not gain the same

value from their disclosures as quarterly reporters gain, because markets assess the value of

voluntary and mandated disclosures differently. For example, studies have argued that certain

voluntary disclosures are believed by markets because they are subsequently confirmed by

mandatory disclosures covering materially the same information, and thus voluntary disclosure

becomes less valuable in the absence of such mandatory disclosures. 305 Mandatory semiannual

reports could serve this function, but the information provided in these mandatory reports would

be delayed and potentially less precise relative to mandatory quarterly reports. To the extent that




302
      See, e.g., Andrew J. Felo et al., Can XBRL Detailed Tagging of Footnotes Improve Financial Analysts’
      Information Environment?, 28 Int’l. J. Acct. Info. Sys. 45 (2018); Marcus Kirk et al., From Print to Practice:
      XBRL Extension Use and Analyst Forecast Properties (Aug. 18, 2016), available at
      https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2826159 (retrieved from SSRN Elsevier database);
      Chunhui Liu et al., XBRL’s Impact on Analyst Forecast Behavior: An Empirical Study, 33 J. Acct. & Pub. Pol’y
      69 (2014); but see Sherwood Lane Lambert et al., Analysts’ Forecasts Timeliness and Accuracy Post-XBRL, 27
      Int’l J. Acct. & Info. Mgmt. 151 (2019).
303
      See, e.g., Marcelo Farr et al., Can AI Be Trusted with Financial Data? (Sept. 15, 2025), available at
      https://ssrn.com/abstract=5316518 (retrieved from SSRN Elsevier database); See also Revathy Ramanan, Why
      Structured Data and Definitions Vastly Outperform Unstructured PDFs in LLM Analysis, XBRL (Dec. 19,
      2024), available at https://www.xbrl.org/why-structured-data-and-definitions-vastly-outperform-unstructured-
      pdfs-in-llm-analysis/.
304
      See, e.g. Jeong-Bon Kim et al., Does XBRL Adoption Constrain Earnings Management? Early Evidence from
      Mandated U.S. Filers, 36 Contemp. Acct. Res., 4 (2019); Jung Min Kim, Economics of Information Search and
      Financial Misreporting, 62 J. Acct. Res. 1007 (2024).
305
      See, e.g., Frank Gigler & Thomas Hemmer, On the Frequency, Quality, and Informational Role of Mandatory
      Financial Reports, 36 J. Acct. Rsch. 117 (1998) (arguing that mandatory disclosures are valuable because they
      can confirm previously made voluntary disclosures, facilitating market trust in otherwise unverifiable voluntary
      disclosures), Lin Cheng et al., The Commitment Effect Versus Information Effect of Disclosure—Evidence from
      Smaller Reporting Companies, 88 Acct. Rev. 1239 (2013) (finding that when firms no longer have mandatory
      reporting requirements but continue voluntarily disclosing, they see a decrease in liquidity, consistent with the
      loss of mandatory confirmation resulting in less valuable voluntary disclosures).

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hybrid reporters provide voluntary disclosures that are of a higher frequency than their

mandatory reporting, it could be the case that the market’s ability to confirm those disclosures is

diminished, thereby reducing the market’s perceived value of those voluntary disclosures.

       Finally, hybrid reporters would likely incur switching costs similar to those of

semiannual reporters as they transition from quarterly reporting to semiannual reporting. For

example, hybrid reporters may also incur initial switching costs to update their systems,

procedures, and controls as well as costs to renegotiate certain contracts. The changes, however,

and their respective costs may be more limited, relative to semiannual reporters, to the extent that

hybrid reporters preserve existing systems and procedures for the voluntary quarterly disclosure

that they provide.

       To the extent that hybrid reporters voluntarily provide quarterly financial information in a

Form 10-S filing, some of the costs discussed above, such as reduced comparability of

information, reduced credibility of information, and less structured data, could be mitigated.

           4. Factors Affecting Issuers’ Decisions on their Reporting Frequency

       Issuers’ reporting choices under the proposed amendments are likely to reflect a

combination of firm-specific, market-based, and institutional considerations. Firm size, operating

complexity, growth stage, and seasonality of business operations may influence both the

perceived costs of quarterly reporting and the perceived benefits of more frequent disclosure. For

instance, to the extent that the costs of providing interim reports are fixed, smaller issuers may

face relatively higher compliance burdens (in a relative sense compared to larger issuers as a

percentage of the issuer’s revenue) and be more motivated to switch to semiannual reporting

from a cost savings perspective. Conversely, investors may demand more frequent reporting

from such firms as there tends to be less available public information about smaller firms and



                                                    122

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therefore higher information asymmetry. 306 Investors’ expectations for more frequent reporting

may also be driven by poorer prior performance and more uncertain operating environments. 307

          Investor base composition and analyst coverage are also expected to play an important

role. Issuers with substantial institutional ownership or active analyst following may face

stronger market expectations for quarterly information, whether through Form 10-Q filings or

other disclosures. 308 In contrast, issuers with more concentrated or long-term-oriented ownership

may perceive less pressure to maintain quarterly reporting.

          Contractual and regulatory constraints may further shape issuer decisions. 309 Debt

agreements, bank regulatory requirements, exchange listing standards, or foreign legal

obligations may effectively necessitate continued quarterly reporting for certain issuers, limiting

their ability to rely on the proposed flexibility, unless these agreements and requirements are

modified.

          Issuers may also consider how reporting frequency interacts with capital raising activities

and liability frameworks. As discussed above in Section V.C.2, underwriters and investors may


306
      “Research suggests that size proxies for the amount of prior information available about a firm.” Frankel & Li,
      supra note 285 (surveying prior literature). Further, “Elliot et al. (1984) hypothesize that because fewer analysts
      follow smaller firms, small firms’ prices do not ‘completely reflect information,’ and insiders can more
      successfully use private information.” Id. (quoting John Elliott et al., The Association Between Insider Trading
      and Information Announcements, 15 Rand J. Econ. 521 (1984)). See also Mark Lang & Russell Lundholm,
      Cross-Sectional Determinants of Analyst Ratings of Corporate Disclosures, 31 J. Acct. Rsch. 246 (1993)
      (providing evidence consistent with firm size being positively correlated with the amount and quality of
      information provided).
307
      See, e.g. Shuping Chen et al., Is Silence Golden? An Empirical Analysis of Firms that Stop Giving Quarterly
      Earnings Guidance, 51 J. Acct. & Econ. 134 (2011) (studying firms that stop providing earnings guidance and
      showing relative to firms that continue guiding, stoppers have poorer prior performance and more uncertain
      operating environments. The paper also finds that stock market reacts negatively to the announcement of
      stopping guidance, and that stoppers subsequently experience increases in analyst forecast dispersion and
      decreases in analyst forecast accuracy).
308
      Kimball Chapman & Jeremiah R. Green, Analysts’ Influence on Managers’ Guidance, 93 Acct. Rev. 45 (2018)
      (finding that analysts’ questions during conference calls influenced future manager disclosure choices,
      consistent with analysts shaping managers’ disclosure choices).
309
      See sections V.C.1.c and .d (describing some of the Federal and State laws that could incentivize continued
      quarterly reporting by issuers).

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expect reviewed interim financial information in registered offerings, which could lead issuers

that access capital markets frequently to continue quarterly reporting or to obtain voluntary

auditor reviews of their quarterly financials even under a semiannual reporting regime. The

proposed amendments to Rule 3-01, Rule 3-12, and Rule 8-08 of Regulation S-X would alter the

age of financial statements requirements so that semiannual filers would not be required to

include or incorporate by reference quarterly financial statements in a registration statement (or a

proxy statement). 310 Nonetheless, investors and underwriters may still demand quarterly

financial disclosure to have more recent or granular information. Likewise, issuers participating

in or planning to participate in a merger or acquisition could face similar pressures.

          Finally, strategic and competitive considerations (including peer behavior and evolving

market norms) may influence issuer decisions. Issuers may weigh potential reductions in

disclosure of proprietary information against concerns that reduced reporting frequency could be

perceived negatively by investors or analysts. Given these interacting factors, issuer responses to

the proposed amendments are likely to be heterogenous and may evolve over time as market

practices adjust.

              5. Aggregate Monetized Benefits and Costs

          Throughout this economic analysis, we have estimated monetized benefits and costs per

response. In this section, we present aggregate measures of these monetized effects. These totals




310
      The impact of the proposed amendments to Rules 3-01, 3-12, and 8-08 of Regulation S-X on issuers of
      semiannual reports will depend on the timing of registration statements and proxy statements relative to the
      most recently filed financial statements. For instance, for semiannual filers, registration statements filed by
      reporting companies in the first (or third) fiscal quarter would simply need to include or incorporate by
      reference financial statements from the most recent annual report on Form 10-K (or semiannual report on Form
      10-S).

                                                              124

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include only benefits and costs that are monetized in the economic analysis 311 and thus do not

encompass all of the proposed amendments’ benefits and costs.


                             a) Annual Aggregate Monetized Benefits and Costs

          We report the annual aggregate monetized benefits and costs, respectively, of the

proposed amendments, which are aggregated across all affected entities and instances of

reporting each year. To aggregate these monetized effects, we use estimates of the number of

affected filings 312 and estimated burdens per filing under the Paperwork Reduction Act in

Section VI. Consistent with these estimated burdens, there are no initial monetized costs or

benefits that would accrue immediately upon adoption of the proposed rules (i.e., at Time 0).

Under the proposed amendments, these benefits and costs are incurred by reporting companies

that elect to report on a semiannual basis and by all companies that file certain registration and

reporting forms.

          Because the decision to switch to semiannual reporting is voluntary and firm-specific, we

are unable to predict with certainty how many reporting companies would make this change. For

the purpose of computing annual aggregate monetized effects, we assume that 20 percent of all

affected issuers would switch to semiannual reporting, which represents 1,195 issuers (i.e., 20%

of 5,976 affected issuers = 1,195 issuers). 313 As shown in Table 2, these issuers would save the

annual direct compliance costs associated with filing three Form 10-Q’s, which we estimated

earlier to be $330,000 per issuer on average. 314 Multiplying the number of affected issuers that

would switch by this cost saving per issuer, we estimate aggregate monetized cost savings (i.e.,


311
      See supra section V.D and supra notes 260, 261, 262.
312
      See supra section V.C.2.
313
      See id. for a discussion of affected parties and infra note 332 for a discussion of the 20 percent estimate.
314
      See supra Section V.D.

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benefits) across all affected issuers and filings of $394,350,000 per year (i.e., 1,195 issuers x

$330,000 per issuer = $394,350,000). The same 1,195 issuers would instead file Form 10-S. As

shown in Table 3, these issuers would thus incur annual direct compliance costs associated with

filing Form 10-S, which we estimated earlier to be $132,000 per issuer on average. 315

Multiplying the number of affected issuers that would switch by this cost per issuer, we estimate

aggregate monetized costs across all affected issuers of $157,740,000 (i.e., 1,195 issuers x

$132,000 per issuer = $157,740,000). The estimated aggregated annual monetized costs and

benefits would increase or decrease depending on whether more or fewer issuers decide to report

on a semiannual basis than we assumed. In addition, as shown in Table 3, all filers of Securities

Act registration statements on Forms S-1, S-3, S-4, and S-11, and Exchange Act registration

statements on Form 10, and annual reports on Form 10-K would incur a per filing cost of $123

associated with completing the semiannual box. The aggregate annual costs for each form are

calculated by multiplying $123 by the estimate for the number of affected filings of each form

each year. 316 Adding each of those aggregate monetized costs for each form to the aggregate

monetized costs associated with filing Form 10-S results in a total estimate of $158,821,000

aggregate annual monetized costs across all affected parties (i.e., $157,740,000 aggregate annual

monetized costs for Form 10-S + $1,081,000 total aggregate annual monetized costs for

semiannual check boxes = $158,821,000).


                                   Table 2. Aggregate Monetized Benefits
                                               (2025 dollars)



315
      See supra Section V.D.
316
      The estimates for affected filings per year are based on the number of filings in CY 2024. These estimates differ
      from the estimates provided in Section VI (Paperwork Reduction Act analysis), which are based on the number
      of annual responses for these forms reflected in the OMB inventory of currently approved information
      collections.

                                                              126

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Benefit per Affected          Number of Affected             Aggregate Annual
                                          Filing                  Filings Per Year                  Benefits
                                           (A)                          (B)                      (C) = (A)x(B)
           Form 10-Q                   $110,000                        3,585                     $394,350,000
             Total                                                                               $394,350,000
Note: See supra note 260 for an explanation of the $110,000 estimated benefit per affected filing.


                                      Table 3. Aggregate Monetized Costs
                                                 (2025 dollars)

                                     Cost per Affected           Number of Affected             Aggregate Annual
                                          Filing                  Filings Per Year                   Costsc
                                            (A)                         (B)                      (C) = (A)x(B)
           Form 10-S                    $132,000a                      1,195                     $157,740,000
            Form S-1                       $123b                        933                        $115,000
            Form S-3                       $123b                       1,574                       $194,000
            Form S-4                       $123b                        193                         $24,000
           Form S-11                       $123b                         13                          $2,000
            Form 10                        $123b                         87                         $11,000
           Form 10-K                       $123b                       5,976                       $735,000
              Total                                                                              $158,821,000
Notes:
a
    See supra note 261 for an explanation of the $132,000 estimated cost per affected filing.
b
    See supra note 262 for an explanation of the $123 estimated cost per affected filing.
c
    Estimates rounded to the nearest thousand.



                              b) Present Values and Annualized Values of Aggregate Monetized
                              Benefits and Costs

           Consistent with the requirements of Executive Order 12866, the Commission reports

estimated total monetized benefits and costs for all affected entities in two additional ways

specified in OMB Circular A-4. 317 The two presentations are intended to address the fact that the



317
       See E.O. 12866 (Sept. 30, 1993), 58 FR 51735, 51741 (Oct. 4, 1993) (requiring agencies to provide an analysis
       of benefits, costs, and regulatory alternatives to OIRA for significant regulatory actions); OMB, Circular A-4, at
       31-34, 45 (Sept. 17, 2003) (providing guidance to agencies regarding compliance with E.O. 12866); see also
       E.O. 14215 (Feb. 18, 2025), 90 FR 10447, 10448 (Feb. 24, 2025) (requiring independent agencies to comply
       with E.O. 12866). In addition, E.O. 14192 requires agencies to provide their best approximation of the total
       costs or savings associated with each new regulation or repealed regulation consistent with the analyses
       required by E.O. 12866. See E.O. 14192 (Jan. 31, 2025), 90 FR 9065, 9066 (Feb. 6, 2025). For purposes of
       approximating the total cost savings and costs under E.O. 14192, the Commission uses the annualized
       monetized benefits and costs using a real discount rate of 7 percent. See Table 5 and accompanying discussion.

                                                                127

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various benefits and costs of the proposed amendments would not accrue at the same point in

time; rather, benefits and costs that accrue sooner are generally more valuable than those that

occur later in time. 318

          We report (1) the present values of expected benefits and costs that are monetized in our

Economic Analysis, aggregated across all affected entities, over a 10-year time horizon, starting

in 2026, as well as (2) the annualized values over the same time horizon that are derived from the

present values. This time horizon represents the period over which the principal benefits and

costs that are monetized in the Economic Analysis are expected to accrue. 319 The present values

and annualized values account for the timing of benefits and costs through discounting, which is

a procedure that accounts for the time value of money. 320 Under the proposed amendments, these

benefits and costs are only incurred by reporting companies that elect to report on a semiannual

basis.

          Table 4 reports the present values of the aggregated monetized benefits and costs. The

analysis uses annual real discount rates of 3 percent and 7 percent over a 10-year time horizon,

starting in 2026. 321 We assume that affected issuers would switch to semiannual reporting in the


318
      See Circular A-4, at 32.
319
      See id. at 31 (stating that “[t]he ending point should be far enough in the future to encompass all the significant
      benefits and costs likely to result from the rule”). For the purposes of this analysis, we assume the effective date
      of the amendments, as well as the start year for the analysis’s time horizon, is the present year. The analysis
      uses calendar years and accounts for the compliance periods included in the release (see note a in Table 4).
320
      See id. at 32 (“The Rationale for Discounting”) & 45 (“Treatment of Benefits and Costs over Time”); see also
      OIRA, Regulatory Impact Analysis: A Primer, at 11 (Aug. 15, 2011), available at
      https://www.reginfo.gov/public/jsp/Utilities/circular-a-4_regulatory-impact-analysis-a-primer.pdf (“To provide
      an accurate assessment of benefits and costs that occur at different points in time or over different time
      horizons, an agency should use discounting. Agencies should provide benefit and cost estimates using both 3
      percent and 7 percent annual discount rates expressed as a present value as well as annualized.”); Harvey S.
      Rosen & Ted Gayer, Public Finance 151 (8th ed. 2008) (defining present value as “the value today of a given
      amount of money to be paid or received in the future”).
321
      This approach is consistent with OMB Circular A-4. See Circular A-4, at 31-34 (stating that, “[f]or regulatory
      analysis, [agencies] should provide estimates of net benefits using both 3 percent and 7 percent” discount rates
      and discussing why those rates are reasonable default rates). Also, we use a mid-year discount rate. See OMB,


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first year of the 10-year time horizon. We further assume that the number of affected issuers

would remain constant over that period. We estimated in Table 2 that aggregated monetized

benefits across affected issuers are $394,350,000 per year. Over a 10-year time horizon, the

present value of aggregated monetized benefits is thus $3,413,970,906 using a 3 percent discount

rate and $2,865,051,037 using a 7 percent discount rate. For the same affected issuers, we

estimated in Table 3 that aggregated monetized costs are $158,821,000 per year. Over a 10-year

time horizon, the present value of aggregated monetized costs is thus $1,374,946,807 using a 3

percent discount rate and $1,153,874,149 using a 7 percent discount rate.

                             Table 4: Present Value of Monetized Benefits and Costs
                                 over 10 years from 2026 to 2035 (2025 Dollars)
         Estimated Effects
                                              3% real discount rate                   7% real discount rate
                Benefits
                                                   $3,413,970,906                          $2,865,051,037
                 Costs
                                                   $1,374,946,807                          $1,153,874,149
Notes: The present values for aggregated monetized benefits represent the present values of annual aggregated
benefits of $394,350,000 per year over 10 years using each of a 3 percent and 7 percent discount rate. The present
values for aggregated monetized costs represent the present values of annual aggregated costs of $158,821,000 per
year over 10 years using each of a 3 percent and 7 percent discount rate. See Section V.D.5.a We assume that
monetized benefits and costs accrue mid-year, and we use a mid-year discount rate.


          Table 5 reports annualized monetized benefits and costs using real discount rates of 3

percent and 7 percent over a 10-year horizon. 322 The lump sum present values of monetized

benefits and costs reported in Table 4 are converted in Table 5 into a constant stream of

annualized benefits and costs over a 10-year time horizon, starting in 2026. 323 Because the



      Circular A-94, at 21-22 (Oct. 19, 1992) (stating that, “When costs and benefits occur in a steady stream,
      applying mid-year discount factors is more appropriate.”).
322
      This approach is consistent with the recommended treatment of benefits and costs over time in Circular A-4.
      See id. at 45 (“You should present annualized benefits and costs using real discount rates of 3 and 7 percent”).
323
      For each discount rate, the annualized monetized benefits (costs, respectively) in Table 5 represent the constant
      annual stream of benefits (costs, respectively) whose present value over the time horizon equates the
      corresponding present value in Table 4. See note a, Table 5 for additional calculation details.

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annual aggregated monetized benefits and costs reported in Tables 2 and 3 are identical in every

year of the 10-year time horizon and because there are no initial benefits or costs at Time 0, the

annualized aggregate monetized benefits and costs in Table 5 are the same as the annual

aggregate monetized benefits and costs in Table 3. Hence, across all affected issuers, we estimate

that annualized total monetized benefits are $394,350,000 per year using a 3 percent discount

rate and $394,350,000 per year using a 7 percent discount rate. For those same affected issuers,

we estimate that annualized total monetized costs are $158,821,000 per year using a 3 percent

discount rate and $158,821,000 per year using a 7 percent discount rate.

                               Table 5: Annualized Monetized Benefits and Costs
                                over 10 years from 2026 to 2035 (2025 Dollars)
         Estimated Effects                    3% real discount rate                  7% real discount rate
              Benefits                           $394,350,000                           $394,350,000
               Costs                             $158,821,000                           $158,821,000
 Notes: For each discount rate, the annualized values are calculated by dividing the corresponding present values in
 Table 4 by the sum of discount factors over the time horizon. The discount factor in year t of the time horizon is
 equal to 1/(1 + 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟)(𝑡𝑡−0.5) .

       E. Anticipated Effects on Efficiency, Competition, and Capital Formation

       Based on our discussion above, we expect that Exchange Act reporting companies that

would switch to becoming semiannual or hybrid reporters under the proposed amendments could

incur some cost savings in terms of both time and cash flows by not having to prepare and

disclose Form 10-Qs for the first and third fiscal quarters. We expect these savings would be

greater for those companies that would become semiannual reporters, rather than hybrid

reporters, depending on the extent of voluntary quarterly disclosure provided by the hybrid

reporters. To the extent any future semiannual or hybrid reporters currently face limited

managerial capacity or financing constraints, some or all of the time and cash flows saved may

be redirected to more productive use, thereby increasing the allocative efficiency of the

companies’ resources. In addition, to the extent that companies moving to semiannual reporting

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would feel less pressure to focus on shorter term earnings at the possible expense of long-term

value creation, there could be further efficiency gains through improved managerial incentives.

          The proposed amendments, however, could also lead to efficiency reductions. As

discussed above, 324 a switch to semiannual (or hybrid) reporting would likely increase

information asymmetries, thereby reducing the informational efficiency of share prices and

reducing stock market liquidity for the companies that move away from quarterly reporting. The

magnitude of this effect would likely vary based on company characteristics and the degree to

which the delayed disclosure would impact investor decision-making. For instance, as discussed

above, for some companies or industries, investors may mainly base their investment decisions

on information that is provided in current reports, in which case a switch to semiannual reporting

may only have a limited impact on information asymmetry.

          To the extent there would be an increase in information asymmetries for companies

choosing semiannual reporting, there could also be related spillover effects, including on the

companies that would continue to report at a quarterly frequency. In particular, as discussed

above, to the extent there would be a reduction in the frequency of interim financial reports

under the proposal for a significant number of reporting companies, it would make it more

difficult for investors and information intermediaries, such as financial analysts, to compare

disclosures over time and across companies and arrive at accurate company valuations in a

timely fashion, which could decrease the informational efficiency of share prices even for

companies that would continue to file quarterly reports. 325 To the extent a switch by companies


324
      See supra Sections V.C.1.b and V.C.3.b.
325
      Financial analysts and other investment professionals, as well as non-professional investors, may try to
      substitute for the reduction in reporting frequency by searching for alternative financial data to use for their
      company valuations but would most likely incur greater search and information processing costs. Such
      substitute data may also not be as reliable or comparable across companies or time as the financial information


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to semiannual reporting would reduce liquidity and reduce the informational efficiency of share

prices, it would, in turn, reduce investors’ ability to make informed investment and voting

decisions and could have adverse effects on their ability to make efficient capital allocation

decisions within their portfolios. 326

          The proposed amendments could also potentially affect competition. To the extent

required quarterly reporting currently makes companies disclose time-sensitive proprietary

business information useful to competitors earlier than they would otherwise do, or the quarterly

reporting frequency gives competitors greater insight into a company’s business dynamics than

semiannual reporting would give, there could be competitive benefits to a company that adopts

semiannual reporting. In addition, to the extent a reporting company’s competitors are privately

held domestic companies or foreign companies (including foreign private issuers) without

mandated quarterly reporting, companies may improve their competitive position by switching to

semiannual reporting if the current compliance costs of the required quarterly reporting are a

competitive disadvantage. To the extent there is a fixed cost component to the quarterly reporting

requirements, smaller companies may benefit disproportionately more from any cost savings

associated with switching to semiannual reporting relative to larger industry peers (because these

fixed costs represent a larger percentage of their revenues) and thereby may also get a

comparatively larger competitive benefit from switching. We note that any competitive benefits



      disclosed in a Form 10-Q. In addition, to the extent reduced timeliness and comparability of interim reports
      increases processing and other costs to financial analysts, they may stop covering certain companies altogether.
      See supra notes 251 and 252.
326
      There are other potential negative externalities in terms of reduced allocative efficiency to the extent companies
      would adopt semiannual reporting under the proposed amendments. For example, to the extent other market
      participants (such as peer companies, whether publicly traded or privately held, customers, and suppliers) use
      and compare the information contained in the current quarterly reports made by a large number of public
      companies as an input for their own capital investment or other business decisions, the efficiency of these
      market participants’ resource allocations may also be reduced if a significant number of reporting companies
      would adopt semiannual reporting under the proposed amendments.

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from cost savings or a reduction in the frequency of disclosures of proprietary information could

be mitigated if less frequent reporting leads to a higher cost of capital, as discussed above.

       The proposed amendments may also have effects on capital formation. On the one hand,

to the extent that companies adopt semiannual (or hybrid) reporting and the cost savings from

switching from quarterly reporting can be redeployed to a more productive use such as new

investments, there could be an increase in net capital formation. In addition, a reduced burden of

periodic disclosures on reporting companies may encourage additional companies to raise capital

through registered securities offerings in public markets. An increase in the number of

companies who access public capital markets could increase capital formation to the extent it

facilitates the raising of more capital than would be available to these issuers outside of public

markets, for example, due to an enhancement of investor protections and a broadening of the

investor base.

       On the other hand, less frequent disclosures may result in a higher cost of capital if

investors receive less precise information about an issuer’s cash flows and how they covary with

other issuers’ cash flows or if there is an increased risk of information asymmetry across

investors because of the increased time gaps between public disclosures. A higher cost of capital

could, in turn, reduce corporate investment and thereby negatively impact capital formation.

Thus, to the extent the proposed amendment would lead to higher cost of capital for semiannual

or hybrid reporters, it could negatively affect capital formation. Capital formation could be

further impaired to the extent companies’ choice of switching to semiannual reporting would

lead to the negative externalities on the broader information environment discussed above,

thereby also potentially raising the cost of capital for quarterly reporters as well. Such a negative

spillover effect on quarterly reporters’ cost of capital could be mitigated, however, if continued



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quarterly reporting is viewed by investors as a credible signal of company quality, and therefore

quarterly reporters may benefit from a comparatively higher degree of investor confidence

compared to those companies that would choose to become semiannual or hybrid reporters.

          The aggregate effects on efficiency, competition, and capital formation will depend on

how many reporting companies choose to report on a semiannual basis and how investors

respond to that choice. It also depends on which types of reporting companies choose to report

on a semiannual basis as the importance of more frequent periodic disclosure to investors and

market participants would vary across reporting companies.

          F. Reasonable Alternatives

          In this section, we present certain significant alternatives and a discussion of their

benefits and costs relative to the proposed rules.

              1. Mandatory Semiannual Reporting; Elimination of Quarterly Reporting

          As an alternative to the proposed optional semiannual reporting approach, we considered

retaining the existing Form 10-Q disclosure requirements but requiring interim reporting on a

semiannual rather than quarterly basis for all reporting companies. 327

          Compared to the proposed optional semiannual reporting approach, this alternative would

provide no flexibility for reporting companies to elect the reporting frequency option—either

semiannual or quarterly—that may best serve the company and its investors. This lack of

flexibility could run counter to what some companies may view as the better reporting frequency

to serve the company and its investors. For example, if a reporting company believed the best

way to manage investor or analyst expectations or obligations under an agreement would be to




327
      See, e.g., supra note 62 (discussing required UK semiannual reporting and the elimination of UK quarterly
      reporting).

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report quarterly to the Commission, this ability could be frustrated under the alternative proposal

consisting of mandated semiannual reporting.

       Because mandated semiannual reporting would force companies to become either

semiannual or hybrid reporters, with no choice of filing reports on Form 10-Q, we expect the

potential costs to be larger under this alternative than under the proposal. To the extent those

companies that would have incentives to remain as quarterly reporters under the proposal would

have incentives to become hybrid reporters under this alternative, the expected larger costs of

this alternative relative to the proposal would be mitigated to some extent.

       We expect that the benefits associated with reporting cost savings, as discussed above,

would be larger under this alternative than under the proposal since no company would incur the

costs associated with filing interim reports with the Commission for the company’s first and third

fiscal quarters. These larger benefits, however, would be reduced for those companies that would

choose to become hybrid reporters under this alternative, as they may continue to provide

voluntary quarterly information.

       In terms of the effects on efficiency, competition, and capital formation, we expect the

potential negative market externalities from less frequent reporting, as discussed in Section V.F

above, to be greater under this alternative than under the proposal, because we expect a greater

potential loss of information (compared to the baseline) under this alternative than under the

proposal.

            2. Semiannual Reporting Only for Certain Registrant Categories

       As an alternative, we considered an optional semiannual reporting approach that would

be available only to reporting companies in certain smaller size categories, for example reporting

companies that are: (1) within one of the existing categories under Commission rules, which

generally base the criteria for the category on company size—including (A) emerging growth

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companies, (B) smaller reporting companies, or (C) companies that are not accelerated filers or

large accelerated filers—or (2) companies that meet the criteria of a new size-based category the

Commission could create. Or such an alternative could consist of one or more combinations of

those categories.

       As compared to the proposal, an alternative that limited optional semiannual reporting to

one category or a combination of categories of companies that generally indicate small company

size would result in the exclusion of larger companies from optional semiannual reporting. Thus,

under that alternative, larger companies would have less flexibility to opt for the reporting

frequency that best serves those companies and their shareholders and would not be able to avail

themselves of the benefits of cost savings and time savings that could accrue under the proposal.

Even though the alternative would reduce the aggregate potential benefits from reporting cost

savings compared to the proposal (by precluding large companies from filing semiannual

reports), it would still provide the flexibility of reporting frequency choice and the associated

potential cost savings for smaller sized reporting companies that may currently face a

disproportionate cost burden of the quarterly reporting requirement, as discussed above.

       The potential informational costs of the proposal stem from those companies that choose

to switch to semiannual reporting, as discussed above. As compared to the proposal, an

alternative that does not allow this option for larger companies would have the potential

informational costs limited to smaller, potentially less economically influential companies. This

difference in costs is limited by the extent to which we would expect large companies to opt to

continue filing quarterly under the proposal. To the extent that larger companies may convey

more information about market fundamentals, this alternative could result in less expected




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informational costs, compared to the proposal, because there would still be potentially valuable

information spillovers from the large quarterly filers to smaller semiannual filers.

               3. Form 8-K Filing Requirement When Company Decides to Change Reporting
                  Frequency for Next Fiscal Year

          Another alternative would be a requirement that a reporting company must file a report

on Form 8-K within four business days of a decision that the company intends to change its

frequency of reporting in connection with periodic reports that cover the next fiscal year.

          As compared to the proposal, this alternative could add complexity to Commission rules

as we expect that under such an alternative the Commission would need to provide for

requirements concerning when a decision is considered to have been made that triggers the Form

8-K filing obligation. Once a decision to change the frequency of interim reporting has been

disclosed in a Form 8-K, companies may have less flexibility to change their minds before filing

the next Form 10-K as doing so would likely confuse investors or be interpreted negatively.

          To the extent uncertainty about what interim reporting frequency to expect from a

company for the upcoming fiscal year imposes costs on investors or other market participants, 328

they may benefit from the alternative of a Form 8-K filing obligation by receiving an earlier

notice of what the company intends to do.

          The alternative of a Form 8-K filing obligation would impose Form 8-K filing costs not

present under the proposal that could marginally offset time and money savings for semiannual

filers under the proposal.




328
      One such cost could be potentially increased volatility of share prices before the uncertainty about issuers’
      upcoming interim reporting frequency is resolved.

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4. Longer Filing Deadline for Form 10-S than for Form 10-Q

       Another alternative would be a longer filing deadline for Form 10-S than for Form 10-Q.

Under this alternative, the disclosure requirements of Form 10-S would be the same as those of

Form 10-Q (except that Form 10-S would cover a longer six-month period). One factor relevant

to this alternative is whether it would take the independent public accountant a longer period of

time to review financial statements covering a six-month period than a three-month period

because of the longer period of time covered or because less frequent auditor review would

involve a loss of economies of scale that could slow down the independent public accountant’s

review process.

       Extending the reporting deadline for semiannual interim reports could grant semiannual

reporters and independent public accountants that conduct reviews more time to effectively

manage their resources. This could potentially reduce the overall cost of preparing the interim

reports, reduce the likelihood of delinquent filings, and potentially reduce the risk of errors in the

interim financial statements. Conversely, extending the deadline to file Form 10-S could delay

the disclosure of Form 10-S even further which could incrementally increase information

asymmetry and costs to investors.

           5. Revisions to Form 10-Q

       As another alternative to the proposed semiannual reporting, we considered revising

Form 10-Q to reduce the burden on reporting companies of filing this form. Potential changes to

Form 10-Q could include changes related to one of the following items or a combination of these

items: required interim financial statement review by an independent public accountant, XBRL

data tagging, MD&A, certain items disclosed in Part II of Form 10-Q such as Item 2 information

required by Item 701 of Regulation S-K and associated referencing to any previously filed Form



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8-K containing Item 701 disclosures, or year-to-date comparisons involving financial statements

and MD&A.

       Relative to the baseline, such revisions to Form 10-Q could reduce reporting companies’

compliance costs in terms of both time and money, thereby potentially enabling the companies to

improve the allocative efficiency of their resources. Private companies could be more inclined to

enter public markets if they expect lower compliance costs under this alternative, and more

companies could decide to remain public for the same reason. To the extent the reduced

disclosure requirements would result in less information provided publicly, however, such

compliance cost savings could be offset by increased costs associated with higher information

asymmetry, such as less liquidity and a higher cost of capital. There could also be other costs

depending on the specific type of revisions that would be made to Form 10-Q under this

alternative. For example, if the revisions would remove the requirement of financial statement

review by an independent public accountant it could increase the likelihood of errors in the

interim financial statements, which could be costly to both issuers and investors.

       Fundamentally, the difference in benefits between this alternative and the proposal is that

the alternative would lower reporting costs by reducing mandated reporting requirements,

whereas the proposal would lower reporting costs by reducing mandated reporting frequency.

The difference in costs would primarily be costs associated with less information disclosed to

investors (and potentially also reliability of quarterly reports depending on type of revisions to

Form 10-Q) under the alternative versus the costs associated with investors receiving existing

disclosures less frequently under the proposal. The optionality of semiannual reporting would

allow issuers to tailor reporting frequency to their own specific situation, whereas the Form 10-Q

revisions under the alternative would apply to all issuers, which could make the proposal more



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beneficial to both issuers and investors than this alternative, all else equal. The comparative cost

and benefits of this alternative versus the proposal would ultimately depend on the extent of the

potential changes to Form 10-Q under the alternative and how many and what type of companies

would elect semiannual reporting under the proposal. It would also depend on how many and

what type of companies would choose to voluntarily provide disclosure that would no longer be

required under the alternative. For example, depending on the specific type of revisions that

would be done to Form 10-Q under this alternative, such a reduction in information could

increase the likelihood that errors in financial statements go unnoticed by investors, reduce

investors’ understanding of changes in the business over time, or increase information

asymmetry and related costs to investors, potentially resulting in less liquidity and a higher cost

of capital.

        G. Request for Comment

        We request comment on all aspects of our economic analysis, including the potential

costs and benefits of the proposed amendments and alternatives, and whether the amendments, if

adopted, would promote efficiency, competition, and capital formation. Commenters are

requested to provide empirical data, estimation methodologies, and other factual support for their

views, in particular, on costs and benefits estimates. In addition, we request comment on the

following:

48.   What would be the benefits to investors from reporting companies’ flexibility to file

      semiannual reports on Form 10-S, instead of quarterly reports on Form 10-Q? Are there

      certain types of companies or industries for which such benefits would be greater than for

      others? Would the benefits to investors be limited to the pass-through of cost savings, or

      would there be other kinds of benefits, such as improved managerial incentives or

      reallocation of company resources to potentially more productive corporate activities?

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49.   What would be the costs to investors from providing reporting companies with flexibility to

      file semiannual reports on Form 10-S, instead of quarterly reports on Form 10-Q? Would

      the option for semiannual reporting increase information asymmetries in ways that impair

      investors’ abilities to make investment and voting decisions? To the extent there are such

      costs or information is reduced, would other regulatory requirements (beyond those

      requiring interim reports) or market forces mitigate such factors?

50.   What compliance cost savings would be realized by companies that would elect the

      proposed semiannual reporting option? Please provide any data regarding the cost of

      preparing quarterly reports, including employee and director time, legal counsel fees,

      external accounting advice or independent public accountant review fees, costs for XBRL

      data tagging, and other costs associated with filing Form 10-Q. To what extent would the

      option to file one semiannual report, rather than two quarterly reports for the same period,

      result in lower costs, such as independent public accountant review fees? Would

      semiannual filers’ audit fees paid—in connection with an annual audit of their financial

      statements or management’s assessment of the effectiveness of internal control over

      financial reporting—be materially different in any way compared to the fees that would

      have been paid if the same company were a quarterly filer?

51.   If the proposal were adopted and a reporting company were to switch from quarterly to

      semiannual reporting as a result, what would be the initial costs of the switch? What would

      be the recurring costs, if any? In connection with such a switch, would there be costs

      associated with procuring, developing, and testing new information technology, engaging

      service providers, or updating policies, procedures, and compliance systems and, if so,

      what would be the amount of those costs? Would there be potential costs associated with



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adjusting or renegotiating contracts and agreements that may rely on quarterly financial

      information, such as loan agreements or managerial compensation contracts, and, if so,

      what would be the amount of those costs?

52.   What percentage of companies currently required to report quarterly on Form 10-Q would

      likely switch to semiannual reporting? Please provide an explanation of any percentage

      estimate(s), including assumptions and methodology used.

53.   What general economic consequences would result from companies electing to report

      semiannually under the proposed flexible approach? Would semiannual filers reallocate

      any resources freed up from a potentially lower reporting burden to alternative uses, such

      as capital expenditure or other business needs?

54.   Are there capital market factors that would limit a reporting company’s ability to switch to

      semiannual reporting if the proposal were adopted? For example, is creditor demand for

      quarterly financial information one such potential limiting factor?

55.   For semiannual filers who would not voluntarily release earnings quarterly, would stock

      price movements around the release of semiannual financial information be more volatile

      compared to movements around quarterly releases? If so, what are the reasons this would

      occur? If so, how would this affect investors, companies, and markets?

56.   If the proposal were to reduce securities analyst coverage of Exchange Act reporting

      companies that elect the semiannual reporting option, what effect would this have on

      investors and companies? How would such a reduction in analyst coverage affect stock

      market price efficiency? How would such a reduction affect liquidity of semiannual filers’

      securities?




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57.     What impact would the proposal—including the proposed option to file interim reports on a

        semiannual basis and the proposed financial statement rule changes, including to age of

        financial statement rules—have on the ability of semiannual filers to conduct public

        offerings? Would any cost savings generated by the less frequent interim reporting be

        offset by a potential perceived need to include quarterly or more recent financial

        information in Securities Act registration statements or prospectuses based on market

        practices or liability concerns? For example, would semiannual filers continue to retain

        independent public accountants to review their financial statements on a quarterly basis to

        facilitate capital-raising by the company in offerings registered under the Securities Act?

58.     Would a company’s valuation or cost of capital differ based on whether the company is a

        quarterly filer or a semiannual filer? Please explain the reasons why there would be a

        difference and provide any specific data. Would less frequent interim reporting negatively

        affect the ability of investors or other market participants to value the company’s

        securities? If cost of capital would increase for semiannual filers, would this result from an

        increase in the cost of equity or cost of debt (or both)? How?

VI.       PAPERWORK REDUCTION ACT ANALYSIS

          A. Summary of the Collections of Information

          Certain provisions of our rules and forms that would be affected by the proposed

amendments contain “collection of information” requirements within the meaning of the

Paperwork Reduction Act (“PRA”). 329 We are submitting the proposed amendments to OMB for

review and approval in accordance with the PRA. 330 The hours and costs associated with



329
      44 U.S.C. 3501 et seq.
330
      44 U.S.C. 3507(d); 5 CFR 1320.11.

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preparing, filing, and sending the forms and retaining records constitute reporting and cost

burdens imposed by each collection of information. An agency may not conduct or sponsor, and

a person is not required to comply with, a collection of information requirement unless it

displays a currently valid OMB control number. The titles for the collections of information are:

          •   Form S-1 (OMB Control No. 3235-0065);

          •   Form S-3 (OMB Control No. 3235-0073);

          •   Form S-4 (OMB Control No. 3235-0324);

          •   Form S-11 (OMB Control No. 3235-0067);

          •   Form 10-K (OMB Control No. 3235-0063);

          •   Form 10-Q (OMB Control No. 3235-0070);

          •   Form 10 (OMB Control No. 3235-0064); and

          •   Form 10-S (a proposed new collection of information).

          We are applying for an OMB control number for the proposed new collection of

information in accordance with 44 U.S.C. 3507(j) and 5 CFR 1320.13, and OMB has not yet

assigned a control number to this new collection. The forms listed above were adopted or, in the

case of proposed Form 10-S, would be adopted under the Securities Act or the Exchange Act.

These forms set forth the disclosure requirements for registration statements, annual reports,

quarterly reports, and proposed semiannual reports filed by registrants to provide investors with

information to make informed investment decisions. 331 Responses to these collections of

information are mandatory. Responses to these information collections are not kept confidential,

and there is no mandatory retention period for the information disclosed.


331
      We are also proposing technical amendments to Form 8-K, Form 6-K, Form 12b-25, and Schedule 14A to
      include references to semiannual reporting. We have not included these filings among the affected collections of
      information because we do not believe the paperwork burden for these filings would change as a result of these
      technical amendments.

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A description of the proposed amendments, including the need for the information and its

use, as well as a description of the likely respondents, can be found in Section III above, and a

discussion of the economic effects of the proposed amendments can be found in Section V

above.

         B. Estimated Paperwork Burden Effects of the Proposed Amendments

         The following PRA Table 1 summarizes the estimated effects of the proposed

amendments on the paperwork burdens associated with the affected forms.

 PRA Table 1. Estimated Paperwork Burden Effects of the Proposed Amendments*

 Proposed Amendment                                                   Affected Forms            Estimated Effect



 § 240.13a-13 and § 240.15d-13                                         Form 10-Q                Estimated reduction of 3,585 Form 10-Q
                                                                                                filings per year**
 Permit reporting companies to file semiannual interim
 reports on Form 10-S in lieu of filing quarterly reports on
 Form 10-Q                                                             Form 10-S                162.2 burden hours per response***
                                                                                                $32,437 cost burden per response****

 Form S-1, Form S-3, Form S-4, Form S-11, Form 10,                     Form S-1                 For all forms shown, 0.2 hour increase in
 Form 10-K                                                             Form S-3                 burden hours per response
                                                                       Form S-4
 Add a check box to indicate whether the registrant has                Form S-11
 elected to file semiannual reports                                    Form 10
                                                                       Form 10-K
  * In this table, the burden hours per response have been rounded to the first decimal place and the cost burden per response has been
  rounded to the nearest dollar.
  ** The estimated reduction of 3,585 Form 10-Q filings per year is calculated as: (1) in connection with proposed new Form 10-S, the
  Annual Responses from Column (A) of PRA Table 4 below (1,195), times (2) 3 (representing the first, second, and third fiscal quarter
  Form 10-Q filings that would no longer be made by a company electing semiannual reporting on Form 10-S).
  *** The burden hours per response for Form 10-S is calculated as: (1) the estimated Burden Hours in Column (B) of PRA Table 4
  below (193,816), divided by (2) the estimated Annual Responses in Column (A) of PRA Table 4 below (1,195).
  **** The cost per response for Form 10-S is calculated as: (1) the estimated Cost Burden in Column (C) of PRA Table 4 below
  ($38,763,204), divided by (2) the estimated Annual Responses in Column (A) of PRA Table 4 below (1,195).


         C. Incremental and Aggregate Burden and Cost Estimates

         We estimate below the incremental and aggregate increase in paperwork burden as a

result of the proposed amendments. These estimates represent the average burden for all

respondents, both large and small. In deriving our estimates, we recognize that the burdens will

likely vary among individual respondents based on a number of factors, including the size and


                                                                         145

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complexity of their business. These estimates include the time and the cost of preparing and

reviewing disclosure, filing documents, and retaining records. We believe that some registrants

would experience costs in excess of this average and some registrants would experience less than

the average costs. Our methodologies for deriving these estimates are discussed below.

        For purposes of the PRA, the burden is generally allocated between burden hours and

costs. The cost burden generally reflects the portion of the burden carried by outside

professionals, while the burden hours generally reflect the portion of the burden carried by the

company internally. With respect to the changes related to the inclusion of a check box on Forms

S-1, S-3, S-4, S-11, 10, and 10-K, we believe the burden would typically be assumed entirely by

the registrant internally and reflected as burden hours and, therefore, we have not reflected an

increased cost burden associated with those proposed amendments. The following PRA Table 2

summarizes the estimated effects of the proposed amendments on the paperwork burdens

associated with these affected collections of information:


 PRA Table 2. Standard Estimated Burden Allocation for Specified Collections of
 Information
                        Number of         Estimated Burden Hour         Total Estimated Incremental
 Form               Estimated Affected   Increase or (Decrease) per   Increase or (Decrease) in Burden
                        Responses            Affected Response                     Hours
                           (A)                      (B)                         (C) = (A) x (B)

 Form S-1                  908                       .2                            181.60
 Form S-3                 1,467                      .2                            293.40
 Form S-4                  588                       .2                            117.60
 Form S-11                 14                        .2                             2.80
 Form 10                   104                       .2                             20.80
 Form 10-K                8,292                      .2                           1,658.40



        With respect to Form 10-Q, we expect the proposed amendments would reduce the

number of annual responses proportionate to the number of registrants that elect to report

semiannually. For purposes of the PRA, taking a conservative approach, we estimate that

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approximately 20% of reporting companies would change their reporting frequency from

quarterly reporting to semiannual reporting if the proposed rules are adopted. 332 As a result, we

estimate that this would result in a reduction of approximately 3,585 Form 10-Q filings per year.

          The following PRA Table 3 summarizes the requested paperwork burden changes to

existing information collections, including the estimated total reporting burdens and costs, under

the proposed amendments.




332
      We derived our estimate that 20% of reporting companies would change their reporting frequency from
      quarterly reporting to semiannual reporting based on an analysis that took into account and synthesized the
      anticipated effects of several factors, including: (1) responses answering “Yes” by 75% of 183 listed companies
      that responded to the survey question, “Do you believe that your company and/or your investors would benefit
      from moving to a semi-annual reporting model?” (Nasdaq 2019); (2) evaluation of the potential impact of the
      factors we discuss in Section III on companies that may be inclined to switch to semiannual reporting but may
      determine to continue to report quarterly, including: expectations of investors and securities analysts, disclosure
      practices that may be prevalent in a company’s industry, contractual obligations, and companies’ insider
      trading-related concerns; and (3) the possibility there will be long-run effects of the proposal if adopted
      whereby some reporting companies switch to semiannual reporting a significant period of time after adoption
      after observing effects on and experiences of other companies that report semiannually. Our estimate that 20%
      of reporting companies would change their reporting frequency from quarterly reporting to semiannual
      reporting does not include these potential long-run effects noted above, because we believed there is a level of
      uncertainty around such potential long-run effects that is too great to include in our estimate for paperwork
      burden purposes.

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PRA Table 3. Requested Paperwork Burden under the Proposed Amendments

              Current Burden                                             Program Change                                                                         Revised Burden



Form          Current        Current Burden       Current Cost           Change in          Number of      Estimated Increase     Estimated Increase or         Annual          Burden Hours***       Cost Burden****
              Annual         Hours                Burden                 Number of          Estimated      or (Decrease) in       (Decrease) in Cost            Responses
              Responses                                                  Annual             Affected       Burden Hours*          Burden**
                                                                         Responses          Responses

              (A)            (B)                  (C)                    (D)                (E)            (F)                    (G)                           (H) = (A) +     (I) = (B) + (F)       (J) = (C) + (G)
                                                                                                                                                                (D)

Form S-1      908            145,861              $262,550,016           0                  908            181.60                 $0                            908             146,043               $262,550,016

Form S-3      1,467          168,291              $302,923,031           0                  1,467          293.40                 $0                            1,467           168,584               $302,923,031

Form S-4      588            560,988              $675,605,379           0                  588            117.60                 $0                            588             561,106               $675,605,379

Form S-11     14             2,564                $4,614,624             0                  14             2.80                   $0                            14              2,567                 $4,614,624

Form 10       104            5,170                $9,305,712             0                  104            20.80                  $0                            104             5,191                 $9,305,712

Form 10-K     8,292          14,056,593           $2,773,166,578         0                  8,292          1,658.40               $0                            8,292           14,058,251            $2,773,166,578

Form 10-Q     19,419         2,624,187            $524,837,313           (3,585)            3,585          (484,459.06)           ($96,891,795)                 15,834          2,139,728             $427,945,518

Total         30,792         17,563,654           $4,553,002,653         (3,585)            14,958         (482,184.46)           ($96,891,795)                 27,207          17,081,470            $4,456,110,858

* The Estimated Increase or (Decrease) in Burden Hours in Column (F) is taken from Column (C) of PRA Table 2 above for Forms S-1, S-3, S-4, S-11, 10, and 10-K and, for Form 10-Q, is calculated as: (1) The Current Burden
Hours in Column (B), divided by (2) Current Annual Responses in Column (A), times (3) the Change in Number of Annual Responses in Column (D). The Estimated Increase or (Decrease) in Burden Hours for each row in
Column (F) has been rounded to the second decimal place.
** The Estimated Increase or (Decrease) in Cost Burden in Column (G) is calculated as: (1) The Current Cost Burden in Column (C), divided by (2) Current Annual Responses in Column (A), times (3) the Change in Number of
Annual Responses in Column (D).
*** Burden Hours for each row in Column (I) have been rounded to the nearest whole number. The total for Column (I) has been calculated using unrounded values in connection with all row items in Column (I) and then
rounding the total to the nearest whole number.
**** Cost Burden for each row in Column (J) has been rounded to the nearest whole number. The total for Column (J) has been calculated using unrounded values in connection with all row items in Column (J) and then rounding
the total to the nearest whole number.




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For purposes of the proposed new Form 10-S, we estimate the number of annual

responses based on the conservative estimate noted above that approximately 20% of reporting

companies will elect to report semiannually. Additionally, while the disclosure requirements of

proposed new Form 10-S for semiannual reporting would be substantially the same as the

disclosure requirements in current Form 10-Q, we believe the burden of Form 10-S would be

incrementally greater than Form 10-Q because it will cover a longer period. 333 Accordingly, we

estimated the burden hour and cost burden for Form 10-S by using the current burden inventory

for Form 10-Q as the starting point and have estimated that the burdens would be approximately

20% higher for Form 10-S. We specifically request comment on the reasonableness of these

estimates.

          The following PRA Table 4 summarizes the requested paperwork burden for the

collection of information for proposed new Form 10-S, including the estimated total reporting

burdens and costs.




333
      Because Form 10-S would cover a six-month period while Form 10-Q covers a three-month period, a
      semiannual filer may take more time to review the applicable period for any disclosure required to be made in
      Form 10-S (than for Form 10-Q). Also, the longer period covered in Form 10-S may mean, depending on a
      semiannual filer’s facts and circumstances—with respect to the same line items that might otherwise be
      disclosed in Form 10-Q if the registrant were a quarterly filer—that there are more instances of these line items
      to disclose in a Form 10-S, requiring the semiannual filer to spend more time preparing these disclosures in a
      Form 10-S than would be spent to prepare similar disclosures in a single Form 10-Q.

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PRA Table 4. Requested Paperwork Burden for the New Collection of Information
                   Requested Paperwork Burden*


Collection of      Annual Responses                               Burden Hours                                  Cost Burden
Information        (A)**                                          (B)***                                        (C)****

Form 10-S          1,195                                          193,817                                       $38,763,204

Notes:
* Numbers in this table have been rounded to the nearest whole number.
** The number of Estimated Affected Responses in Column (A) for Form 10-S (1,195) is the product of: (1) 5,976 affected reporting
companies (the number of registrants identified by CIK that filed a Form 10-K or an amendment thereto during calendar year 2024, as
discussed supra note 206 and accompanying text), times (2) 0.2 (representing the percentage of affected reporting companies we estimate
would elect to report semiannually).
*** The number of Burden Hours in Column (B) is calculated as: (1) the unrounded number in connection with Annual Responses from
Column (A) (1,195.2), times (2) the number of burden hours per Form 10-Q, which is calculated by dividing the Current Burden Hours for
Form 10-Q in Column (B) of PRA Table 3 above (2,624,187) by Current Annual Responses for Form 10-Q in Column (A) of PRA Table
3 above (19,419)), times (3) 1.2 (representing the incrementally greater burden of Form 10-S we estimate as compared to Form 10-Q).
**** The cost burden hours in Column (C) is calculated as: (1) the unrounded number in connection with Annual Responses from
Column (A) (1,195.2), times (2) $27,027 (the cost burden number per Form 10-Q, which is calculated by dividing the Current Cost
Burden for Form 10-Q in Column (C) of PRA Table 3 above ($524,837,313) by Current Annual Responses for Form 10-Q in Column (A)
of PRA Table 3 above (19,419)), times (3) 1.2 (representing the incrementally greater burden of Form 10-S we estimate as compared to
Form 10-Q).




         D. Request for Comment

         Pursuant to 44 U.S.C. 3506(c)(2)(B), we request comment in order to:

         •      Evaluate whether the proposed changes to the collections of information are

                necessary for the proper performance of the functions of the Commission, including

                whether the information will have practical utility;

         •      Evaluate the accuracy of our estimates of the additional burden hours that would

                result from adoption of the proposed amendments and new Form 10-S;

         •      Determine whether there are ways to enhance the quality, utility, and clarity of the

                information to be collected;

         •      Evaluate whether there are ways to minimize the burden of the collections of

                information on those who respond, including through the use of automated collection

                techniques or other forms of information technology; and




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•   Evaluate whether the proposed amendments and new Form 10-S would have any

              effects on any other collection of information not previously identified in this section.

          Any member of the public may direct to us any comments concerning the accuracy of

these burden estimates and any suggestions for reducing these burdens. Persons submitting

comments on the collection of information requirements should direct their comments to the

OMB Desk Officer for the Securities and Exchange Commission,

[email protected], and should send a copy to, Vanessa A.

Countryman, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE,

Washington, DC 20549-1090, with reference to File No. S7-2026-15. Requests for materials

submitted to OMB by the Commission with regard to the collection of information should be in

writing, refer to File No. S7-2026-15 and be submitted to the U.S. Securities and Exchange

Commission, Office of FOIA Services, 100 F Street NE, Washington DC 20549-2736. OMB is

required to make a decision concerning the collections of information between 30 and 60 days

after publication of this release. Consequently, a comment to OMB is best assured of having its

full effect if OMB receives it within 30 days of publication.

VII.      CONGRESSIONAL REVIEW ACT

          For purposes of Subtitle E of the Small Business Regulatory Enforcement Fairness Act of

1996 (also known as the Congressional Review Act), 334 the Commission must seek OMB’s

determination as to whether a final regulation constitutes a “major” rule. Under the

Congressional Review Act, a rule is considered “major” where, if adopted, it results or is likely

to result in:

          •   An annual effect on the economy of $100 million or more;


334
      See 5 U.S.C. chapter 8.

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•   A major increase in costs or prices for consumers or individual industries; or

          •   Significant adverse effects on competition, investment, or innovation. 335

          To help inform OMB’s determination whether any final rule that results from the

proposal would be a “major rule,” we solicit comment and data on:

          •   The potential effect on the U.S. economy on an annual basis;

          •   Any potential increase in costs or prices for consumers or individual industries; and

          •   Any potential effect on competition, investment, or innovation.

          We request those submitting comments to provide data and other factual support for their

views to the extent possible.

VIII. INITIAL REGULATORY FLEXIBILITY ACT ANALYSIS

          The Regulatory Flexibility Act 336 requires an agency, when issuing a rulemaking

proposal, to prepare and make available for public comment an Initial Regulatory Flexibility

Analysis (“IRFA”) that describes the impact of the proposal on small entities, unless the

Commission certifies that the proposal, if adopted, would not have a significant economic impact

on a substantial number of small entities. 337 This IRFA has been prepared in accordance with the

Regulatory Flexibility Act. It relates to the proposed amendments and new Form 10-S described

in Section III above.

          A. Reasons for, and Objectives of, the Proposed Action

           The proposed amendments and new Form 10-S would provide Exchange Act reporting

companies with the option of filing interim reports on a semiannual basis rather than on a

quarterly basis. Semiannual reports would be filed on new Form 10-S in lieu of quarterly reports


335
      See 5 U.S.C. 804(2) (defining “major rule”).
336
      5 U.S.C. 601 et seq.
337
      5 U.S.C. 603(a); 5 U.S.C. 605(b).

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on Form 10-Q. We are also proposing various amendments to Regulation S-X, including age of

financial statement requirements, that will help enable the proposed option to report

semiannually and simplify these requirements. We are also proposing to add a check box to

indicate whether the registrant has elected to file semiannual reports pursuant to Exchange Act

Rule 13a-13(b) or 15d-13(b) to the cover page of Forms S-1, S-3, S-4, S-11, 10, and 10-K. We

are also proposing technical changes, including to various rules that currently refer to quarterly

reporting to refer to semiannual reporting or to Form 10-S and to correct references to rescinded

forms.

         The proposal, if adopted, would provide an Exchange Act reporting company with the

flexibility to determine the frequency of interim reporting that best suits its particular

circumstances. Companies that decide to report on a semiannual basis may reduce interim

reporting compliance costs of time and money. Companies that elect semiannual interim

reporting would incur these interim reporting costs only one time in connection with each fiscal

year instead of three times in connection with each fiscal year pursuant to quarterly reporting.

Providing such regulatory flexibility could reduce the regulatory burden of being a public

company, which could potentially influence a company’s decision to become a public company

and encourage more companies to become public companies.

         The proposed changes to Regulation S-X will conform the financial statement

requirements in periodic reports to the semiannual reporting frequency of semiannual filers. The

proposed changes to Regulation S-X concerning age of financial statement requirements would

also help ensure that, among other things, when semiannual filers file registration statements,

their financial statements in those registration statements are not considered “stale” under

existing rules built along a quarterly framework and would revise those age requirements for



                                                     153

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registrants that would be semiannual filers to fit with their reporting schedule. The proposed

changes to the age of financial statement rules would also simplify existing rules, including by

combining and centralizing the age requirements in a single rule and by using plain wording and

plain methods of counting the age of financial statements in order to reduce the complexity of

existing rules.

          The reasons for, and objectives of, the proposed amendments are discussed in more detail

in Section III above.

          B. Legal Basis

          We are proposing amendments and new Form 10-S under the authority set forth in

Sections 2(a), 4(a), 7, 10, 19(a), and 28 of the Securities Act; Sections 3, 12, 13, 14, 15, 23(a),

and 36 of the Exchange Act; and Section 319(a) of the Trust Indenture Act of 1939.

          C. Small Entities Subject to the Proposed Rules and Amendments

          The proposed amendments and new Form 10-S would apply to registrants that are small

entities. The Regulatory Flexibility Act defines “small entity” to mean “small business,” “small

organization,” or “small governmental jurisdiction.” 338 The regulation at 17 CFR 240.0-10(a)

(Rule 0-10(a) under the Exchange Act) defines a registrant, other than an investment company,

to be a “small business” or “small organization” for purposes of the Regulatory Flexibility Act if

it had total assets of $5 million or less on the last day of its most recent fiscal year. The

regulation at 17 CFR 270.0-10(a) (Rule 0-10(a) under the Investment Company Act of 1940

(“Investment Company Act”)) defines the terms “small business” or “small organization” for

purposes of the Regulatory Flexibility Act as an investment company that, together with other

investment companies in the same group of related investment companies, had net assets of $50



338
      5 U.S.C. 601(6).

                                                      154

--- page 155 ---

million or less as of the end of its most recent fiscal year. 339 The regulation at 17 CFR 230.157

(Rule 157 under the Securities Act) defines a registrant, other than an investment company, to be

a “small business” or “small organization” for purposes of the Regulatory Flexibility Act if it had

total assets of $5 million or less on the last day of its most recent fiscal year and is engaged or

proposing to engage in an offering of securities not exceeding $5 million.

          In connection with Exchange Act Rule 0-10(a), we estimate that there are approximately

705 registrants with a class of securities registered under Section 12 of the Exchange Act that file

reports on Form 10-Q and on Form 10-K that are small entities. 340 We expect that the proposed

amendments that provide the option to report semiannually on Form 10-S in lieu of quarterly on

Form 10-Q and the related proposed amendments to Regulation S-X will affect some reporting

companies that elect to report semiannually and are small entities under the definitions of small

entity under the Exchange Act for purposes of the Regulatory Flexibility Act. In addition, we are

proposing to add a check box to indicate whether the registrant has elected to file semiannual

reports pursuant to Exchange Act Rules 13a-13(b) or 15d-13(b) to the cover page of Form 10 and

10-K. The proposed amendments to Forms 10 and 10-K to provide this check box will affect

registrants that file registration statements on Form 10 or annual reports on Form 10-K, including

registrants that are small entities under the definition of small entity under the Exchange Act for

purposes of the Regulatory Flexibility Act.




339
      Business development companies currently file Form 10-Q quarterly reports and Form 10-K annual reports. See
      supra note 6.
340
      Our estimate is based on the number of registrants (excluding business development companies, face-amount
      certificate companies, and asset-backed securities issuers) that filed a Form 10-K in calendar year 2024 and had
      total assets of $5 million or less on the last day of the fiscal year covered in that Form 10-K filing. We provide
      an estimate for business development companies and face-amount certificate companies that would be small
      entities under the Commission’s Investment Company Act small entity definitions below. We excluded asset-
      backed securities issuers because, although they file Form 10-K, they do not file Form 10-Q.

                                                               155

--- page 156 ---

In connection with Investment Company Act Rule 0-10(a), we estimate that there are

approximately seven business development companies and one face-amount certificate company

that file reports on Form 10-Q and Form 10-K that are small entities. We expect that the

proposed amendments that provide the option to report semiannually on Form 10-S in lieu of

quarterly on Form 10-Q and the related proposed amendments to Regulation S-X will affect

some of these entities that elect to report semiannually and are small entities under the definition

of small entity under the Investment Company Act for purposes of the Regulatory Flexibility

Act. In addition, we are proposing to add a check box to indicate whether the registrant has

elected to file semiannual reports pursuant to Exchange Act Rules 13a-13(b) or 15d-13(b) to

Forms 10 and 10-K. The proposed amendments to Forms 10 and 10-K to provide this check box

will affect entities that file registration statements on Form 10 and annual reports on Form 10-K,

including registrants that are small entities under the definition under the Investment Company

Act for purposes of the Regulatory Flexibility Act.

          We estimate that there are 137 registrants that are small entities for purposes of Securities

Act Rule 157. 341 We are proposing amendments to Regulation S-X to facilitate semiannual

reporting (which would affect financial statements in registration and proxy statements as

described above). We are proposing to add a check box to indicate whether the registrant has

elected to file semiannual reports pursuant to Exchange Act Rules 13a-13(b) or 15d-13(b) to the

cover page of Forms S-1, S-3, S-4, and S-11. The proposed amendments to Regulation S-X and



341
      Our estimate is based on—out of the universe of registrants that have filed on Form 10-K for the calendar year
      2024 and had total assets of $5 million or less on the last day of the fiscal year covered by the Form 10-K—the
      number of those registrants that filed a registration statement on Form S-1, S-3, or S-11 in calendar year 2024.
      For our estimate, we have assumed the number of issuers that actually filed such registration statements in 2024
      provides a good estimate of affected registrants who would be required to complete the check box on the cover
      page of these forms and that, depending on the capital needs of the registrant, it is possible that any future
      offerings using such forms could be for $5 million or less.

                                                              156

--- page 157 ---

to these forms will affect registrants filing registration statements on these forms, including

registrants that are small entities under the definition of small entity under the Securities Act for

purposes of the Regulatory Flexibility Act.

       D. Reporting, Recordkeeping, and Other Compliance Requirements

       We expect that the proposal, which would provide Exchange Act reporting companies

with the option of filing interim reports on a semiannual basis on new Form 10-S rather than

filing Form 10-Q on a quarterly basis and would provide for related amendments to Regulation

S-X, will have a significant effect on reporting, recordkeeping, and other compliance burdens for

registrants, including small entities, if adopted. To comply with existing Form 10-Q filing

obligations, registrants commonly incur costs, including those related to the retention of

professional advisors such as lawyers and accountants, who would provide some of the types of

professional skills necessary for the preparation of the report. If the proposal is adopted,

Exchange Act reporting companies will have the option to file one semiannual report on Form

10-S for each fiscal year in lieu of filing three quarterly reports on Form 10-Q each fiscal year.

As a result, if the proposal is adopted, we expect interim reporting compliance costs for

registrants that are Exchange Act reporting companies that elect to file interim reports

semiannually (instead of quarterly) will be significantly reduced. We generally expect that the

cost reduction and benefit would be greater in absolute terms for larger companies than for

smaller companies, because larger companies may spend more time preparing their Form 10-Q

reports currently than smaller companies due to larger companies’ scope of operations and

because larger companies may incur greater costs to retain outside professionals for similar

reasons. We generally expect, however, that the cost reduction and benefit would be greater in a

relative sense for smaller companies than for larger companies, because the fixed costs of



                                                     157

--- page 158 ---

preparing periodic reports for smaller companies represent a greater percentage of revenue than

for larger companies.

       The proposed changes to Regulation S-X would revise the age of financial statement

requirements for registrants that would be semiannual filers to fit with their reporting schedule.

We expect that these proposed Regulation S-X amendments would reduce registrant costs

compared to the absence of such amendments, because, in connection with registration and

proxy statements, in the absence of such amendments, semiannual filers would be required to file

quarterly financial statements in the registration or proxy statement that they would not be

required to file otherwise under the current Exchange Act periodic reporting system. For the

same reasons discussed above in connection with proposed optional semiannual reporting, we

believe the cost reduction and benefit would be greater in an absolute sense for larger companies

than for smaller companies but that the cost reduction and benefit in a relative sense would be

greater for smaller companies than for larger companies.

       We are also proposing to add a check box to indicate whether the registrant has elected to

file semiannual reports pursuant to Exchange Act Rules 13a-13(b) or 15d-13(b) to the cover page

of Forms S-1, S-3, S-4, S-11, 10, and 10-K. If the proposal is adopted, we expect the addition of

these form check boxes will result in an incremental increase in the time all registrants, including

small entities, spend on preparing these forms for filing with the Commission. We generally

expect that this incremental increase will be the same for larger companies and for smaller

companies.

       Among small entities, we expect that the economic benefits and costs of the proposal

may be based on factors including the nature of their business, which makes it difficult to project

the economic impact on small entities with precision. The proposed amendments and new Form



                                                    158

--- page 159 ---

10-S are discussed in detail in Section III above. We discuss the economic effects, including the

estimated costs and burdens, of the proposed amendments and new Form 10-S on all registrants,

including small entities, in Section V above and discuss the paperwork burden on all registrants,

including small entities, in Section VI above.

       E. Duplicative, Overlapping or Conflicting Federal Rules

       We do not believe the proposed amendments and new Form 10-S would duplicate,

overlap, or conflict with other existing Federal rules. Proposed Form 10-S for semiannual reports

would be substantially similar to existing Form 10-Q, as discussed in Section III above, but

reporting companies would file only one form or the other for purposes of interim reporting,

depending on whether they elect to file interim reports semiannually or file quarterly.

       F. Significant Alternatives

       The Regulatory Flexibility Act directs us to consider alternatives that would accomplish

our stated objectives, while minimizing any significant adverse impact on small entities. In

connection with the proposal, we considered the following alternatives:

       •   Establishing different compliance or reporting requirements or timetables that take

           into account the resources available to small entities;

       •   Clarifying, consolidating, or simplifying compliance and reporting requirements

           under the rules for small entities;

       •   Using performance rather than design standards; and

       •   Exempting small entities from all or part of the requirements.

       The proposal would provide Exchange Act reporting companies with the option of filing

interim reports on a semiannual basis on new Form 10-S rather than filing Form 10-Q on a

quarterly basis and make related changes to financial statement requirements in Regulation S-X.

As discussed above, if the proposal is adopted, we expect interim reporting compliance costs for

                                                    159

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registrants that are Exchange Act reporting companies that elect to file interim reports

semiannually (instead of quarterly) will be significantly reduced. We have not proposed to apply

different compliance and reporting requirements or timetables for small entities or to exempt

small entities from the proposal, because we believe small entities, as with all reporting

companies, should be able to avail themselves of the benefits of the proposal in terms of cost

reduction. The proposed option to report semiannually would consolidate existing reporting

requirements (by replacing three quarterly reports with one semiannual report for semiannual

filers). The proposed option to report semiannually may add incremental complexity to existing

rules by allowing for a choice of options. We believe this complexity is minimal and is a

necessary part of the beneficial flexibility we propose providing to all registrants, including small

entities, with respect to interim reporting. While the proposal would result in this marginal

increase in complexity, we have proposed creating the optional semiannual reporting system in a

manner we believe will be simple for registrants to understand. In particular the proposed

approach would feature simplicity by: (1) maintaining existing quarterly reporting rules as the

default approach but adding an option to report semiannually in lieu thereof, and (2) requiring

the same disclosure in semiannual Form 10-S as in quarterly Form 10-Q (except Form 10-S

would cover a six-month period). This simplicity would mean registrants would not need to

adapt to an entirely different reporting system (although they would need to become familiar

with the potential new semiannual reporting option). We do not believe further simplification,

clarification, or consolidation for small entities is needed.

       Filing interim reports semiannually on Form 10-S with the Commission through its

EDGAR system is a design standard that provides uniformity that enables comparison across

registrants and centralizes the information in a way that makes it readily and freely accessible to



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the investing public. The alternative of a performance standard would not result in uniform,

comparable information across registrants and, therefore, in this case, would not accomplish our

objective of allowing for more flexibility while still providing information necessary for the

protection of investors.

       As described in detail above, the proposed changes to Regulation S-X would conform the

financial statement requirements in periodic reports to the semiannual reporting frequency of

semiannual filers and change the age of financial statement requirements for semiannual filers in

connection with registration and proxy statements to fit with their reporting schedule. We have

not proposed to apply different compliance and reporting requirements or timetables for small

entities or to exempt small entities from the proposed changes to Regulation S-X, because we

believe small entities, as with all reporting companies, should be able to avail themselves of the

benefits of the proposal in terms of cost reduction. The proposed changes to Regulation S-X age

of financial statement rules would clarify, consolidate, and simplify existing rules, including by

combining and centralizing the age requirements in a single rule and by using plain wording and

plain methods of counting the age of financial statements in order to reduce the complexity of

existing rules. We believe these design standards are appropriate for all registrants, including

small entities, because this required financial information provides uniformity that enables

comparison across registrants and enables the investing public to understand the financial

position and performance of the registrant based on consistent principles.

       The proposed changes to registrant forms would add a check box to indicate whether the

registrant has elected to file semiannual reports pursuant to Exchange Act Rule 13a-13(b) or 15d-

13(b) to the cover page of Forms S-1, S-3, S-4, S-11, 10, and 10-K. We have not proposed

different compliance or reporting requirements or different timetables, proposed provisions that



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would consolidate compliance and reporting requirements, or proposed exemptions related to

these check boxes for small entities, because we believe uniformity across all registrants is

necessary to inform investors about the frequency of the company’s disclosure, which may affect

their investment decisions. We believe these check boxes will be simple and will be clear for all

registrants, including small entities: these proposed form amendments are limited to one, short

sentence asking whether the registrant has elected to report semiannually and a check box that

the registrant would be required to check if the registrant has so elected.

       We do not believe there are existing requirements in other rules or forms that could be

consolidated in connection with the addition of the proposed new check box. We believe the

check box is a design standard that is appropriate for all registrants, including small entities,

because it is a simple, clear, and minimally burdensome method to convey the information in a

way that can be easily stored and retrieved by the Commission and the public and is simple to

find on the cover of the filed form. Unlike a performance standard, the check box would provide

a consistent approach at minimal cost.

       G. Request for Comment

       We encourage the submission of comments with respect to any aspect of this IRFA. In

particular, we request comments regarding:

       •   The number of small entities that may be affected by the proposal;

       •   The existence or nature of the potential impact of the proposal on small entities

           discussed in the analysis;

       •   How the proposal could further lower the burden on small entities; and

       •   How to quantify the impact of the proposal.

       We request that commenters describe the nature of any impact and provide empirical data

supporting the extent of the impact. Comments will be considered in the preparation of the Final

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Regulatory Flexibility Analysis if the proposal is adopted and will be placed in the same public

file as other comments on the proposal.

STATUTORY AUTHORITY

        We are proposing the rule and form amendments contained in this document under the

authority set forth in Sections 2(a), 4(a), 7, 10, 19(a), and 28 of the Securities Act; Sections 3, 12,

13, 14, 15, 23(a), and 36 of the Exchange Act; and Section 319(a) of the Trust Indenture Act of

1939.

        List of Subjects

        17 CFR Part 200

        Administrative practice and procedure, Authority delegations (Government agencies),

Electronic filing, Reporting and recordkeeping requirements, Securities.

        17 CFR Part 210

        Accountants, Accounting, Banks, Banking, Employee benefit plans, Holding companies,

Insurance companies, Investment companies, Oil and gas exploration, Reporting and

recordkeeping requirements, Securities, Utilities.

        17 CFR Parts 229 and 249

        Investment companies, Reporting and recordkeeping requirements, Securities.

        17 CFR Parts 230 and 239

        Reporting and recordkeeping requirements, Securities.

        17 CFR Part 232




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Administrative practice and procedure, Electronic Filing, Investment Companies,

Reporting and recordkeeping requirements, Securities.

       17 CFR Part 240

       Administrative practice and procedure, Brokers, Confidential business information,

Fraud, Reporting and recordkeeping requirements, Securities, Swaps.

       17 CFR Part 260

       Reporting and recordkeeping requirements, Securities, Trusts and trustees.

Text of Proposed Amendments

       PART 200—ORGANIZATION; CONDUCT AND ETHICS; AND

INFORMATION AND REQUESTS

       1. The authority citation for part 200 continues to read as follows:

       Authority: 5 U.S.C. 552, 552a, 552b, and 557; 11 U.S.C. 901 and 1109(a); 15 U.S.C.

77c, 77e, 77f, 77g, 77h, 77j, 77o, 77q, 77s, 77u, 77z-3, 77ggg(a), 77hhh, 77sss, 77uuu, 78b,

78c(b), 78d, 78d-1, 78d-2, 78e, 78f, 78g, 78h, 78i, 78k, 78k-1, 78l, 78m, 78n, 78o, 78o-4, 78q,

78q-1, 78t-1, 78u, 78w, 78ll(d), 78mm, 78eee, 80a-8, 80a-20, 80a-24, 80a-29, 80a-37, 80a-41,

80a-44(a), 80a-44(b), 80b-3, 80b-4, 80b-5, 80b-9, 80b-10(a), 80b-11, 7202, and 7211 et seq.; 29

U.S.C. 794; 44 U.S.C. 3506 and 3507; Reorganization Plan No. 10 of 1950 (15 U.S.C. 78d); sec.

8G, Pub. L. 95-452, 92 Stat. 1101 (5 U.S.C. App.); sec. 913, Pub. L. 111-203, 124 Stat. 1376,

1827; sec. 3(a), Pub. L. 114-185, 130 Stat. 538; E.O. 11222, 30 FR 6469, 3 CFR, 1964-1965

Comp., p. 36; E.O. 12356, 47 FR 14874, 3 CFR, 1982 Comp., p. 166; E.O. 12600, 52 FR 23781,

3 CFR, 1987 Comp., p. 235; Information Security Oversight Office Directive No. 1, 47 FR

27836; and 5 CFR 735.104 and 5 CFR parts 2634 and 2635, unless otherwise noted.

       * * * * *


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2. Amend § 200.800(b) by:

       a. Adding “Form 10-S” after “Form 10-Q” in the “Information collection requirement”

column in the table; and

       b. Adding “249.308b” after “249.308a” in the column for “17 CFR part or section where

identified and described” in the table.

       PART 210 – FORM AND CONTENT OF AND REQUIREMENTS FOR

FINANCIAL STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE

ACT OF 1934, INVESTMENT COMPANY ACT OF 1940, INVESTMENT ADVISERS

ACT OF 1940, AND ENERGY POLICY AND CONSERVATION ACT OF 1975

       3. The authority citation for part 210 continues to read as follows:

       Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26),

77nn(25), 77nn(26), 78c, 78j-1, 78l, 78m, 78n, 78o(d), 78q, 78u-5, 78w, 78ll, 78mm, 80a-8, 80a-

20, 80a-29, 80a-30, 80a-31, 80a-37(a), 80b-3, 80b-11, 7202 and 7262, and sec. 102(c), Pub. L.

112-106, 126 Stat. 310 (2012), unless otherwise noted.

       * * * * *

       4. Revise and republish § 210.3-01 to read as follows:

       § 210.3-01 Consolidated balance sheets and age thereof.

       (a) This section sets forth requirements for the registrant and its predecessors for the

balance sheets and the ages of annual balance sheets and of any interim balance sheet based on

the filing date. In a registration or proxy statement, the date of the most recent balance sheet

must be updated to comply with this section’s requirements as if the effective date of the

registration statement, or proposed mailing date in the case of a proxy statement, were the filing

date. The periods for which consolidated statements of comprehensive income and cash flows



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and changes in stockholders’ equity and noncontrolling interests are to be provided are

prescribed elsewhere in this part (see § 210.3-02 and § 210.3-04).

         (b) Annual balance sheets. File audited balance sheets as of the end of each of the two

most recently completed fiscal years, except that, for filings other than Form 10-K:

         (1) If the filing is made no more than 45 days after the end of the registrant’s most

recently completed fiscal year, the audited balance sheets may be as of the end of the two fiscal

years preceding the most recently completed fiscal year and the filing must include an additional

balance sheet as of an interim date specified in paragraph (c)(1) of this section.

         (2) If the filing is made more than 45 days but no more than 59 days (for large

accelerated filers, as defined in § 240.12b-2 of this chapter), 74 days (for accelerated filers, as

defined in § 240.12b-2 of this chapter), or 89 days (for all other registrants) after the end of the

registrant’s most recently completed fiscal year, the registrant may apply paragraph (b)(1) of this

section if the following conditions are met:

         (i) The registrant files annual reports, quarterly or semiannual reports, and other reports

pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 and all reports due have

been filed;

         (ii) For the most recently completed fiscal year, for which audited financial statements

are not yet available the registrant reasonably and in good faith expects to report income

attributable to the registrant after income taxes; and

         (iii) For at least one of the two fiscal years immediately preceding the most recently

completed fiscal year, the registrant reported income attributable to the registrant after income

taxes.




                                                     166

--- page 167 ---

(3) If the registrant was not in existence as of the end of its fiscal year, file an audited

balance sheet dated as of a date not more than 134 days before the date of filing.

        (4) Notwithstanding the requirements of this section, the filing must be updated with

audited financial statements for the most recently completed fiscal year if they become available

prior to the filing date.

        (c) Interim balance sheet. In filings other than on Form 10-K, file a balance sheet as of an

interim date:

        (1) If an audited balance sheet as of the end of the most recently completed fiscal year is

not included in the filing:

        (i) As of the end of the third fiscal quarter of the most recently completed fiscal year for

quarterly filers (as defined in § 240.12b-2 of this chapter); or

        (ii) As of the end of the first fiscal semiannual period of the most recently completed

fiscal year for semiannual filers (as defined in § 240.12b-2 of this chapter).

        (2) If an audited balance sheet as of the end of the most recently completed fiscal year is

included in a filing, as of the end of the registrant’s most recently completed fiscal quarter or

semiannual period for which a Form 10-Q or Form 10-S has been filed or is required to be filed

on or before the filing date. A registrant that is not subject to Exchange Act Section 13(a) or

15(d) must apply this paragraph as if it were required to file Form 10-Q or Form 10-S.

        (3) Any interim balance sheet provided in accordance with the requirements of this

section may be unaudited and need not be presented in greater detail than is required by §

210.10-01.

        (d) For filings by registered management investment companies, the requirements of §

210.3-18 shall apply in lieu of the requirements of this section.



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(e)

       (1) Any foreign private issuer, other than a registered management investment company

or an employee plan, may file the financial statements required by Item 8.A of Form 20-F (§

249.220 of this chapter) in lieu of the financial statements specified in this rule.

       (2) Financial statements of a foreign business which are furnished pursuant to § 210.3-05

or § 210.3-09 because it is an acquired business or a 50 percent or less owned person may be of

the age specified in Item 8.A of Form 20-F.

       5. Remove and reserve § 210.3-12.

       6. Amend § 210.8-03 by:

       a. Redesignating paragraph (b) as paragraph (c) and revising newly redesignated

paragraphs (c)(2) and (c)(5);

       b. Redesignating paragraph (a) as paragraph (b) and revising newly redesignated

paragraph (b)(5);

       c. Redesignating the introductory text as paragraph (a) and revising the newly

redesignated paragraph (a); and

       d. Removing Instruction 1.

       The renumbered and revised paragraphs read as follows:

       § 210.8-03 Interim financial statements.

       (a)

       (1) Interim financial statements may be unaudited; however, before filing, interim

financial statements included in quarterly reports on Form 10-Q (§ 249.308a of this chapter) or

semiannual reports on Form 10-S (§ 249.308b of this chapter) must be reviewed by an

independent public accountant using applicable professional standards and procedures for


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conducting such reviews, as may be modified or supplemented by the Commission. If, in any

filing, the issuer states that interim financial statements have been reviewed by an independent

public accountant, a report of the accountant on the review must be filed with the interim

financial statements.

       (2) For quarterly filers, as defined in § 240.12b-2 of this chapter, interim represents a

fiscal quarterly period, except when the section addresses a year-to-date interim period. Interim

financial statements in a Form 10-Q must include a balance sheet as of the end of the issuer’s

most recently completed fiscal quarter for which the report is being filed, a balance sheet as of

the end of the most recently completed fiscal year, and statements of comprehensive income and

statements of cash flows for the interim period up to the date of such balance sheet and the

comparable period of the preceding fiscal year. For quarterly filers, as defined in §240.12b-2 of

this chapter, where §§ 210.8-01 through 210.8-08 (Article 8 of this part) are applicable to a Form

10-Q (§ 249.308a of this chapter) and the interim period is for the second or third fiscal quarter,

statements of comprehensive income must also be provided for the most recent interim quarter

and the comparable quarter of the preceding fiscal year.

       (3) For semiannual filers, as defined in § 240.12b-2 of this chapter, interim represents a

fiscal semiannual period. Interim financial statements in a Form 10-S must include a balance

sheet as of the end of the issuer’s first fiscal semiannual period, balance sheet as of the end of the

preceding fiscal year, and statements of comprehensive income and statements of cash flows for

the interim period up to the date of such balance sheet and the comparable period of the

preceding fiscal year.

       (b) * * *




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--- page 170 ---

(5) Provide the information required by § 210.3-04 for the current and comparative year-

to-date periods, with subtotals for each quarterly period when the registrant is a quarterly filer (as

defined in § 240.12b-2).

       (c) * * *

       (2) Adjustments. Interim financial statements must include all adjustments that, in the

opinion of management, are necessary in order to make the financial statements not misleading.

An affirmative statement that the financial statements have been so adjusted must be included

with the interim financial statements.

       * * * * *

       (5) Material accounting changes. The registrant’s independent accountant must provide

a letter in the first Form 10-Q (§ 249.308a of this chapter) or Form 10-S (§ 249.308b of this

chapter) filed after the change indicating whether or not the change is to a preferable method.

Disclosure must be provided of any retroactive change to prior period financial statements,

including the effect of any such change on income and income per share.

       * * * * *

       7. Amend § 210.8-08 by:

       a. Removing the introductory text; and

       b. Revising paragraphs (a) and (b).

       The revisions read as follows:

       § 210.8-08 Age of financial statements.

       (a) Annual financial statements. In filings other than on Form 10-K, file audited annual

financial statements for the registrant and its predecessors required by § 210.8-02, except that:




                                                     170

--- page 171 ---

(1) If the effective date of a registration statement or mailing date of a proxy statement is

no more than 45 days after the end of the most recently completed fiscal year, the filing may

include audited financial statements as of the end of the two fiscal years preceding the most

recently completed fiscal year and for the years then ended and interim financial statements

required by paragraph (b)(1) of this section.

       (2) If the effective date of a registration statement or mailing date of a proxy statement is

more than 45 days but not more than 89 days after the end of the most recently completed fiscal

year, the registrant may apply paragraph (a)(1) of this section if the following conditions are met:

       (i) If the smaller reporting company is a reporting company, all reports due must have

been filed;

       (ii) For the most recently completed fiscal year, for which audited financial statements

are not yet available, the smaller reporting company reasonably and in good faith expects to

report income from continuing operations attributable to the registrant before income taxes; and

       (iii) For at least one of the two fiscal years immediately preceding the most recently

completed fiscal year, the smaller reporting company reported income from continuing

operations attributable to the registrant before income taxes.

       (3) Notwithstanding the requirements of this section, the filing must be updated with

audited financial statements for the most recently completed fiscal year if they become available

prior to the date of effectiveness of a registration statement or mailing of a proxy statement.

       (b) Interim financial statements.

       (1) In filings other than on Form 10-Q or Form 10-S, if audited financial statements for

the most recently completed fiscal year are not included in the filing:




                                                    171

--- page 172 ---

(i) file interim financial statements as of the end of the third fiscal quarter of the most

recently completed fiscal year and for the nine months then ended for quarterly filers (as defined

in § 240.12b-2 of this chapter),

        (ii) file interim financial statements as of the end of the first fiscal semiannual period of

the most recently completed fiscal year and for the semiannual period then ended for semiannual

filers (as defined in § 240.12b-2 of this chapter).

        (2) If audited financial statements for the most recently completed fiscal year are

included in a filing other than on Form 10-K, file interim financial statements for the end of the

most recently completed fiscal quarter (for quarterly filers) or semiannual period (for semiannual

filers) and for the year-to-date interim period then ended for which a Form 10-Q or Form 10-S

has been filed, or is required to be filed on or before the filing date. A registrant that is not

subject to Exchange Act Section13(a) or 15(d) must apply this paragraph as if it were required to

file Form 10-Q or Form 10-S.

        (3) Interim financial statements must be prepared and presented in accordance with §

210.8-03 of this part.

        8. Amend § 210.10-01 by revising paragraphs (a)(7) and (b)(1) and (6), the introductory

text to paragraph (c), and paragraphs (c)(1) through (4) and (d).

        The revisions read as follows:

        § 210.10-01 Interim financial statements.

        (a) * * *

        (7) Provide the information required by § 210.3-04 for the current and comparative year-

to-date periods, with subtotals for each quarterly period when the registrant is a quarterly filer (as

defined in § 240.12b-2).



                                                      172

--- page 173 ---

(b) * * *

       (1) Summarized statement of comprehensive income information shall be given

separately as to each subsidiary not consolidated or 50 percent or less owned persons or as to

each group of such subsidiaries or 50 percent or less owned persons for which separate

individual or group statements would otherwise be required for annual periods. Such

summarized information, however, need not be furnished for any such unconsolidated subsidiary

or person which would not be required pursuant to § 240.13a-13 or § 240.15d-13 of this chapter

to file quarterly or semiannual financial information with the Commission if it were a registrant.

       * * * * *

       (6) For filings on Form 10-Q (§ 249.308a of this chapter) or Form 10-S (§ 249.308b of

this chapter), a letter from the registrant’s independent accountant shall be filed as an exhibit (in

accordance with the provisions of 17 CFR 229.601 (Item 601 of Regulation S-K)) in the first

Form 10-Q or Form 10-S after the date of an accounting change indicating whether or not the

change is to an alternative principle which, in the accountant’s judgment, is preferable under the

circumstances; except that no letter from the accountant need be filed when the change is made

in response to a standard adopted by the Financial Accounting Standards Board that requires

such change.

       * * * * *

       (c) Periods to be covered. The periods for which interim financial statements are to be

provided in registration statements are prescribed elsewhere in this part (see, e.g., § 210.3-01 and

§ 210.3-02). For quarterly filers, as defined in §240.12b-2 of this chapter, interim represents a

fiscal quarterly period, except when the section addresses a year-to-date interim period, and, for




                                                     173

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semiannual filers, as defined in §240.12b-2 of this chapter, interim represents a fiscal semiannual

period.

          (1) Provide an interim balance sheet as of the end of the most recently completed fiscal

quarter and a balance sheet as of the end of the most recently completed fiscal year for Form 10-

Q. Provide an interim balance sheet as of the end of the first fiscal semiannual period and a

balance sheet as of the end of the preceding fiscal year for Form 10-S. The balance sheet as of

the end of the preceding fiscal year may be condensed to the same degree as the interim balance

sheet provided. An interim balance sheet as of the end of the corresponding fiscal quarter of the

preceding fiscal year for quarterly filers, or as of the end of the first fiscal semiannual period

from the preceding fiscal year for semiannual filers, need not be provided unless necessary for an

understanding of the impact of seasonal fluctuations on the registrant’s financial condition.

          (2) Provide interim statements of comprehensive income:

          (i) For the most recent fiscal quarter, for the period between the end of the preceding

fiscal year and the end of the most recent fiscal quarter, and for the corresponding periods of the

preceding fiscal year for Form 10-Q; or

          (ii) For the first fiscal semiannual period and the corresponding period of the preceding

fiscal year for Form 10-S.

          (iii) Such statements may also be presented for the cumulative twelve-month period

ended as of the end of the most recent fiscal quarter for Form 10-Q, or first fiscal semiannual

period for Form 10-S, and for the corresponding preceding period.

          (3) Provide interim statements of cash flows:




                                                      174

--- page 175 ---

(i) For the period between the end of the preceding fiscal year and the end of the most

recent fiscal quarter, and for the corresponding period of the preceding fiscal year for Form 10-

Q; or

        (ii) For the period between the end of the preceding fiscal year and the end of the first

fiscal semiannual period and for the corresponding period of the preceding fiscal year for Form

10-S.

        (iii) Such statements may also be presented for the cumulative twelve-month period

ended as of the last day of the most recent fiscal quarter for Form 10-Q, or first fiscal semiannual

period for Form 10-S, and for the corresponding preceding period.

        (4) Registrants engaged in seasonal production and sale of a single-crop agricultural

commodity may provide interim statements of comprehensive income and cash flows for the

twelve-month period ended as of the last day of the most recent fiscal quarter or semiannual

period and for the corresponding preceding period in lieu of the year-to-date statements specified

in paragraphs (c)(2) and (3) of this section.

        (d) Interim review by independent public accountant. Prior to filing, interim financial

statements included in quarterly reports on Form 10-Q or semiannual reports on Form 10-S must

be reviewed by an independent public accountant using applicable professional standards and

procedures for conducting such reviews, as may be modified or supplemented by the

Commission. If, in any filing, the company states that interim financial statements have been

reviewed by an independent public accountant, a report of the accountant on the review must be

filed with the interim financial statements.

        * * * * *




                                                    175

--- page 176 ---

9. Amend § 210.11-02 by revising paragraph (c)(3) and Instruction 1 to paragraph (c)(3)

to read as follows:

       § 210.11-02 Preparation requirements.

       * * * * *

       (c) * * *

       (3) * * *

       Instruction 1 to paragraph (c)(3): In circumstances where different fiscal year ends

exist, § 210.3-01 may require a registrant to include in the pro forma financial information an

acquired or to be acquired foreign business historical period that would be more current than the

periods included in the required historical financial statements of the foreign business.

       * * * * *

       10. Amend § 210.15-01 by revising paragraphs (b) and (c) to read as follows:

       § 210.15-01 Acquisitions of businesses by a shell company (other than a business

combination related shell company).

       * * * * *

       (b) Financial statements. When a registrant is a shell company (other than a business

combination related shell company) and the financial statements of a business that will be

combining with such registrant are required in a registration statement or proxy statement, such

registrant must file financial statements of the business in accordance with §§ 210.3-01 through

210.3-20 and 210.10-01 (Articles 3 and 10 of Regulation S-X) as if the filing were a Securities

Act registration statement for the initial public offering of the business’s equity securities. The

financial statements of the business may be filed pursuant to §§ 210.8-01 through 210.8-08

(Article 8) when that business would qualify to be a smaller reporting company based on its



                                                     176

--- page 177 ---

annual revenues as of the most recently completed fiscal year for which audited financial

statements are available, if it were filing a registration statement alone.

       (c) Age of financial statements. The financial statements of a business that will be

acquired by a shell company (other than a business combination related shell company) must

comply with the requirements in § 210.3-01 (§ 210.8-08 when that business would qualify to be

a smaller reporting company based on its annual revenues as of the most recently completed

fiscal year for which audited financial statements are available, if it were filing a registration

statement alone) as if the financial statements were included in an initial registration statement in

determining the age of financial statements of the business in the registration statement or proxy

statement of the registrant.

       * * * * *

       PART 229—STANDARD INSTRUCTIONS FOR FILING FORMS UNDER

SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY

POLICY AND CONSERVATION ACT OF 1975—REGULATION S-K

       11. The authority citation for part 229 continues to read as follows:

       Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26),

77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1,

78o, 78u-5, 78w, 78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c), 80a-37, 80a-

38(a), 80a-39, 80b-11 and 7201 et seq.; 18 U.S.C. 1350; sec. 953(b), Pub. L. 111-203, 124 Stat.

1904 (2010); and sec. 102(c), Pub. L. 112-106, 126 Stat. 310 (2012).

       * * * * *

       12. Amend § 229.10 by revising paragraphs (f)(2)(i)(A) and (C) and (ii)(C) to read as

follows:



                                                     177

--- page 178 ---

§ 229.10 (Item 10) General.

        * * * * *

        (f) * * *

        (2) * * *

        (i) * * *

        (A) Public float is measured as of the last business day of the issuer’s most recently

completed second fiscal quarter for a quarterly filer (as defined in § 240.12b-2 of this chapter) or

first fiscal semiannual period for a semiannual filer (as defined in § 240.12b-2 of this chapter)

and computed by multiplying the aggregate worldwide number of shares of its voting and non-

voting common equity held by non-affiliates by the price at which the common equity was last

sold, or the average of the bid and asked prices of common equity, in the principal market for the

common equity;

        * * * * *

        (C) An issuer must reflect the determination of whether it came within the definition of

smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the

next year for a quarterly filer or its semiannual report on Form 10-S for the next year for a

semiannual filer, indicating on the cover page of that filing, and in subsequent filings for that

fiscal year, whether it is a smaller reporting company, except that, if a determination based on

public float indicates that the issuer is newly eligible to be a smaller reporting company, the

issuer may choose to reflect this determination beginning with its third quarterly report on Form

10-Q for a quarterly filer or its annual report on Form 10-K for a semiannual filer, rather than

waiting until the quarterly report for the first fiscal quarter of the next fiscal year for a quarterly




                                                      178

--- page 179 ---

filer or the semiannual report for the first fiscal semiannual period of the next fiscal year for a

semiannual filer.

       * * * * *

       (ii) * * *

       (C) The issuer must reflect the determination of whether it came within the definition of

smaller reporting company in the registration statement and must appropriately indicate on the

cover page of the filing, and subsequent filings for the fiscal year in which the filing is made,

whether it is a smaller reporting company. The issuer must re-determine its status at the end of its

second fiscal quarter for a quarterly filer or first fiscal semiannual period for a semiannual filer

and then reflect any change in status as provided in paragraph (f)(2)(i)(C) of this section. In the

case of a determination based on an initial Securities Act registration statement, an issuer that

was not determined to be a smaller reporting company has the option to re-determine its status at

the conclusion of the offering covered by the registration statement based on the actual offering

price and number of shares sold.

       13. Amend § 229.101 by revising paragraph (a)(3)(iii)(A) and (B) and (e)(4)(i) to read as

follows:

       § 229.101 (Item 101) Description of business.

       (a) * * *

       (3) * * *

       (iii) * * *

       (A) If the registration statement is filed prior to the end of the registrant’s second fiscal

quarter for a quarterly filer (as defined in § 240.12b-2 of this chapter) or the end of the registrant




                                                     179

--- page 180 ---

first fiscal semiannual period for a semiannual filer (as defined in § 240.12b-2 of this chapter), a

description of the registrant’s plan of operation for the remainder of the fiscal year; or

       (B) If the registration statement is filed subsequent to the end of the registrant’s second

fiscal quarter for a quarterly filer (as defined in § 240.12b-2 of this chapter) or the end of the

registrant first fiscal semiannual period for a semiannual filer (as defined in § 240.12b-2 of this

chapter), a description of the registrant’s plan of operation for the remainder of the fiscal year

and for the first six months of the next fiscal year. If such information is not available, the

reasons for its not being available shall be stated. Disclosure relating to any plan shall include

such matters as:

       * * * * *

       (e) * * *

       (4)

       (i) Whether you make available free of charge on or through your internet website, if you

have one, your annual report on Form 10-K, quarterly reports on Form 10-Q (§ 249.308a of this

chapter), semiannual reports on Form 10-S (§ 249.308b of this chapter), current reports on Form

8-K (§ 249.308 of this chapter), and amendments to those reports filed or furnished pursuant to

Section 13(a) or 15(d) of the Exchange Act (15 U.S.C. 78m(a) or 78o(d)) as soon as reasonably

practicable after you electronically file such material with, or furnish it to, the SEC;

       * * * * *

       14. Amend § 229.103 by revising paragraph (c)(3)(iii)(B) to read as follows:

       § 229.103 (Item 103) Legal proceedings.

       * * * * *

       (c) * * *



                                                     180

--- page 181 ---

(3) * * *

       (iii) * * *

       (B) the registrant discloses (including any change thereto) in each annual, semiannual,

and quarterly report, and

       * * * * *

       15. Amend § 229.201 by revising paragraph (a)(1)(iii) to read as follows:

       § 229.201 (Item 201) Market price of and dividends on the registrant’s common

equity and related stockholder matters.

       (a) * * *

       (1) * * *

       (iii) Where there is no established public trading market for a class of common equity,

furnish a statement to that effect and, if applicable, state the range of high and low bid

information for each full quarterly period for a quarterly filer (as defined in § 240.12b-2 of this

chapter) or semiannual period for a semiannual filer (as defined in § 240.12b-2 of this chapter)

within the two most recent fiscal years and any subsequent interim period for which financial

statements are included, or are required to be included by 17 CFR 210.3-01 through 210.3-20

(Article 3 of Regulation S-X), indicating the source of such quotations. Reference to quotations

shall be qualified by appropriate explanation. For purposes of this Item the existence of limited

or sporadic quotations should not of itself be deemed to constitute an “established public trading

market.”

       * * * * *

       16. Amend § 229.302 by revising paragraph (a) to read as follows:

       § 229.302 (Item 302) Supplementary financial information.



                                                    181

--- page 182 ---

(a) Disclosure of material quarterly or semiannual changes. When there are one or more

retrospective changes to the statements of comprehensive income for any of the quarters or

semiannual periods within the two most recent fiscal years or any subsequent interim period for

which financial statements are included or are required to be included by §§ 210.3-01 through

210.3-20 of this chapter (Article 3 of Regulation S-X) that individually or in the aggregate are

material, provide an explanation of the reasons for such material changes and disclose, for each

affected fiscal quarterly period or fiscal semiannual period and the fourth fiscal quarter or second

fiscal semiannual period in the affected year, summarized financial information related to the

statements of comprehensive income as specified in § 210.1-02(bb)(1)(ii) of this chapter (Rule 1-

02(bb)(1)(ii) of Regulation S-X) and earnings per share reflecting such changes.

       * * * * *

       17. Amend § 229.303 by revising paragraph (c)(2)(ii) to read as follows:

       § 229.303 (Item 303) Management’s discussion and analysis of financial condition

and results of operations.

       * * * * *

       (c) * * *

       (2) * * *

       (ii) For quarterly filers (as defined in § 240.12b-2 of this chapter), discuss any material

changes in the registrant’s results of operations with respect to either the most recent fiscal

quarter for which a statement of comprehensive income is provided and the corresponding fiscal

quarter for the preceding fiscal year or, in the alternative, the most recent fiscal quarter for which

a statement of comprehensive income is provided and the immediately preceding sequential

fiscal quarter. For semiannual filers (as defined in § 240.12b-2 of this chapter), discuss any



                                                     182

--- page 183 ---

material changes in the registrant’s results of operations with respect to the most recent fiscal

semiannual period for which a statement of comprehensive income is provided and the

corresponding fiscal semiannual period for the preceding fiscal year or, in the alternative, the

most recent fiscal semiannual period for which a statement of comprehensive income is provided

and the immediately preceding fiscal semiannual period. If the immediately preceding sequential

fiscal quarter or semiannual period is discussed, then provide in summary form the financial

information for that immediately preceding sequential fiscal quarter or semiannual period that is

the subject of the discussion or identify the registrant’s prior filings on EDGAR that present such

information. If there is a change in the form of presentation from fiscal period to fiscal period

that forms the basis of comparison from previous fiscal periods provided pursuant to this

paragraph, the registrant must discuss the reasons for changing the basis of comparison and

provide both comparisons in the first filing in which the change is made.

       * * * * *

       18. Amend § 229.308 by revising paragraph (c) to read as follows:

       § 229.308 (Item 308) Internal control over financial reporting.

       * * * * *

       (c) Changes in internal control over financial reporting. Disclose any change in the

registrant’s internal control over financial reporting identified in connection with the evaluation

required by paragraph (d) of § 240.13a-15 or 240.15d-15 of this chapter that, for quarterly filers

(as defined in § 240.12b-2 of this chapter), occurred during the registrant’s last fiscal quarter (the

registrant’s fourth fiscal quarter in the case of an annual report) or that, for semiannual filers (as

defined in § 240.12b-2 of this chapter), occurred during the registrant’s first fiscal semiannual

period (the registrant’s second fiscal semiannual period in the case of an annual report) that has



                                                     183

--- page 184 ---

materially affected, or is reasonably likely to materially affect, the registrant's internal control

over financial reporting.

        * * * * *

        19. Amend § 229.402 by revising paragraph (x)(2)(i) to read as follows:

        § 229.402 (Item 402) Executive compensation.

        * * * * *

        (x) * * *

        (2) * * *

        (i) If, during the last completed fiscal year, the registrant awarded options to a named

executive officer in the period beginning four business days before the filing of a periodic report

on Form 10-Q (§ 249.308a of this chapter), Form 10-S (§ 249.308b of this chapter), or Form 10-

K (§ 249.310 of this chapter), or the filing or furnishing of a current report on Form 8-K (§

249.308 of this chapter) that discloses material nonpublic information (other than a current report

on Form 8-K disclosing a material new option award grant under Item 5.02(e) of that form), and

ending one business day after the filing or furnishing of such report provide the information

specified in paragraph (x)(2)(ii) of this section, concerning each such award for each of the

named executive officers in the following tabular format:

        * * * * *

        20. Amend § 229.407 by revising the instructions to paragraphs (c)(2)(ix) and (c)(3) to

read as follows:

        § 229.407 (Item 407) Corporate governance.

        * * * * *

        (c) * * *



                                                      184

--- page 185 ---

(2) * * *

        (ix) * * *

        Instructions to Item 407(c)(2)(ix). 1. For purposes of paragraph (c)(2)(ix) of this Item, the

percentage of securities held by a nominating security holder may be determined using

information set forth in the registrant’s most recent quarterly, semiannual, or annual report, and

any current report subsequent thereto, filed with the Commission pursuant to the Exchange Act

(or, in the case of a registrant that is an investment company registered under the Investment

Company Act of 1940, the registrant’s most recent report on Form N-CSR (§§ 249.331 and

274.128 of this chapter)), unless the party relying on such report knows or has reason to believe

that the information contained therein is inaccurate.

        * * * * *

        (3) * * *

        Instructions to Item 407(c)(3). 1. The disclosure required in paragraph (c)(3) of this Item

need only be provided in a registrant’s quarterly, semiannual, or annual reports.

        * * * * *

        21. Amend § 229.408 by revising the instructions to paragraph (a)(1) to read as follows:

        § 229.408 (Item 408) Insider trading arrangements and policies.

        (a) * * *

        (1) Disclose whether, for quarterly filers (as defined in § 240.12b-2 of this chapter),

during the registrant’s last fiscal quarter (the registrant’s fourth fiscal quarter in the case of an

annual report), or for semiannual filers (as defined in § 240.12b-2 of this chapter), during the

registrant’s first fiscal semiannual period (the registrant’s second fiscal semiannual period in the




                                                      185

--- page 186 ---

case of an annual report), any director or officer (as defined in § 240.16a-1(f) of this chapter)

adopted or terminated:

        * * * * *

        22. Amend § 229.601 by:

        a. Adding a column for “10-S” between the column for “10-Q” and the column for “10-

K” and revising the entries for rows (2), (3)(i) and (ii), (4), (6), (10), (13), (15), (18), (22), (23),

(24), (31), (37) through (94), (95), (99), (101) and (104) and footnote 6 to the exhibit table in

paragraph (a);

        b. Revising paragraph (a)(4), Instruction 3 to paragraph (b)(10), and paragraph (b)(4),

(13), (15), (95), (99), and (101); and

        c. Revising paragraph (b)(31)(i) to add the words “or most recent fiscal semiannual

period for registrants that report semiannually (the registrant’s second fiscal semiannual period in

the case of an annual report)” after the words “Disclosed in this report any change in the

registrant’s internal control over financial reporting that occurred during the registrant’s most

recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)”;

        Other than the revisions to paragraph (b)(31)(i), the additions and revisions read as

follows:

        § 229.601 (Item 601) Exhibits.

        (a) * * *

        (4) If a material contract or plan of acquisition, reorganization, arrangement, liquidation

or succession is executed or becomes effective during the reporting period reflected by a Form

10-Q, Form 10-S, or Form 10-K, it must be filed as an exhibit to the Form 10-Q, Form 10-S, or

Form 10-K filed for the corresponding period. Any amendment or modification to a previously



                                                       186

--- page 187 ---

filed exhibit to a Form 10, 10-K, 10-Q, or 10-S document must be filed as an exhibit to a Form

10-Q or Form 10-S and to the Form 10-K. Such amendment or modification need not be filed

where such previously filed exhibit would not be currently required.

       * * * * *

       Exhibit Table

       * * * * *




                                                  187

--- page 188 ---

Exhibit Table
                                                   Securities Act Forms                                            Exchange Act Forms
                                                                                                           8-         10-    10-              10-     ABS
                                S-1   S-3   SF-1   SF-3   S-4 1   S-8     S-11 F-1     F-3   F-4 1   10    K2         D      Q      10-S      K       -EE
                                                                        * * * * *
(2) Plan of acquisition,        X     X     X      X      X               X     X      X     X       X     X                  X       X       X
reorganization,
arrangement, liquidation or
succession
(3) (i) Articles of             X           X      X      X               X      X           X       X     X          X       X       X       X
incorporation
(ii) Bylaws                     X           X      X      X               X      X           X       X     X          X       X       X       X
(4) Instruments defining the    X     X     X      X      X       X       X      X     X     X       X     X          X       X       X       X
rights of securities holders,
including indentures, (i)
through (v)
                                                                        * * * * *
(6) [Reserved]                  N/A   N/A   N/A    N/A    N/A     N/A     N/A   N/A    N/A   N/A     N/A   N/A        N/A     N/A     N/A     N/A     N/A
                                                                        * * * * *
(10) Material contracts         X           X      X      X               X     X            X       X                X       X       X       X
                                                                        * * * * *
(13) Annual report to                                     X                                                                   X       X       X
security holders, Form 10-S
or semiannual report to
security holders, Form 10-
Q or quarterly report to
security holders 3
                                                                        * * * * *
(15) Letter re unaudited        X     X                   X       X       X     X      X     X                                X       X
interim financial
information
                                                                        * * * * *
(18) Letter re change in                                                                                                      X       X       X
accounting principles
                                                                        * * * * *
(22) Subsidiary guarantors      X     X     X      X      X               X     X      X     X       X                        X       X       X
and issuers of guaranteed
securities and affiliates
whose securities
collateralize securities of
the registrant
(23) Consents of experts        X     X     X      X      X       X       X      X     X     X             5
                                                                                                               X      5
                                                                                                                          X   5
                                                                                                                                  X   5
                                                                                                                                          X   5
                                                                                                                                                  X
and counsel
(24) Power of attorney          X     X     X      X      X       X       X     X      X     X       X     X                  X       X       X
                                                                        * * * * *
(31) (i) Rule 13a-14(a)/15d-                                                                                                  X       X       X
14(a) Certifications
(32) Section 1350                                                                                                             X       X       X
Certifications 6
                                                                        * * * * *
(37) through (94)               N/A   N/A   N/A    N/A    N/A     N/A     N/A   N/A    N/A   N/A     N/A   N/A        N/A     N/A     N/A     N/A     N/A
[Reserved]
(95) Mine Safety                                                                                                              X       X       X
Disclosure Exhibit
                                                                        * * * * *
(99) Additional exhibits        X     X     X      X      X       X       X     X      X     X       X     X          X       X       X       X
                                                                        * * * * *
(101) Interactive Data File     X     X                   X               X     X      X     X             X                  X       X       X
                                                                        * * * * *
(104) Cover Page                                                                                           X                  X       X       X
Interactive Data File




                          * * *




                                                                               188

--- page 189 ---

6
           Pursuant to §§ 240.13a-13(c)(3) and 240.15d-13(c)(3) of this chapter, asset-backed

issuers are not required to file reports on Form 10-Q or Form 10-S.

       * * * * *

       (b) * * *

       (4) * * *

       (v) With respect to Forms 8-K, 10-Q, and 10-S under the Exchange Act that are filed and

that disclose, in the text of the Forms 10-Q or 10-S, the interim financial statements, or the

footnotes thereto the creation of a new class of securities or indebtedness or the modification of

existing rights of security holders, file all instruments defining the rights of holders of these

securities or indebtedness. However, there need not be filed any instrument with respect to long-

term debt not being registered which meets the exclusion set forth in paragraph (b)(4)(iii)(A) of

this Item.

       * * * * *

       (10) * * *

       Instruction 3 to paragraph (b)(10): If a material contract is executed or becomes effective

during the reporting period reflected by a Form 10-Q, Form 10-S, or Form 10-K, it must be filed

as an exhibit to the Form 10-Q, Form 10-S, or Form 10-K filed for the corresponding period. See

paragraph (a)(4) of this Item. With respect to quarterly reports on Form 10-Q or semiannual

reports on Form 10-S, only those contracts executed or becoming effective during the most

recent period reflected in the report must be filed.

       * * * * *

   (13) Annual, semiannual, or quarterly report to security holders.




                                                       189

--- page 190 ---

(i) The registrant’s annual report to security holders for its last fiscal year or its

semiannual or quarterly report to security holders, if all or a portion thereof is incorporated by

reference in the filing. Such report, except for those portions thereof that are expressly

incorporated by reference in the filing, is to be furnished for the information of the Commission

and is not to be deemed “filed” as part of the filing. If the financial statements in the report have

been incorporated by reference in the filing, the accountant’s certificate must be manually signed

in one copy. See Rule 439 (§ 230.439 of this chapter).

       (ii) Electronic filings. If all, or any portion, of the annual, semiannual, or quarterly report

to security holders is incorporated by reference into any electronic filing, all, or such portion of

the annual, semiannual, or quarterly report to security holders so incorporated, must be filed in

electronic format as an exhibit to the filing.

       * * * * *

       (15) Letter re unaudited interim financial information. A letter, where applicable, from

the independent accountant that acknowledges awareness of the use in a registration statement of

a report on unaudited interim financial information that pursuant to Rule 436(c) under the

Securities Act (§ 230.436(c) of this chapter) is not considered a part of a registration statement

prepared or certified by an accountant or a report prepared or certified by an accountant within

the meaning of sections 7 and 11 of that Act. Such letter may be filed with the registration

statement, an amendment thereto, or a report on Form 10-Q or a report on Form 10-S which is

incorporated by reference into the registration statement.

       * * * * *

       (95) Mine Safety Disclosure Exhibit. A registrant that is an operator, or that has a

subsidiary that is an operator, of a coal or other mine must provide the information required by



                                                     190

--- page 191 ---

Item 104 of Regulation S-K (§ 229.104 of this chapter) in an exhibit to its Exchange Act annual,

semiannual, or quarterly report. For purposes of this Item:

       * * * * *

       (99) * * *

       (ii) If pursuant to Section 11(a) of the Securities Act (15 U.S.C. 77k(a)) an issuer makes

generally available to its security holders an earnings statement covering a period of at least 12

months beginning after the effective date of the registration statement, and if such earnings

statement is made available by “other methods” than those specified in paragraphs (a) or (b) of §

230.158 of this chapter, it must be filed as an exhibit to the Form 10-Q, Form 10-S, or the Form

10-K, as appropriate, covering the period in which the earnings statement was released.

       * * * * *

       (101) * * *

       (i) * * *

       (A) First is required for a periodic report on Form 10-Q (§ 249.308a of this chapter),

Form 10-S (§ 249.308b of this chapter), Form 20-F (§ 249.220f of this chapter), or Form 40-F (§

249.240f of this chapter), as applicable;

       * * * * *

       23. Amend § 229.701 by revising paragraph (e) to read as follows:

       § 229.701 (Item 701) Recent sales of unregistered securities; use of proceeds from

registered securities.

       * * * * *

       (e) Terms of conversion or exercise. If the information called for by this paragraph (e) is

being presented on Form 8-K, Form 10-Q, Form 10-S, Form 10-K, or Form 10-D under the



                                                    191

--- page 192 ---

Exchange Act (§ 249.308, § 249.308a, § 249.308b, § 240.310 or § 249.312 of this chapter), and

where the securities sold by the registrant are convertible or exchangeable into equity securities,

or are warrants or options representing equity securities, disclose the terms of conversion or

exercise of the securities.

        * * * * *

        24. Amend § 229.1010 by revising paragraph (a)(2) to read as follows:

        § 229.1010 (Item 1010) Financial statements.

        (a) * * *

        (2) Unaudited balance sheets, comparative year-to-date statements of comprehensive

income (as defined in § 210.1-02 of this chapter) and related earnings per share data, and

statements of cash flows required to be included in the company’s most recent quarterly or

semiannual report filed under the Exchange Act; and

        * * * * *

        25. Amend § 229.1100 by revising paragraph (c)(2)(ii)(F) to read as follows:

        § 229.1100 (Item 1100) General.

        * * * * *

        (c) * * *

        (2) * * *

        (ii) * * *

        (F) The third party is a U.S. Government-sponsored enterprise, has outstanding securities

held by non-affiliates with an aggregate market value of $75 million or more, and makes

information publicly available on an annual and semiannual basis (for semiannual filers, as

defined in § 240.12b-2 of this chapter) or quarterly basis (for quarterly filers, as defined in §



                                                     192

--- page 193 ---

240.12b-2 of this chapter), including audited financial statements prepared in accordance with

generally accepted accounting principles covering the same periods that would be required for

audited financial statements under §§ 210.1-01 through 210.13-02 (Regulation S-X) of this

chapter and non-financial information consistent with that required by this part (Regulation S-K).

       * * * * *

       PART 230–-GENERAL RULES AND REGULATIONS, SECURITIES ACT OF

1933

       26. The general authority citation for part 230 continues to read, in part, as follows:

       Authority: 15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss,

78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o-7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28,

80a-29, 80a-30, and 80a-37, and Pub. L. No. 112-106, sec. 201(a), sec. 401, 126 Stat. 313

(2012), unless otherwise noted.

       * * * * *

       27. Amend § 230.138 by revising paragraph (a)(2)(i)(A) to read as follows:

       § 230.138 Publications or distributions of research reports by brokers or dealers

about securities other than those they are distributing.

       (a) * * *

       (2) * * *

       (i) * * *

       (A) The issuer as of the date of reliance on this section: Is required to file reports, and has

filed all periodic reports required during the preceding 12 months (or such shorter time that the

issuer was required to file such reports) on Forms 10-K (§ 249.310 of this chapter), 10-S (§

249.308b of this chapter), 10-Q (§ 249.308a of this chapter), and 20-F (§ 249.220f of this



                                                    193

--- page 194 ---

chapter) pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (15

U.S.C. 78m or 78o(d)); or

       * * * * *

       28. Amend § 230.139 by revising paragraph (a)(1)(i)(A)(2) to read as follows:

       § 230.139 Publications or distributions of research reports by brokers or dealers

distributing securities.

       (a) * * *

       (1) * * *

       (i) * * *

       (A) * * *

       (2) As of the date of reliance on this section, has filed all periodic reports required during

the preceding 12 months on Forms 10-K (§ 249.310 of this chapter), 10-S (§ 249.308b of this

chapter), 10-Q (§ 249.308a of this chapter), and 20-F (§ 249.220f of this chapter) pursuant to

section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); or

       * * * * *

           29. Amend § 230.139b by revising paragraph (a)(1)(i)(A)(2) to read as follows:

       § 230.139b Publications or distributions of covered investment fund research

reports by brokers or dealers distributing securities.

       (a) * * *

       (1) * * *

       (i) * * *

       (A) * * *




                                                    194

--- page 195 ---

(2) If the covered investment fund is not a registered investment company under the

Investment Company Act, has been subject to the reporting requirements of section 13 or section

15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) (15 U.S.C. 78m or 78o(d))

for a period of at least 12 calendar months and has filed in a timely manner all of the reports

required to be filed for the immediately preceding 12 calendar months on Forms 10-K (§ 249.310

of this chapter), 10-S (§ 249.308b of this chapter), and 10-Q (§ 249.308a of this chapter), or 20-F

(§ 249.220f of this chapter) pursuant to section 13 or section 15(d) of the Exchange Act; and

       * * * * *

       30. Amend § 230.144 by revising paragraph (c):

       § 230.144 Persons deemed not to be engaged in a distribution and therefore not

underwriters.

       * * * * *

       (c) * * *

       Note to § 230.144(c): With respect to paragraph (c)(1), the person can rely upon:

       1. A statement in whichever is the most recent report, quarterly, semiannual, or annual,

required to be filed and filed by the issuer that such issuer has:

       * * * * *

       31. Amend § 230.158 by revising paragraph (a)(1)(i), (a)(2)(i), and (b)(2) to read as

follows:

       § 230.158 Definitions of certain terms in the last paragraph of section 11(a).

       (a) * * *

       (1)




                                                     195

--- page 196 ---

(i): In Item 8 of Form 10-K (§ 239.310 of this chapter), Item 1 of Part I of Form 10-S (§

240.308b of this chapter), Item 1 of Part I of Form 10-Q (§ 240.308a of this chapter), or Rule

14a-3(b) (§ 240.14a-3(b) of this chapter) under the Securities Exchange Act of 1934;

       * * * * *

       (2) * * *

       (i) On Form 10-K, Form 10-S, Form 10-Q, Form 8-K (§ 249.308 of this chapter), or in

the annual report to security holders pursuant to Rule 14a-3 under the Securities Exchange Act of

1934 (§ 240.14a-3 of this chapter); or

       * * * * *

       (b) * * *

       (2) Has filed its report or reports on Form 10-K, Form 10-S, Form 10-Q, Form 8-K, Form

20-F, Form 40-F, or Form 6-K, or has submitted to the Commission in electronic format, in

accordance with the EDGAR Filer Manual, its annual report sent to security holders pursuant to

Rule 14a-3(c) (§ 240.14a-3(c) of this chapter) containing such information. A registrant may use

other methods to make an earning statement “generally available to its security holders” for

purposes of the last paragraph of section 11(a).

       * * * * *

       32. Amend § 230.175 by revising paragraph (b)(1) and (2) to read as follows:

       § 230.175 Liability for certain statements by issuers.

       * * * * *

       (b) * * *

       (1) A forward-looking statement (as defined in paragraph (c) of this section) made in a

document filed with the Commission, in Part I of a quarterly report on Form 10-Q (§ 249.308a of



                                                   196

--- page 197 ---

this chapter), Part I of a semiannual report on Form 10-S (§ 249.308b of this chapter) or in an

annual report to security holders meeting the requirements of Rule 14a-3(b) and (c) or 14c-3(a)

and (b) under the Securities Exchange Act of 1934 (§§ 240.14a-3(b) and (c) or 240.14c-3(a) and

(b) of this chapter), a statement reaffirming such forward-looking statement after the date the

document was filed or the annual report was made publicly available, or a forward-looking

statement made before the date the document was filed or the date the annual report was publicly

available if such statement is reaffirmed in a filed document, in Part I of a quarterly report on

Form 10-Q, in Part I of a semiannual report on Form 10-S, or in an annual report made publicly

available within a reasonable time after the making of such forward-looking statement; Provided,

that

       * * * * *

       (2) Information that is disclosed in a document filed with the Commission, in Part I of a

quarterly report on Form 10-Q (§ 249.308a of this chapter), in Part I of a semiannual report on

Form 10-S, or in an annual report to shareholders meeting the requirements of Rules 14a-3 (b)

and (c) or 14c-3 (a) and (b) under the Securities Exchange Act of 1934 (§§ 240.14a-3(b) and (c)

or 240.14c-3(a) and (b) of this chapter) and that relates to:

       * * * * *

       33. Amend § 230.405 by:

       a.   Adding in alphabetical order a definition for the terms “quarterly filer” and

“semiannual filer”; and

       b. Revising paragraph (3)(i)(A) and (C) and (ii)(C) of the definition of “smaller

reporting company”.

       The additions and revisions read as follows:



                                                     197

--- page 198 ---

§ 230.405 Definitions of terms.

       * * * * *

       Quarterly filer. A registrant that is required to file quarterly reports on Form 10-Q,

pursuant to § 240.13a-13(a) of this part.

       * * * * *

       Semiannual filer. A registrant that is required to file semiannual reports on Form 10-S,

pursuant to § 240.13a-13(b) of this part.

       * * * * *

       Smaller reporting company.

       * * * * *

       (3) * * *

       (i) * * *

       (A) Public float is measured as of the last business day of the issuer’s most recently

completed second fiscal quarter for a quarterly filer or first fiscal semiannual period for a

semiannual filer and computed by multiplying the aggregate worldwide number of shares of its

voting and non-voting common equity held by non-affiliates by the price at which the common

equity was last sold, or the average of the bid and asked prices of common equity, in the

principal market for the common equity;

       (C) An issuer must reflect the determination of whether it came within the definition of

smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the

next year for a quarterly filer or its semiannual report on Form 10-S for the next year for a

semiannual filer, indicating on the cover page of that filing, and in subsequent filings for that

fiscal year, whether it is a smaller reporting company, except that, if a determination based on



                                                    198

--- page 199 ---

public float indicates that the issuer is newly eligible to be a smaller reporting company, the

issuer may choose to reflect this determination beginning with its third quarterly report on Form

10-Q for a quarterly filer or its annual report on Form 10-K for a semiannual filer, rather than

waiting until the quarterly report for the first fiscal quarter of the next fiscal year for a quarterly

filer or the semiannual report for the first fiscal semiannual period of the next fiscal year for a

semiannual filer.

        * * * * *

        (ii) * * *

        (C) The issuer must reflect the determination of whether it came within the definition of

smaller reporting company in the registration statement and must appropriately indicate on the

cover page of the filing, and subsequent filings for the fiscal year in which the filing is made,

whether it is a smaller reporting company. The issuer must re-determine its status at the end of its

second fiscal quarter for a quarterly filer or at the end of its first fiscal semiannual period for a

semiannual filer and then reflect any change in status as provided in paragraph (3)(i)(C) of this

definition. In the case of a determination based on an initial Securities Act registration statement,

an issuer that was not determined to be a smaller reporting company has the option to re-

determine its status at the conclusion of the offering covered by the registration statement based

on the actual offering price and number of shares sold.

        * * * * *

        34. Amend § 230.485 by revising paragraph (b)(i)(1) to read as follows:

        § 230.485 Effective date of post-effective amendments filed by certain registered

investment companies or issuers offering registered non-variable annuities.

        * * * * *



                                                      199

--- page 200 ---

(b) * * *

        (1) * * *

        (i) Bringing the financial statements up to date under section 10(a)(3) of the Securities

Act of 1933 [15 U.S.C. 77j(a)(3)] or Rules 3-01 or 3-18 of Regulation S-X [17 CFR 210.3-01

and 210.3-18];

        * * * * *

        PART 232 — REGULATION S-T — GENERAL RULES AND REGULATIONS

FOR ELECTRONIC FILINGS

        35. The general authority citation for part 232 continues to read, in part, as follows:

            Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 77sss(a), 78c(b), 78l,

78m, 78n, 78n-1, 78o(d), 78w(a), 78ll, 80a-6(c), 80a-8, 80a-29, 80a-30, 80a-37, 7201 et seq.; and

18 U.S.C. 1350, unless otherwise noted.

        * * * * *

        36. Amend § 232.11 by deleting both the first and second definitions of “related official

filing” and, in their place, adding a single revised definition of “related official filing” to read as

follows:

        § 232.11 Definition of terms used in this part.

        * * * * *

        Related Official Filing. The term Related Official Filing means the ASCII or HTML

format part of the official filing with which all or part of an Interactive Data File appears as an

exhibit or, in the case of a filing on Form N-1A (§§ 239.15A and 274.11A of this chapter), Form

N-2 (§§ 239.14 and 274.11a-1 of this chapter), Form N-3 (§§ 239.17a and 274.11b of this

chapter), Form N-4 (§§ 239.17b and 274.11c of this chapter), Form N-6 (§§ 239.17c and 274.11d



                                                      200

--- page 201 ---

of this chapter), Form N-8B-2 (§ 274.12 of this chapter), Form S-6 (§ 239.16 of this chapter),

and Form N-CSR (§ 274.128 of this chapter), and, to the extent required by § 232.405 (Rule 405

of Regulation S-T) for a business development company as defined in Section 2(a)(48) of the

Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), Form 10-K (§ 249.310 of this

chapter), Form 10-S (§ 249.308b of this chapter), Form 10-Q (§ 249.308a of this chapter), and

Form 8-K (§ 249.308 of this chapter), the ASCII or HTML format part of an official filing that

contains the information to which an Interactive Data File corresponds.

       * * * * *

       37. Amend § 232.303 by revising paragraph (b) to read as follows:

       § 232.303 Incorporation by reference.

       * * * * *

       (b) If a filer incorporates by reference into an electronic filing any portion of an annual,

semiannual, or quarterly report to security holders, it must also file the portion of the annual,

semiannual, or quarterly report to security holders in electronic format as an exhibit to the filing,

as required by Regulation S-K Item 601(b)(13) (§ 229.601(b)(13) of this chapter). If a foreign

private issuer incorporates by reference into an electronic filing any portion of an annual or other

report to security holders, or of a Form 6-K report (§ 249.306 of this chapter) filed or submitted

in paper, it also must file the incorporated portion in electronic format as an exhibit to the filing.

The requirements of this paragraph do not apply to incorporation by reference by an investment

company from an annual, semiannual, or quarterly report to security holders.

       38. Amend § 232.405 by revising Note 1 to read as follows:

       § 232.405 Interactive Data File submissions.

       * * * * *



                                                     201

--- page 202 ---

Note 1 to § 232.405: Section 229.601(b)(101) of this chapter (Item 601(b)(101) of

Regulation S-K) specifies the circumstances under which an Interactive Data File must be

submitted and the circumstances under which it is permitted to be submitted, with respect to §§

239.11 of this chapter (Form S-1), 239.13 of this chapter (Form S-3), 239.25 of this chapter

(Form S-4), 239.18 of this chapter (Form S-11), 239.31 of this chapter (Form F-1), 239.33 of this

chapter (Form F-3), 239.34 of this chapter (Form F-4), 249.310 of this chapter (Form 10-K),

249.308b of this chapter (Form 10-S), 249.308a of this chapter (Form 10-Q) and 249.308 of this

chapter (Form 8-K). General Instruction F of § 249.311 of this chapter (Form 11-K) specifies the

circumstances under which an Interactive Data File must be submitted, and the circumstances

under which it is permitted to be submitted, with respect to Form 11-K. Paragraph (101) of Part

II—Information not Required to be Delivered to Offerees or Purchasers of § 239.40 of this

chapter (Form F-10) specifies the circumstances under which an Interactive Data File must be

submitted and the circumstances under which it is permitted to be submitted, with respect to

Form F-10. Paragraph 101 of the Instructions as to Exhibits of § 249.220f of this chapter (Form

20-F) specifies the circumstances under which an Interactive Data File must be submitted and the

circumstances under which it is permitted to be submitted, with respect to Form 20-F. Paragraph

B.(15) of the General Instructions to § 249.240f of this chapter (Form 40-F) and Paragraph C.(6)

of the General Instructions to § 249.306 of this chapter (Form 6-K) specify the circumstances

under which an Interactive Data File must be submitted and the circumstances under which it is

permitted to be submitted, with respect to §§ 249.240f (Form 40-F) and 249.306 (Form 6-K) of

this chapter. Note D.5 of § 240.14a-101 of this chapter (Schedule 14A) and Item 1 of § 240.14c-

101 of this chapter (Schedule 14C) specify the circumstances under which an Interactive Data

File must be submitted with respect to Schedules 14A and 14C. General Instruction L of §



                                                  202

--- page 203 ---

240.14d-100 of this chapter (Schedule TO) specifies the circumstances under which an

Interactive Data File must be submitted with respect to Schedule TO. Section 240.13a-21 of this

chapter (Rule 13a-21 under the Exchange Act) and General Instruction I to § 249.333 of this

chapter (Form F-SR) specify the circumstances under which an Interactive Data File must be

submitted, with respect to Form F-SR. §§ 242.829 and 242.831 of this chapter (Rules 829 and

831 of Regulation SE) and the Registration Instructions to § 249.1701 of this chapter (Form

SBSEF), as applicable, specify the circumstances under which an Interactive Data File must be

submitted with respect to filings made under Regulation SE. Item 601(b)(101) of Regulation S-

K, paragraph (101) of Part II—Information not Required to be Delivered to Offerees or

Purchasers of Form F-10, paragraph 101 of the Instructions as to Exhibits of Form 20-F,

paragraph B.(15) of the General Instructions to Form 40-F, and paragraph C.(6) of the General

Instructions to Form 6-K all prohibit submission of an Interactive Data File by an issuer that

prepares its financial statements in accordance with 17 CFR 210.6-01 through 210.6-11 (Article

6 of Regulation S-X). For an issuer that is a management investment company or separate

account registered under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.), a

registered non-variable annuity issuer as defined in Rule 405 under the Securities Act (17 CFR

230.405), a business development company as defined in Section 2(a)(48) of the Investment

Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), or a unit investment trust as defined in Section

4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4), General Instruction C.3.(g) of

Form N-1A (§§ 239.15A and 274.11A of this chapter), General Instruction I of Form N-2 (§§

239.14 and 274.11a-1 of this chapter), General Instruction C.3.(h) of Form N-3 (§§ 239.17a and

274.11b of this chapter), General Instruction C.3.(h) of Form N-4 (§§ 239.17b and 274.11c of

this chapter), General Instruction C.3.(h) of Form N-6 (§§ 239.17c and 274.11d of this chapter),



                                                   203

--- page 204 ---

General Instruction 2.(l) of Form N-8B-2 (§ 274.12 of this chapter), General Instruction 5 of §

239.16 of this chapter (Form S-6), and General Instruction C.4 of Form N-CSR (§§ 249.331 and

274.128 of this chapter), as applicable, specifies the circumstances under which an Interactive

Data File must be submitted. For entities subject to §§ 240.15fk-1, 240.17a-5, 240.17a-12,

240.17h-2T, or 240.18a-7 of this chapter (Rule 15fk-1, 17a-5, 17a-12, 17h-2T, or 18a-7 under

the Exchange Act), §§ 240.15fk-1(c)(2)(ii)(A), 240.17a-5(d)(6)(i), 240.17a-5(k)(2), 240.17a-

12(b)(6), 240.17a-12(k), 240.17a-12(l), 240.17a-12(m), 240.17h-2T(a)(2), and 240.18a-7(c)(6)

of this chapter (Rules 15fk-1(c)(2)(ii)(A), 17a-5(d)(6)(i), 17a-5(k)(2), 17a-12(b)(6), 17a-12(k),

17a-12(l), 17a-12(m), 17h-2T(a)(2), and 18a-7(c)(6) under the Exchange Act), as applicable,

specify the circumstances under which an Interactive Data File must be submitted. For an

exchange as defined in 15 U.S.C. 78c(a)(1) (Section 3(a)(1) of the Exchange Act), General

Instruction A of § 249.1 of this chapter (Form 1) specifies the circumstances under which an

Interactive Data File must be submitted. For a clearing agency as defined in 15 U.S.C.

78c(a)(23)(A) (Section 3(a)(23)(A) of the Exchange Act), General Instruction A of § 249.200b

of this chapter (Form CA-1) specifies the circumstances under which an Interactive Data File

must be submitted with respect to § 249.200b of this chapter (Form CA-1), and § 240.17ad-27(d)

of this chapter (Rule 17ad-27(d) under the Exchange Act) specify the circumstances under which

an Interactive Data File must be submitted with respect to the reports required under § 249.200b

of this chapter (Form CA-1) and § 240.17ad-27 of this chapter (Rule 17ad-27 under the

Exchange Act).

       39. Revise § 232.406 to read as follows:

       § 232.406 Cover Page XBRL Data Tagging.




                                                   204

--- page 205 ---

Electronic filers submitting Forms 10-K (§ 249.310 of this chapter), 10-S (§ 249.308b of

this chapter), 10-Q (§ 249.308a of this chapter), 8-K (§ 249.308 of this chapter), 20-F (§

249.220f of this chapter) or 40-F (§ 249.240f of this chapter) who are required to submit

Interactive Data Files (§ 232.11) in Inline XBRL format in accordance with this Regulation S-T

must tag in Inline XBRL electronic format, in the manner provided by the EDGAR Filer Manual,

all of the information provided by the electronic filer that is required on the cover page of these

forms.

         PART 239—FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

         40. The general authority citation for part 239 continues to read, in part, as follows:

         Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 78l, 78m,

78n, 78o(d), 78o-7 note, 78u-5, 78w(a), 78ll, 78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-

13, 80a-24, 80a-26, 80a-29, 80a-30, 80a-37, and sec. 71003 and sec. 84001, Pub. L. 114-94, 129

Stat. 1321, unless otherwise noted.

         * * * * *

         41. Amend Form S-1 (referenced in § 239.11) by:

         a. Adding on the form cover page the text “Indicate by check mark if the registrant has

elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

and

         b. Revising Item 11A.

         Note: The additions and revisions to Form S-1 read as shown in Appendix A to this

document. The text of Form S-1 does not, and the text of the amendments to Form S-1 will

not, appear in the Code of Federal Regulations.

         42. Amend Form S-3 (referenced in § 239.13) by:


                                                     205

--- page 206 ---

a. Adding on the form cover page the text “Indicate by check mark if the registrant has

elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

and

       b. Revising Item 11(a).

       Note: The additions and revisions to Form S-3 read as shown in Appendix B to this

document. The text of Form S-3 does not, and the text of the amendments to Form S-3 will

not, appear in the Code of Federal Regulations.

       43. Amend Form S-11 (referenced in § 239.18) by:

       a. Adding on the form cover page the text “Indicate by check mark if the registrant has

elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

and

       b. Revising Item 28A.

       Note: The additions and revisions to Form S-11 read as shown in Appendix C to this

document. The text of Form S-11 does not, and the text of the amendments to Form S-11

will not, appear in the Code of Federal Regulations.

       44. Amend Form S-4 (referenced in § 239.25) by:

       a. Adding on the form cover page the text “Indicate by check mark if the registrant has

elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

and

       b. Revising Item 10, 12, 13, 16, and 17.

       Note: The additions and revisions to Form S-4 read as shown in Appendix D to this

document. The text of Form S-4 does not, and the text of the amendments to Form S-4 will

not, appear in the Code of Federal Regulations.


                                                  206

--- page 207 ---

45. Amend Form F-1 (referenced in § 239.31) by revising Item 4A and 5.

       Note: The revisions to Form F-1 read as shown in Appendix E to this document. The

text of Form F-1 does not, and the text of the amendments to Form F-1 will not, appear in

the Code of Federal Regulations.

       46. Amend Form F-3 (referenced in § 239.33) by revising Item 5 and 6.

       Note: The revisions to Form F-3 read as shown in Appendix F to this document. The

text of Form F-3 does not, and the text of the amendments to Form F-3 will not, appear in

the Code of Federal Regulations.

       47. Amend Form F-4 (referenced in § 239.34) by revising Item 10, 11, 12 , 13, and 17.

       Note: The revisions to Form F-4 read as shown in Appendix G to this document.

The text of Form F-4 does not, and the text of the amendments to Form F-4 will not, appear

in the Code of Federal Regulations.

       48. Amend Form F-10 (referenced in § 239.40) by revising Part II.

       Note: The revisions to Form F-10 read as shown in Appendix H to this document.

The text of Form F-10 does not, and the text of the amendments to Form F-10 will not,

appear in the Code of Federal Regulations.

       PART 240—GENERAL RULES AND REGULATIONS, SECURITIES

EXCHANGE ACT OF 1934

       49. The general authority citation for part 240 continues to read, in part, as follows:

       Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss,

77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78j-4, 78k, 78k-1, 78l, 78m, 78n,

78n-1, 78o, 78o-4, 78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78dd, 78ll, 78mm, 80a-20,

80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, 1681w(a)(1), 6801-6809, 6825, 7201 et seq., and



                                                    207

--- page 208 ---

8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 1350; Pub. L. 111-203, 939A, 124

Stat. 1887 (2010); and sec. 503 and 602, Pub. L. 112-106, 126 Stat. 326 (2012), unless otherwise

noted.

         * * * * *

         50. Amend § 240.3a55-1 by revising paragraph (d)(7) to read as follows:

         § 240.3a55-1 Method for determining market capitalization and dollar value of

average daily trading volume; application of the definition of narrow-based security index.

* * * * *

         (d) * * *

         (7) Outstanding shares of a security means the number of outstanding shares of such

security as reported on the most recent Form 10-K, Form 10-Q, Form 10-S, or Form 20-F (17

CFR 249.310, 249.308a, 249.308b, or 249.220f) filed with the Commission by the issuer of such

security, including any change to such number of outstanding shares subsequently reported by

the issuer on a Form 8-K (17 CFR 249.308).

         * * * * *

         51. Amend § 240.3b-6 by revising paragraph (b)(1) and (2) to read as follows:

         § 240.3b-6 Liability for certain statements by issuers.

         * * * * *

         (b) * * *

         (1) A forward-looking statement (as defined in paragraph (c) of this section) made in a

document filed with the Commission, in Part I of a quarterly report on Form 10-Q (§ 249.308a of

this chapter), in Part I of a semiannual report on Form 10-S (§ 249.308b of this chapter), or in an

annual report to security holders meeting the requirements of Rules 14a-3(b) and (c) or 14c-3(a)



                                                    208

--- page 209 ---

and (b) (§ 240.14a-3(b) and (c) or § 240.14c-3(a) and (b)), a statement reaffirming such forward-

looking statement after the date the document was filed or the annual report was made publicly

available, or a forward-looking statement made before the date the document was filed or the

date the annual report was made publicly available if such statement is reaffirmed in a filed

document, in Part I of a quarterly report on Form 10-Q, in Part I of a semiannual report on Form

10-S, or in an annual report made publicly available within a reasonable time after the making of

such forward-looking statement; Provided, that:

       * * * * *

       (2) Information that is disclosed in a document filed with the Commission in Part I of a

quarterly report on Form 10-Q (§ 249.308a of this chapter), in Part I of a semiannual report on

Form 10-S (§ 249.308b of this chapter), or in an annual report to security holders meeting the

requirements of Rules 14a-3(b) and (c) or 14c-3(a) and (b) under the Act (§ 240.14a-3(b) and (c)

or § 240.14c-3(a) and (b) of this chapter) and that relates to:

       * * * * *

       52. Amend § 240.10b5-1 by revising paragraph (c)(1)(ii)(B)(1)(ii) to read as follows:

       § 240.10b5-1 Trading “on the basis of” material nonpublic information in insider

trading cases.

       * * * * *

       (c)

       (1) * * *

       (ii) * * *

       (B) * * *

       (1) * * *



                                                     209

--- page 210 ---

(ii) Two business days following the disclosure of the issuer’s financial results in a Form

10-Q (§ 249.308a of this chapter), Form 10-S (§ 249.308b of this chapter), or Form 10-K (§

249.310 of this chapter) for the completed fiscal quarter in which the plan was adopted or, for

foreign private issuers, in a Form 20-F (§ 249.220f of this chapter) or Form 6-K (§ 249.306 of

this chapter) that discloses the issuer’s financial results (but, in any event, this required cooling-

off period is subject to a maximum of 120 days after adoption of the contract, instruction, or

plan); or

        * * * * *

        53. Amend § 240.12b-2 by:

        a. Revising paragraph (1)(i), 2(i), and (3)(i) through (iv) of the definition of “accelerated

filer and large accelerated filer”;

        b. Adding definitions in alphabetical order for “quarterly filer” and “semiannual filer”;

and

        c. Revising paragraph (3)(i)(A) and (C) and (ii)(C) of the definition “smaller reporting

company”.

        The additions and revisions read as follows:

        § 240.12b-2 Definitions.

        * * * * *

        Accelerated filer and large accelerated filer—

        * * * * *

        (1) Accelerated filer. * * *

        (i) The issuer had an aggregate worldwide market value of the voting and non-voting

common equity held by its non-affiliates of $75 million or more, but less than $700 million, as of



                                                     210

--- page 211 ---

the last business day of the issuer’s most recently completed second fiscal quarter for quarterly

filers or first fiscal semiannual period for semiannual filers;

        * * * * *

        (2) Large accelerated filer. * * *

        (i) The issuer had an aggregate worldwide market value of the voting and non-voting

common equity held by its non-affiliates of $700 million or more, as of the last business day of

the issuer’s most recently completed second fiscal quarter for quarterly filers or first fiscal

semiannual period for semiannual filers;

        * * * * *

        (3) Entering and exiting accelerated filer and large accelerated filer status.

        (i) The determination at the end of the issuer’s fiscal year for whether a non-accelerated

filer becomes an accelerated filer, or whether a non-accelerated filer or accelerated filer becomes

a large accelerated filer, governs the deadlines for the annual report to be filed for that fiscal

year, the quarterly or semiannual reports, as applicable, and annual reports to be filed for the

subsequent fiscal year and all annual reports and quarterly or semiannual reports, as applicable,

to be filed thereafter while the issuer remains an accelerated filer or large accelerated filer.

        (ii) Once an issuer becomes an accelerated filer, it will remain an accelerated filer unless:

The issuer determines, at the end of a fiscal year, that the aggregate worldwide market value of

the voting and non-voting common equity held by its non-affiliates was less than $60 million, as

of the last business day of the issuer’s most recently completed second fiscal quarter for

quarterly filers or first fiscal semiannual period for semiannual filers; or it determines that it is

eligible to use the requirements for smaller reporting companies under the revenue test in

paragraph (2) or (3)(iii)(B) of the “smaller reporting company” definition in this section, as



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applicable. An issuer that makes either of these determinations becomes a non-accelerated filer.

The issuer will not become an accelerated filer again unless it subsequently meets the conditions

in paragraph (1) of this definition.

       (iii) Once an issuer becomes a large accelerated filer, it will remain a large accelerated

filer unless: It determines, at the end of a fiscal year, that the aggregate worldwide market value

of the voting and non-voting common equity held by its non-affiliates (“aggregate worldwide

market value”) was less than $560 million, as of the last business day of the issuer’s most

recently completed second fiscal quarter for quarterly filers or first semiannual period for

semiannual filers or it determines that it is eligible to use the requirements for smaller reporting

companies under the revenue test in paragraph (2) or (3)(iii)(B) of the “smaller reporting

company” definition in this section, as applicable. If the issuer’s aggregate worldwide market

value was $60 million or more, but less than $560 million, as of the last business day of the

issuer’s most recently completed second fiscal quarter for quarterly filers or first fiscal

semiannual period for semiannual filers, and it is not eligible to use the requirements for smaller

reporting companies under the revenue test in paragraph (2) or (3)(iii)(B) of the “smaller

reporting company” definition in this section, as applicable, it becomes an accelerated filer. If the

issuer’s aggregate worldwide market value was less than $60 million, as of the last business day

of the issuer’s most recently completed second fiscal quarter for quarterly filers or first fiscal

semiannual period for semiannual filers, or it is eligible to use the requirements for smaller

reporting companies under the revenue test in paragraph (2) or (3)(iii)(B) of the “smaller

reporting company” definition in this section, it becomes a non-accelerated filer. An issuer will

not become a large accelerated filer again unless it subsequently meets the conditions in

paragraph (2) of this definition.



                                                     212

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(iv) The determination at the end of the issuer’s fiscal year for whether an accelerated

filer becomes a non-accelerated filer, or a large accelerated filer becomes an accelerated filer or a

non-accelerated filer, governs the deadlines for the annual report to be filed for that fiscal year,

the quarterly or semiannual and annual reports to be filed for the subsequent fiscal year and all

annual and quarterly or semiannual reports to be filed thereafter while the issuer remains an

accelerated filer or non-accelerated filer.

       * * * * *

       Quarterly filer. A registrant that is required to file quarterly reports on Form 10-Q,

pursuant to § 240.13a-13(a) of this part.

       * * * * *

       Semiannual filer. A registrant that is required to file semiannual reports on Form 10-S,

pursuant to § 240.13a-13(b) of this part.

       * * * * *

       Smaller reporting company.

       * * * * *

       (3) * * *

       (i) * * *

       (A) Public float is measured as of the last business day of the issuer’s most recently

completed second fiscal quarter for a quarterly filer or first fiscal semiannual period for a

semiannual filer and computed by multiplying the aggregate worldwide number of shares of its

voting and non-voting common equity held by non-affiliates by the price at which the common

equity was last sold, or the average of the bid and asked prices of common equity, in the

principal market for the common equity;



                                                     213

--- page 214 ---

* * * * *

        (C) An issuer must reflect the determination of whether it came within the definition of

smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the

next year for a quarterly filer or semiannual report on Form 10-S for the next year for a

semiannual filer, indicating on the cover page of that filing, and in subsequent filings for that

fiscal year, whether it is a smaller reporting company, except that, if a determination based on

public float indicates that the issuer is newly eligible to be a smaller reporting company, the

issuer may choose to reflect this determination beginning with its third quarterly report on Form

10-Q for a quarterly filer or its annual report on Form 10-K for a semiannual filer, rather than

waiting until the quarterly report for the first fiscal quarter of the next fiscal year for a quarterly

filer or the semiannual report for the first fiscal semiannual period of the next fiscal year for a

semiannual filer.

        * * * * *

        (ii) * * *

        (C) The issuer must reflect the determination of whether it came within the definition of

smaller reporting company in the registration statement and must appropriately indicate on the

cover page of the filing, and subsequent filings for the fiscal year in which the filing is made,

whether it is a smaller reporting company. The issuer must re-determine its status at the end of its

second fiscal quarter for a quarterly filer or at the end of its first fiscal semiannual period for a

semiannual filer and then reflect any change in status as provided in paragraph (3)(i)(C) of this

definition. In the case of a determination based on an initial Securities Act registration statement,

an issuer that was not determined to be a smaller reporting company has the option to re-




                                                      214

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determine its status at the conclusion of the offering covered by the registration statement based

on the actual offering price and number of shares sold.

       54. Amend § 240.12b-25 by revising paragraph (a) and (b)(2)(ii) to read as follows:

       § 240.12b-25 Notification of inability to timely file all or any required portion of a

Form 10-K, 20-F, 11-K, N-CEN, N-CSR, 10-S, 10-Q, or 10-D.

       (a) If all or any required portion of an annual or transition report on Form 10-K, 20-F or

11-K (17 CFR 249.310, 249.220f or 249.311), a semiannual or transition report on Form 10-S

(17 CFR 249.308b), a quarterly or transition report on Form 10-Q (17 CFR 249.308a), or a

distribution report on Form 10-D (17 CFR 249.312) required to be filed pursuant to Section 13 or

15(d) of the Act (15 U.S.C. 78m or 78o(d)) and rules thereunder, or if all or any required portion

of a semi-annual, annual or transition report on Form N-CSR (17 CFR 249.331; 17 CFR

274.128) or Form N-CEN (17 CFR 249.330; 17 CFR 274.101) required to be filed pursuant to

Section 13 or 15(d) of the Act or section 30 of the Investment Company Act of 1940 (15 U.S.C.

80a-29) and the rules thereunder, is not filed within the time period prescribed for such report,

the registrant, no later than one business day after the due date for such report, shall file a Form

12b-25 (17 CFR 249.322) with the Commission which shall contain disclosure of its inability to

file the report timely and the reasons therefore in reasonable detail.

       (b) * * *

       (2) * * *

       (ii) The subject annual report, semiannual report or transition report on Form 10-K, 20-F,

11-K, N-CEN, or N-CSR, or portion thereof, will be filed no later than the fifteenth calendar day

following the prescribed due date; or the subject quarterly report or transition report on Form 10-

Q, subject semiannual report or transition report on Form 10-S or distribution report on Form 10-



                                                     215

--- page 216 ---

D, or portion thereof, will be filed no later than the fifth calendar day following the prescribed

due date; and

        * * * * *

        55. Amend § 240.13a-10 by revising paragraph (c), (d), (e), (f) and (j) to read as follows:

        § 240.13a-10 Transition reports.

        * * * * *

        (c) If the transition period covers a period of less than six months, in lieu of the report

required by paragraph (b) of this section, a quarterly filer (as defined in § 240.12b-2 of this

chapter) may file a report for the transition period on Form 10-Q (§ 249.308a of this chapter) and

a semiannual filer (as defined in § 240.12b-2 of this chapter) may file a report for the transition

period on Form 10-S (§ 249.308b of this chapter) not more than the number of days specified in

paragraph (j) of this section after either the close of the transition period or the date of the

determination to change the fiscal closing date, whichever is later. The report on Form 10-Q or

Form 10-S shall cover the period from the close of the last fiscal year end and shall indicate

clearly the period covered. The financial statements filed therewith need not be audited but, if

they are not audited, the issuer shall file with the first annual report for the newly adopted fiscal

year separate audited statements of income and cash flows covering the transition period. The

notes to financial statements for the transition period included in such first annual report may be

integrated with the notes to financial statements for the full fiscal period. A separate audited

balance sheet as of the end of the transition period shall be filed in the annual report only if the

audited balance sheet as of the end of the fiscal year prior to the transition period is not filed.

Schedules need not be filed in transition reports on Form 10-Q or Form 10-S.

        (d) * * *



                                                      216

--- page 217 ---

(2) * * *

       (ii) The first report required to be filed by the issuer for the newly adopted fiscal year

after the date of the determination to change the fiscal year end is a quarterly report on Form 10-

Q or semiannual report on Form 10-S; and

       (iii) Information on the transition period is included in the quarterly filer’s report on Form

10-Q for the first quarterly period (except the fourth quarter) of the newly adopted fiscal year

that ends after the date of the determination to change the fiscal year or in the semiannual filer’s

report on Form 10-S for the first semiannual period of the newly adopted fiscal year after the

date of the determination to change the fiscal year. The information covering the transition

period required by Part II and Item 2 of Part I may be combined with the information regarding

the quarter or semiannual period. However, the financial statements required by Part I, which

may be unaudited, shall be furnished separately for the transition period.

       (e) A quarterly filer that changes its fiscal year end shall apply paragraph (e)(1) of this

section. A semiannual filer that changes its fiscal year end shall apply paragraph (e)(2) of this

section.

       (1) A quarterly filer shall:

       (i) File a quarterly report on Form 10-Q within the time period specified in General

Instruction A.1. to that form for any quarterly period (except the fourth quarter) of the old fiscal

year that ends before the date on which the issuer determined to change its fiscal year end, except

that the issuer need not file such quarterly report if the date on which the quarterly period ends

also is the date on which the transition period ends;

       (ii) File a quarterly report on Form 10-Q within the time specified in General Instruction

A.1. to that form for each quarterly period of the old fiscal year within the transition period. In



                                                     217

--- page 218 ---

lieu of a quarterly report for any quarter of the old fiscal year within the transition period, the

issuer may file a quarterly report on Form 10-Q for any period of three months within the

transition period that coincides with a quarter of the newly adopted fiscal year if the quarterly

report is filed within the number of days specified in paragraph (j) of this section after the end of

such three-month period, provided the issuer thereafter continues filing quarterly reports on the

basis of the quarters of the newly adopted fiscal year;

       (iii) Commence filing quarterly reports for the quarters of the new fiscal year no later

than the quarterly report for the first quarter of the new fiscal year that ends after the date on

which the issuer determined to change the fiscal year end; and

       (iv) Unless such information is or will be included in the transition report, or the first

annual report on Form 10-K for the newly adopted fiscal year, include in the initial quarterly

report on Form 10-Q for the newly adopted fiscal year information on any period beginning on

the first day subsequent to the period covered by the issuer’s final quarterly report on Form 10-Q

or annual report on Form 10-K for the old fiscal year. The information covering such period

required by Part II and Item 2 of Part I may be combined with the information regarding the

quarter. However, the financial statements required by Part I, which may be unaudited, shall be

furnished separately for such period.

       (2) A semiannual filer shall:

       (i) File a semiannual report on Form 10-S within the time period specified in General

Instruction A.1. to that form for its first fiscal semiannual period of the old fiscal year that ends

before the date on which the issuer determined to change its fiscal year end, except that the issuer

need not file such semiannual report if the date on which the fiscal semiannual period ends also

is the date on which the transition period ends;



                                                     218

--- page 219 ---

(ii) File a semiannual report on Form 10-S within the time specified in General

Instruction A.1. to that form for the first fiscal semiannual period of the old fiscal year within the

transition period. In lieu of a semiannual report for the first fiscal semiannual period of the old

fiscal year within the transition period, the issuer may file a semiannual report on Form 10-S for

the first fiscal semiannual period within the transition period that coincides with the first fiscal

semiannual period of the newly adopted fiscal year if the semiannual report is filed within the

number of days specified in paragraph (j) of this section after the end of such semiannual period,

provided the issuer thereafter continues filing semiannual reports on the basis of the fiscal

semiannual periods of the newly adopted fiscal year;

        (iii) Commence filing semiannual reports for the first fiscal semiannual period of the new

fiscal year no later than the semiannual report for the first fiscal semiannual period of the new

fiscal year that ends after the date on which the issuer determined to change the fiscal year end.

        Note to paragraphs (c) and (e):

        If it is not practicable or cannot be cost-justified to furnish in a transition report on Form

10-Q or Form 10-S or a quarterly or semiannual report for the newly adopted fiscal year financial

statements for corresponding periods of the prior year where required, financial statements may

be furnished for the quarters or semiannual period of the preceding fiscal year that most nearly

are comparable if the issuer furnishes an adequate discussion of seasonal and other factors that

could affect the comparability of information or trends reflected, an assessment of the

comparability of the data, and a representation as to the reason recasting has not been

undertaken.

        (f) Every successor issuer with securities registered under Section 12 of this Act that has

a different fiscal year from that of its predecessor(s) shall file a transition report pursuant to this



                                                      219

--- page 220 ---

section, containing the required information about each predecessor, for the transition period, if

any, between the close of the fiscal year covered by the last annual report of each predecessor

and the date of succession. The report shall be filed for the transition period on the form

appropriate for annual reports of the issuer not more than the number of days specified in

paragraph (j) of this section after the date of the succession, with financial statements in

conformity with the requirements set forth in paragraph (b) of this section. If the transition period

covers a period of less than six months, in lieu of a transition report on the form appropriate for

the issuer’s annual reports, the report may be filed for the transition period on Form 10-Q and

Form 10-S not more than the number of days specified in paragraph (j) of this section after the

date of the succession, with financial statements in conformity with the requirements set forth in

paragraph (c) of this section. Notwithstanding the foregoing, if the transition period covers a

period of one month or less, the successor issuer need not file a separate transition report if the

information is reported by the successor issuer in conformity with the requirements set forth in

paragraph (d) of this section.

       * * * * *

       (j)

       (1) For transition reports to be filed on the form appropriate for annual reports of the

issuer, the number of days shall be:

       (i) 60 days for large accelerated filers (as defined in § 240.12b-2);

       (ii) 75 days for accelerated filers (as defined in § 240.12b-2); and

       (iii) 90 days for all other issuers; and

       (2) For transition reports to be filed on Form 10-Q (§ 249.308a of this chapter) or Form

10-S (§ 249.308b of this chapter) the number of days shall be:



                                                     220

--- page 221 ---

(i) 40 days for large accelerated filers and accelerated filers (as defined in § 240.12b-2);

and

        (ii) 45 days for all other issuers.

        * * * * *

        56. Revise § 240.13a-13 to read as follows:

        § 240.13a-13 Quarterly reports on Form 10-Q (§ 249.308a of this chapter) or

semiannual reports on Form 10-S (§ 249.308b of this chapter)

        (a) Except as provided in paragraphs (b), (c), and (d) of this section, every issuer that has

securities registered pursuant to section 12 of the Act and is required to file annual reports

pursuant to section 13 of the Act on Form 10-K (§ 249.310 of this chapter) shall file a quarterly

report on Form 10-Q (§ 249.308a of this chapter) within the period specified in General

Instruction A.1. to that form for each of the first three quarters of each fiscal year of the issuer,

commencing with the first fiscal quarter following the most recent fiscal year for which full

financial statements were included in an initial registration statement, or, if the initial registration

statement included financial statements for an interim period after the most recent fiscal year end

meeting the requirements of Article 10 of Regulation S-X or Rule 8-03 of Regulation S-X for

smaller reporting companies, for the first fiscal quarter after the quarter reported upon in the

initial registration statement. The first quarterly report of the issuer shall be filed on or before

either the 45th day after the effective date of the initial registration statement or the date on

which such report would have been required to be filed if the issuer had been required to file

reports on Form 10-Q as of its last fiscal quarter, whichever is later.

        (b) Issuers that are obligated under paragraph (a) of this section to file quarterly reports

on Form 10-Q, may, in lieu thereof, file a semiannual report on Form 10-S (§ 249.308b of this



                                                      221

--- page 222 ---

chapter) by marking the semiannual reporting box on the cover page of Form 10-K or initial

registration statement, as applicable. Issuers must file the Form 10-S within the period specified

in General Instruction A.1. to that form for the first fiscal semiannual period of the fiscal year of

the issuer, commencing with the first fiscal semiannual period following the most recent fiscal

year for which full financial statements were included in the initial registration statement with

the marked semiannual reporting box, or, if the initial registration statement with the marked

semiannual reporting box included financial statements for a fiscal semiannual period subsequent

to the most recent fiscal year end meeting the requirements of Article 10 of Regulation S-X or

Rule 8-03 of Regulation S-X for smaller reporting companies, commencing with the first fiscal

semiannual period of the fiscal year that immediately follows the fiscal year reported upon in the

registration statement.

       (1) The first semiannual report of the issuer shall be filed on or before either the 45th day

after the effective date of an initial registration statement or the date on which such report would

have been required to be filed if the issuer had been required to file reports on Form 10-S as of

its last fiscal semiannual period, whichever is later.

       (2) Issuers that elected to file semiannual reports on Form 10-S in reliance on paragraph

(b) of this section by marking the semiannual reporting box on the cover page of Form 10-K

shall file a semiannual report on Form 10-S for the first fiscal semiannual period of the fiscal

year in which the Form 10-K with the election was filed.

       (3) Issuers that elected to no longer file semiannual reports on Form 10-S in reliance on

paragraph (b) of this section by unmarking the semiannual reporting box on the cover page of the

Form 10-K shall commence filing quarterly reports on Form 10-Q for the first quarter of the

fiscal year in which the Form 10-K was filed.



                                                     222

--- page 223 ---

(4) Issuers may correct an error with respect to the semiannual reporting box on the

cover page of a Form 10-K by amending the Form 10-K as soon as practicable after discovery of

the error, provided, however, issuers may not correct such errors after the deadline by which, if

the issuer were a quarterly filer, the issuer’s first quarterly report would be required to be filed

for the fiscal year in which the Form 10-K with the error was filed.

        (c) This section shall not apply to the following issuers:

        (1) Investment companies required to file reports pursuant to § 270.30a-1;

        (2) Foreign private issuers required to file reports pursuant to § 240.13a-16; and

        (3) Asset-backed issuers required to file reports pursuant to § 240.13a-17.

        (d) Part I of the quarterly reports on Form 10-Q or Part I of the semiannual reports on

Form 10-S, as applicable, need not be filed by:

        (1) Mutual life insurance companies; or

        (2) Mining companies not in the production stage but engaged primarily in the

exploration for the development of mineral deposits other than oil, gas, or coal, if all of the

following conditions are met:

        (i) The issuer has not been in production during the current fiscal year or the two years

immediately prior thereto; except that being in production for an aggregate period of not more

than eight months over the three-year period shall not be a violation of this condition.

        (ii) Receipts from the sale of mineral products or from the operations of mineral

producing properties by the issuer and its subsidiaries combined have not exceeded $500,000 in

any of the most recent six years and have not aggregated more than $1,500,000 in the most

recent six fiscal years.




                                                     223

--- page 224 ---

(e) Notwithstanding the foregoing provisions of this section, the financial information

required by Part I of Form 10-Q or Part I of Form 10-S, as applicable, shall not be deemed to be

“filed” for the purpose of Section 18 of the Act or otherwise subject to the liabilities of that

section of the Act, but shall be subject to all other provisions of the Act.

       57. Amend § 240.13a-14 by revising paragraph (a) to read as follows:

       § 240.13a-14 Certification of disclosure in annual, semiannual, and quarterly

reports.

       (a) Each report, including transition reports, filed on Form 10-Q, Form 10-S, Form 10-K,

Form 20-F or Form 40-F (§ 249.308a, § 249.308b, § 249.310, § 249.220f, or § 249.240f of this

chapter) under Section 13(a) of the Act (15 U.S.C. 78m(a)), other than a report filed by an Asset-

Backed Issuer (as defined in § 229.1101 of this chapter) or a report on Form 20-F filed under §

240.13a-19, must include certifications in the form specified in the applicable exhibit filing

requirements of such report and such certifications must be filed as an exhibit to such report.

Each principal executive and principal financial officer of the issuer, or persons performing

similar functions, at the time of filing of the report must sign a certification. The principal

executive and principal financial officers of an issuer may omit the portion of the introductory

language in paragraph 4 as well as language in paragraph 4(b) of the certification that refers to

the certifying officers’ responsibility for designing, establishing and maintaining internal control

over financial reporting for the issuer until the issuer becomes subject to the internal control over

financial reporting requirements in § 240.13a-15 or § 240.15d-15.

       * * * * *

       58. Amend § 240.13a-15 by revising paragraphs (b) and (d) to read as follows:

       § 240.13a-15 Controls and procedures.



                                                     224

--- page 225 ---

* * * * *

       (b) Each such issuer’s management must evaluate, with the participation of the issuer’s

principal executive and principal financial officers, or persons performing similar functions, the

effectiveness of the issuer’s disclosure controls and procedures, as of the end of each fiscal

quarter for a quarterly filer (as defined in § 240.12b-2 of this chapter) or the end of each fiscal

semiannual period for a semiannual filer (as defined in § 240.12b-2 of this chapter), except that

management must perform this evaluation:

       * * * * *

       (d) The management of each such issuer that either had been required to file an annual

report pursuant to section 13(a) or 15(d) of the Act (15 U.S.C. 78m(a) or 78o(d) for the prior

fiscal year or had filed an annual report with the Commission for the prior fiscal year, other than

an investment company registered under section 8 of the Investment Company Act of 1940 (15

U.S.C. 80a-8), must evaluate, with the participation of the issuer’s principal executive and

principal financial officers, or persons performing similar functions, any change in the issuer’s

internal control over financial reporting, that occurred during each of the issuer’s fiscal quarters

for a quarterly filer or fiscal semiannual periods for a semiannual filer, or fiscal year in the case

of a foreign private issuer, that has materially affected, or is reasonably likely to materially

affect, the issuer’s internal control over financial reporting.

       * * * * *

       59. Amend § 240.13a-16 by revising paragraph (a)(3) to read as follows:

       § 240.13a-16 Reports of foreign private issuers on Form 6-K (17 CFR 249.306).

       (a) * * *




                                                     225

--- page 226 ---

(3) Issuers filing periodic reports on Form 10-K, Form 10-S, and Form 10-Q, and current

reports on Form 8-K; or

       * * * * *

       60. Amend § 240.13d-1 by revising paragraph (j) to read as follows:

       § 240.13d-1 Filing of Schedules 13D and 13G.

       * * * * *

       (j) For the purpose of sections 13(d) and 13(g) of the Act, any person, in determining the

amount of outstanding securities of a class of equity securities, may rely upon information set

forth in the issuer’s most recent quarterly, semiannual, or annual report, and any current report

subsequent thereto, filed with the Commission pursuant to the Act, unless such person knows or

has reason to believe that the information contained therein is inaccurate.

       * * * * *

       61. Amend § 240.14a-5 by revising paragraph (f) to read as follows:

       § 240.14a-5 Presentation of information in proxy statement.

       * * * * *

       (f) If the date of the next annual meeting is subsequently advanced or delayed by more

than 30 calendar days from the date of the annual meeting to which the proxy statement relates,

the registrant shall, in a timely manner, inform shareholders of such change, and the new dates

referred to in paragraphs (e)(1) and (e)(2) of this section, by including a notice, under Item 5, in

its earliest possible quarterly report on Form 10-Q (§ 249.308a of this chapter) or semiannual

report on Form 10-S (§ 249.308b of this chapter), in the case of investment companies, in a

shareholder report under § 270.30d-1 of this chapter under the Investment Company Act of 1940,

or, if impracticable, any means reasonably calculated to inform shareholders.



                                                    226

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62. Amend § 240.14a-8 by revising paragraph (e)(1):

       § 240.14a-8 Shareholder proposals.

       * * * * *

       (e)

       (1) If you are submitting your proposal for the company’s annual meeting, you can in

most cases find the deadline in last year’s proxy statement. However, if the company did not

hold an annual meeting last year, or has changed the date of its meeting for this year more than

30 days from last year’s meeting, you can usually find the deadline in one of the company’s

quarterly reports on Form 10-Q (§ 249.308a of this chapter) or semiannual reports on Form 10-S

(§ 249.308b of this chapter), or in shareholder reports of investment companies under § 270.30d-

1 of this chapter of the Investment Company Act of 1940. In order to avoid controversy,

shareholders should submit their proposals by means, including electronic means, that permit

them to prove the date of delivery.

       * * * * *

       63. Amend § 240.14a-101 by revising NOTES D.4. and Item 9. (e)(1) to read as follows:

       § 240.14a-101 Schedule 14A. Information required in proxy statement.

       * * * * *

       NOTES * * *

       D. * * *

       4. Electronic filings. If any of the information required by Items 13 or 14 of this Schedule

is incorporated by reference from an annual, semiannual, or quarterly report, such report, or any

portion thereof incorporated by reference, shall be filed in electronic format with the proxy

statement. This provision shall not apply to registered investment companies.



                                                   227

--- page 228 ---

* * * * *

       Item 9. * * *

       (e)

       (1) Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last

two fiscal years for professional services rendered by the principal accountant for the audit of the

registrant’s annual financial statements and review of financial statements included in the

registrant’s Form 10-Q (17 CFR 249.308a) or Form 10-S (17 CFR 249.308b), or services that are

normally provided by the accountant in connection with statutory and regulatory filings or

engagements for those fiscal years.

       * * * * *

       64. Amend § 240.15c2-11 by revising paragraph (f)(3)(i)(C)(1):

       § 240.15c2-11 Publication or submission of quotations without specified

information.

       * * * * *

       (f) * * *

       (3) * * *

       (i) * * *

       (C) * * *

       (1) Paragraph (b)(3)(i), (iv), or (v) of this section are filed within 180 calendar days from

the end of the issuer’s most recent fiscal year, fiscal semiannual period, or fiscal quarterly

reporting period that is covered by a report required by section 13 or 15(d) of the Act, as

applicable;

       * * * * *



                                                    228

--- page 229 ---

65. Amend § 240.15d-10 by revising paragraph (c), (d), (e), (f), and (j) to read as follows:

        § 240.15d-10 Transition reports.

        * * * * *

        (c) If the transition period covers a period of less than six months, in lieu of the report

required by paragraph (b) of this section, a quarterly filer (as defined in § 240.12b-2 of this

chapter) may file a report for the transition period on Form 10-Q (§ 249.308 of this chapter) and

a semiannual filer (as defined in § 240.12b-2 of this chapter) may file a report for the transition

period on Form 10-S (§ 249.308b of this chapter) not more than the number of days specified in

paragraph (j) of this section after either the close of the transition period or the date of the

determination to change the fiscal closing date, whichever is later. The report on Form 10-Q or

10-S shall cover the period from the close of the last fiscal year end and shall indicate clearly the

period covered. The financial statements filed therewith need not be audited but, if they are not

audited, the issuer shall file with the first annual report for the newly adopted fiscal year separate

audited statements of income and cash flows covering the transition period. The notes to

financial statements for the transition period included in such first annual report may be

integrated with the notes to financial statements for the full fiscal period. A separate audited

balance sheet as of the end of the transition period shall be filed in the annual report only if the

audited balance sheet as of the end of the fiscal year before the transition period is not filed.

Schedules need not be filed in transition reports on Form 10-Q or Form 10-S.

        (d) Notwithstanding the foregoing in paragraphs (a), (b), and (c) of this section, if the

transition period covers a period of one month or less, the issuer need not file a separate

transition report if either:




                                                      229

--- page 230 ---

(1) The first report required to be filed by the issuer for the newly adopted fiscal year

after the date of the determination to change the fiscal year end is an annual report, and that

report covers the transition period as well as the fiscal year; or

       (2)

       (i) The issuer files with the first annual report for the newly adopted fiscal year separate

audited statements of income and cash flows covering the transition period; and

       (ii) The first report required to be filed by the issuer for the newly adopted fiscal year

after the date of the determination to change the fiscal year end is a quarterly report on Form 10-

Q or semiannual report on Form 10-S; and

       (iii) Information on the transition period is included in the quarterly filer’s report on Form

10-Q for the first quarterly period (except the fourth quarter) of the newly adopted fiscal year

that ends after the date of the determination to change the fiscal year or the semiannual filer’s

report on Form 10-S for the first semiannual period of the newly adopted fiscal year after the

date of the determination to change the fiscal year. The information covering the transition

period required by Part II and Item 2 of Part I may be combined with the information regarding

the quarter or semiannual period. However, the financial statements required by Part I, which

may be unaudited, shall be furnished separately for the transition period.

       (e) A quarterly filer that changes its fiscal year end shall apply paragraph (e)(1) of this

section. A semiannual filer that changes its fiscal year end shall apply paragraph (e)(2) of this

section:

       (1) A quarterly filer shall:

       (i) File a quarterly report on Form 10-Q within the time period specified in General

Instruction A.1. to that form for any quarterly period (except the fourth quarter) of the old fiscal



                                                     230

--- page 231 ---

year that ends before the date on which the issuer determined to change its fiscal year end, except

that the issuer need not file such quarterly report if the date on which the quarterly period ends

also is the date on which the transition period ends;

       (ii) File a quarterly report on Form 10-Q within the time specified in General Instruction

A.1 to that form for each quarterly period of the old fiscal year within the transition period. In

lieu of a quarterly report for any quarter of the old fiscal year within the transition period, the

issuer may file a quarterly report on Form 10-Q for any period of three months within the

transition period that coincides with a quarter of the newly adopted fiscal year if the quarterly

report is filed within the number of days specified in paragraph (j) of this section after the end of

such three month period, provided the issuer thereafter continues filing quarterly reports on the

basis of the quarters of the newly adopted fiscal year;

       (iii) Commence filing quarterly reports for the quarters of the new fiscal year no later

than the quarterly report for the first quarter of the new fiscal year that ends after the date on

which the issuer determined to change the fiscal year end; and

       (iv) Unless such information is or will be included in the transition report, or the first

annual report on Form 10-K for the newly adopted fiscal year, include in the initial quarterly

report on Form 10-Q for the newly adopted fiscal year information on any period beginning on

the first day after the period covered by the issuer’s final quarterly report on Form 10-Q or

annual report on Form 10-K for the old fiscal year. The information covering such period

required by Part II and Item 2 of Part I may be combined with the information regarding the

quarter. However, the financial statements required by Part I, which may be unaudited, shall be

furnished separately for such period.

       (2) A semiannual filer shall:



                                                     231

--- page 232 ---

(i) File a semiannual report on Form 10-S within the time period specified in General

Instruction A.1. to that form for its first fiscal semiannual period of the old fiscal year that ends

before the date on which the issuer determined to change its fiscal year end, except that the issuer

need not file such semiannual report if the date on which the fiscal semiannual period ends also

is the date on which the transition period ends;

       (ii) File a semiannual report on Form 10-S within the time specified in General

Instruction A.1. to that form for the first fiscal semiannual period of the old fiscal year within the

transition period. In lieu of a semiannual report for the first fiscal semiannual period of the old

fiscal year within the transition period, the issuer may file a semiannual report on Form 10-S for

the first fiscal semiannual period within the transition period that coincides with the first fiscal

semiannual period of the newly adopted fiscal year if the semiannual report is filed within the

number of days specified in paragraph (j) of this section after the end of such semiannual period,

provided the issuer thereafter continues filing semiannual reports on the basis of the fiscal

semiannual periods of the newly adopted fiscal year;

       (iii) Commence filing semiannual reports for the first fiscal semiannual period of the new

fiscal year no later than the semiannual report for the first fiscal semiannual period of the new

fiscal year that ends after the date on which the issuer determined to change the fiscal year end.

       Note to paragraphs (c) and (e):

       If it is not practicable or cannot be cost-justified to furnish in a transition report on Form

10-Q or 10-S or a quarterly or semiannual report for the newly adopted fiscal year financial

statements for corresponding periods of the prior year where required, financial statements may

be furnished for the quarters or semiannual period of the preceding fiscal year that most nearly

are comparable if the issuer furnishes an adequate discussion of seasonal and other factors that



                                                     232

--- page 233 ---

could affect the comparability of information or trends reflected, an assessment of the

comparability of the data, and a representation as to the reason recasting has not been

undertaken.

       (f) Every successor issuer that has a different fiscal year from that of its predecessor(s)

shall file a transition report pursuant to this section, containing the required information about

each predecessor, for the transition period, if any, between the close of the fiscal year covered by

the last annual report of each predecessor and the date of succession. The report shall be filed for

the transition period on the form appropriate for annual reports of the issuer not more than the

number of days specified in paragraph (j) of this section after the date of the succession, with

financial statements in conformity with the requirements set forth in paragraph (b) of this

section. If the transition period covers a period of less than six months, in lieu of a transition

report on the form appropriate for the issuer’s annual reports, the report may be filed for the

transition period on Form 10-Q or Form 10-S not more than the number of days specified in

paragraph (j) of this section after the date of the succession, with financial statements in

conformity with the requirements set forth in paragraph (c) of this section. Notwithstanding the

foregoing, if the transition period covers a period of one month or less, the successor issuer need

not file a separate transition report if the information is reported by the successor issuer in

conformity with the requirements set forth in paragraph (d) of this section.

       * * * * *

       (j)

       (1) For transition reports to be filed on the form appropriate for annual reports of the

issuer, the number of days shall be:

       (i) 60 days for large accelerated filers (as defined in § 240.12b-2);



                                                     233

--- page 234 ---

(ii) 75 days for accelerated filers (as defined in § 240.12b-2); and

       (iii) 90 days for all other issuers; and

       (2) For transition reports to be filed on Form 10-Q (§ 249.308 of this chapter) or Form

10-S (§ 249.308b of this chapter), the number of days shall be:

       (i) 40 days for large accelerated filers and accelerated filers (as defined in § 240.12b-2);

and

       (ii) 45 days for all other issuers.

       * * * * *

       66. Revise § 240.15d-13 to read as follows:

       § 240.15d-13 Quarterly reports on Form 10-Q (§ 249.308 of this chapter) or

semiannual reports on Form 10-S (§ 249.308b of this chapter).

       (a) Except as provided in paragraphs (b), (c) and (d) of this section, every issuer that has

securities registered pursuant to the Securities Act and is required to file annual reports pursuant

to section 15(d) of the Act on Form 10-K (§ 249.310 of this chapter) shall file a quarterly report

on Form 10-Q (§ 249.308a of this chapter) within the period specified in General Instruction A.1

to that form for each of the first three quarters of each fiscal year of the issuer, commencing with

the first fiscal quarter following the most recent fiscal year for which full financial statements

were included in an initial registration statement, or, if the initial registration statement included

financial statements for an interim period after the most recent fiscal year end meeting the

requirements of Article 10 of Regulation S-X or Rule 8-03 of Regulation S-X for smaller

reporting companies, for the first fiscal quarter after the quarter reported upon in the initial

registration statement. The first quarterly report of the issuer shall be filed on or before either the

45th day after the effective date of the initial registration statement or the date on which such



                                                     234

--- page 235 ---

report would have been required to be filed if the issuer had been required to file reports on Form

10-Q as of its last fiscal quarter, whichever is later.

        (b) Issuers that are obligated under paragraph (a) of this section to file quarterly reports

on Form 10-Q, may, in lieu thereof, file a semiannual report on Form 10-S (§ 249.308b of this

chapter) by marking the semiannual reporting box on the cover page of Form 10-K or initial

registration statement, as applicable. Issuers must file the Form 10-S within the period specified

in General Instruction A.1. to that form for the first fiscal semiannual period of the fiscal year of

the issuer, commencing with the first fiscal semiannual period following the most recent fiscal

year for which full financial statements were included in the initial registration statement with

the marked semiannual reporting box, or, if the initial registration statement with the marked

semiannual reporting box included financial statements for a fiscal semiannual period subsequent

to the most recent fiscal year end meeting the requirements of Article 10 of Regulation S-X or

Rule 8-03 of Regulation S-X for smaller reporting companies, commencing with the first fiscal

semiannual period of the fiscal year that immediately follows the fiscal year reported upon in the

registration statement.

        (1) The first semiannual report of the issuer shall be filed on or before either the 45th day

after the effective date of an initial registration statement or the date on which such report would

have been required to be filed if the issuer had been required to file reports on Form 10-S as of

its last fiscal semiannual period, whichever is later.

        (2) Issuers that elected to file semiannual reports on Form 10-S in reliance on paragraph

(b) of this section by marking the semiannual reporting box on the cover page of Form 10-K

shall file a semiannual report on Form 10-S for the first fiscal semiannual period of the fiscal

year in which the Form 10-K with the election was filed.



                                                      235

--- page 236 ---

(3) Issuers that elected to no longer file semiannual reports on Form 10-S in reliance on

paragraph (b) of this section by unmarking the semiannual reporting box on the cover page of the

Form 10-K shall commence filing quarterly reports on Form 10-Q for the first quarter of the

fiscal year in which the Form 10-K was filed.

       (4) Issuers may correct an error with respect to the semiannual reporting box on the cover

page of a Form 10-K by amending the Form 10-K as soon as practicable after discovery of the

error, provided, however, issuers may not correct such errors after the deadline by which, if the

issuer were a quarterly filer, the issuer’s first quarterly report would be required to be filed for

the fiscal year in which the Form 10-K with the error was filed.

       (c) This section shall not apply to the following issuers:

       (1) Investment companies required to file reports pursuant to § 270.30a-1;

       (2) Foreign private issuers required to file reports pursuant to § 240.15d-16; and

       (3) Asset-backed issuers required to file reports pursuant to § 240.15d-17.

       (d) Part I of the quarterly reports on Form 10-Q or Part I of the semiannual reports on

Form 10-S, as applicable, need not be filed by:

       (1) Mutual life insurance companies; or

       (2) Mining companies not in the production stage but engaged primarily in the

exploration for the development of mineral deposits other than oil, gas, or coal, if all of the

following conditions are met:

       (i) The issuer has not been in production during the current fiscal year or the two years

immediately prior thereto; except that being in production for an aggregate period of not more

than eight months over the three-year period shall not be a violation of this condition.




                                                     236

--- page 237 ---

(ii) Receipts from the sale of mineral products or from the operations of mineral

producing properties by the issuer and its subsidiaries combined have not exceeded $500,000 in

any of the most recent six years and have not aggregated more than $1,500,000 in the most

recent six fiscal years.

        (e) Notwithstanding the foregoing provisions of this section, the financial information

required by Part I of Form 10-Q or Part I of Form 10-S, as applicable, shall not be deemed to be

“filed” for the purpose of section 18 of the Act or otherwise subject to the liabilities of that

section of the Act, but shall be subject to all other provisions of the Act.

        67. Amend § 240.15d-14 by revising paragraph (a) to read as follows:

        § 240.15d-14 Certification of disclosure in annual, semiannual, and quarterly

reports.

        (a) Each report, including transition reports, filed on Form 10-Q, Form 10-S, Form 10-K,

Form 20-F or Form 40-F (§ 249.308a, § 249.308b, § 249.310, § 249.220f or § 249.240f of this

chapter) under section 15(d) of the Act (15 U.S.C. 78o(d)), other than a report filed by an Asset-

Backed Issuer (as defined in § 229.1101 of this chapter) or a report on Form 20-F filed under §

240.15d-19, must include certifications in the form specified in the applicable exhibit filing

requirements of such report, and such certifications must be filed as an exhibit to such report.

Each principal executive and principal financial officer of the issuer, or persons performing

similar functions, at the time of filing of the report must sign a certification. The principal

executive and principal financial officers of an issuer may omit the portion of the introductory

language in paragraph 4 as well as language in paragraph 4(b) of the certification that refers to

the certifying officers’ responsibility for designing, establishing and maintaining internal control




                                                     237

--- page 238 ---

over financial reporting for the issuer until the issuer becomes subject to the internal control over

financial reporting requirements in § 240.13a-15 or § 240.15d-15.

        * * * * *

        68. Amend § 240.15d-15 by revising paragraphs (b) and (d) to read as follows:

        § 240.15d-15 Controls and procedures.

        * * * * *

        (b) Each such issuer’s management must evaluate, with the participation of the issuer’s

principal executive and principal financial officers, or persons performing similar functions, the

effectiveness of the issuer’s disclosure controls and procedures, as of the end of each fiscal

quarter for a quarterly filer (as defined in § 240.12b-2 of this chapter) or the end of each fiscal

semiannual period for a semiannual filer (as defined in § 240.12b-2 of this chapter), except that

management must perform this evaluation:

        * * * * *

        (d) The management of each such issuer that previously either had been required to file

an annual report pursuant to section 13(a) or 15(d) of the Act (15 U.S.C. 78m(a) or 78o(d)) for

the prior fiscal year or previously had filed an annual report with the Commission for the prior

fiscal year, other than an investment company registered under section 8 of the Investment

Company Act of 1940 (15 U.S.C. 80a-8), must evaluate, with the participation of the issuer’s

principal executive and principal financial officers, or persons performing similar functions, any

change in the issuer’s internal control over financial reporting, that occurred during each of the

issuer’s fiscal quarters for a quarterly filer or fiscal semiannual periods for a semiannual filer, or

fiscal year in the case of a foreign private issuer, that has materially affected, or is reasonably

likely to materially affect, the issuer’s internal control over financial reporting.



                                                      238

--- page 239 ---

* * * * *

       69. Amend § 240.15d-16 by revising paragraphs (a)(2) and (3) and adding new paragraph

(a)(4) to read as follows:

       § 240.15d-16 Reports of foreign private issuers on Form 6-K (17 CFR 249.306).

       (a) * * *

       (2) Issuers of American depositary receipts for securities of any foreign issuer;

       (3) Issuers filing periodic reports on Form 10-K, Form 10-S, and Form 10-Q, and current

reports on Form 8-K; or

       (4) Asset-backed issuers, as defined in § 229.1101 of this chapter.

       * * * * *

       70. Amend § 249.322 by revising paragraph (a) to read as follows:

       § 249.322 Form 12b-25—Notification of late filing.

       (a) This form shall be filed pursuant to § 240.12b-25 of this chapter by issuers who are

unable to file timely all or any required portion of an annual or transition report on Form 10-K,

20-F, or 11-K (§ 249.310, 249.220f, or 249.311), a quarterly or transition report on Form 10-Q (§

249.308a), a semiannual or transition report on Form 10-S (§ 249.308b), or a distribution report

on Form 10-D (§ 249.312) pursuant to section 13 or 15(d) of the Act (15 U.S.C. 78m or 78o(d))

or an annual report on Form N-CEN (§ 249.330; 274.101) or a semi-annual or annual report on

Form N-CSR (§ 249.331; 274.128) pursuant to section 13 or 15(d) of the Act or section 30 of the

Investment Company Act of 1940 (15 U.S.C. 80a-29). The filing shall consist of a signed

original and three conformed copies, and shall be filed with the Commission at Washington, DC

20549, no later than one business day after the due date for the periodic report in question.




                                                    239

--- page 240 ---

Copies of this form may be obtained from “Publications,” Securities and Exchange Commission,

100 F Street, NE., Washington, DC 20549 and at our Web site at http://www.sec.gov.

        * * * * *

        PART 249—FORMS, SECURITIES EXCHANGE ACT OF 1934

        71. The authority citation for part 249 continues to read, in part, as follows:

        Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C. 5461 et seq.; 18 U.S.C.

1350; Sec. 953(b), Pub. L. 111-203, 124 Stat. 1904; Sec. 102(a)(3), Pub. L. 112-106, 126 Stat.

309 (2012); Sec. 107, Pub. L. 112-106, 126 Stat. 313 (2012), and Sec. 72001, Pub. L. 114-94,

129 Stat. 1312 (2015), and secs. 2 and 3 Pub. L. 116-222, 134 Stat. 1063 (2020), unless

otherwise noted.

            * * * * *

        72. Amend Form 10 (referenced in § 249.210) by adding on the form cover page the text

“Indicate by check mark if the registrant has elected to file semiannual reports pursuant to Rule

13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

        Note: The additions to Form 10 read as shown in Appendix I to this document. The

text of Form 10 does not, and the text of the amendments to Form 10 will not, appear in the

Code of Federal Regulations.

        73. Amend Form 6-K (referenced in § 249.306) by revising General Instruction

(C)(6)(a)(i).

        Note: The revisions to Form 6-K read as shown in Appendix J to this document. The

text of Form 6-K does not, and the text of the amendments to Form 6-K will not, appear in

the Code of Federal Regulations.

        74. Amend Form 8-K (referenced in § 249.308) by revising Item 2.02.


                                                     240

--- page 241 ---

Note: The revisions to Form 8-K read as shown in Appendix K to this document.

The text of Form 8-K does not, and the text of the amendments to Form 8-K will not,

appear in the Code of Federal Regulations.

        75. Add new Form 10-S (to be referenced in § 249.308b).

        Note: Proposed Form 10-S is attached as Appendix L to this document. The text of

Form 10-S will not appear in the Code of Federal Regulations.

        76. Amend Form 10-K (referenced in § 249.310) by:

        a. Adding on the form cover page the text: “Indicate by check mark if the registrant has

elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐”;

        b. Revising the cover page sentence: “State the aggregate market value of the voting and

non-voting common equity held by non-affiliates computed by reference to the price at which the

common equity was last sold, or the average bid and asked price of such common equity, as of

the last business day of the registrant’s most recently completed second fiscal quarter.”; and

        c. Revising Item 3, 5, 9B, and 14.

        Note: The additions and revisions to Form 10-K read as shown in Appendix M to

this document. The text of Form 10-K does not, and the text of the amendments to Form

10-K will not, appear in the Code of Federal Regulations.

        77. Amend Form 12b-25 (referenced in § 249.322) by revising the cover page, Part II,

and Part III.

        Note: The revisions to Form 12b-25 read as shown in Appendix N to this document.

The text of Form 12b-25 does not, and the text of the amendments to Form 12b-25 will not,

appear in the Code of Federal Regulations.




                                                   241

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PART 260—GENERAL RULES AND REGULATIONS, TRUST INDENTURE

ACT OF 1939

       78. The authority citation for part 260 continues to read as follows:

       Authority: 15 U.S.C. 77c, 77ddd, 77eee, 77ggg, 77nnn, 77sss, 78ll (d), 80b-3, 80b-4, and

80b-11, unless otherwise noted.

       * * * * *

       79. Amend § 260.0-11 by revising paragraph (b)(1) and (2) to read as follows:

       § 260.0-11 Liability for certain statements by issuers.

       * * * * *

       (b) * * *

       (1) A forward-looking statement (as defined in paragraph (c) of this section) made in a

document filed with the Commission, in Part I of a quarterly report on Form 10-Q, § 249.308a of

this chapter, in Part I of a semiannual report on Form 10-S, § 249.308b of this chapter, or in an

annual report to security holders meeting the requirements of Rules 14a-3(b) and (c) or 14c-3(a)

and (b) under the Securities Exchange Act of 1934 (§ 240.14a-3(b) and (c) or § 240.14c-3(a) and

(b) of this chapter), a statement reaffirming such forward-looking statement after the date the

document was filed or the annual report was made publicly available, or a forward-looking

statement made before the date the document was filed or the date the annual report was made

publicly available if such statement is reaffirmed in a filed document, in Part I of a quarterly

report on Form 10-Q, in Part I of a semiannual report on Form 10-S, or in an annual report made

publicly available within a reasonable time after the making of such forward-looking statement;

Provided, that:

       * * * * *



                                                    242

--- page 243 ---

(2) Information relating to the effects of changing prices on the business enterprise

presented voluntarily or pursuant to Item 303 of Regulation S-K (§ 229.303 of this chapter), Item

5 of Form 20-F (§ 249.220f of this chapter), “Operating and Financial Review and Prospects,”

Item 302 of Regulation S-K (§ 229.302 of this chapter), “Supplementary Financial Information,”

or Rule 3-20(c) of Regulation S-X (§ 210.3-20(c) of this chapter), and disclosed in a document

filed with the Commission, in Part I of a quarterly report on Form 10-Q, in Part I of a semiannual

report on Form 10-S, or in an annual report to shareholders meeting the requirements of Rules

14a-3(b) and (c) or 14c-3(a) and (b) (§ 240.14a-3(b) and (c) or § 240.14c-3(a) and (b)) under the

Securities Exchange Act of 1934.

         * * * * *

By the Commission.

Dated:



May 5, 2026,

Vanessa A. Countryman, Secretary.




                                                     243

--- page 244 ---

Appendix A—Form S-1

       * * * * *

                                            FORM S-1

       * * * * *

       Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

       * * * * *

        Item 11A. Material Changes.

       If the registrant elects to incorporate information by reference pursuant to General

Instruction VII., describe any and all material changes in the registrant’s affairs which have

occurred since the end of the latest fiscal year for which audited financial statements were

included in the latest Form 10-K and that have not been described in a Form 10-Q, Form 10-S, or

Form 8-K filed under the Exchange Act.

       * * * * *




                                                    244

--- page 245 ---

Appendix B—Form S-3

       * * * * *

                                            FORM S-3

       * * * * *

       Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

       * * * * *

       Item 11. Material Changes.

       (a) Describe any and all material changes in the registrant’s affairs which have occurred

since the end of the latest fiscal year for which certified financial statements were included in the

latest annual report to security holders and which have not been described in a report on Form

10-Q (§249.308a of this chapter), Form 10-S (§249.308b of this chapter), or Form 8-K (§249.308

of this chapter) filed under the Exchange Act.

       * * * * *




                                                    245

--- page 246 ---

Appendix C—Form S-11

       * * * * *

                                           FORM S-11

       * * * * *

   Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

       * * * * *

       Item 28A. Material Changes.

       If the registrant elects to incorporate information by reference pursuant to General

Instruction H, describe any and all material changes in the registrant’s affairs which have

occurred since the end of the latest fiscal year for which audited financial statements were

included in the latest Form 10-K and which have not been described in a Form 10-Q, Form 10-S,

or Form 8-K filed under the Exchange Act.

       * * * * *




                                                   246

--- page 247 ---

Appendix D—Form S-4

       * * * * *

                                            FORM S-4

       * * * * *

       Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

       * * * * *

       Item 10. Information with Respect to S-3 Registrants.

       If the registrant meets the requirements for use of Form S-3 and elects to furnish

information in accordance with the provisions of this Item, furnish information as required below:

       (a) Describe any and all material changes in the registrant’s affairs that have occurred

since the end of the latest fiscal year for which audited financial statements were included in the

latest annual report to security holders and that have not been described in a report on Form 10-Q

(§249.308a of this chapter), Form 10-S (§249.308a of this chapter), or Form 8-K (§249.308 of

this chapter) filed under the Exchange Act.

       * * * * *

       Item 12. Information with Respect to S-3 Registrants.

       * * * * *

       (a) * * *

       (2) Provide financial and other information with respect to the registrant in the form

required by Part I of Form 10-Q as of the end of the most recent fiscal quarter (or, if applicable,

required by Part I of Form 10-S as of the end of the most recent fiscal semiannual period) which

ended after the end of the latest fiscal year for which certified financial statements were included


                                                    247

--- page 248 ---

in the latest Form 10-K or the latest report to security holders (whichever the registrant elects to

deliver pursuant to paragraph (a) of this Item), and more than forty-five days prior to the

effective date of this registration statement (or as of a more recent date) by one of the following

means:

         (i) including such information in the prospectus;

         (ii) providing without charge to each person to whom a prospectus is delivered a copy of

the registrant’s latest Form 10-Q or latest Form 10-S; or

         (iii) providing without charge to each person to whom a prospectus is delivered a copy of

the registrant’s latest quarterly report or semiannual report that was delivered to its security

holders and which included the required financial information.

         * * * * *

         (4) Describe any and all material changes in the registrant’s affairs which have occurred

since the end of the latest fiscal year for which audited financial statements were included in the

latest Form 10-K or the latest annual report to security holders (whichever the registrant elects to

deliver pursuant to paragraph of this Item) and that were not described in a Form 10-Q, Form 10-

S, or quarterly report or semiannual report delivered with the prospectus in accordance with

paragraphs (a)(2)(ii) or (iii) of this Item.

         Instruction. Where the registrant elects to deliver the documents identified in paragraph

(a) with a preliminary prospectus, such documents need not be redelivered with the final

prospectus.

         (b) * * *

         (2) * * *




                                                     248

--- page 249 ---

(i) the interim financial information required by Rule 10-01 of Regulation S-X (§210.10-

01 of this chapter) for a filing on Form 10-Q or Form 10-S;

       * * * * *

       Item 13. Incorporation of Certain Information by Reference.

       * * * * *

       (a) * * *

       (4) If the registrant elects, pursuant to Item 12(a)(2)(iii) of this Form, to provide a copy of

its latest quarterly report or latest semiannual report, as applicable, which was delivered to

security holders, financial information equivalent to that required to be presented in Part I of

Form 10-Q or Part I of Form 10-S.

       Instruction. Attention is directed to Rule 439 regarding consent to the use of

material incorporated by reference.

       (b) The registrant also may state, if it so chooses, that specifically described portions of

its annual, semiannual, or quarterly report to security holders, other than those portions required

to be incorporated by reference pursuant to paragraphs (a)(3) and (4) of this Item, are not part of

the registration statement. In such case, the description of portions that are not incorporated by

reference or that are excluded shall be made with clarity and in reasonable detail.

       (c) Electronic filings. Electronic filers electing to deliver and incorporate by reference all,

or any portion, of the quarterly, semiannual, or annual report to security holders pursuant to this

Item shall file as an exhibit such quarterly, semiannual, or annual report to security holders, or

such portion thereof that is incorporated by reference, in electronic format.

       * * * * *

       Item 16. Information with Respect to S-3 Companies.



                                                    249

--- page 250 ---

* * * * *

       (b) Electronic filings. In addition to satisfying the requirements of paragraph (a) of this

Item, electronic filers that elect to deliver and incorporate by reference all, or any portion, of the

quarterly, semiannual, or annual report to security holders of a company being acquired pursuant

to this Item shall file as an exhibit such quarterly, semiannual, or annual report to security

holders, or such portion thereof that is incorporated by reference, in electronic format.

       Item 17. Information with Respect to Companies Other Than S-3 Companies.

       * * * * *

       (b) * * *

       (8)

       (i) the quarterly financial and other information as would have been required had the

company being acquired been required to file Part I of Form 10-Q (§249.308a) for the most

recent quarter for which such a report would have been on file at the time the registration

statement becomes effective or for a period ending as of a more recent date; or

       (ii) the semiannual financial and other information as would have been required had the

company being acquired been required to file Part I of Form 10-S (§249.308b) for the most

recent semiannual period for which such a report would have been on file at the time the

registration statement becomes effective or for a period ending as of a more recent date.

       * * * * *




                                                     250

--- page 251 ---

Appendix E—Form F-1

       * * * * *

                                           FORM F-1

       * * * * *

       Item 4A. Material Changes.

       If the registrant elects to incorporate information by reference pursuant to General

Instruction VI., describe any and all material changes in the registrant’s affairs which have

occurred since the end of the latest fiscal year for which audited financial statements were

included in accordance with Item 5 of this Form and which have not been described in a report

on Form 6-K, Form 10-Q, Form 10-S, or Form 8-K filed under the Exchange Act and

incorporated by reference pursuant to Item 5 of this Form.

       * * * * *

       Item 5. Incorporation of Certain Information by Reference.

       * * * * *

       (a) * * *

       2. Any report on Form 10-Q, Form 10-S, or Form 8-K filed since the date of filing of the

annual report. The registrant may also incorporate by reference any Form 6-K meeting the

requirements of this Form.

       * * * * *




                                                   251

--- page 252 ---

Appendix F—Form F-3

       * * * * *

                                             FORM F-3

       * * * * *

       Item 5. Material Changes.

       (a) Describe any and all material changes in the registrant’s affairs that have occurred

since the end of the latest fiscal year for which certified financial statements are included in this

registration statement in accordance with Item 6 of this Form and that have not been described in

a report on Form 6-K (§249.306 of this chapter), Form 10-Q (§249.308a of this chapter), Form

10-S (§249.308b of this chapter), or Form 8-K (§249.308 of this chapter) filed under the

Exchange Act and incorporated by reference pursuant to Item 6 of this Form.

       * * * * *

       Item 6. Incorporation of Certain Information by Reference.

       (a) The registrant’s latest Form 20-F, Form 40-F, Form 10-K or Form 10 filed pursuant to

the Exchange Act shall be incorporated by reference. Any report on Form 10-Q, Form 10-S, or

Form 8-K filed since the date of filing of the annual report incorporated by reference also shall

be incorporated by reference. If capital stock is to be registered and securities of the same class

are registered under Section 12 of the Exchange Act, the description of such class of securities

which is contained in a registration statement filed under the Exchange Act, including any

amendment or reports filed for the purpose of updating such description, shall be incorporated by

reference.

       Instruction




                                                     252

--- page 253 ---

If the registrant’s latest filing on Form 20-F, Form 40-F or Form 10-K is amended to

include the information specified in Item 18 of Form 20-F, the prospectus shall state that the

Form 20-F, Form 40-F or Form 10-K has been so amended. Reference is made to the Transaction

Requirements in General Instruction I.B. that, in some cases, require the financial statements in

the Form 20-F, Form 40-F or Form 10-K to comply with Item 18 of Form 20-F as a condition for

eligibility to use Form F-3.

       (b) The prospectus shall also state that all subsequent annual reports filed on Form 20-F,

Form 40-F or Form 10-K, and all subsequent filings on Forms 10-Q, 10-S, and 8-K filed by the

registrant pursuant to the Exchange Act, prior to the termination of the offering, shall be deemed

to be incorporated by reference into the prospectus.

       * * * * *




                                                   253

--- page 254 ---

Appendix G—Form F-4

         * * * * *

                                             FORM F-4

         * * * * *

         Item 10. Information With Respect to F-3 Companies.

         If the registrant meets the requirements for use of Form F-3 and elects to furnish

information in accordance with the provisions of this Item, furnish information as required

below:

         (a) Describe any and all material changes in the registrant’s affairs that have occurred

since the end of the latest fiscal year for which audited financial statements are incorporated by

reference in accordance with Item 11 of this Form and that have not been described in a report on

Form 6-K (§249.306 of this chapter), Form 10-Q (§249.308a of this chapter), Form 10-S

(§249.308b of this chapter), or Form 8-K (§249.308 of this chapter) filed under the Exchange

Act;

         (b) If the financial statements incorporated by reference in accordance with Item 11 of

this Form are not sufficiently current to comply with Item 8.A of Form 20-F, financial statements

necessary to comply with that rule shall be presented either in the prospectus, in an amended

Form 20-F, 40-F or 10-K (in which case the prospectus shall disclose that such form has been so

amended), or in a Form 6-K, Form 10-Q, Form 10-S, or Form 8-K; and

         * * * * *

         Item 11. Incorporation of Certain Information by Reference.

         If the registrant furnishes information in accordance with the provisions of Item 10 of this

Form:



                                                     254

--- page 255 ---

(a) * * *

       Instructions

       * * * * *

       2. Where common equity securities are being issued, the information required by Item

9.A.4 of Form 20-F, nature of trading markets, should be updated, to cover any subsequent

interim periods for which interim financial statements are required to be included to comply with

Item 8.A of Form 20-F. Such updating may be made in the prospectus, in an amended Form 20-

F, Form 10-K or, in the case of registrants described in General Instruction A.(2) of Form 40-F,

Form 40-F, or in a Form 6-K, Form 10-Q, Form 10-S, or Form 8-K, as applicable.

       * * * * *

       (b) The prospectus also shall state that all annual reports on Form 20-F, on Form 10-K or,

in the case of registrants described in General Instruction A.(2) of Form 40-F, on Form 40-F and

all Forms 10-Q, Form 10-S, and 8-K, and any Form 6-K so designated, subsequently filed by the

registrant pursuant to sections 31(a), 13(c) or 15(d) of the Exchange Act, prior to one of the

following dates, whichever is applicable, shall be deemed to be incorporated by reference into

the prospectus:

       * * * * *

       Item 12. Information With Respect to F-3 Registrants.

       * * * * *

       (a) * * *

       (2) * * *

       (ii) providing without charge to whom a prospectus is delivered a copy of the registrant’s

Form 10-Q, Form 10-S, Form 8-K or Form 6-K report that contains such later information; or



                                                    255

--- page 256 ---

* * * * *

       (4) Describe any and all material changes in the registrant’s affairs that have occurred

since the end of the latest fiscal year for which audited financial statements are incorporated by

reference in accordance with Item 13 of this Form and that have not been described in a report on

Form 6-K, Form 10-Q, Form 10-S, or Form 8-K delivered with the prospectus in accordance

with paragraph (2)(ii) of this Item.

       (5) Where common equity securities are being issued, the information required by Item

9.A.4 of Form 20-F, nature of trading markets, should be updated to cover any subsequent

interim periods for which interim financial statements are required to be included to comply with

Item 8.A of Form 20-F. Such updating may be made in the prospectus, in an amended Form 20-

F, Form 10-K or Form 40-F, or in a Form 6-K, Form 10-Q, Form 10-S, or Form 8-K.

       * * * * *

       Item 13. Incorporation of Certain Information by Reference.

       * * * * *

       Instructions

       * * * * *

       2. Where common equity securities are being issued, the information required by Item

9.A.4. of Form 20-F, nature of trading markets, should be updated to cover any subsequent

interim periods for which interim financial statements are required to be included to comply with

Item 8-A of Form 20-F. Such updating may be made in the prospectus, in an amended Form 20-

F, Form 10-K or Form 40-F or in a Form 6-K, Form 10-Q, Form 10-S, or Form 8-K.

       3. The registrant may incorporate by reference and deliver with the prospectus any Form

6-K, Form 10-Q, Form 10-S, or Form 8-K containing information eligible to be incorporated by



                                                    256

--- page 257 ---

reference into Form F-1. See Rules 4-01(a)(2) and 10-01 of Regulation S-X and Item 18 of Form

20-F.

        * * * * *

        Item 17. Information With Respect to Foreign Companies Other Than F-3

Companies.

        * * * * *

        (b) * * *

        (2) Where common equity securities are being issued, the information required by Item

9.A.4 of Form 20-F, nature of trading markets, updated to cover any subsequent interim periods

for which interim financial statements are required to be included to comply with Item 8.A of

Form 20-F. Such updating may be made in the prospectus, in an amended Form 20-F, Form 10-

K or, in the case of registrants described in General Instruction A.(2) of Form 40-F, Form 40-F,

or in a Form 6-K, Form 10-Q, Form 10-S, or Form 8-K;

        * * * * *




                                                  257

--- page 258 ---

Appendix H—Form F-10

       * * * * *

                                           FORM F-10

       * * * * *

       PART II — INFORMATION NOT REQUIRED TO BE DELIVERED TO

OFFEREES OR PURCHASERS

       * * * * *

       (101) * * *

       (a) * * *

       (i) First is required for a periodic report on Form 10-Q (§249.308a of this chapter), Form

10-S (§249.308b of this chapter), Form 20-F (§249.220f of this chapter), or Form 40-F

(§249.240f of this chapter), as applicable; and

       * * * * *




                                                  258

--- page 259 ---

Appendix I—Form 10

       * * * * *

                                           FORM 10

       * * * * *

       Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

       * * * * *




                                                   259

--- page 260 ---

Appendix J—Form 6-K

       * * * * *

                                           FORM 6-K

       * * * * *

       GENERAL INSTRUCTIONS

       * * * * *

       (C) * * *

       (6) * * *

       (a) * * *

       (i) First is required for a periodic report on Form 10-Q (§249.308a of this chapter), Form

10-S (§249.308b of this chapter), Form 20-F (§249.220f of this chapter), or Form 40-F

(§249.240f of this chapter), as applicable; and

       * * * * *




                                                  260

--- page 261 ---

Appendix K—Form 8-K

       * * * * *

                                            FORM 8-K

       * * * * *

       Item 2.02 Results of Operations and Financial Condition.

       (a) If a registrant, or any person acting on its behalf, makes any public announcement or

release (including any update of an earlier announcement or release) disclosing material non-

public information regarding the registrant’s results of operations or financial condition for a

completed quarterly, semiannual, or annual fiscal period, the registrant shall disclose the date of

the announcement or release, briefly identify the announcement or release and include the text of

that announcement or release as an exhibit.

       (b) * * *

       Instructions.

       1. The requirements of this Item 2.02 are triggered by the disclosure of material non-

public information regarding a completed fiscal year, semiannual period, or quarter. Release of

additional or updated material non-public information regarding a completed fiscal year,

semiannual period, or quarter would trigger an additional Item 2.02 requirement.

       * * * * *

       3. Issuers that make earnings announcements or other disclosures of material non-public

information regarding a completed fiscal year, semiannual period, or quarter in an interim or

annual report to shareholders are permitted to specify which portion of the report contains the

information required to be furnished under this Item 2.02.




                                                    261

--- page 262 ---

4. This Item 2.02 does not apply in the case of a disclosure that is made in a quarterly

report filed with the Commission on Form 10-Q (17 CFR 249.308a), semiannual report on Form

10-S (17 CFR 249.308b), or an annual report filed with the Commission on Form 10-K (17 CFR

249.310).




                                                   262

--- page 263 ---

Appendix L—Form 10-S

                                                                                          OMB APPROVAL
                                       UNITED STATES                              OMB Number:
                                                                                  Expires:
                      SECURITIES AND EXCHANGE COMMISSION                          Estimated average burden
                                                                                  hours per response ......................
                                    Washington, D.C. 20549

                                           FORM 10-S

                                  GENERAL INSTRUCTIONS


A.    Rule as to Use of Form 10-S.

      1. Form 10-S shall be used for semiannual reports under Section 13 or
         15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
         78o(d)), filed pursuant to Rule 13a-13 (17 CFR 240.13a-13) or Rule
         15d-13 (17 CFR 240.15d-13). A semiannual report on this Form
         pursuant to Rule 13a-13 or Rule 15d-13 shall be filed within the
         following period after the end of the first semiannual period of each
         fiscal year, but no report need be filed for the second semiannual period
         of any fiscal year:

           a.      40 days after the end of the first semiannual period of a
                   fiscal year for large accelerated filers and accelerated
                   filers (as defined in 17 CFR § 240.12b-2); and

           b.      45 days after the end of the first semiannual period of a fiscal year for all other
                   registrants.

B.    Application of General Rules and Regulations.

      1.        The General Rules and Regulations under the Act contain certain
                general requirements which are applicable to reports on any form.
                These general requirements should be carefully read and observed in
                the preparation and filing of reports on this Form.

      2.        Particular attention is directed to Regulation 12B which contains
                general requirements regarding matters such as the kind and size of
                paper to be used, the legibility of the report, the information to be
                given whenever the title of securities is required to be stated, and the
                filing of the report. The definitions contained in Rule 12b-2 (17 CFR
                240. 12b-2) should be especially noted. See also Regulations 13A and
                15D.

C.    Preparation of Report.

                                                    263

--- page 264 ---

1.   This is not a blank form to be filled in. It is a guide copy to be used in
            preparing the report in accordance with Rules 12b-11 (17 CFR
            240.12b-11) and 12b-12 (17 CFR 240.12b-12). The Commission does
            not furnish blank copies of this Form to be filled in for filing.

       2.   These general instructions are not to be filed with the report. The
            instructions to the various captions of the Form are also to be
            omitted from the report as filed.




SEC   Potential persons who are to respond to the collection of information

      contained in this Form are not required to respond unless the Form displays a

      currently valid OMB control number.




                                                 264

--- page 265 ---

D.   Incorporation by Reference.

     1.    If the registrant makes available to its stockholders or otherwise publishes, within the
           period prescribed for filing the report, a document or statement containing
           information meeting some or all of the requirements of Part I of this Form, the
           information called for may be incorporated by reference from such published
           document or statement, in answer or partial answer to any item or items of Part I of
           this Form, provided copies thereof are filed as an exhibit to Part I of the report on this
           Form.

     2.    Other information may be incorporated by reference in answer or partial answer to
           any item or items of Part II of this Form in accordance with the provisions of Rule
           12b-23 (17 CFR 240.12b-23).

     3.    If any information required by Part I or Part II is incorporated by reference into an
           electronic format document from the semiannual report to security holders as
           provided in General Instruction D, any portion of the semiannual report to security
           holders incorporated by reference shall be filed as an exhibit in electronic format, as
           required by Item 601(b)(13) of Regulation S-K.

E.   Integrated Reports to Security Holders.

      Semiannual reports to security holders may be combined with the required information
of Form 10-S and will be suitable for filing with the Commission if the following conditions
are satisfied:

     1.    The combined report contains full and complete answers to all items required by Part
           I of this Form. When responses to a certain item of required disclosure are separated
           within the combined report, an appropriate cross-reference should be made.

     2.    If not included in the combined report, the cover page, appropriate responses to Part
           II, and the required signatures shall be included in the Form 10-S. Additionally, as
           appropriate, a cross-reference sheet should be filed indicating the location of
           information required by the items of the Form.

     3.    If an electronic filer files any portion of a semiannual report to security holders in
           combination with the required information of Form 10-S, as provided in this
           instruction, only such portions filed in satisfaction of the Form 10-S requirements
           shall be filed in electronic format.

F.   Filed Status of Information Presented.
     1.   Pursuant to Rule 13a-13(e) and Rule 15d-13(e), the information presented in
          satisfaction of the requirements of Items 1, 2 and 3 of Part I of this Form, whether
          included directly in a report on this Form, incorporated therein by reference from a
          report, document or statement filed as an exhibit to Part I of this Form pursuant to
          Instruction D(1) above, included in an integrated report pursuant to Instruction E
          above, or contained in a statement regarding computation of per share earnings or a
          letter regarding a change in accounting principles filed as an exhibit to Part I pursuant
                                                    265

--- page 266 ---

to Item 601 of Regulation S-K (§ 229.601 of this chapter), except as provided by
                Instruction F(2) below, shall not be deemed filed for the purpose of Section 18 of the
                Act or otherwise subject to the liabilities of that section of the Act but shall be subject
                to the other provisions of the Act.

      2.        Information presented in satisfaction of the requirements of this Form other than
                those of Items 1, 2 and 3 of Part I shall be deemed filed for the purpose of Section 18
                of the Act; except that, where information presented in response to Item 1 or 2 of Part
                I (or as an exhibit thereto) is also used to satisfy Part II requirements through
                incorporation by reference, only that portion of Part I (or exhibit thereto) consisting of
                the information required by Part II shall be deemed so filed.

G.    Signature and Filing of Report.

      If the report is filed in paper pursuant to a hardship exemption from electronic filing (see
Item 201 et seq. of Regulation S-T (17 CFR 232.201 et seq.), three complete copies of the report,
including any financial statements, exhibits or other papers or documents filed as a part thereof,
and five additional copies which need not include exhibits must be filed with the Commission.

      At least one complete copy of the report, including any financial statements, exhibits or
other papers or documents filed as a part thereof, must be filed with each exchange on which any
class of securities of the registrant is registered. At least one complete copy of the report filed
with the Commission and one such copy filed with each exchange must be manually signed on
the registrant’s behalf by a duly authorized officer of the registrant and by the principal financial
or chief accounting officer of the registrant. (See Rule 12b-11(d) (17 CFR 240.12b-11(d).)
Copies not manually signed must bear typed or printed signatures. In the case where the principal
executive officer, principal financial officer or chief accounting officer is also duly authorized to
sign on behalf of the registrant, one signature is acceptable provided that the registrant clearly
indicates the dual responsibilities of the signatory.

H.    Omission of Information by Certain Wholly-Owned Subsidiaries.

      If on the date of the filing of its report on Form 10-S, the registrant meets the conditions
specified in paragraph (1) below, then such registrant may omit the information called for in the
items specified in paragraph (2) below.

      1.        Conditions for availability of the relief specified in paragraph (2) below:

           a.       All of the registrant’s equity securities are owned, either directly or indirectly, by
                    a single person which is a reporting company under the Act and which has filed
                    all the material required to be filed pursuant to Section 13, 14 or 15(d) thereof, as
                    applicable;
           b.       During the preceding thirty-six calendar months and any subsequent period of
                    days, there has not been any material default in the payment of principal, interest,
                    a sinking or purchase fund installment, or any other material default not cured
                    within thirty days, with respect to any indebtedness of the registrant or its
                    subsidiaries, and there has not been any material default in the payment of rentals
                    under material long-term leases; and
                                                          266

--- page 267 ---

c.      There is prominently set forth, on the cover page of the Form 10-S, a statement
             that the registrant meets the conditions set forth in General Instruction H(1)(a) and
             (b) of Form 10-S and is therefore filing this Form with the reduced disclosure
             format.

2.        Registrants meeting the conditions specified in paragraph (1) above are entitled to the
          following relief:

     a.      Such registrants may omit the information called for by Item 2 of Part I,
             Management’s Discussion and Analysis of Financial Condition and Results of
             Operations, provided that the registrant includes in the Form 10-S a
             management’s narrative analysis of the results of operations explaining the
             reasons for material changes in the amount of revenue and expense items between
             the fiscal semiannual period presented and the corresponding semiannual period
             in the preceding fiscal year. Explanations of material changes should include, but
             not be limited to, changes in the various elements which determine revenue and
             expense levels such as unit sales volume, prices charged and paid, production
             levels, production cost variances, labor costs and discretionary spending
             programs. In addition, the analysis should include an explanation of the effect of
             any changes in accounting principles and practices or method of application that
             have a material effect on net income as reported.

     b.      Such registrants may omit the information called for in the following Part II
             Items: Item 2, Changes in Securities; Item 3, Defaults Upon Senior Securities.

     c.      Such registrants may omit the information called for by Item 3 of Part I,
             Quantitative and Qualitative Disclosures About Market Risk.




                                                  267

--- page 268 ---

UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                                 Washington, D.C. 20549

                                              FORM 10-S

    (Mark One)

    [ ] SEMIANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

    For the semiannual period ended

                                                                   or



    [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934



    For the transition period from                            to

Commission File Number:




                          (Exact name of registrant as specified in its charter)




   (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)




      (Address of principal executive offices)                                          (Zip Code)




                        (Registrant’s telephone number, including area code)
                                                  268

--- page 269 ---

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


  Title of each class     Trading Symbol(s)        Name of each exchange on which registered




SEC Potential persons who are to respond to the collection of information contained in this

      Form are not required to respond unless the Form displays a currently valid OMB control

      number.




                                                   269

--- page 270 ---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.                               ☐ Yes      ☐ No

       Indicate by check mark whether the registrant has submitted electronically every Interactive
Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files).                                                       ☐ Yes      ☐ No

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
"emerging growth company" in Rule 12b-2 of the Exchange Act.

                         Large accelerated filer ☐                Accelerated filer ☐

                         Non-accelerated filer ☐                  Smaller reporting company ☐

                                                                  Emerging growth company ☐

        If an emerging growth company, indicate by check mark if the registrant has elected not to
use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐

       Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).

                                                                                ☐ Yes      ☐No

        APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                        DURING THE PRECEDING FIVE YEARS:

        Indicate by check mark whether the registrant has filed all documents and reports required to
be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.

                                                                               ☐ Yes      ☐No

                          APPLICABLE ONLY TO CORPORATE ISSUERS:

        Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date.

                                      PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.


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Provide the information required by Rule 10-01 of Regulation S-X (17 CFR Part 210). A
smaller reporting company, defined in Rule 12b-2 (§ 240.12b-2 of this chapter) may provide the
information required by Article 8-03 of Regulation S-X (§ 210.8-03 of this chapter).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

       Furnish the information required by Item 303 of Regulation S-K (§ 229.303 of this chapter).

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

       Furnish the information required by Item 305 of Regulation S-K (§ 229.305 of this chapter).

Item 4. Controls and Procedures.

       Furnish the information required by Item 307 of Regulation S-K (§ 229.307 of this chapter)
and Item 308(c) of Regulation S-K (§229.308(c) of this chapter).

                                      PART II—OTHER INFORMATION

         Instruction. The report shall contain the item numbers and captions of all applicable items
of Part II, but the text of such items may be omitted provided the responses clearly indicate the
coverage of the item. Any item which is inapplicable or to which the answer is negative may be
omitted and no reference thereto need be made in the report. If substantially the same information
has been previously reported by the registrant, an additional report of the information on this Form
need not be made. The term “previously reported” is defined in Rule 12b-2 (17 CFR 240. 12b-2).
A separate response need not be presented in Part II where information called for is already
disclosed in the financial information provided in Part I and is incorporated by reference into Part
II of the report by means of a statement to that effect in Part II which specifically identifies the
incorporated information.

Item 1. Legal Proceedings.

        Furnish the information required by Item 103 of Regulation S-K (§ 229.103 of this
chapter). As to such proceedings which have been terminated during the period covered by the
report, provide similar information, including the date of termination and a description of the
disposition thereof with respect to the registrant and its subsidiaries.

       Instruction. A legal proceeding need only be reported in the Form 10-S filed for the
semiannual period in which it first became a reportable event and in subsequent semiannual periods
in which there have been material developments.

Item 1A. Risk Factors.

      Set forth any material changes from risk factors as previously disclosed in the registrant’s
Form 10-K (§249.310) in response to Item 1A. to Part 1 of Form 10-K. Smaller reporting
companies are not required to provide the information required by this item.




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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Furnish the information required by Item 701 of Regulation S-K (17 CFR 229.701) as to all
    equity securities of the registrant sold by the registrant during the period covered by the report
    that were not registered under the Securities Act. If the Item 701 information previously has
    been included in a Current Report on Form 8-K (17 CFR 249.308), however, it need not be
    furnished.

(b) If required pursuant to Rule 463 (17 CFR 230.463) of the Securities Act of 1933, furnish the
    information required by Item 701(f) of Regulation S-K (§ 229.701(f) of this chapter).

(c) Furnish the information required by Item 703 of Regulation S-K (§ 229.703 of this chapter) for
    any repurchase made in the semiannual period covered by the report. Provide disclosures
    covering repurchases made on a monthly basis. For example, if the semiannual period began
    on January 16 and ended on July 15, the chart would show repurchases for the months from
    January 16 through February 15, February 16 through March 15, March 16 through April 15,
    April 16 through May 15, May 16 through June 15, and June 16 through July 15.

Instruction. Working capital restrictions and other limitations upon the payment of dividends are to
    be reported hereunder.

Item 3. Defaults Upon Senior Securities.

(a) If there has been any material default in the payment of principal, interest, a sinking or purchase
fund installment, or any other material default not cured within 30 days, with respect to any
indebtedness of the registrant or any of its significant subsidiaries exceeding 5 percent of the total
assets of the registrant and its consolidated subsidiaries, identify the indebtedness and state the
nature of the default. In the case of such a default in the payment of principal, interest, or a sinking
or purchase fund installment, state the amount of the default and the total arrearage on the date of
filing this report.

Instruction. This paragraph refers only to events which have become defaults under the governing
instruments, i.e., after the expiration of any period of grace and compliance with any notice
requirements.

(b) If any material arrearage in the payment of dividends has occurred or if there has been any other
material delinquency not cured within 30 days, with respect to any class of preferred stock of the
registrant which is registered or which ranks prior to any class of registered securities, or with
respect to any class of preferred stock of any significant subsidiary of the registrant, give the title of
the class and state the nature of the arrearage or delinquency. In the case of an arrearage in the
payment of dividends, state the amount and the total arrearage on the date of filing this report.

Instructions to Item 3.

   1. Item 3 need not be answered as to any default or arrearage with respect to any class of
securities all of which is held by, or for the account of, the registrant or its totally held subsidiaries.




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2. The information required by Item 3 need not be made if previously disclosed on a
report on Form 8-K (17 CFR 249.308).

Item 4. Mine Safety Disclosures.

        If applicable, provide a statement that the information concerning mine safety violations or
other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in exhibit
95 to the semiannual report.

Item 5. Other Information.

(a) The registrant must disclose under this item any information required to be disclosed in a report
on Form 8-K during the period covered by this Form 10-S, but not reported, whether or not
otherwise required by this Form 10-S. If disclosure of such information is made under this item, it
need not be repeated in a report on Form 8-K which would otherwise be required to be filed with
respect to such information or in a subsequent report on Form 10-S.

(b) Furnish the information required by Item 407(c)(3) of Regulation S-K (§ 229.407 of this
chapter).

(c) Furnish the information required by Item 408(a) of Regulation S-K (17 CFR 229.408(a)).

Item 6. Exhibits.

       Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).




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SIGNATURES


        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.




                                                                                 (Registrant)




     Date                                                                (Signature) *




       Date                                                              (Signature) *



         * Print name and title of the signing officer under the signing officer’s signature.




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Appendix M—Form 10-K

        * * * * *

                                            FORM 10-K

        * * * * *

        Indicate by check mark if the registrant has elected to file semiannual reports pursuant to

Rule 13a-13(b) or Rule 15d-13(b) of the Act. ☐

        * * * * *

        State the aggregate market value of the voting and non-voting common equity held by

non-affiliates computed by reference to the price at which the common equity was last sold, or

the average bid and asked price of such common equity, as of the last business day of the

registrant’s most recently completed second fiscal quarter (or first semiannual period if the

registrant elected to file semiannual reports pursuant to Rule 13a-13(b) or Rule 15d-13(b) of the

Act).

        * * * * *

        Item 3. Legal Proceedings.

        * * * * *

        (b) As to any proceeding that was terminated during the fourth quarter of the fiscal year

(or the second semiannual period of the fiscal year if the registrant elected to file semiannual

reports) covered by this report, furnish information similar to that required by Item 103 of

Regulation S-K (§ 229.103 of this chapter), including the date of termination and a description of

the disposition thereof with respect to the registrant and its subsidiaries.

        * * * * *




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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and

Issuer Purchases of Equity Securities.

       (a) Furnish the information required by Item 201 of Regulation S-K (17 CFR 229.201)

and Item 701 of Regulation S-K (17 CFR 229.701) as to all equity securities of the registrant

sold by the registrant during the period covered by the report that were not registered under the

Securities Act. If the Item 701 information previously has been included in a Quarterly Report on

Form 10-Q, Semiannual Report on Form 10-S, or in a Current Report on Form 8-K (17 CFR

249.308), it need not be furnished.

       * * * * *

       (c) Furnish the information required by Item 703 of Regulation S-K (§ 229.703 of this

chapter) for any repurchase made in a month within the fourth quarter of the fiscal year (or the

second semiannual period of the fiscal year if the registrant elected to file semiannual reports)

covered by the report. Provide disclosures covering repurchases made on a monthly basis. For

example, if the fourth quarter began on January 16 and ended on April 15, the chart would show

repurchases for the months from January 16 through February 15, February 16 through March

15, and March 16 through April 15.

       * * * * *

       Item 9B. Other Information.

       (a) The registrant must disclose under this item any information required to be disclosed

in a report on Form 8-K during the fourth quarter of the fiscal year (or the second semiannual

period of the fiscal year if the registrant elected to file semiannual reports) covered by this Form

10-K, but not reported, whether or not otherwise required by this Form 10-K. If disclosure of

such information is made under this item, it need not be repeated in a report on Form 8-K which




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would otherwise be required to be filed with respect to such information or in a subsequent

report on Form 10-K.

       * * * * *

       Item 14. Principal Accountant Fees and Services.

       Furnish the information required by Item 9(e) of Schedule 14A (§ 240.14a-101 of this

chapter).

       (1) Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last

two fiscal years for professional services rendered by the principal accountant for the audit of the

registrant’s annual financial statements and review of financial statements included in the

registrant’s Form 10-Q (17 CFR 249.308a) or Form 10-S (17 CFR 249.308b) or services that are

normally provided by the accountant in connection with statutory and regulatory filings or

engagements for those fiscal years.

       * * * * *




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Appendix N—Form 12b-25

       * * * * *

                                          FORM 12b-25

                             NOTIFICATION OF LATE FILING


 (Check            ☐ Form 10-K         ☐ Form 20-F         ☐ Form 11-K
 one):
                   ☐ Form 10-Q         ☐ Form 10-S    ☐ Form 10-D             ☐ Form N-
                                                      ☐ Form N-                 CSR
                                                         CEN
                       For Period Ended: _______________________
                       ☐   Transition Report on Form 10-K
                       ☐   Transition Report on Form 20-F
                       ☐   Transition Report on Form 11-K
                       ☐   Transition Report on Form 10-Q
                       ☐   Transition Report on Form 10-S
                       For the Transition Period Ended: _______________________

       * * * * *

       PART II — RULES 12b-25(b) AND (c)

       ☐ If the subject report could not be filed without unreasonable effort or expense and the

registrant seeks relief pursuant to Rule 12b-25(b), the following should be completed. (Check

box if appropriate)

       (a) * * *

       (b) The subject annual report, semi-annual report, transition report on Form 10-K, Form

20-F, Form 11-K, Form N-CEN or Form N-CSR, or portion thereof, will be filed on or before

the fifteenth calendar day following the prescribed due date; or the subject quarterly report or

transition report on Form 10-Q, subject semiannual report or transition report on Form 10-S, or




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subject distribution report on Form 10-D, or portion thereof, will be filed on or before the fifth

calendar day following the prescribed due date; and

       (c) The accountant’s statement or other exhibit required by Rule 12b-25(c) has been

attached if applicable.

       PART III — NARRATIVE

       State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-S, 10-D, N-

CEN, N-CSR, or the transition report or portion thereof, could not be filed within the prescribed

time period.

       (Attach extra sheets if needed.)




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