Morningstar CEO Kunal Kapoor knows quarterly earnings calls intimately. Or rather, he doesn’t. His firm hasn’t held one since its 2005 Dutch auction IPO. Now, as the SEC proposes letting public companies swap three 10-Qs for a single semiannual 10-S each year, Kapoor’s experience offers a real-world proof point.
The regulator dropped the plan Monday, allowing firms to file one interim report on new Form 10-S—due 40 or 45 days after the first half-year period, based on filer status—plus the annual 10-K. Material events still demand prompt 8-K disclosures. Comments open for 60 days. SEC press release.
Kapoor cheers it. “The SEC is weighing one of the most significant changes to public company disclosure in decades: moving mandatory reporting from quarterly to semiannual,” he wrote in Fortune. “At Morningstar, we’ve effectively been running that experiment for more than 20 years.”
U.S. markets shine for transparency. They draw everyday investors with timely data. Capital prices sharply. Misconduct hides less easily. Fees stay low. Yet quarterly mandates extract a toll. Every 10-Q demands auditor reviews, Sarbanes-Oxley sign-offs, SEC submissions, calls. Smaller outfits suffer most. A software startup diverts engineers to filings before the next release. That’s no way to build.
Public listings have plunged. From over 7,000 in 1998 to about 4,000 now. Unicorns hoard $5.8 trillion privately, per PitchBook. Traditional IPOs hit just 200 in 2025. Private markets doubled public growth last decade. Investors pay. Morningstar’s blended index of top publics plus private giants returned 31.3% in one year, versus 17.4% public-only. Over 10 years: 16% against 14.7%.
“Every company that stays private because the cost-benefit calculation for being public doesn’t work is a company most American retirement savers can’t own. At least not at low cost,” Kapoor notes.
But semiannual alone won’t kill short-termism. Morningstar research pins blame on EPS guidance, pay tied to beats. Fix those first.
Australia shows a path. Twice-yearly financials. Continuous disclosure for price-sensitive news. Quarterly cash flows for biotech, mining, oil. Enforcement bites: fines, jail. Investors get speed plus safeguards.
Kapoor lays out U.S. must-haves. Clarify materiality, safe harbors for metrics like unit economics between filings. Mandate quarterlies for microcaps, pre-revenue, distressed—echoing Australia. Push useful data: retention, cash conversion. Ditch EPS obsession. Enforce rigorously.
Europe tested it. U.K., EU ditched mandatory quarterlies a decade back. No hits to valuations or returns on equity. Liquidity dips possible. Analyst coverage might thin. Design matters.
SEC Chair Paul Atkins frames it as flexibility. “Public companies have an obligation… to provide information that is material to investors. Yet, the rigidity of the SEC’s rules has prevented companies and their investors from determining for themselves the interim reporting frequency,” he said in the proposal announcement. Part of his “Make IPOs Great Again” push.
Commissioner Hester Peirce questions depth over frequency. Form 10-Q packs more punch than old semiannual setups. “Maybe the issue isn’t frequency — it’s that 10-Q requirements are too heavy,” she stated in her remarks.
Commissioner Mark Uyeda sees balance. Firms could pick based on needs. His statement.
Wall Street Journal calls it elimination of the requirement—optional now. Markets might see volatility spikes around fewer dates. Bid-ask spreads widen without fresh data, some X posts warn.
Large caps may stick quarterly anyway. Investors demand it. Lenders too. But for emerging growth? Game on. Fewer IPOs mean locked-out retail, pensions chasing private access at high fees.
Morningstar thrives sans calls. Monthly filings answer questions. Annual meetings host Q&A. Shareholder letters flow quarterly, longer yearly. “We try to provide investors with valuable information that helps them evaluate the business,” Kapoor said elsewhere.
History flips. Semiannual ruled pre-1970. Quarterly locked in amid market woes. Now reverse.
House Financial Services Republicans applaud. Aligns with their INVEST Act for less tape. Their X post.
Risks loom. Poor design erodes trust. Liquidity frays. Coverage fades. But done right? More listings. Better access. Long-term focus.
Kapoor’s caveat. “Design will determine whether investors win or lose.”
Bold. Tested. Watching.
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