May 6, 2026
To the Securities and Exchange Commission: I am submitting this comment regarding Release No. 2026-42, “SEC Proposes Amendments to Permit Optional Semiannual Reporting by Public Companies.” The proposal raises an important question beyond the commonly discussed tradeoff between regulatory flexibility and disclosure frequency. It also raises a market-function question: what happens when the interval between verified financial reporting “reality checks” expands from three months to six months? Quarterly reporting does not eliminate uncertainty, nor does it prevent markets from relying on estimates, guidance, sell-side models, or alternative data. But it does compress the period during which management assumptions, consensus expectations, and market narratives can drift materially from underlying operating conditions before being reset by standardized financial disclosure. If public companies are permitted to elect semiannual reporting, investors may place greater reliance on interim guidance, unaudited narratives, alternative data, and model-driven estimates between filings. This may be especially important in capital-intensive sectors where operating risk can form before it appears cleanly in financial statements, including utilities, energy infrastructure, AI infrastructure, data centers, advanced manufacturing, transportation, and other long-lived asset sectors. In these sectors, material developments often emerge through changes in operating assumptions: demand durability, utilization, construction timelines, project cost escalation, customer commitments, supply-chain constraints, rate recovery expectations, and capital-allocation decisions. Less frequent standardized reporting could increase the duration over which such assumptions remain unverified by formal financial disclosure. For that reason, I respectfully encourage the Commission to evaluate not only whether optional semiannual reporting reduces compliance burden, but also whether longer reporting intervals may increase market reliance on non-standardized operating signals between filings. The relevant issue is not simply whether quarterly or semiannual reporting is preferable. It is whether investors retain sufficient decision-grade information to distinguish durable operating performance from assumption-driven performance during longer intervals between required reports. If the Commission proceeds with an optional semiannual reporting framework, it should consider whether additional safeguards, disclosure expectations, or sector-sensitive guidance may be appropriate where long-lived capital commitments, major infrastructure programs, large customer concentration, or material demand assumptions are central to investor valuation. Respectfully submitted, Neil P. Osnato