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Proposed SEC rollbacks for public company quarterly reporting and disclosures

Proposed SEC rollbacks: optional semiannual reporting may heighten disclosure and D&O risk.

07/20/2026 · 5 minute read

The Securities and Exchange Commission (SEC) is proposing amendments that would allow public companies the option to file semiannual earnings reports instead of the current quarterly reporting (Form 10-Q). If enacted, the new reporting structure would shift public company disclosure obligations toward a more principles-based, materiality-driven framework under Regulation S-K. Although these proposals remain at the pre-rule stage, they are being taken seriously by issuers, investors, and the directors and officers liability (D&O) insurance market.

On the surface, the proposals are framed as ways to reduce the compliance burden and discourage short-termism. From a liability perspective, however, quarterly reporting and disclosure rollbacks are more likely to redistribute risk rather than reduce it. This is mainly because the current regime produces frequent, standardized disclosure events. While the contemplated regime mandates fewer disclosures, each disclosure event — whether periodic or voluntary — could be interpreted as carrying more weight by shareholders and other stakeholders.

Shift from continuous to episodic liability

Under the current quarterly reporting structure, public companies benefit from a predictable disclosure cadence. Each Form 10-Q may serve as both an update and, practically, a partial reset of the disclosure record. Plaintiffs face constraints in extending alleged class periods because the market is refreshed with updated information at regular intervals.

A move to semiannual reporting — or an optional quarterly regime — disrupts that cadence. The result is the creation of longer “information gaps” during which material developments may occur without a mandated reporting checkpoint. In that environment, plaintiffs are more likely to allege that adverse information was known but not disclosed in a timely manner, particularly where the eventual disclosure produces a sharp market reaction.

This dynamic does not necessarily increase the number of securities class actions, but it could increase claim severity. Longer class periods, larger alleged inflationary effects, and more complex loss-causation arguments are likely.

Elevation of voluntary disclosure risk

As mandatory reporting frequency decreases, the system might implicitly rely more heavily on voluntary disclosures, including earnings releases, investor presentations, conference remarks, and Form 8-K filings. These communications may, in practice, become the primary vehicles through which the market receives interim information.

From a D&O perspective, this raises a potentially meaningful shift. Unlike Forms 10-Q and 10-K, which are highly structured, heavily reviewed, and supported by established disclosure controls, voluntary disclosures are comparatively less standardized and more context-dependent. They are also more likely to be forward-looking, narrative-driven, and responsive to real-time developments. These voluntary disclosures may be heavily scrutinized, with language parsed for errors, omissions, inconsistencies, or overly optimistic framing, which, if found, can lead to risks for the company and its directors and officers.

Materiality-based disclosure and under-disclosure risk

The SEC’s parallel effort to streamline Regulation S-K emphasizes a shift away from prescriptive, line-item disclosure requirements toward a more principles-based materiality standard. While this offers flexibility, it can also transfer greater judgment and therefore increase liability risk for management and the board.

In practice, this creates tension. On one hand, there is regulatory encouragement to eliminate boilerplate and reduce immaterial disclosure. On the other hand, plaintiffs’ counsel might continue to argue, with the benefit of hindsight, that omitted information was in fact material. Courts applying the established materiality standard under federal securities laws will not necessarily defer to a company’s decision to streamline disclosures.

Regulation FD and selective disclosure pressure

Reduced formal reporting frequency is likely to increase pressure from analysts and investors for interim updates. This, in turn, can raise the risk of inadvertent selective disclosure under Regulation Fair Disclosure (FD). The company’s management team — particularly those involved in investor relations and external communications — might face more frequent judgment calls about what should be shared, when, and in what forum.

Practical actions to consider

The central mistake would be to interpret reduced reporting obligations as a basis for reducing disclosure discipline. The more defensible approach — particularly for a high-profile issuer ­— is to maintain a disclosure cadence and rigor that approximates the current regime, even if not strictly required. Organizations, in discussion with their legal counsel, should consider:

  • Preserving a de facto quarterly review and disclosure process
  • Applying 10-Q level controls to investor presentations, earnings scripts, production updates, sustainability disclosures, and reserve commentary
  • Documenting contemporaneous materiality decisions around reserves, impairments, environmental matters, and project developments
  • Tightening Regulation FD protocols for management, investor relations, technical teams, and operational leaders
  • Aligning legal, finance, operations, engineering, environmental, and investor relations teams before external communications
  • Engaging early with directors and officers liability (D&O) insurance carriers on evolving disclosure controls and event-driven risk management

The proposed SEC changes represent a structural shift in the disclosure landscape. For D&O purposes, they should be understood not as deregulation in the traditional sense, but as a reallocation of liability toward fewer, more consequential disclosure events.

The market typically considers forward-looking growth expectations, user engagement, platform performance, monetization strategy, technological execution, and investor confidence in management’s narrative when evaluating public communications, media, and technology (CMT) companies.

In this context, any increase in the time between mandatory disclosures may heighten scrutiny around management’s awareness of adverse developments and its judgment regarding disclosure timing. For CMT companies, developments related to subscriber growth, advertising demand, AI implementation challenges, cybersecurity, platform reliability, privacy concerns, content moderation, or product adoption can materially affect valuation within a short timeframe. Limitations of information flow to investors and analysts may make it more difficult to make informed decisions, potentially leading to reduced trading activity/investor influence and share, especially for CMT companies in a fast-changing industry.

Further, many of these developments evolve incrementally for CMT companies and are closely tied to internal metrics and qualitative assessments rather than discrete external events. Changes in engagement trends, user churn, system performance, or regulatory posture may not immediately appear material in isolation, but may later be alleged to have signaled a deteriorating trajectory. In a principles-based disclosure regime, plaintiffs may challenge management’s materiality judgments when subsequent disclosures or market reactions suggest that earlier disclosure could have altered investor expectations.

The move toward fewer mandatory filings also elevates the importance and legal risk of voluntary communications. Earnings releases, investor presentations, shareholder letters, analyst calls, conference remarks, AI updates, and Form 8-K filings may carry disproportionate informational weight and become focal points for securities litigation. When forward-looking and assumption-dependent communications substitute structured periodic filings, they may be parsed aggressively for alleged omissions, inconsistencies, or overly optimistic framing.

Practically, CMT issuers should treat these structural changes as a reason to preserve disclosure discipline rather than reduce it. Maintaining a de facto quarterly cadence, applying 10-Q level controls to voluntary disclosures, documenting materiality analyses contemporaneously, and tightening Regulation FD escalation protocols may reduce the risk that an information gap or discretionary communication becomes the centerpiece of a securities claim.

Early engagement with D&O underwriters will be important if the changes do materialize. CMT companies should be prepared to demonstrate that disclosure governance extends beyond traditional financial reporting and captures cybersecurity, AI governance, operational performance, user metrics, privacy exposure, regulatory developments, and strategic communications.

SEC reporting and disclosure rollback — D&O risk summary for CMT companies

Regulatory shift

What changes

D&O exposure shift

CMT-specific amplifier

Actions to consider

Reduced optional quarterly reporting (10-Q)

Longer intervals between mandated disclosures; potential semiannual cadence

Fewer disclosure points but potentially longer class periods and higher severity claims; increased delayed-disclosure allegations

Subscriber declines, advertising weakness, cybersecurity incidents, AI execution issues, or platform deterioration may emerge mid-cycle and later be framed as withheld material developments

Maintain de facto quarterly disclosure discipline even if not formally required

Greater reliance on voluntary disclosure

Shift from structured filings to more discretionary communications

Each disclosure becomes a primary liability anchor; less standardized review increases misstatement or omission risk

AI strategy updates, product commentary, user metrics, advertising guidance, and monetization outlook are highly scrutinized and forward-looking

Apply 10-Q level controls to all external communications; centralize disclosure review

Materiality-based disclosures

Fewer prescriptive requirements; more issuer judgment on what to disclose

Increased hindsight litigation risk; plaintiffs challenge omissions as material

Determining materiality for cybersecurity incidents, user trends, AI governance issues, or platform performance is highly judgment-driven

Document materiality analyses contemporaneously; avoid over-streamlining disclosures

Longer information gaps between disclosures

Market receives less frequent formal updates

Greater opportunity for inflation build-up and larger corrective disclosures, potentially increasing damages models

Growth-oriented valuations may react sharply to subscriber losses, engagement declines, failed launches, or revenue softness

Implement event-triggered disclosure protocols independent of the reporting cycle

Increased analyst and investor pressure for interim updates

More informal communications outside format filings.

Elevated regulatory financial disclosure risk and selective disclosure exposures.

High investor sensitivity to pipeline progress and increase risk of inadvertent signaling.

Tighten IR scripts, training, and escalation policies; pre-clear sensitive topics. Consistency may be key.

Shift from prescriptive to principles-based regime

Less check-the-box disclosure; more reliance on management judgment

Greater scrutiny of process and governance, not just outcomes

Boards must evaluate rapidly evolving operational, technological, regulatory, and reputational developments with legal implications

Enhance board-level oversight of disclosure judgments; formalize review frameworks

Loss causation complexity

Fewer disclosures may aggregate multiple developments into one corrective disclosure

More complex and costly litigation; harder to isolate causation; potentially higher defense costs

Multiple operational, regulatory, AI, cybersecurity, or monetization developments may become bundled into one market-moving disclosure

Preserve clear internal timelines and documentation of developments and disclosure decisions

Market and activist expectations

Peers may continue quarterly reporting voluntarily

Deviation from peer disclosure norms may be framed as governance weakness

Technology and media investors often expect continuous operational visibility and rapid market updates

Benchmark against peers; consider voluntary continuation of quarterly cadence

D&O insurance underwriting — potential shift

Underwriters may focus less on reporting frequency and more on disclosure controls

No expected reduction in premiums; emphasis shifts toward event-driven disclosure governance

The sector already faces elevated exposure from cybersecurity, privacy, AI, regulatory, and volatility-driven securities claims

Engage insurers early; demonstrate robust interim disclosure governance

Our people

Robyn Stevens

New York Financial Lines Client Advisory Team Leader

  • United States

Liz Walker

SVP, FINPRO CMT Co-Practice Leader

  • United States

Banks, asset managers, insurers, specialty finance companies, and other financial institutions operate in markets where perceptions of liquidity, capitalization, credit quality, and governance can shift rapidly and impact market confidence. Valuation of these highly regulated entities often depends on how effective management is perceived to be at identifying and managing emerging risks.

If disclosure changes come into effect, the longer intervals between mandatory reporting may heighten attention on the timing and substance of interim communications, especially around reserve adequacy, liquidity management, deposit stability, counterparty exposure, cyber incidents, or regulatory interactions. When these developments are ultimately disclosed alongside adverse market reactions, plaintiffs may argue that warning signals existed earlier and were not communicated to investors in a timely or complete manner.

A key differentiator for financial services companies is that many material developments involve judgment rather than discrete events. Assessments of reserve adequacy, capital sufficiency, interest‑rate sensitivity, concentration risk, or regulatory feedback often evolve through internal analysis, supervisory dialogue, and stress testing. In a disclosure regime that places greater weight on management’s materiality determinations, these judgment calls may later be challenged — particularly where subsequent disclosures suggest that conditions were deteriorating before the market was informed.

In this environment, interim and discretionary disclosures may take on heightened legal significance. Earnings releases, investor presentations, analyst calls, conference remarks, and Form 8-K filings may carry disproportionate informational weight and become focal points for securities litigation, especially in cases of unexpected losses, regulatory actions, market dislocation, or capital events.

Financial institutions may also face intensified pressure to provide ongoing updates to analysts and institutional investors during periods of economic uncertainty. Discussions around credit trends, deposit flows, capital deployment, liquidity management, or supervisory developments can become particularly sensitive if shared inconsistently across forums. In an environment with fewer mandated reporting checkpoints, even subtle differences in messaging may assume greater importance.

Financial services issuers should treat these structural changes as a reason to preserve rather than loosen disclosure discipline. Maintaining a de facto quarterly cadence, applying formal disclosure controls to all investor-facing communications, documenting materiality determinations contemporaneously, and tightening regulation fair disclosure escalation protocols might substantially reduce the risk that an information gap or discretionary communication becomes the centerpiece of a securities claim.

Early engagement with D&O underwriters regarding evolving disclosure governance practices will also help demonstrate that the institution is proactively managing the shift in regulatory expectations.

SEC reporting and disclosure rollback — D&O risk summary for financial services companies

Regulatory shift

What changes

D&O exposure shift

Financial services-specific amplifier

Actions to consider

Reduced optional quarterly reporting (10-Q)

Longer intervals between mandated disclosures (potential semiannual cadence)

Fewer disclosure points but potentially longer class periods and higher severity claims; increased delayed-disclosure allegations

Credit deterioration, liquidity stress, reserve changes, or capital concerns may emerge mid-cycle and later be framed as withheld material developments

Maintain de facto quarterly disclosure discipline even if not formally required

Greater reliance on voluntary disclosure (8-Ks, earnings releases, investor calls)

Shift from structured filings to more discretionary communications

Each disclosure becomes a primary liability anchor; less standardized review increases misstatement/omission risk

Commentary on credit quality, deposits, net interest margin, or capital adequacy is highly market-sensitive and often forward-looking

Apply 10-Q level controls to all external communications; centralize disclosure review

Materiality-based disclosures (S-K “rationalization”)

Fewer prescriptive requirements; more issuer judgment on what to disclose

Increased hindsight litigation risk; plaintiffs challenge omissions as “material”

Determining materiality for reserves, regulatory findings, liquidity events, or concentration risk is highly judgment-driven

Document materiality analyses contemporaneously; avoid over-streamlining disclosures

Longer information gaps between disclosures

Market receives less frequent formal updates

Greater opportunity for inflation build-up and larger corrective disclosures could increase damages models

Rapid shifts in market confidence can significantly impact valuation and funding stability

Implement event-triggered disclosure protocols independent of the reporting cycle

Increased analyst and investor pressure for interim updates

More informal communications outside formal filings

Elevated Regulation FD and selective disclosure exposure

Institutional investors closely monitor credit trends, capital ratios, and liquidity metrics

Tighten IR scripts, training, and escalation policies; pre-clear sensitive topics

Shift from prescriptive to principles-based regime

Less “check-the-box,” more reliance on management judgment

Greater scrutiny of governance process and disclosure controls

Boards must evaluate evolving financial, regulatory, and macroeconomic risks in real time

Enhance board-level oversight of disclosure judgments; formalize review frameworks

Loss causation complexity

Fewer disclosures aggregate more developments into single corrective events

More complex and costly litigation; harder to isolate causation

Multiple financial or regulatory developments may become bundled into one market-moving disclosure

Preserve detailed internal timelines and decision documentation

Market and activist expectations

Peers may continue quarterly reporting voluntarily

Deviation from peer disclosure norms may be framed as governance weakness

Banks and financial institutions are often evaluated comparatively on disclosure transparency

Benchmark against peers; consider maintaining voluntary quarterly cadence

D&O insurance underwriting — potential shift

Underwriters may focus less on reporting frequency and more on disclosure governance

No expected reduction in premiums; emphasis shifts toward event-driven risk management

The sector remains highly sensitive to systemic risk, confidence events, and regulatory scrutiny

Engage insurers early; demonstrate robust interim disclosure governance

Reduced reporting may elevate disclosure risk

Consumer demand, foot traffic, occupancy, pricing power, brand strength, operating margin, franchise performance, unit growth, and management’s ability to forecast demand and costs play a critical role in determining the risk profile of hospitality, food, and beverage companies. Short-cycle operating indicators can shift quickly, impacting brand perception that is often reflected in financial results.

Reducing mandatory disclosure checkpoints is likely to lead to heightened attention to management knowledge of weakening traffic, slowing bookings, rising commodity costs, worsening labor pressures, increased franchisee stress, and emerging food safety issues, among others. These issues may develop quickly and can produce sharp market reactions when formally disclosed.

The sector may also face heightened selective disclosure sensitivity as analysts, lenders, franchise stakeholders, and rating agencies seek interim insight into operating trends. Informal commentary provided in investor meetings, industry conferences, franchise forums, or media interviews — particularly regarding traffic patterns, pricing actions, labor conditions, or food safety — may carry greater legal significance if fewer formal reporting checkpoints exist. These documents are likely to be parsed closely for alleged omissions or overly optimistic assumptions.

Mitigating risks in this changing landscape requires hospitality, food, and beverage companies to preserve quarterly disclosure discipline in any informal commentary. It is also important to demonstrate to D&O insurers the company’s existing controls around food safety and actions being taken to address both evolving and emerging risks.

SEC reporting and disclosure rollback — D&O risk summary for hospitality, food, and beverage companies

Regulatory shift

What changes

D&O exposure shift

Hospitality/food and beverage-specific amplifier

Actions to consider

Reduced optional quarterly reporting/Form 10-Q

Longer intervals between mandated disclosures

Longer class periods and higher-severity delayed-disclosure allegations

Traffic declines, occupancy weakness, food safety incidents, commodity inflation, franchisee distress, or margin pressure may emerge mid-cycle

Maintain de facto quarterly disclosure discipline

Greater reliance on voluntary disclosure

More reliance on earnings releases, investor calls, sales updates, revenue per available room (RevPAR) commentary, franchise communications, and conferences

Each disclosure becomes a primary liability anchor

Same-store sales, RevPAR, pricing, margin, food safety, unit growth, and franchise health are heavily scrutinized

Apply 10-Q level controls to all external communications

Materiality-based disclosures

More issuer judgment on what to disclose

Higher hindsight risk over alleged omissions

Food safety events, product contamination, labor disruption, demand weakness, commodity exposure, and brand damage may be hard to time

Document materiality analyses contemporaneously

Longer information gaps

Market receives less frequent formal updates

Greater inflation build-up and larger corrective disclosures

Consumer demand, travel patterns, input costs, labor availability, and brand sentiment can change quickly

Use event-triggered disclosure protocols

Increased analyst and investor pressure

More informal communications outside formal filings

Higher Regulation FD and selective disclosure risk

Investors seek frequent color on traffic, bookings, occupancy, RevPAR, same-store sales, margins, and guidance

Tighten IR scripts, training, and escalation policies

Principles-based regime

Less check-the-box disclosure

More scrutiny of governance and disclosure controls

Boards must assess fast-moving operational, food safety, labor, supply chain, franchise, and brand risks

Formalize board-level disclosure review

Loss causation complexity

Multiple developments may be bundled into one corrective disclosure

More costly litigation and harder causation analysis

Demand weakness, food safety events, labor inflation, commodity costs, franchisee issues, and guidance cuts may overlap

Preserve internal timelines and decision records

Market and activist expectations

Peers may continue quarterly reporting voluntarily

Reduced cadence may be framed as weak transparency

Investors often expect regular visibility into traffic, occupancy, pricing, margins, unit growth, and brand health

Benchmark peers; consider voluntary quarterly cadence

D&O insurance underwriting

Focus shifts to disclosure controls and event-driven governance

No automatic premium benefit

Sector exposed to consumer volatility, food safety, labor, supply chain, cyber, brand, and commodity risks

Engage insurers early; demonstrate strong interim controls

Our people

Christina Olsen

SVP, FINPRO Retail, Wholesale, Food and Beverage Co-Practice Leader United States

  • United States

Jake Gussin

SVP, FINPRO Retail, Wholesale, Food and Beverage Co-Practice Leader

  • United States

Heightened securities exposure in an event-driven sector

Pharmaceutical and biotech public companies face a distinct and heightened exposure under the proposed SEC changes because their market value depends heavily on discrete, often binary, events — clinical readouts, regulatory decisions, safety signals, manufacturing issues, and commercial inflection points. Any regulatory shift that increases the temporal distance between required disclosures will amplify scrutiny around when management knew what, and when it chose to disclose it.

The move toward fewer mandatory filings also elevates the importance of voluntary communications. Longer class periods, larger alleged inflationary effects, and more complex loss‑causation arguments are likely. For a pharmaceutical company or biotech, where a single clinical or regulatory event can drive substantial market capitalization shifts, this has the potential to create a materially different exposure profile.

Earnings releases, investor presentations, conference remarks and Form 8‑K notices are likely to carry disproportionate informational weight and become focal points for liability. For life‑science companies, voluntary statements about trial progress, timelines, or regulatory interactions are inherently judgmental and forward‑looking; when these communications substitute structured periodic filings, they may be parsed intensely for alleged omissions, inconsistencies, or overly optimistic assertions.

Life‑science issuers should treat these structural changes as a call to preserve disclosure discipline, not loosen it. Maintaining a de facto quarterly cadence, applying 10‑Q level controls to voluntary disclosures, documenting contemporaneous materiality decisions for clinical and regulatory matters, and tightening IR scripts and escalation protocols will reduce the risk that an information gap or discretionary communication becomes the center of a damaging securities claim. Early engagement with D&O underwriters on evolving disclosure governance will also help demonstrate to the market and carriers that the company is managing the shift responsibly.

SEC reporting and disclosure rollback — D&O risk summary for life sciences companies

Regulatory shift

What changes

D&O exposure shift

Life sciences-specific amplifier

Actions to consider

Reduced optional quarterly reporting (10Q)

Longer intervals between mandated disclosures (potential semiannual cadence)

Fewer disclosure points, but potentially longer class periods and higher-severity claims; increased delay of disclosure allegations

Clinical failures, FDA feedback, or safety signals may occur mid-cycle — framed as withheld material events

Maintain de facto quarterly disclosure discipline even if not required

Greater reliance on voluntary disclosure (8-Ks, earnings releases, investor calls

Shift from structured filings to more discretionary communications

Each disclosure becomes a primary liability anchor; less standardized review increases misstatement/omission risk

Pipeline updates, trial commentary, and forward-looking timelines are inherently uncertain and subject to scrutiny

Apply 10-Q level controls to all external communications; centralize disclosure reviews

Materiality-based disclosures (8-K “rationalization”)

Fewer prescriptive requirements; more issuer judgment on what to disclose

Increased hindsight litigation risk; plaintiffs challenge omissions as “material”

Determining materiality of interim clinical data, adverse events, or regulatory dialogue is highly judgment-driven

Document materiality analyses contemporaneously; avoid over-pruning disclosures

Longer information gaps between disclosures

The market receives less frequent formal updates

Greater opportunity for inflation build-up and larger corrective disclosures could lead to higher damages models

Binary events (trial readouts, FDA decisions) can reprice the company

Implement event-triggered disclosure protocols independent of the reporting cycle

Increased analyst and investor pressure for interim updates

More informal communications outside of format filings

Elevated regulatory financial disclosure risk and selective disclosure exposures

High investor sensitivity to pipeline progress and increase risk of inadvertent signaling

Tighten internal reporting scripts, training, and escalation policies; pre-clear sensitive topics. Consistency may be key

Shift from prescriptive to principles-based regime

Less “check-the-box,” more reliance on management judgment

Greater scrutiny of process and governance, not just outcomes

Boards must evaluate nuanced scientific/regulatory information with legal implications

Enhanced board-level oversight of disclosure judgments; formalize review frameworks

Loss causation complexity

Fewer disclosures aggregate more events into a single corrective disclosure

More complex and costly litigation; harder to isolate cause — could lead to higher defense costs

Multiple pipeline or regulatory developments may be bundled into one disclosure event

Preserve clear internal timelines and documentation of developments and decisions

 

Market activist expectations

Peers may continue quarterly reporting voluntarily

Deviation from peer disclosure norms may be framed as a governance weakness

Pharma and biotech investors rely heavily on consistent pipeline visibility

Benchmark against peers; consider voluntary continuation of quarterly cadence

D&O insurance underwriting — potential shift

Underwriters may focus less on frequency, more on disclosure controls

No expected reduction in premiums; focus on even-driven risk management

Sector already viewed as having potential for high-volatility and being litigation-prone

Engage insurers early; demonstrate robust interim disclosure governance
 

Our people

Allison Carr

SVP, FINPRO Life Science Co-Practice Leader

  • United States

Abigail Williams

SVP, FINPRO Life Science Co-Practice Leader

  • United States

Disclosure risk driven by technical judgement and market volatility

For public energy and power companies, the proposed SEC changes can lead to significant risks since market value is often tied to volatile, technical, and judgment-intensive information. Commodity prices, reserve estimates, production volumes, asset impairments, project execution, environmental liabilities, permitting outcomes, geopolitical events, and energy-transition strategy can each materially affect valuation.

Any regulatory shift that increases the time between mandatory disclosures may amplify scrutiny around when management knew of adverse developments and when it chose to disclose them. For exploration and production companies, reserve revisions, drilling results, production shortfalls, or hedging losses can quickly become focal points of potential securities litigation. For midstream, refining, utilities, LNG, and integrated energy companies, project delays, cost overruns, environmental events, regulatory changes, and demand shifts may create a similar exposure. Power companies share many of these exposures, as well as heightened focus on specific issues, such as wildfire risk and mitigation strategies and capital expenditure and growth projections to meet increasing electricity demand driven by data center growth.

A distinguishing risk for energy and power companies is that many potentially material developments emerge gradually and require technical judgment before crystallizing. Reserve downgrades, impairments, permitting challenges, emissions‑related exposures, climate and weather impacts, or transition‑strategy changes often involve evolving data and assumptions rather than discrete triggering events. In a disclosure framework that relies more heavily on management’s materiality judgments, plaintiffs may later argue — with the benefit of hindsight — that information should have been disclosed earlier, particularly where subsequent announcements result in sharp market reactions.

The move toward fewer mandatory filings also elevates the importance of voluntary communications. Earnings releases, investor presentations, conference remarks, production updates, sustainability reports, and Form 8-K filings may carry disproportionate informational weight. Statements about reserves, capital discipline, project economics, emissions targets, transition plans, or commodity sensitivity are often forward-looking and based on assumptions. If those communications are used as a substitute for structured periodic filings, they may be parsed aggressively for alleged omissions, inconsistency, or optimism that later proves unsupported.

Finally, reduced formal reporting frequency may increase pressure on management to provide interim updates in less formal settings. For energy companies, investor demand for frequent detail on production trends, free cash flow, capital allocation, regulatory developments, and project execution may elevate the risk that informal commentary — particularly at conferences or analyst meetings — becomes a focal point in Regulation FD inquiries or securities litigation.

Taken together, these dynamics suggest that the proposed SEC changes may have a disproportionate impact on D&O exposure for public energy and power companies, not by increasing disclosure obligations, but by concentrating legal risk around fewer, more judgment-intensive, and more market-sensitive disclosure decisions.

SEC reporting and disclosure rollback — D&O risk summary for energy and power companies

Regulatory shift

What changes

D&O exposure shift

Public energy- and power-specific amplifier

Actions to consider

Reduced optional quarterly reporting/Form 10-Q

Longer intervals between mandated disclosures; potential semiannual cadence

Fewer disclosure points, but potentially longer class periods and higher-severity claims; increased delayed-disclosure allegations

Commodity swings, reserve revisions, production misses, impairments, or project delays may occur mid-cycle and later be framed as withheld material developments

Maintain de facto quarterly disclosure discipline even if not required

Greater reliance on voluntary disclosure

Shift from structured filings to more discretionary communications, including earnings releases, investor calls, production updates, and presentations

Each disclosure becomes a primary liability anchor; a less standardized review increases misstatement or omission risk

Production guidance, drilling results, reserve commentary, hedging strategy, and project timelines are highly market-sensitive

Apply 10-Q level controls to all external communications; centralize disclosure review

Materiality-based disclosures

Fewer prescriptive requirements; more issuer judgment on what to disclose

Increased hindsight litigation risk; plaintiffs challenge omissions as material

Materiality of reserve adjustments, environmental incidents, permitting delays, impairments, or transition-plan changes can be highly judgment-driven

Document materiality analyses contemporaneously; avoid over-pruning disclosures

Longer information gaps between disclosures

The market receives less frequent formal updates

Greater opportunity for inflation build-up and larger corrective disclosures, potentially increasing damages models

Energy and power companies may experience rapid repricing from commodity shocks, reserve revisions, operational incidents, or geopolitical disruptions

Implement event-triggered disclosure protocols independent of the reporting cycle

Increased analyst and investor pressure for interim updates

More informal communications outside formal filings

Elevated Regulation FD and selective disclosure exposure

Investors closely track production volumes, free cash flow, capital discipline, commodity sensitivity, and project execution

Tighten internal reporting scripts, training, and escalation policies; pre-clear sensitive topics

Shift from prescriptive to principles-based regime

Less check-the-box disclosure; more reliance on management judgment

Greater scrutiny of process and governance, not just outcomes

Boards must assess technical, operational, environmental, regulatory, and geopolitical developments with legal significance

Enhance board-level oversight of disclosure judgments; formalize review frameworks

Loss causation complexity

Fewer disclosures may aggregate multiple developments into one corrective disclosure

More complex and costly litigation; harder to isolate cause; potentially higher defense costs

Commodity price moves, production issues, reserve revisions, and regulatory developments may be bundled into one market-moving disclosure

Preserve clear internal timelines and documentation of developments and disclosure decisions

Market and activist expectations

Peers may continue quarterly reporting voluntarily

Deviation from peer disclosure norms may be framed as a governance weakness

Energy and power investors often expect consistent visibility into production, capital allocation, reserves, and transition strategy

Benchmark against peers; consider voluntary continuation of quarterly cadence

D&O insurance underwriting — potential shift

Underwriters may focus less on reporting frequency and more on disclosure controls

No expected reduction in premiums; focus shifts toward event-driven risk governance

The sector already carries volatility from commodities, environmental exposure, regulatory scrutiny, and geopolitical risk

Engage insurers early; demonstrate robust interim disclosure governance

Our people

Sarah Baldys

Managing Director, FINPRO Energy & Power Leader

  • United States

Securities risk shaped by reimbursement and execution risk

Public healthcare companies face a distinct exposure profile because valuation often depends on reimbursement stability, utilization trends, labor management, operational execution, regulatory compliance, patient outcomes, cybersecurity preparedness, and management’s ability to forecast margins and growth.

Reduced mandatory reporting may amplify scrutiny around when management knew reimbursement trends were deteriorating, staffing shortages were worsening, utilization was weakening, compliance issues were emerging, cybersecurity risks were increasing, or guidance was no longer supportable. Many of these issues develop incrementally but can trigger sharp market reactions once formally disclosed.

Voluntary communications will matter more. Earnings releases, investor presentations, analyst calls, operational updates, conference remarks, guidance commentary, and Form 8-K filings may be parsed closely for alleged omissions, inconsistencies, or overly optimistic assumptions.

Healthcare issuers should consider preserving quarterly disclosure discipline, apply formal controls to all investor-facing communications, document materiality decisions in real time, and tighten Regulation FD escalation protocols. D&O carriers will likely focus on whether the company has credible controls around reimbursement exposure, operational performance, staffing, cybersecurity, compliance, patient care, regulatory investigations, and guidance governance.

SEC reporting and disclosure rollback — D&O risk summary for public healthcare companies

Regulatory shift

What changes

D&O exposure shift

Healthcare-specific amplifier

Actions to consider

Reduced optional quarterly reporting/Form 10-Q

Longer intervals between mandated disclosures

Longer class periods and higher-severity delayed-disclosure allegations

Reimbursement pressure, utilization declines, staffing shortages, compliance issues, physician practice integration issues, or regulatory investigations may emerge mid-cycle

Maintain de facto quarterly disclosure discipline

Greater reliance on voluntary disclosure

More reliance on earnings releases, investor calls, operational updates, and conferences

Each disclosure becomes a primary liability anchor

Commentary regarding reimbursement, patient volumes, occupancy, staffing, margins, and compliance is highly scrutinized

Apply 10-Q level controls to all external communications

Materiality-based disclosures

More issuer judgment on what to disclose

Higher hindsight risk over alleged omissions

Determining materiality for regulatory inquiries, billing issues, cybersecurity, staffing, litigation, or care-quality concerns can be highly judgment-driven

Document materiality analyses contemporaneously

Longer information gaps

The market receives less frequent formal updates

Greater inflation build-up and larger corrective disclosures

Healthcare operations can be materially affected by reimbursement changes, labor pressure, utilization trends, or enforcement developments; larger information gaps could lead to bigger surprises for investors

Use event-triggered disclosure protocols

Increased analyst and investor pressure

More informal communications outside of formal filings

Higher Regulation FD and selective disclosure risk

Investors seek frequent color on reimbursement, margins, labor, utilization, occupancy, FCA matters, and compliance exposure

Tighten internal reporting scripts, training, and escalation policies

Principles-based regime

Less check-the-box disclosure

More scrutiny of governance and disclosure controls

Boards must assess the legal significance of operational, reimbursement, regulatory, cybersecurity, and patient care risks

Formalize board-level disclosure review

Loss causation complexity

Multiple developments may be bundled into one corrective disclosure

More costly litigation and harder causation analysis

Margin pressure, reimbursement changes, staffing shortages, compliance failures, litigation, and operational disruption may overlap

Preserve internal timelines and decision records

Market and activist expectations

Peers may continue quarterly reporting voluntarily

Reduced cadence may be framed as weak transparency

Healthcare investors often expect regular visibility into reimbursement, operations, compliance, utilization, and guidance

Benchmark peers; consider voluntary quarterly cadence

D&O insurance underwriting

Focus shifts to disclosure controls and event-driven governance

No automatic premium benefit

The sector is exposed to reimbursement risk, labor inflation, cyber exposure, regulatory scrutiny, compliance enforcement, and operational volatility

Engage insurers early; demonstrate strong interim controls

Our people

Nicole Francis

Managing Director, FINPRO Healthcare Co-Practice Leader

  • United States

Alyssa Wade

SVP, FINPRO Healthcare Co-Practice Leader

  • United States

Fewer filing checkpoints could intensify portfolio scrutiny

Occupancy levels, leasing velocity, tenant credit, interest quality, rent collections, capitalization rates, refinancing terms, development progress, and dividend sustainability are continuously reassessed by investors, often well before they are fully reflected in reported results, impacting the risk profile of public real estate companies and real estate investment trusts (REITs).

With fewer mandatory disclosure checkpoints, scrutiny is likely to intensify around when management identified emerging portfolio stress — such as tenant distress, leasing slowdowns, rising interest rate exposure, liquidity constraints, or impairment risk — and how those developments were conveyed to the market. Many of these conditions unfold unevenly across assets, geographies, or tenant categories, increasing the likelihood that later disclosures prompt retrospective claims that adverse trends were apparent earlier.

Valuation and portfolio judgement could come under increased scrutiny

A defining feature of D&O exposure in the real estate sector is the role of valuation judgment. Decisions regarding asset impairments, cap rate assumptions, development feasibility, and dividend coverage often rely on forward-looking estimates and internal projections rather than observable market events. In a principles-based disclosure framework, management’s ability to make adequate forecasts may later be challenged, particularly if impairments are recorded, dividends are reduced, projects are delayed, or refinancing occurs on unfavorable terms.

A reduction in mandatory reporting requirements will likely lead to more focus on voluntary communications, such as earnings releases, supplemental packages, investor decks, analyst calls, lender discussions, rating-agency updates, and conference remarks. Alleged omissions or overly optimistic assumptions may be challenged or potentially lead to litigation.

Preliminary indications point to limited benefits

Several REITs are currently reviewing the benefits of adopting semi-annual reporting in conjunction with the National Association of Real Estate Investment Trusts. Preliminary industry feedback indicates limited benefits to making the shift away from quarterly reporting.

Some considerations that have been identified include:

  • Continuing to do a quarterly close, an investor supplemental, and a shareholder quarterly call, which may limit any potential savings from adopting Form 10-S
  • The need to provide information to satisfy debt covenants on a quarterly basis
  • Anticipated feedback from the investment community that quarterly reporting is valued over semi-annual reporting

Managing this increased risk will likely depend on whether real estate and REIT issuers are able to preserve quarterly disclosure discipline in informal communications. It is also important to note that D&O insurers will likely be scrutinizing companies’ controls and actions being taken to mitigate both existing and incoming risks.

SEC reporting and disclosure rollback — D&O risk summary for public real estate companies & REITs

Regulatory shift

What changes

D&O exposure shift

Real estate/REIT-specific amplifier

Actions to consider

Reduced optional quarterly reporting/Form 10-Q

Longer intervals between mandated disclosures

Longer class periods and higher-severity delayed-disclosure allegations

Tenant distress, occupancy deterioration, refinancing pressure, asset impairments, or development delays may emerge mid-cycle

Maintain de facto quarterly disclosure discipline

Greater reliance on voluntary disclosure

More reliance on earnings releases, investor calls, supplemental packages, property updates, and conferences

Each disclosure becomes a primary liability anchor

Funds from operations (FFO) and adjusted funds from operations (AFFO) guidance, same-store net operating income, occupancy, leasing spreads, debt maturities, and dividend coverage are heavily scrutinized

Apply 10-Q level controls to all external communications

Materiality-based disclosures

More issuer judgment on what to disclose

Higher hindsight risk over alleged omissions

Tenant defaults, refinancing risk, cap rate movements, impairments, development overruns, and liquidity constraints may be difficult to time

Document materiality analyses contemporaneously

Longer information gaps

Market receives less frequent formal updates

Greater inflation build-up and larger corrective disclosures

Portfolio performance can change materially due to tenant credit, rate movements, regional weakness, or capital market access

Use event-triggered disclosure protocols

Increased analyst and investor pressure

More informal communications outside formal filings

Higher Regulation FD and selective disclosure risk

Investors seek frequent color on leasing, tenant health, FFO/AFFO, debt maturities, liquidity, and dividend sustainability

Tighten IR scripts, training, and escalation policies

Principles-based regime

Less check-the-box disclosure

More scrutiny of governance and disclosure controls

Boards must assess valuation, liquidity, tenants, development, financing, and market risks

Formalize board-level disclosure review

Loss causation complexity

Multiple developments may be bundled into one corrective disclosure

More costly litigation and harder causation analysis

Occupancy declines, tenant defaults, refinancing setbacks, impairments, and dividend changes may overlap

Preserve internal timelines and decision records

Market and activist expectations

Peers may continue quarterly reporting voluntarily

Reduced cadence may be framed as weak transparency

REIT investors often expect regular visibility into FFO/AFFO, portfolio performance, leasing, and capital structure

Benchmark peers; consider voluntary quarterly cadence

D&O insurance underwriting

Focus shifts to disclosure controls and event-driven governance

No automatic premium benefit

The sector is exposed to interest-rate risk, refinancing risk, valuation pressure, tenant credit, and capital market volatility

Engage insurers early; demonstrate strong interim controls
 

Our people

Jonathan Sampson

Managing Director, FINPRO Real Estate Practice Leader

  • United States

Operational signals may face greater scrutiny

Retail companies operate in an environment where market value is shaped by consumer behavior that can change abruptly, sometimes in response to secondary developments. Sales momentum, inventory discipline, gross margin stability, promotional strategy, digital performance, and management’s ability to forecast demand are closely watched by investors and can shift materially in a short timeframe. As a result, disclosure timing, rather than simply content, becomes especially consequential.

If mandatory reporting occurs at a more infrequent cadence, greater attention will likely be placed on how quickly management recognized softening demand, excess inventory, rising markdown pressure, margin erosion, or operational disruption and whether these developments were communicated before results visibly deteriorated. This risk is magnified around peak selling periods, when even modest forecasting errors can have outsized effects on annual performance and investor expectations.

Retail-specific risk is also driven by the cumulative nature of operational signals. Inventory build-ups, category-level weakness, supply chain disruption, changes in tariffs, and other challenges often emerge gradually rather than through a single triggering event. In a disclosure framework that relies more heavily on management judgment, the point at which these trends become “material” may later be contested if subsequent disclosures reveal a sharper downturn.

Interim communications may take on heightened importance in this environment. Earnings calls, sales updates, conference remarks, investor presentations, and guidance commentary may be parsed closely for alleged omissions or overly optimistic framing. Because these communications are frequently forward-looking and assumption-driven, they may be closely examined in hindsight following earnings misses, inventory write-downs, or revised guidance.

Retail issuers may also experience intensified pressure to provide off‑cycle insight into performance trends. Informal discussions with analysts or investors — particularly around traffic, promotions, inventory positioning, or seasonal demand — can carry increased legal sensitivity in an environment with fewer formal disclosure checkpoints.

In this environment, retailers should consider treating informal communications with the same attention reserved for SEC-mandated disclosures and ensure they have comprehensive information to respond to D&O carriers’ questions about existing controls around inventory, margin, demand forecasting, supply chain, cybersecurity, and guidance.

SEC reporting and disclosure rollback — D&O risk summary for retail companies

Regulatory shift

What changes

D&O exposure shift

Retail-specific amplifier

Actions to consider

Reduced optional quarterly reporting/Form 10-Q

Longer intervals between mandated disclosures

Longer class periods and higher-severity delayed-disclosure allegations

Traffic declines, excess inventory, markdown pressure, shrink, or margin compression may emerge mid-cycle

Maintain de facto quarterly disclosure discipline

Greater reliance on voluntary disclosure

More reliance on earnings releases, investor calls, sales updates, and conferences

Each disclosure becomes a primary liability anchor

Same-store sales, inventory, gross margin, promotional activity, and guidance are heavily scrutinized

Apply 10-Q level controls to all external communications

Materiality-based disclosures

More issuer judgment on what to disclose

Higher hindsight risk over alleged omissions

Inventory overhang, demand weakness, vendor disruption, cybersecurity, or labor cost pressure may be hard to time

Document materiality analyses contemporaneously

Longer information gaps

Market receives less frequent formal updates

Greater inflation build-up and larger corrective disclosures

Retail results can turn quickly due to seasonality, consumer sentiment, weather, tariffs, or supply chain disruption

Use event-triggered disclosure protocols

Increased analyst and investor pressure

More informal communications outside formal filings

Higher Regulation FD and selective disclosure risk

Investors seek frequent color on traffic, holiday sales, margins, inventory, and guidance

Tighten IR scripts, training, and escalation policies

Principles-based regime

Less check-the-box disclosure

More scrutiny of governance and disclosure controls

Boards must assess fast-changing operational, consumer, supply chain, and digital risks

Formalize board-level disclosure review

Loss causation complexity

Multiple developments may be bundled into one corrective disclosure

More costly litigation and harder causation analysis

Weak sales, markdowns, inventory write-downs, theft/shrinkage, and guidance cuts may overlap

Preserve internal timelines and decision records

Market and activist expectations

Peers may continue quarterly reporting voluntarily

Reduced cadence may be framed as weak transparency

Retail investors often expect regular performance visibility

Benchmark peers; consider voluntary quarterly cadence

D&O insurance underwriting

Focus shifts to disclosure controls and event-driven governance

No automatic premium benefit

The sector is exposed to consumer volatility, supply chain disruption, cybersecurity, labor, and margin pressure

Engage insurers early; demonstrate strong interim controls

Our people

Christina Olsen

SVP, FINPRO Retail, Wholesale, Food and Beverage Co-Practice Leader United States

  • United States

Jake Gussin

SVP, FINPRO Retail, Wholesale, Food and Beverage Co-Practice Leader

  • United States

Contact us

For more information on how the proposed changes to mandatory quarterly reporting could impact your organization and the specific actions you should consider to protect your company and your people, fill out the form below.

 

Contact us

Our people

Brenda Shelly

Managing Director, FINPRO

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