SEC Proposes Optional Semiannual Reporting for BDCs

On May 5, 2026, the SEC proposed rule and form amendments that would give U.S. public operating companies and BDCs the option to file semiannual reports in lieu of quarterly reports to meet their interim reporting obligations under the federal securities laws (the “Proposed Rule”).¹ In explaining the rationale for providing an option for semiannual reporting, SEC Chairman Paul S. Atkins stated that “[p]ublic companies have an obligation under the federal securities laws to provide information that is material to investors,” but emphasized that “the rigidity of the SEC’s rules has prevented companies and their investors from determining for themselves the interim reporting frequency that best serves their business needs and investors.”² The Proposed Rule is consistent with the current SEC leadership’s broader initiative to reduce regulatory costs and burdens for companies.

Background

Under the existing disclosure framework, BDCs are subject to the same reporting requirements under the Exchange Act, as U.S. public operating companies and, as a result, currently are required to file three quarterly reports on Form 10-Q and one annual report on Form 10-K each fiscal year. The quarterly reporting regime has long been a feature of the U.S. public operating company disclosure system (since 1970) and the BDC disclosure system (since 1980 when Congress created BDCs), but has also been a source of ongoing debate regarding the costs it imposes on these companies, including management time, legal and accounting fees, and the potential for short-term focused corporate decision-making, relative to the informational benefit it provides to investors. The Proposed Rule reflects the SEC’s view that the current one-size-fits-all approach may not serve all companies and their investor bases best.

Notably, investment companies registered under the 1940 Act, which are more similar to BDCs than public operating companies, are already subject to a semiannual reporting regime and file semiannual reports on Form N-CSRS, rather than quarterly reports on Form 10-Q. The existing semiannual reporting framework applicable to registered investment companies provides a useful precedent for the Proposed Rule and underscores the view that a semiannual reporting cadence for BDCs can provide investors with adequate interim financial information without imposing the costs associated with quarterly reporting.

The Proposed Amendments

New Optional Form 10-S

The Proposed Rule, if adopted, would allow BDCs to elect to file semiannual reports on new Form 10-S instead of quarterly reports on Form 10-Q. BDCs that elect semiannual reporting would file one semiannual report and one annual report for each fiscal year, in lieu of three quarterly reports and one annual report. Form 10-S would track the existing disclosure and financial statement requirements of Form 10-Q but would cover a six-month period rather than a quarterly period.

The election to file on Form 10-S would be made annually by checking a box on the cover page of the BDC’s Form 10-K; once made, the election locks in the BDC’s reporting cadence for the entire fiscal year. A BDC may not switch between quarterly and semiannual reporting mid-fiscal year, and a semiannual filer wishing to revert to quarterly reporting may only do so by leaving the box unchecked on its next Form 10-K.

The Proposed Rule would permit a BDC to amend its Form 10-K to correct an inadvertent error in checking, or failing to check, the semiannual reporting box by filing an amended Form 10-K correcting the error as soon as practicable after discovery of the error, but in no event later than the filing deadline of the BDC’s first Form 10-Q for the fiscal year in which the Form 10-K was filed.

Filing Deadlines

Under the Proposed Rule, the filing deadline for semiannual reports on Form 10-S would depend on the BDC’s filer status:

• For accelerated filers and large accelerated filers, 40 days after the end of the first semiannual period of the fiscal year.
• For all other filers, 45 days after the end of the first semiannual period of the fiscal year.

This deadline structure mirrors the tiered approach currently used for Form 10-Q, where accelerated filers and large accelerated filers are subject to shorter filing windows than non-accelerated filers.

Similar to current requirements for the first quarterly report on Form 10-Q for newly launched BDCs, the first semiannual report on Form 10-S would be due the later of (i) 45 days after the effective date of the Form N-2 or Form 10 registration statement, as appropriate, or (ii) the date that Form 10-S would otherwise have been due had the BDC been subject to the reporting company rules under the Exchange Act.

Amendments to Regulation S-X

The Proposed Rule would also amend Regulation S-X, which governs the financial statement requirements for periodic reports, registration statements and proxy statements required to include financial statements, to reflect the new semiannual reporting option, including to address the financial statement “staleness” requirement for semiannual filers. In this regard, under the current rules, a Form N-2 registration statement cannot be declared effective by the SEC and a proxy statement that is required to include financial statements cannot be mailed by a BDC later than the 129^th day for large accelerated filers and accelerated filers or the 134^th day for all other filers after the latest balance sheet date included in the registration statement or proxy statement, as applicable (i.e., 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 registration statement 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)). Under the Proposed Rule, a BDC would instead be required to include only the interim financial statements required to be filed in the most recent Form 10-Q (for quarterly filers) or Form 10-S (for semiannual filers) as of the filing date of the applicable registration statement or proxy statement. 

Comment Period

Comments are due on the Proposed Rule on or before July 6, 2026. Given the significance of the Proposed Rule, BDCs have a meaningful opportunity to shape the final rule through comment letters. BDCs should consider participating in the comment process before the July 6, 2026 comment period end date. In this regard, the SEC included the following request for comment specific to BDCs in the Proposing Release:

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?

Practical Considerations

The Proposed Rule represents a significant potential shift in the BDC reporting landscape and warrants close attention from BDCs, their boards of directors, and their legal and financial advisors. While the Proposed Rule could meaningfully reduce regulatory and compliance costs for BDCs that elect the new semiannual reporting frequency, it also raises a host of practical considerations that BDCs should weigh before electing the semiannual reporting option. 

• Reduced regulatory and compliance costs. The Proposed Rule would reduce regulatory and compliance costs by allowing BDCs to elect to incur interim reporting costs one time each fiscal year rather than three times under the existing disclosure framework. By allowing BDCs to determine the frequency of interim reporting depending on the BDC’s particular circumstances – e.g., size, stage of operations, portfolio characteristics, capital markets activity – BDCs would have better flexibility to allocate resources in a manner that provides value to investors.
• Flexibility tailored to business model. Permitting BDCs to elect semiannual reporting on new Form 10-S would allow each BDC to select the interim reporting frequency that provides the most meaningful, decision-useful information to its investors — rather than compelling disclosures on a quarterly cadence that may not correspond to any meaningful developments in a BDC's underlying investment portfolio. The Proposed Rule would also allow BDCs the flexibility to align their interim reporting and associated costs with the framework applicable to their registered closed-end fund competitors. 
• Voluntary election, not a mandate. The Proposed Rule does not eliminate quarterly reporting. BDCs will need to evaluate whether moving to a semiannual reporting cadence makes sense given their investor base, capital markets activity, and competitive disclosure practices. Exchange-listed BDCs that rely heavily on access to capital markets – where quarterly financials are often expected by underwriters and investors – may be reluctant to elect the new option even if it becomes available. Underwriters could also require issuers to contractually agree to quarterly reporting. One potential avenue for taking advantage of the lighter disclosure burden while still meeting investor expectations may be to continue announcing earnings on a quarterly basis even while filing semiannual reports on Form 10-S. Similarly, unlisted BDCs will need to consider the views and policies of distribution partners and gatekeepers, who may also be reluctant for BDCs to elect the new option. On the other hand, such distribution partners and gatekeepers might welcome the alignment of BDC reporting cadences with the existing semiannual reporting cadence of registered investment companies, including registered closed-end funds.
• Comfort letters and capital markets activity. Under existing PCAOB standards, an independent public accountant may only provide negative assurance in a comfort letter as of a date within 135 days of the most recently audited or reviewed period, meaning semiannual filers could face more limited windows of negative assurance comfort at certain points in the fiscal year. The SEC has expressly acknowledged this issue and invited comment on whether the PCAOB should amend its standards to accommodate semiannual reporting, suggesting the constraint may be addressed through regulatory action before or alongside adoption of a final rule.
• Insider trading policies and trading windows. A shift to semiannual reporting would extend the periods during which BDC insiders may possess material non-public information that has not yet been publicly disclosed, which could necessitate revisions to the BDC’s insider trading policy. Many listed BDCs impose fixed blackout periods around the close of each fiscal quarter until earnings are released; under a semiannual reporting cadence, BDCs would need to reassess the length and structure of those blackout periods. The Proposed Rule would also amend Rule 10b5-1 under the Exchange Act to provide that the cooling-off period for officers and directors of a semiannual filer would extend until the later of 90 days after the adoption of the relevant contract or plan or two business days following the disclosure of the BDC’s financial results in a Form 10-S. As a result, the officers and directors of semiannual filers would face a longer cooling-off period than quarterly filers.