The U.S. Securities and Exchange Commission (SEC) has proposed a draft rule allowing listed companies to report financial information on a semi-annual basis rather than quarterly, which has become one of the most closely watched issues in the Trump administration's deregulation agenda. However, the agency said it is also weighing a range of other regulatory rollbacks to encourage companies not only to choose to go public but also to remain listed.

At a roundtable discussion hosted by the SEC on Monday, participants from the legal and capital markets fields showed notably more optimism about other proposals than about the semi-annual reporting idea. Other potential adjustments the SEC is considering include expanding the scope of Form S-3 registration to make it easier for companies to access capital, while also relaxing requirements for auditor attestation.

Ryan Mitteness, a partner at the law firm Fenwick & West, shared details of his firm's survey of just over 100 companies that are either already public or about to go public, which focused on the semi-annual reporting proposal.

"I would say that most companies are not making decisions about whether to go public or stay public based on quarterly or semi-annual reporting," Mitteness said of the survey respondents. "That is not really what drives that decision."

He added that most respondents said that even if given the option, they would likely not adopt a semi-annual reporting cadence.

Dan Zinn, general counsel and chief of staff at OTC Markets Group Inc., noted that the reporting frequency a company prefers will ultimately be a "very commercial decision" and will vary from company to company. He cited foreign private issuers (FPIs) as an example, saying they account for the "vast majority" of the 12,000 companies trading on his exchange.

Such companies, while not headquartered in the U.S. but trading in the U.S., already essentially follow a semi-annual reporting cadence. But for other companies, he suggested, market dynamics and the capital needs of individual companies will ultimately determine what reporting frequency makes the most sense.

"If you think... that reducing to semi-annual reporting could adversely affect your ability to raise long-term capital, then you would disclose more," Zinn said.

The views of panel experts on the semi-annual reporting idea largely align with the public comments that have poured in on the proposal. As of July 3, the SEC had received just over 8,000 letters on the proposal, with nearly all of them opposing it, as CFO Dive recently reported.

As for the SEC's other proposed adjustments, Zinn said he welcomes "every opportunity to reduce friction and lower costs."

Another adjustment the SEC is currently considering is expanding the exemption from auditor attestation requirements under the Sarbanes-Oxley Act of 2002. Under the proposal, only companies classified as large accelerated filers would continue to bear such obligations.

Joshua Ford Bonnie, a partner at the law firm Simpson Thacher & Bartlett, said this move is particularly significant for newly listed companies.

"This is a significant expense," he said of the current requirement. "It consumes a great deal of the CFO's and the audit committee's time."

He added: "Anything that reduces the burden on companies... is reasonable."

Jaime Kilma, general counsel at the New York Stock Exchange, emphasized that for many companies, going public is just one of many hurdles. She encouraged SEC leadership to keep in mind the cost of "long-term disclosure obligations."

"What often drives these decisions is not the cost of going public, but the cost of staying public," Klima said.