The SEC Proposes Optional Semiannual Reporting

On May 5, 2026, the SEC proposed amendments that would permit companies subject to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to elect semiannual reporting in lieu of quarterly reporting. Under the proposal, Exchange Act reporting companies currently subject to quarterly reporting could file one interim report on new Form 10-S instead of the three Forms 10-Q now required each fiscal year. To facilitate semiannual reporting and simplify the rules regarding the age of financial statements in SEC filings, the SEC also proposed amendments to the financial statement requirements under Regulation S-X and technical amendments to existing rules and forms that refer to quarterly reporting. The proposal is intended to provide reporting companies with flexibility to determine the interim reporting frequency that best suits their circumstances. Assuming adoption during 2026, a company with a December 31 fiscal year-end could first elect semiannual reporting with its Form 10-K filed in early 2027 and then report semiannually during fiscal 2027.

Under the proposed reporting framework, an Exchange Act reporting company would annually elect either a semiannual or quarterly interim reporting frequency by checking the “semiannual” box to be added to the cover of Form 10-K. A company electing semiannual reporting would file one Form 10-S and one Form 10-K for each fiscal year; a company that does not elect semiannual reporting would continue to file three Forms 10-Q and one Form 10-K. Companies electing semiannual reporting could nevertheless continue to issue quarterly earnings releases, hold quarterly earnings calls and provide earnings guidance, but quarterly earnings releases would be disclosed under Item 2.02 of Form 8-K and would not be subject to the interim financial statement requirements that apply to Form 10-Q. Once an interim reporting frequency is selected, it could not be changed until the subsequent Form 10-K, and a company switching from semiannual to quarterly reporting would need to prepare comparable prior-year quarterly financial statements and have them reviewed.

New Form 10-S would require the same information currently required by Form 10-Q but for a covered six-month period instead of a covered quarter. As with Form 10-Q, the financial statements in Form 10-S would be prepared in accordance with GAAP and reviewed by an independent public accountant, non-GAAP financial measures would remain subject to Regulation G and Item 10(e) of Regulation S-K, and the current disclosure and certification requirements for disclosure controls and procedures and internal control over financial reporting would also apply. The filing deadline for Form 10-S would match the current Form 10-Q deadlines.

The Regulation S-X amendments would revise the rules governing financial statement requirements in periodic reports, registration statements and proxy statements to reflect optional semiannual reporting and simplify the rules with respect to the age of financial statements. The proposal would revise Rule 3-01, eliminate Rule 3-12 and generally determine whether interim financial statements are required in a registration statement or proxy statement by reference to the most recently completed fiscal quarter or semiannual period for which a Form 10-Q or Form 10-S has been filed, or is required to be filed, rather than by reference to a prescribed number of days.

The SEC’s proposal includes requests for comment on 47 questions related to the proposed amendments, including whether semiannual reporting should be available only to certain Exchange Act reporting companies, whether Item 2.02 Form 8-K submissions for quarterly earnings releases of semiannual filers should be filed and not furnished, whether first- or third-quarter earnings releases of financial information should be reviewed by an independent accountant and whether accountant comfort letters in securities offerings will cause semiannual filers to continue quarterly reviews.

The public comment period for the proposed amendments will remain open for 60 days following publication of the proposing release in the Federal Register. Comments may be submitted via the SEC’s form, available here.

For more information, see Debevoise Insights.

 

SEC Exemptive Order Reduces Minimum Tender Offer Period for Many Equity Tender Offers to 10 Business Days

On April 16, 2026, the SEC’s Division of Corporation Finance issued an exemptive order (the “Order”) permitting certain fixed-price, all-cash equity tender offers to remain open for a minimum of 10 business days rather than the 20 business days ordinarily required under the Exchange Act Rules 13e-4(f)(1)(i) and 14e-1(a). The Order applies to (i) negotiated third-party offers under Regulation 14D, (ii) issuer self-tender offers by reporting companies under Rule 13e-4 and (iii) certain issuer self-tender offers by non-reporting companies under Regulation 14E. The Order does not apply to hostile offers, offers relying on cross-border exemptions or Rule 13e-3 going-private transactions.

For reporting companies, the relief is subject to specified announcement, disclosure and notice requirements, including expedited Schedule 14D-9 timing for negotiated Regulation 14D offers. Rule 13e-4 offers must be partial offers, and a later competing bid requires the initial offer to remain open for 20 business days. For non-reporting companies, the relief is limited to issuer or wholly owned subsidiary self-tender offers, also for cash at a fixed price, with similar advance notice requirements for price, size and other material changes.

The Order is intended to reduce market exposure and execution risk associated with extended offering periods while preserving investor protections through enhanced disclosure and procedural safeguards. In practice, the relief is likely to be most relevant for negotiated change-in-control transactions, partial issuer tender offers and certain private-company liquidity tender offers. The Order became effective immediately and replaces the SEC’s prior practice of granting similar relief through individualized exemptive orders and no-action letters.

For more information, see Debevoise Insights.

 

SEC Enforcement Results Reflect Shift in Priorities

On April 7, 2026, the SEC’s Division of Enforcement announced its enforcement results for fiscal year 2025, offering the first detailed view of the agency’s enforcement approach under the Commission’s new leadership. The results reflected a marked decline in enforcement activity and a broader recalibration of the SEC’s enforcement priorities toward traditional fraud-based cases and investor protection.

The SEC reported 456 total enforcement actions in FY 2025, including 303 stand-alone actions, representing a 29% decrease from FY 2024 and a 39% decrease from FY 2023. Securities offering matters, investment adviser and investment company matters and broker-dealer matters comprised the largest categories of stand-alone actions. The Commission stated that the slowdown reflected an intentional effort to refocus enforcement activity on matters involving fraud and investor harm rather than “novel legal theories” or technical compliance violations.

Although overall enforcement activity declined, the SEC reported approximately $17.9 billion in monetary remedies in FY 2025, though $14.9 billion of that amount came from the entry of the final judgment in the Stanford International Bank Ltd. case, which the Commission filed more than 15 years ago. Excluding the Stanford matter, certain “deemed satisfied” remedies and off-channel communications penalties, the total monetary remedies for FY 2025 would have been approximately $2.7 billion.

The SEC also emphasized its continued focus on retail investor protection, individual accountability and market abuse. The Commission highlighted actions involving alleged Ponzi schemes, insider trading and spoofing and misleading statements involving crypto assets and artificial intelligence. The SEC further noted the creation of new task forces focused on cross-border misconduct, cybersecurity and emerging technologies.

The announcement was followed by the appointment of SEC veteran David Woodcock as Director of Enforcement, signaling that the Commission’s revised enforcement approach is likely to continue.

For more information, see Debevoise Insights.

 

DOJ Signals AI Prosecution Priorities with Charges Against AI Technology Company Executives

On April 17, 2026, the U.S. Attorney’s Office for the Eastern District of New York unsealed a 10-count indictment against Harish Chidambaran and Farhan Naqvi, the respective former CEO and CFO of iLearningEngines, Inc. (“iLearning”), an AI-driven digital education company. The indictment alleges a multiyear scheme to defraud investors and lenders through materially false and misleading statements about iLearning’s financial condition.

The indictment alleges that, between approximately January 2019 and April 2025, Chidambaran and Naqvi, together with unnamed co-conspirators, “dramatically inflat[ed]” iLearning’s revenues—at times by hundreds of millions of dollars a year, representing more than 90% of annual revenues. To support those revenues, iLearning allegedly entered into fake contractual arrangements with purported customers, many of which were shell entities connected to iLearning employees, associates, friends and family members, and conducted repeated “round-trip” transfers of investor and lender funds from iLearning to purported customers and back to iLearning.

The indictment charged the defendants with operating a continuing financial crimes enterprise, securities and wire fraud, and conspiracy to commit securities and wire fraud. Although the Department of Justice (the “DOJ”) framed the case as AI-related fraud, the charged conduct primarily involved conventional accounting and securities fraud, including sham transactions and falsified disclosures. The case reflects continued DOJ scrutiny of alleged fraud involving AI-positioned companies, even where the charged misconduct involves conventional accounting and securities fraud. Companies should ensure that representations concerning AI and agentic AI—including statements about automation, customer acquisition and retention, revenues and third-party relationships—are accurate, substantiated and aligned with internal facts, documentation and controls.

For more information, see Debevoise Insights.

 

Board Oversights of AI: Do Boards Need AI Experts?

As the use of AI across industries increases, many boards are considering whether they have the expertise necessary to oversee AI-related opportunities and risks. A frequent question is whether boards should have a director who is an “AI expert.”

While appointing a director with AI expertise may be appealing, it can present practical and governance challenges. The pool of individuals with both deep AI expertise and the qualifications to serve effectively as a public company director is limited, and the percentage of companies for which AI is so fundamental to their business that it requires an AI expert on the board is very small. A designated AI expert may also affect board dynamics, as other directors may defer excessively, reducing the constructive challenge and debate that is critical to effective oversight. Additionally, individuals with deep AI expertise often have extensive experience in the technology industry and may have conflicts of interest, such as investments in AI companies or commercial relationships with vendors, which would require careful management.

Boards may instead rely on management and outside experts. Directors can rely on members of management, such as a Chief Technology Officer or someone serving a similar function, to provide updates on the company’s use of AI and related risks and opportunities. Management and outside advisors can also supplement board expertise through education and regular reporting on AI use cases, risks and governance frameworks.

All directors should, at a minimum, possess baseline AI literacy. As AI becomes more integral to many companies’ operations, investors increasingly expect disclosure of relevant board skills and appropriate oversight processes for AI-related risks and opportunities. Companies may also use proxy disclosures to explain how they are addressing AI and other technology-related risks, including whether AI oversight is allocated to an existing committee or to a dedicated technology committee.

For more information, see Debevoise Insights.

 

Electronic Arts Indentures Raise Questions About Default Interest, Efficient Breach

Electronic Arts’ pending $55 billion all-cash leveraged buyout has raised questions regarding whether Electronic Arts could avoid paying a change-in-control premium of approximately $25 million to existing bondholders by seeking to defease the notes rather than repurchasing them following a “Change-of-Control Repurchase Event.” The scenario underscores a broader strategic question: Where litigation would likely proceed in New York courts and could take years to resolve, why do issuers so infrequently test the bounds of their contractual obligations?

Under New York law, a judgment for breach of contract accrues prejudgment interest at 9% per year from the date of breach through entry of judgment unless the parties have specified a different rate applicable upon default or breach. In the indenture context, the analysis generally follows a two-step framework: first, whether the agreement specifies a default rate of interest; and second, whether that rate applies to the breach in question.

Electronic Arts’ outstanding notes are governed by a base indenture and a second supplemental indenture. The second supplemental indenture gives bondholders a 101% recovery put right upon a Change-of-Control Repurchase Event. In connection with the tender offer and consent solicitation, however, the offeror did not offer to repurchase the notes at 101% or redeem them at par, instead offering consideration valued at approximately 96.9% for the 2031 notes and 79.1% for the 2051 notes. Electronic Arts also indicated that it may seek to defease the notes, potentially avoiding the obligation to pay the change of control premium.

The resulting question is whether the indenture displaces New York’s prejudgment interest rate and, if so, whether the contractual rate applies to the breach at issue. Section 3.1 of the base indenture provides for interest on overdue principal and overdue installments of interest at the rate borne by the securities. The more difficult issue is whether the amounts in dispute would qualify as overdue principal or overdue installments of interest within the meaning of that provision. If they do, the contractual rates apply. If, however, the disputed amounts are characterized as arising from a failure to comply with the change-of-control repurchase obligation, rather than a failure to pay principal, interest or premium when due, then the statutory prejudgment rate of 9% may apply.

This issue bears close watching given the novelty and complexity of the legal questions involved. If litigation arising from the Electronic Arts transaction were to establish that amounts payable in connection with a failure to honor a change-of-control put right do not constitute overdue principal or overdue installments of interest, such that the 9% statutory rate applies in lieu of lower contract rates, issuers may face materially higher exposure in contested situations and revisit how default interest provisions are structured going forward.

For more information, see Debevoise In Depth.

 

Cybersecurity Incident Disclosure Obligations: The EU/UK Market Abuse Regulations

Cybersecurity incidents may constitute “inside information” under the EU/UK Market Abuse Regulation (“MAR”) requiring prompt public disclosure, with delays permitted only where certain conditions are met. “Inside information” under MAR is information that is (i) precise, (ii) not public and (iii) if made public, would be likely to have a significant effect on the price of the issuer’s financial instruments.

Not every cybersecurity incident will constitute “inside information,” particularly at the outset of the incident. Issuers should consider whether the incident could materially impact revenue, margins, costs or financial performance; result in operational disruption to critical business infrastructure and/or internal and customer-facing systems; lead to investigations by regulators, fines and/or litigation; or create significant reputational risk that could materially affect customer trust, commercial relationships or market perception. Cybersecurity incidents are rarely static events, and it is crucial to monitor the situation closely and on an ongoing basis to determine if and when it rises to the level of “inside information” and requires disclosure. Under MAR, disclosure may be delayed if immediate disclosure would be likely to prejudice the issuer’s legitimate interests, delay is not likely to mislead the public, and the issuer is able to ensure the confidentiality of the information.

Issuers subject to MAR must ensure that a cybersecurity incident is immediately brought to the attention of legal and compliance professionals within the business, as well as disclosure committees and legal advisors, who would have to assess whether “inside information” exists that would require immediate disclosure or whether disclosure could be delayed. It is crucial that the situation is monitored closely and on an ongoing basis so that they can determine when “inside information” has arisen and when the appropriate disclosure must be made.

For more information, see the Debevoise Data Blog.

 

Court Order Signals New Era for Shareholder Proposals Under Rule 14a-8

A recent federal court decision ordering a company to include a shareholder proposal in its proxy materials signals a potentially significant development following the SEC’s decision not to respond substantively to most Rule 14a-8 no-action requests during the 2026 proxy season.

<p.in></p.in>Thomas P. DiNapoli v. BJ’s Wholesale Club Holdings, Inc., the U.S. District Court for the District of Massachusetts granted a preliminary injunction requiring BJ’s Wholesale Club Holdings, Inc. (“BJ’s”) to include a shareholder proposal requesting that the company conduct and disclose an assessment of deforestation risks associated with its private label brands. BJ’s had sought to exclude the proposal under Rule 14a-8(i)(7), the “ordinary business” exclusion, and the SEC’s Division of Corporation Finance stated that it would “not object if the Company excludes the Proposal from its proxy materials.” The court held that the plaintiff was likely to succeed on the merits of its claim that the proposal was improperly excluded under Rule 14a-8(i)(7). The court stated that the proposal focused on “a potential generalized risk—deforestation—posed by one aspect of BJ’s business” and that any effect on the company’s business operations was an “incidental byproduct—rather than a focus—of the Proposal.” The court also rejected the argument that the proposal impermissibly “micromanage[d]” the company.

The decision follows the SEC’s November 2025 announcement that it would not respond substantively to most Rule 14a-8 no-action requests during the 2026 proxy season. As a result, companies now exercise unilateral judgment over which proposals to exclude. However, excluding shareholder proposals may lead to increased litigation risk, and courts may increasingly be asked to resolve Rule 14a-8 disputes historically addressed through the SEC no-action process. This development has shifted the battleground from the SEC to the judiciary, with Rule 14a-8’s “ordinary business” exception under renewed scrutiny. Public companies should reassess their internal processes for evaluating and potentially excluding shareholder proposals, particularly those framed as addressing environmental or social risk rather than strictly operational matters.

For more information, see Debevoise Insights.

 

Polymarket Insider Trading Charges Illustrate DOJ and CFTC Prediction Markets Enforcement Strategy

On April 23, 2026, the U.S. Attorney’s Office for the Southern District of New York (“SDNY”) charged a U.S. Army soldier with commodities fraud and wire fraud in connection with trading on Polymarket using allegedly classified information relating to military operations in the Red Sea. The Commodity Futures Trading Commission (the “CFTC”) simultaneously filed a civil enforcement action based on substantially the same alleged conduct. SDNY stated that the case represented “clear insider trading” and warned that “using confidential government information to profit on prediction markets is illegal under federal law.”

According to the indictment, the defendant used nonpublic information obtained through his role as an Army intelligence officer regarding anticipated U.S. military strikes before that information became public. The government alleges that the defendant used that information to place trades on Polymarket event contracts tied to whether military action would occur and generated substantial profits following public reporting of the strikes.

The charges illustrate how the DOJ and CFTC may apply traditional insider trading concepts in the context of prediction markets and event contracts. The case reflects the government’s focus on whether a trader possessed material nonpublic information, whether the information was obtained or used in breach of a duty of trust or confidence, whether the information was used to trade in a federally regulated market instrument and whether the trader took steps evincing a consciousness of wrongdoing. The case also underscores that prediction markets are not exempt from insider trading scrutiny.

The charges have several important compliance implications for companies:

• Prediction market trading should be incorporated into insider trading and personal trading policies.

• Companies should define confidential information broadly. Product launches, regulatory developments, litigation events, M&A, government contracts, cybersecurity incidents and other corporate developments may all be relevant to prediction market contracts just as they are relevant to securities trading.

• Employees and contractors with access to sensitive information should be trained that they may not use that information for personal gain in connection with prediction markets trading.

• Prediction market and crypto platforms should expect increasing scrutiny of surveillance, audit trails, know-your-customer device and IP information, wallet-linking, suspicious activity escalation, and cooperation with regulators (as reflected by SDNY’s public acknowledgement of Polymarket’s cooperation).

For more information, see Debevoise Insights.

 

FCA Consults on IPO Research Rules

On April 27, 2026, the UK Financial Conduct Authority published Consultation Paper 26/14 (“CP 26/14”) proposing amendments to the Conduct of Business Sourcebook rules governing the publication of analyst research during UK initial public offerings (“IPOs”). The proposals would remove the current waiting periods between the publication of an FCA-approved registration document or prospectus and connected research and remove the equal-sharing obligations between “connected analysts” and “unconnected analysts.”

Under the current regime, introduced in 2018, connected analysts can publish research one day after publication of an FCA-approved registration document or prospectus, if unconnected analysts have been briefed jointly with connected analysts, or seven days after publication in all other cases. The FCA acknowledged in CP 26/14 that the regime “has not had the intended effect” and that the default seven-day delay has applied to most UK IPOs. The consultation proposes removing the seven-day and one-day waiting periods so that connected research could be published at the same time as the approved registration document or prospectus. The consultation also proposes removing the prohibition on communication between connected analysts and issuers unless substantially the same information is provided to unconnected analysts.

The FCA stated that feedback on the current rules is that they have “made the UK IPO timetable longer” and “may in fact be impeding the flow of information to analysts.” The proposals are intended to complement the new Public Offers and Admissions to Trading regime and the new UK Listing Rules in rebuilding the competitive position of London’s capital markets. The consultation closes on May 29, 2026.

For more information, see Debevoise Insights.

 

FTSE Russell Lowers Free Float Requirement for Non-UK Issuers in FTSE UK Index Series

On March 26, 2026, FTSE Russell announced a change to the eligibility criteria for non-UK incorporated issuers in the FTSE UK Index Series. Effective from the 2026 index review on June 22, 2026, non-UK incorporated issuers with a minimum free float of 10%, rather than 25%, will be eligible for inclusion in the FTSE UK Index Series, aligning the requirement with that applicable to UK incorporated issuers. FTSE Russell said the change is intended to remove the distinction between UK and non-UK incorporated issuers and confirmed that companies included in the FTSE UK Monitored List on the June 2, 2026, cut-off date with a minimum free float of 10% will be eligible for inclusion at the June 22, 2026, review, subject to satisfying the other applicable criteria.

The change follows a January 2026 market consultation in which FTSE Russell recognized that the FTSE UK Index Series was the only FTSE Russell index series to impose different minimum free float requirements for domestic and non-domestic issuers. Respondents were generally supportive, noting that the change would simplify the eligibility framework and align with the London Stock Exchange’s Main Market listing requirements. The revised 10% threshold is also consistent with practices observed across other major index providers. Although there are no issuers currently on the FTSE UK Monitored List excluded solely because of the 25% minimum free float requirement, the change reduces a potential barrier to index inclusion for international issuers and will be relevant for non-UK issuers considering a London Stock Exchange listing as broader UK capital markets reforms continue.

For more information, see Debevoise Insights.

 

SEC Rulemaking Under OIRA Review

A summary of selected SEC rulemaking items currently under review by the Office of Information and Regulatory Affairs (“OIRA”) follows:

Regulatory Identifier	Description of Rulemaking Item	Latest Action
3235-AN38	Recommendation of proposed rules relating to the offer and sale of crypto assets, potentially to include certain exemptions and safe harbors, to help clarify the regulatory framework for crypto assets and provide greater certainty to the market.	OIRA – Pending review.
3235-AN41	Recommendation of proposed rule amendments to modernize the shelf registration process to reduce compliance burdens and further facilitate capital formation.	OIRA – Pending review.
3235-AN40	Recommendation of proposed rule amendments to expand accommodations that are available for emerging growth companies and to rationalize filer statuses to simplify the categorization of registrants and reduce their compliance burdens.	OIRA – Pending review.
3235-AN76	Recommendation of proposed rule to rescind climate-related disclosure rules.	OIRA – Pending review.
3235-AN77	Recommendation of proposed rule to rescind the policy regarding denials in settlements of enforcement actions	OIRA – Pending review.

 

Securities Law-Related Legislation

A summary of selected recent securities law-related legislation proposed in May 2026 follows:

Name of Bill	Description of Bill	Latest Action
S.4157	A bill to prohibit bailouts of digital asset market participants and for other purposes.	Senate – 03/24/2026 Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
H.R.8383	To amend the Securities Exchange Act of 1934 to establish certain requirements related to proxy voting and for other purposes.	House – 04/20/2026 Referred to the House Committee on Financial Services
H.R.8612	To prohibit public companies from repurchasing their shares on the open market and for other purposes.	House – 04/30/2026 Referred to the House Committee on Financial Services.
H.Res.1207	A resolution concerning private equity practices in the housing, child care, healthcare and energy industries.	House – 04/22/2026 Referred to the House Committee on Financial Services.
H.R.8398	Establish guidelines for the use, access and responsible disclosure of financial data.	House – 04/21/2026 Referred to the House Committee on Financial Services
S.4419	A bill to amend title 31, United States Code, to require only foreign entities to report beneficial ownership information and for other purposes.	Senate – 04/28/2026 Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.