US Quarterly Earnings Reports May Become Semi-Annual? SEC Reportedly to Submit Proposal to Cancel Quarterly Reports by April at the Earliest

Questioning AI · How much influence did Trump’s push have on the SEC’s cancellation of quarterly reports?

Cailian Press, March 17 (Editor: Ma Lan) The U.S. Securities and Exchange Commission (SEC) is reportedly considering a major reform that could eliminate the requirement for U.S. listed companies to file quarterly reports, allowing companies to report their performance only twice a year.

According to reports, regulators are discussing this plan with officials from major exchanges. The proposal could be announced as early as April to solicit public opinions, with a typical public comment period of 60 days for significant rule proposals.

This may be related to some of former President Trump’s past statements. In September last year, Trump suggested that companies should be allowed to report their results every six months instead of quarterly, arguing that this would help companies save costs and enable management to focus more on operations.

Supporters of this view also point out that some companies remain private because they do not want to spend the time and money required for listing and maintaining public trading. About ten years ago, the EU and the UK abolished the requirement for quarterly financial reports.

Pros and Cons

Trump had previously proposed the same idea during his first term as president, claiming it would provide greater flexibility, but the proposal was not implemented at that time.

At the end of last year, the New York-based Long-Term Stock Exchange (LTSE) applied to the SEC to change the frequency of information disclosure. Since then, the momentum for reforming disclosure requirements has significantly increased. The SEC’s proposed cancellation of quarterly reports could mark a key milestone, ending the mandatory quarterly disclosure rule that has been in place in the U.S. for 50 years. However, quarterly reports are unlikely to disappear entirely; instead, they may become optional.

From a rules perspective, both supporters and opponents have valid points. Supporters argue that quarterly reporting helps maintain liquidity and stability in the U.S. capital markets because investors trust the quality and frequency of company disclosures. Adequate information also broadens analyst coverage, aiding investors in making rational decisions.

Opponents, however, point out that the effort and costs required to comply with quarterly reporting are factors contributing to the decline in the number of U.S. listed companies. Additionally, quarterly reports are seen as a factor that leads companies to focus less on long-term investments and more on achieving short-term profits and meeting quarterly earnings forecasts.

(Cailian Press, Ma Lan)