The American SEC is working on a change that could end more than half a century of mandatory quarterly reporting by public companies. The new proposal would allow companies to publish results only twice a year.

  • SEC is preparing a draft that will make quarterly reporting optional.

  • Companies could switch to a semi-annual system instead of publishing results every 90 days.

  • Experts from Citadel and Fidelity warn that less frequent reporting will increase volatility and limit capital flow, especially to smaller firms.

SEC wants to change the rules of the game

The U.S. Securities and Exchange Commission is working on a proposal that would allow publicly traded companies to publish financial results twice a year instead of quarterly.

According to reports, the project may be published as early as next month, and regulators are discussing necessary changes to their regulations with major exchanges. After the proposal is published, a public consultation period of at least 30 days will begin, followed by a commission vote.

It is worth emphasizing that this is not about a complete ban on quarterly reports. Companies would retain the option to continue publishing results every three months, but it would no longer be mandatory.

This idea has long been supported by Donald Trump, who argues that less frequent reporting will reduce pressure for short-term results and lower costs for companies. SEC Chairman Paul Atkins also supports accelerating work on the reform.

Investors are not thrilled

Experts from the financial industry, however, view the idea with great caution. Stephen Berger from Citadel points out that quarterly reports allow the market to value companies more accurately and make more informed investment decisions.

In his opinion, the argument about excessive burden on companies is exaggerated, as internal reporting usually occurs more frequently than once a quarter.

Neil Constable from Fidelity shares a similar view. He warns that if investors receive less data, they may invest capital more cautiously, which will particularly hit smaller and developing companies. Reduced transparency may also increase volatility and paradoxically discourage long-term holding of shares.

Proponents of the changes remind that similar models are already functioning in Europe and the United Kingdom, where mandatory quarterly reporting was limited about a decade ago. Nevertheless, some companies still voluntarily publish results more frequently.