The US Securities and Exchange Commission (SEC) is working on a proposal to eliminate the requirement for companies to publish quarterly earnings, allowing firms to instead report results twice a year, according to a report by The Wall Street Journal.
Citing people familiar with the discussions, the newspaper said the proposal could be unveiled as early as next month, while regulators are also consulting major stock exchanges about possible changes to their rules.
Following its publication, the proposal will enter a public feedback phase. After the comment window, typically lasting at least 30 days, the SEC will decide whether to proceed with the measure.
Its approval remains uncertain. Under the plan, companies would still be able to publish quarterly results, but they would no longer be required to do so.
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Reuters reported that it could not independently verify the report.
The reform would permit publicly traded companies to disclose earnings on a half-yearly basis, replacing the existing rule that mandates updates every three months.
The idea of moving to half-yearly financial reporting gathered pace towards the end of last year. In September, the Long-Term Stock Exchange petitioned the SEC to drop the obligation for quarterly earnings disclosures, The Wall Street Journal reported.
Shortly afterwards, Donald Trump and SEC Chairman Paul Atkins signalled their backing for the move.
The concept was originally proposed by Trump during his first term, arguing that fewer reporting deadlines could help companies avoid short-term decision-making while lowering administrative costs. Detractors warn that the approach might weaken transparency and amplify market volatility, according to Reuters.
For more than five decades, publicly listed companies in the US have published earnings every quarter. During his first term in office, Trump briefly considered shifting to half-yearly reporting, but the proposal ultimately failed to gain traction.
Supporters of reducing the frequency of corporate disclosures argue that the move could help reverse the steady decline in the number of publicly listed companies in the United States. Many firms cite administrative workload and high compliance costs associated with listing and maintaining publicly traded shares as key reasons for remaining private, according to The Wall Street Journal.
However, the proposal is expected to meet resistance from investors who value the transparency provided by frequent financial disclosures. In Europe, listed companies have not been obliged to publish quarterly results since a regulatory change in 2013. The UK also scrapped mandatory quarterly reporting roughly a decade ago, although many firms continue to release updates every three months.
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