The Securities and Exchange Commission is developing a rulemaking that would change the cadence of public company disclosures from four filings per year to two. According to reporting, the agency may publish the proposal as soon as next month, offering listed companies the choice to forgo quarterly reporting in favor of semiannual updates.
Support for the change has emerged from high levels of government and regulatory leadership. Backers including President Trump and SEC Chairman Paul Atkins have argued that the current quarterly reporting requirement is an excessive administrative load. Proponents contend that giving firms the option to report twice yearly could reduce clerical expenses and help address the long-running contraction in the U.S. public market by lowering compliance costs for issuers.
Regulators preparing the proposal have been in consultation with major stock exchanges to assess what modifications might be necessary to listing rules if the disclosure cadence shifts. While the move would end the mandatory nature of a requirement that has been in place for roughly 50 years, the expectation is that quarterly disclosures would remain available as an option for companies that choose to continue providing them.
The momentum behind the initiative accelerated late in the previous year after the Long-Term Stock Exchange formally requested the SEC to change the frequency of required disclosures. The current effort represents a more formal step toward a semiannual standard than earlier explorations of the idea during President Trump’s first term.
Any final rule would be subject to a mandatory public comment period of at least 30 days followed by an official vote by the commission. There is no certainty the proposal will become binding, and the outcome will depend on the comment process and the commission’s ultimate decision. Institutional investors and other market participants have raised concerns about the implications of less frequent mandated transparency for the valuation of holdings.
Critics warn the change could introduce additional volatility for some market participants. Supporters note that both European and U.K. regulators relaxed similar legal requirements more than a decade ago and that many firms overseas still voluntarily provide quarterly updates despite the absence of a legal mandate.
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