SEC Prepares Proposal Ending Mandatory Quarterly Reporting

The Securities and Exchange Commission (SEC) is preparing to propose that it eliminate the quarterly reporting requirement and allow public companies to report earnings only twice a year, The Wall Street Journal (WSJ) said Monday (March 16).

The regulator has been talking with officials at major exchanges about the potential change and could publish a proposal for public comment as soon as April, according to the report.

Reached by PYMNTS, an SEC spokesperson declined to comment on the report.

WSJ reported in September that President Donald Trump said in a post on Truth Social that companies should be allowed to report their earnings every six months rather than every three months.

“This will save money, and allow managers to focus on properly running their companies,” Trump wrote in the post.

According to WSJ’s Monday report, supporters of this idea say that some companies remain private because they don’t want to spend the time and money it takes to list and maintain publicly traded shares.

Opposition to the idea is likely to come from investors who want the transparency provided by regular disclosures, per the report.

Both the European Union and the United Kingdom ended their quarterly financial reporting requirements about a decade ago, according to the report.

Trump asked the SEC to consider nixing required quarterly earnings reports in favor of half-year reports during his first term as president.

The Washington Post reported in August 2018 that Trump did so and that he tweeted that the proposal would “allow greater flexibility and save money.”

Trump told reporters at the time: “We are not thinking far enough out. We’ve been accused of that for a long time, this country. So we’re looking at that very, very seriously. We’re looking at twice a year instead of four times a year.”

PYMNTS reported in January that quarterly reporting has deep roots in United States securities regulation and stock exchange norms.

However, the earnings call arrived later. They began to appear as a regular feature of public company life in the 1980s and then became more open and more standardized with the advent of the internet.