The SEC is working on a proposal to allow public companies to release earnings reports twice a year instead of quarterly. According to WSJ.
Discussion of making the more than 50-year-old quarterly requirement optional has gained momentum in the past year, as companies lament the cost and burden of quarterly earnings preparation. This requirement is also considered a reason why some companies prefer to remain private for a long time.
Those favoring the change hope that the semiannual requirement will encourage more companies to go public by making it easier to maintain public company status. Both SEC Chairman Paul Atkins and President Trump have expressed support for the idea. The Journal reports that the SEC has already begun discussions with exchanges about potential next steps, although any changes are still a long way off.
If the SEC issues its proposal — which could come in the next few weeks — it will be subject to a public comment period and then a vote. The Journal notes that precedent exists for this rule. Both the EU and the UK abolished mandatory quarterly reporting in favor of semiannual disclosures about a decade ago, although many companies in both markets still report quarterly by choice.
