US SEC to Abolish Mandatory Quarterly Earnings Reports, Shifting to Optional Disclosure

The U.S. Securities and Exchange Commission (SEC) is set to deliberate as early as next month on a proposal to abolish the mandatory quarterly earnings reporting requirement for companies. If this proposal is implemented, companies will be able to choose between submitting quarterly reports or filing them only twice a year.

Exterior view of the Securities and Exchange Commission (SEC) in Washington D.C., USA. Washington D.C., USA – Photo by Reuters Yonhap News

The Wall Street Journal (WSJ) reported on March 16 (local time), citing sources, that the authorities could announce such a proposal as early as next month. The SEC is said to be currently discussing with officials from major stock exchanges how to adjust the relevant regulations.

Once the proposal is announced, it will undergo a public comment period. This period typically lasts for at least 30 days. Afterward, the SEC will hold a vote on the agenda. However, it has not yet been confirmed whether the proposal will be implemented in the end.

According to the WSJ, the regulation is expected to shift quarterly reporting from being mandatory to optional, rather than eliminating it entirely. Companies would be able to choose whether to publicly disclose their quarterly earnings. Former President Donald Trump made a similar proposal during his first term, but was unable to change the system.

Proponents of reducing reporting frequency argue that such a change could help increase the number of listed companies in the United States, which has been declining. One of the reasons companies cite for remaining private is the significant time and costs associated with administrative work required for listing and maintaining listed status. However, there is expected to be opposition from investors who value the transparency provided by regular public disclosures.

The U.S. disclosure regime has required “periodic public disclosure” since the Securities Exchange Act of 1934 and has been based on quarterly reporting since 1970. However, the European Union (EU) abolished the quarterly reporting requirement in 2013, and the United Kingdom took similar measures over a decade ago. Nevertheless, many companies still voluntarily disclose their quarterly earnings. In Korea, listed companies are required to submit quarterly reports.

This content was produced with the assistance of AI translation services.