Date: September 16, 2025
Proposal Overview
On September 15, 2025, U.S. President Donald Trump renewed his call for a major reform in corporate financial reporting. He proposed that public companies move from the long-established practice of filing quarterly reports to submitting results only twice per year. The stated aim is to reduce regulatory burden and allow companies to focus on long-term performance rather than meeting short-term targets.
The U.S. Securities and Exchange Commission (SEC) has indicated that it is prioritizing a review of this proposal following Trump’s request.
Arguments in Favor
Supporters of the move highlight several potential benefits:
- Reduced Compliance Costs: Preparing quarterly disclosures requires significant accounting, auditing, and legal resources. A semiannual schedule could lower these recurring expenses.
- Long-Term Focus: Critics of quarterly reporting argue that it encourages executives to prioritize immediate earnings results over sustainable strategies. A shift to semiannual reporting could reduce this short-termism.
- Encouraging Public Listings: Market leaders have suggested that reducing regulatory “friction” could make public markets more attractive to companies considering an initial public offering.
Concerns and Criticisms
The proposal has also raised concerns among investors and analysts:
- Reduced Transparency: Quarterly updates provide investors with timely insights into company performance. Longer reporting gaps may leave markets less informed.
- Potential Market Shocks: Without interim reports, companies might delay revealing adverse developments, potentially leading to sudden surprises or volatility when disclosures are eventually made.
- Investor Confidence: Institutional and retail investors alike have built expectations around quarterly earnings data. A change could undermine confidence in U.S. market transparency.
Historical Context
The SEC first mandated quarterly reporting in 1970. Prior to that, many companies filed semiannual results. Trump previously raised the idea during his earlier tenure in office, and the SEC explored easing guidance in 2018 but retained quarterly filings after reviewing public feedback.
Any rule change would require the SEC to go through a formal process, including drafting proposals, soliciting comments, and assessing impacts before implementation.
Potential Implications
- For Companies: Cost savings on audits and filings could be significant, particularly for smaller public firms. Reduced short-term pressures might also encourage more investment in research, innovation, and long-term projects.
- For Investors: Investors would need to adapt to less frequent disclosures, potentially making it harder to track corporate health and adjust strategies in real time.
- For Markets: U.S. equities could be seen as less transparent compared to other jurisdictions, though the reduced burden may encourage more companies to go public.
What to Watch
- The SEC’s timeline for rulemaking and whether optionality—allowing companies to choose between quarterly and semiannual reporting—becomes part of the debate.
- Responses from large institutional investors, analysts, and corporations, whose positions will heavily influence the final outcome.
- Global comparisons, as practices vary worldwide, and the U.S. will weigh lessons from other markets.
- Market reactions to the idea, particularly in sectors where frequent financial updates are critical to valuation.
Conclusion
The push to end quarterly reporting marks a potential turning point in U.S. securities regulation. Proponents view it as a way to cut costs and encourage long-term growth, while critics warn that reducing transparency could increase risk for investors. The decision now rests with the SEC, which must strike a balance between regulatory relief and safeguarding investor confidence.
