By Göksu Başaran
The U.S. Securities and Exchange Commission is preparing a proposal to eliminate the long-standing requirement for publicly listed companies to report earnings every quarter, according to a report by The Wall Street Journal.
The plan under discussion could allow companies to disclose their financial results twice a year instead of every three months, marking one of the most significant changes to corporate reporting rules in decades.
Supporters of the move argue that quarterly reporting pressures companies to focus too heavily on short-term performance rather than long-term growth strategies. Reducing the frequency of reporting could also lower compliance costs and administrative burdens for publicly traded companies.
However, critics warn that eliminating quarterly reports may reduce transparency for investors and limit the amount of information available to markets. Regular earnings reports have long been seen as a key tool for investors to evaluate corporate performance and make informed decisions.
If the proposal moves forward, the SEC could publish the rule for public comment before a formal vote by the commission. Any change would represent a major shift in how companies communicate financial performance to shareholders and the wider market.
The potential reform comes as regulators and policymakers continue debating how to balance corporate transparency with the desire to reduce short-term pressures on companies listed on U.S. stock exchanges.