Key Takeaways:
More than 200,000 investors told the SEC they want to keep quarterly reports — the regulator is moving ahead anyway.
The Securities and Exchange Commission received more than 200,000 public comments opposing its proposal to let companies file earnings reports every six months instead of every quarter, yet the regulator is expected to proceed with the rule change, according to people familiar with the matter.
"Quarterly reporting is a lynch pin of the United States public markets and is necessary to ensure transparency for the investing community," one commenter wrote on the SEC website. "Without these quarterly disclosures the investing public will lack the timely insights upon which we depend to make informed investment decisions."
The vast majority of the more than 169,000 comments posted on the SEC's website opposed the policy. Critics warned that reducing disclosure frequency would increase information asymmetry, widen bid-ask spreads and amplify volatility around semi-annual and annual earnings releases. Exxon Mobil, one of the few corporate voices to weigh in, argued that material quarterly information is already disclosed independently and that a move to semiannual reporting would not reduce timely information available to investors.
The proposal represents one of the most significant changes to US disclosure rules in decades. If enacted, it would shift the US away from the quarterly reporting cadence that has defined public markets since the Securities Exchange Act of 1934, potentially reducing short-term pressure on corporate management but increasing uncertainty for the tens of millions of Americans whose retirement savings depend on timely financial data.
Investor Opposition Runs Deep
The comments came from a wide cross-section of market participants, including individual investors, academics, nonprofit organizations, retirement funds and corporations. One commenter warned that the change "will make investors captive to the whims of corporate executives and boards who tend to be self-serving stakeholders," adding that it "will dramatically increase uncertainty and risk thereby increasing market volatility."
Despite the overwhelming feedback, the Wall Street Journal reported that the SEC is expected to move forward with the proposal, though the final language could be altered. The agency has not yet set a date for a final vote.
The current US quarterly reporting requirement dates to 1970, when the SEC adopted Form 10-Q under the Securities Exchange Act. The US is one of the few major markets that mandates quarterly filings — most European and Asian exchanges require only semi-annual reports, though many companies in those regions choose to report more frequently.
What a Shift Would Mean for Markets
A move to semi-annual reporting would fundamentally alter the information flow that drives price discovery in US equity markets. With fewer data points, analysts would have longer gaps between verified financial updates, potentially increasing reliance on management guidance and third-party estimates. Bid-ask spreads on stocks with thinner analyst coverage could widen as information asymmetry grows, according to academic research cited by several commenters.
The change could also reduce the quarterly "earnings beat" dynamic that has shaped corporate behavior for decades. Companies that previously managed earnings expectations to deliver quarterly surprises would face less frequent scrutiny, though the trade-off would be larger, more volatile price swings on semi-annual and annual filing dates.
This article is for informational purposes only and does not constitute investment advice.
