U.S. SEC Proposes Adjusting Financial Disclosure Frequency by Company Size, Shifting from Quarterly to Semi-Annual Reports

The U.S. Securities and Exchange Commission (SEC) is brewing a potential game-changing reform for American capital markets, aiming to reset information disclosure frequency based on company size, potentially ending the mandatory quarterly reporting tradition that has lasted over 50 years in the United States.

According to market sources, regulators are actively evaluating modifications to financial reporting requirements, planning to transform mandatory quarterly disclosures into optional ones, allowing companies to choose to release performance reports semi-annually. The proposal could be announced as early as next month.

This reform is not baseless speculation—it directly responds to the Trump administration's previous calls to "change corporate financial reporting frequency from quarterly to semi-annual."

Atkins believes that the quarterly reporting system forces companies to focus excessively on short-term performance, which is detrimental to long-term strategic planning. Changing the disclosure frequency to semi-annual would allow companies, especially small and medium-sized enterprises, to focus more on long-term development.

Specifically, the core of this reform is to reduce corporate burden. By adjusting the disclosure cycle, it would save companies substantial time and costs, enabling corporate management to free themselves from complex compliance documentation work and invest more energy into long-term operational planning.

However, policy implementation will take time. According to procedures, the SEC must first submit the draft proposal for White House review before releasing it for public comment.

Based on historical data patterns, the SEC's average rule-making cycle is approximately 18 months, meaning that even if everything proceeds smoothly, the new rules would not take effect until the second half of 2027.

Nevertheless, market opinions on this matter remain divided. Supporters argue that this would help curb market "short-termism" and ease the declining trend in the number of listed companies;

However, opponents raise concerns that lowering disclosure frequency would weaken market transparency, lead to information asymmetry, and ultimately harm investor interests.

Overall, finding a balance between reducing corporate burden and safeguarding investor's right to information will be key to whether this proposal can be successfully implemented.

#SEC # Corporate financial reporting disclosure frequency