End of a 50+ Year Tradition? U.S. Stock Quarterly Reports May Become Semi-Annual Reports

How AI and Information Disclosure Reforms Affect Market Volatility

The U.S. capital markets are brewing the most significant changes to disclosure rules since the 1970s.

On March 16, local time, The Wall Street Journal cited sources familiar with the matter reporting that the U.S. Securities and Exchange Commission (SEC) is drafting a new proposal to eliminate the mandatory quarterly earnings disclosures for listed companies, allowing firms to choose to report semi-annually instead.

It’s important to note that the new regulation does not completely abolish the quarterly reporting system; companies can still opt to maintain their current disclosure frequency.

According to reports, the SEC is expected to submit the proposal next month. If approved, it will end a tradition of over 50 years of quarterly reporting for U.S. listed companies.

Support: Easing Burdens on Companies

The driving force behind this change is President Donald Trump.

During his tenure, Trump repeatedly expressed support for a semi-annual reporting system, believing that the current quarterly system is a heavy burden.

In September last year, he explicitly called on the SEC via social media to switch from quarterly to semi-annual reporting, stating this would “save money and allow management to focus on running the company.”

Supporters of the reform argue that maintaining public company status requires significant time and money spent on compliance and paperwork, which is a key reason many firms choose to go private.

Data shows that the number of publicly listed companies in the U.S. has fallen from over 8,000 at its peak in 1996 to fewer than 4,000 by the end of 2024.

U.S. Treasury Secretary Janet Yellen also endorsed this reform last September. She emphasized that Trump recognized the shrinking of the public markets and that switching to semi-annual disclosures could be a solution—“reducing costs for listed companies without harming investors’ interests and revitalizing the market.”

Additionally, quarterly reporting has been criticized as a root cause of “short-termism.” Under market pressure, many executives sacrifice R&D or long-term strategies to meet quarterly earnings forecasts.

NFJ Investment Group portfolio manager Burns McKinney stated, “Overemphasis on quarterly targets can lead to short-sighted decisions, and extending disclosure periods could promote more rational capital allocation.”

This view is supported by prominent Wall Street figures like Warren Buffett and JPMorgan Chase CEO Jamie Dimon. Buffett has long criticized “earnings management” and, in his 2022 shareholder letter, bluntly said: “Surpassing ‘expectations’ is often celebrated as a management victory, but this manipulation is disgusting and one of capitalism’s shameful practices.”

Opposition: Reduced Transparency

Opposing voices are also strong and well-founded.

Former U.S. Treasury Secretary Lawrence Summers emphasized that the reason the U.S. capital markets have thrived is due to “responsibility and transparency”—“frequent disclosures and the sharing of extensive information have always been core to the U.S. markets.”

Samir Saman, head of global equities and real assets at Wells Fargo Investment Institute, warned, “Longer reporting intervals will lead to greater uncertainty, which could increase market or price volatility when companies report.”

Bryan Nick, head of portfolio strategy at wealth management firm Newedge Wealth, highlighted potential valuation impacts: “While Trump’s proposal aims to encourage long-term focus by investors and companies, it could increase stock market uncertainty and lead to lower valuations (i.e., higher risk premiums) due to less frequent new information. As the likelihood and impact of earnings misses grow, volatility during earnings seasons could also increase.”

For retail investors, information asymmetry could worsen. Matt Maley, chief market strategist at Miller Tabak + Co., said, “Lack of transparency will make investing more difficult but could also free management to focus more on long-term business growth. It’s a double-edged sword that will demand higher accuracy from Wall Street analysts.”

Lessons from Other Markets

At the end of last year, the Long-Term Stock Exchange (LTSE) in New York applied to the SEC to change disclosure frequency, further fueling the push for reform.

In fact, other markets have already set precedents.

Since 2013, the European Union no longer mandates quarterly financial disclosures for listed companies. The UK also abolished quarterly reporting about a decade ago. These practices serve as important references for the U.S. reform.

European experience shows that even without mandatory quarterly reports, many companies voluntarily continue to publish them.

SEC Chairman Paul Atkins pointed to the UK, noting that after reintroducing semi-annual reporting in 2014, some large firms still chose to issue quarterly reports based on their needs. He believes this demonstrates that markets can effectively determine disclosure frequency and depth on their own.

Other Asian markets have also implemented similar reforms. Singapore introduced quarterly reporting requirements for some companies in 2003, but by 2020, it had completely abolished the mandatory quarterly report requirement for all firms.

Hong Kong’s Growth Enterprise Market (GEM) adjusted its disclosure rules starting in 2024, no longer requiring quarterly reports, aligning it with the Main Board, and only mandating semi-annual and annual disclosures.

Jonathan Golub, chief equity strategist at Harbor Research Partners, stated, “When information and transparency are higher, capital markets and the overall economy operate more efficiently.” However, he also emphasized the need to consider companies’ actual burdens and long-term development needs.