SEC preparing proposal to make quarterly reporting optional, WSJ reports

• The proposal would follow a public comment period of at least 30 days after its April 2026 release, then require a formal commission vote
• Supporters argue the change would reduce compliance costs and discourage short-term decision-making, while critics warn it could reduce market transparency and increase volatility
• The initiative follows advocacy from the Long-Term Stock Exchange and consultations with major exchanges, with proponents citing European and UK markets that have relaxed similar mandates

Summary

The Securities and Exchange Commission (SEC) is developing a proposal to make quarterly earnings reporting optional for US public companies, potentially ending a requirement in place for 50 years, according to The Wall Street Journal. Under the plan, companies could transition to semiannual financial disclosures while retaining the option to report quarterly.

Key Timeline: The proposal could be released as early as April 2026, followed by a minimum 30-day public comment period and a formal commission vote.

Background: The initiative follows advocacy from the Long-Term Stock Exchange and consultations with major stock exchanges regarding potential adjustments to listing rules.

Supporters' Position: SEC Chair Paul Atkins and President Donald Trump back the move, arguing it would reduce compliance costs for companies and discourage short-term management decision-making focused on quarterly results.

Critics' Concerns: Opponents warn that less frequent reporting could diminish market transparency and potentially increase market volatility, as investors would receive updates less frequently.

International Context: Proponents reference European and UK markets, which have relaxed similar quarterly reporting mandates. However, these markets have not completely eliminated quarterly updates, with many companies continuing voluntary quarterly disclosure.

Market Implications: If implemented, this regulatory change would represent a significant shift in US corporate transparency requirements, potentially affecting how investors analyze public companies and make trading decisions. The optional nature of the proposal means companies could maintain quarterly reporting if they choose, allowing market forces to determine actual adoption rates.