Exclusive: Two Sigma, D.E. Shaw join Wall Street push against US SEC's bid to relax quarterly reporting

• Investment firms warn that eliminating mandatory quarterly reporting would create inconsistent disclosure practices, heighten market volatility, increase stock price swings, and raise companies' capital costs
• The U.S. has required quarterly reporting since 1970, contrasting with Europe and Asia's semi-annual standards; publicly listed U.S. companies have declined 36% to 4,500 since 2000
• Wall Street remains divided: when Trump first proposed this in 2018, two-thirds of 63 firms that commented opposed the change, including BlackRock and T. Rowe Price, though some public companies now support the shift

Summary

Key Development: Major Wall Street firms including Two Sigma, D.E. Shaw, Citadel, and Fidelity are opposing an SEC proposal to allow U.S. companies to opt out of quarterly earnings reporting in favor of semi-annual disclosures.

Main Players

• SEC Chair Paul Atkins and President Trump are pushing the proposal, arguing it would reduce costs and encourage long-term thinking
• Opposition includes quantitative hedge funds Two Sigma, D.E. Shaw, Citadel (Ken Griffin), and asset manager Fidelity
• Managed Funds Association (MFA) is coordinating industry concerns

The Proposal: The SEC plans to formally seek public comments in coming weeks on allowing companies to choose semi-annual reporting instead of the quarterly requirement mandated since 1970. This revives a Trump initiative from his first term in 2018.

Opposition Arguments

At a March 12 SEC meeting, firms warned that eliminating quarterly reporting would cause:

• Heightened market volatility and larger stock price swings
• Increased capital-raising costs for companies
• Inconsistent disclosure practices creating information gaps
• Less accurate market valuations

Market Context

• U.S.-listed companies have declined 36% to 4,500 since 2000
• European and Asian companies typically report semi-annually
• When proposed in 2018, two-thirds of 63 commenting firms opposed the change, including BlackRock and T. Rowe Price

Current Status: The lobbying effort is in early stages with no formal organized initiative yet launched. The SEC plans to open a public comment period soon, giving markets the opportunity to provide feedback on the controversial proposal.