The SEC’s eyes turn to semiannual earnings reports

The Securities and Exchange Commission is working on a proposal to allow public companies to issue their earnings reports twice a year instead of quarterly, according to the Wall Street Journal.

Talk of making the 50-plus quarterly requirement optional has increased in the past year, with companies lamenting the cost and burden of preparing for quarterly earnings. This requirement is also believed to be one of the reasons why some companies choose to remain in the private sector longer.

Those in favor of the change hope the semi-annual requirement will encourage more companies to go public by making it easier to maintain public company status. SEC Chairman Paul Atkins and President Trump have expressed support for the idea. The SEC has already begun discussions with exchanges about potential next steps, although any change is still some way off, the newspaper reported.

If the SEC releases its proposal — which could come within the next few weeks — it will undergo a public comment period and then a vote. There is precedent for this rule, the magazine notes. Both the EU and the UK abolished mandatory quarterly reporting about a decade ago in favor of semi-annual disclosures, although many companies in both markets still file quarterly reports by choice.