WSJ: U.S. SEC preparing to scrap mandatory quarterly earnings reports for companies, announcement could come as early as next month

[Financial News]

The United States Securities and Exchange Commission (SEC) is preparing a proposal to eliminate mandatory quarterly earnings reports by companies and instead require them to publish semiannual reports, The Wall Street Journal (WSJ) reported on the 16th, local time.
Under the plan, companies would report their earnings twice a year, on a semiannual basis, instead of four times a year, every quarter.
Citing people familiar with the matter, WSJ reported that the SEC could unveil this new regulatory proposal as early as next month.
In drafting the new plan, the SEC has held talks with officials from major exchanges. The discussions focused on how to revise exchange rules to accommodate the change.
Once the proposal is released, there will be a public comment period of at least 30 days. After that, SEC commissioners will vote on the new rule, and it could still be voted down.
The new rule would not completely ban quarterly earnings releases, but would make them optional rather than mandatory. U.S.-listed companies have been reporting their results every three months for more than 50 years.
Momentum for semiannual reporting gathered in the latter half of last year. In September, it was reported that the Long-Term Stock Exchange (LTSE) had petitioned the SEC to abolish the quarterly reporting requirement. Just days after that report, Donald John Trump and Paul S. Atkins announced that they supported the petition.
Trump had also tried to end mandatory quarterly reporting during his first term in office, but that effort eventually fizzled out.
Supporters of abolition argue that removing the burden of quarterly reports would reduce delistings and encourage more companies to go public. They contend that one reason firms stay private is the obligation imposed on listed companies to file quarterly earnings reports, which they say require significant time and money.
Shareholders, however, are pushing back. They say they rely on the regular earnings reports released every three months to evaluate companies.
In Europe, though, quarterly earnings reports are no longer mandatory. The European Union (EU) changed its rules in 2013.
The United Kingdom of Great Britain and Northern Ireland (UK) also made quarterly reporting optional about 10 years ago. However, many companies continue to publish quarterly results even though they are no longer required to do so.


dympna@fnnews.com Song Kyung-jae Reporter