SEC eyes shift to twice-yearly earnings reports

New York: The Securities and Exchange Commission (SEC) is working on a proposal to change how often public companies must share their earnings reports. Currently, companies release these reports four times each year, but the SEC wants to make this only twice a year.

The change would reduce the cost and work needed to prepare for quarterly earnings reports. Many companies, especially smaller ones, find four reports each year challenging. Some believe this quarterly requirement is why companies stay private for longer periods.

SEC Chairman Paul Atkins and President Trump both support the proposal. The SEC has started talking with stock exchanges about possible next steps. However, any changes would require time since the proposal must go through a public comment period and a vote.

This approach matches what some other countries have done. Both European Union and United Kingdom eliminated mandatory quarterly reporting about ten years ago. Many companies there still release reports every three months by choice, even though they don’t have to.

If the SEC completes its proposal in the coming weeks, people can provide feedback before any final decision is made. The change could make it easier for companies to become public businesses.