US regulators have moved to offer companies the option to end quarterly reporting and move to a “semi-annual” disclosure model.

The move comes after the president, Donald Trump, aired a preference for quarterly reporting soon after returning to the White House. In September last year, chief financial regulator Paul Atkins said his agency, the Securities and Exchange Commission (SEC), was fast-tracking proposals.

This week, Atkins said the new proposals would give companies “increased regulatory flexibility”.

“Public companies have an obligation under the federal securities laws to provide information that is material to investors.

“Yet, the rigidity of the SEC’s rules has prevented companies and their investors from determining for themselves the interim reporting frequency that best serves their business needs and investors.”

The move received support in many quarters. Mike Flood, at the US Chamber of Commerce, said: “Allowing optional quarterly reporting would reduce unnecessary burdens, strengthen the environment for public companies, free up valuable time and resources and empower business to focus on long-term value for their shareholders.”

The move would bring the US more into line with other jurisdictions, such as the UK, where semi-annual reporting has been the practice since 2014 and the European Union, since 2013. Japan, another major market, made the switch more recently, in 2024.

Competitiveness versus accountability?

There have been warnings that a switch by the SEC would unleash a lobbying war. Shareholder advisers Minerva Analytics wrote: “Once released, the proposal will trigger an intense lobbying battle.” Minerva predicts Republicans will pitch the decision as a “competitiveness issue”. Meanwhile, investors will argue it is a “transparency and accountability issue”.

Reuters reported Sam Rines of WisdomTree Asset Management saying: “Any established company that makes this shift will pop up on the screen of active investment managers and be a candidate for being downsized or removed from portfolios, or have valuations reconsidered.”

Observers believe boards may be reluctant to pivot to semi-annual reporting because of the pressure from investors.

However, a key argument for the change is that it helps reduce a management team’s focus on short term results and encourage longer term thinking, a quality many investors value.

The SEC’s chair, Paul Atkins, writes that deciding on “reporting cadence”, a company might take into account: the costs and management time involved in preparing quarterly reporting versus semi-annual reports, expectations of investors, potential effects on the cost of capital, the stage of its business maturity, the business model, and other forms of disclosure.

He adds that the reporting changes are “just the first step of the larger, comprehensive effort to review and reshape the current SEC rules governing public companies with respect to their ongoing reporting obligations and their ability to raise capital in the public markets.”