The U.S. Securities and Exchange Commission (SEC) is in the process of making a significant rule change. If passed, this would allow publicly-traded companies to cut their earnings reports from delivering results every three months to twice a year. In a recent interview on CNBC’s “Squawk Box,” SEC Chair Paul Atkins gave us a glimpse of that change. He reiterated the intention behind the proposal to reward companies that prioritize long-term planning and strategy.
Now, the rules require that public companies report out on their profits every quarter. Moreover, as Atkins pointed out, foreign private issuers are already on a semi-annual reporting schedule. This has lead to calls to expand this practice to U.S. firms. Proponents of the measure say a six-month disclosure period will allow companies to focus on their larger business planning. This new paradigm would free them up to escape the temptations of short-termism.
Over the last several years, the business community has waged a passionate fight against the short-termism induced by quarterly reporting. It too frequently fuels a demand for myopic, immediate results. Atkins stated. This sentiment aligns with the views expressed by former President Donald Trump, who advocated for the transition to semi-annual reporting, asserting it would “save money, and allow managers to focus on properly running their companies.”
The Long-Term Stock Exchange (LTSE), a trading platform dedicated to supporting long-term corporate growth, has endorsed less frequent earnings reporting. By moving to a semi-annual schedule, businesses can better synchronize their operations cycles with sustainable long-term growth trajectories. This new approach gets them out from under the thumb of the quarterly performance expectation.
Atkins elaborated on this point, noting that the SEC could approve the proposed rule change within weeks. If it does, corporations will still have the ability to choose whether to convert to semi-annual reporting or remain on their current quarterly routine. This flexibility supports firms in selecting the reporting cadence that aligns most with their operational priorities and stakeholder interests.
Earlier this year, Norway’s sovereign wealth fund proposed similar measures to shift towards semi-annual reporting, reinforcing a growing trend among institutional investors who prioritize long-term value over immediate financial results. The SEC’s consideration of this rule change reflects a broader acknowledgment of the potential benefits of reducing the frequency of earnings disclosures.
“I welcome that posting by the president, and I have talked to him about it,” Atkins remarked regarding Trump’s advocacy for the proposal. He stressed that the industry truly has the prerogative to determine what reporting cadence is appropriate. This is a win for shareholders and public companies alike.