US regulators want to make corporate earnings reports less frequent, but investors have doubts
No federal rule proposal has ever generated so much opposition.
The Securities and Exchange Commission (SEC) has proposed a change to corporate earnings reporting, sparking widespread opposition. Currently, companies must disclose their earnings every three months, a rule that has been in place since 1970. The SEC's new proposal would allow companies to report their earnings only every six months, reducing reporting requirements and potentially lowering compliance costs.
However, many investors and industry groups argue that this reduction in reporting frequency could negatively impact transparency and increase the cost of capital for companies. Over 280,000 letters of opposition have been submitted to the SEC, with most coming from retail and individual investors. Some express concern that less frequent reporting would make it harder to monitor companies' performance and decision-making, while others warn that it could lead to higher rates of return required by investors due to reduced transparency.
The SEC is still evaluating the feedback before deciding on the final rule, which is expected to be implemented by late 2026.
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