The U.S. Securities and Exchange Commission (SEC) is considering a proposal to allow public companies to report earnings twice a year instead of quarterly, a change that would end a 55-year tradition in U.S. financial markets. This initiative, which would fundamentally alter how financial results are communicated, is being prioritized by the SEC, with Chairman Paul Atkins expressing support for the idea. The concept was championed by President Donald Trump, who publicly advocated for the shift on September 15, 2025, via a social media post, arguing it would “save money, and allow managers to focus on properly running their companies”.
The debate surrounding quarterly versus semi-annual reporting has been ongoing for some time. U.S. law has mandated quarterly earnings reports for all publicly traded companies since 1970, a practice that followed an earlier period of semi-annual reporting which began in 1955. President Trump previously raised this idea in 2018 during his first term, prompting the SEC to solicit public comment, but the proposal did not advance further at that time. However, the current push appears to have more momentum, with SEC Chairman Atkins confirming on September 19, 2025, that the SEC will propose a rule change. The Long-Term Stock Exchange also formally petitioned the SEC on September 30, 2025, to amend quarterly reporting requirements.
Arguments for Less Frequent Reporting
“Less frequent reporting would also align the U.S. with reporting standards in other major markets, such as the UK and the European Union, which have moved away from mandated quarterly reporting.”
Proponents of semi-annual reporting, including President Trump, argue that it would reduce the financial and time burdens associated with preparing frequent reports, freeing up companies to focus on long-term growth and strategy rather than short-term earnings targets. This perspective suggests that quarterly reporting can lead to “short-termism,” where companies prioritize immediate profits to meet forecasts, potentially at the expense of sustainable long-term investments. Less frequent reporting would also align the U.S. with reporting standards in other major markets, such as the UK and the European Union, which have moved away from mandated quarterly reporting. For more insights on market changes, explore our related Tech news.
SEC Eyes Semi-Annual Earnings Reports: Concerns and Challenges
However, the proposal faces significant opposition and raises concerns about transparency and market efficiency. Critics, including some investors, worry that less frequent disclosures could lead to a loss of transparency, making it harder for investors to get timely information about a company’s health and potentially increasing market volatility. There are fears that companies might delay or obscure negative news if they only have to report every six months. Some experts also believe that while the cost savings might be touted, the actual reduction in expenses for companies might not be as substantial as anticipated, as many large companies might continue to report quarterly voluntarily due to investor demand. The potential impact on analyst coverage and the risk of increased shareholder litigation are also considerations.
The Road Ahead for Reporting Standards
If the rule change to allow semi-annual earnings reports is approved, it would likely involve a public comment period of at least 30 days, allowing various stakeholders to provide feedback. While a shift to semi-annual reporting could offer companies greater flexibility, it would also require them to re-evaluate their investor relations strategies and how they communicate financial information to the market between mandated reports. The ultimate decision will weigh the benefits of reduced burden against the potential costs to market transparency and investor confidence.
