US SEC Proposes Adjusting Financial Disclosure Frequency Based on Company Size, Changing from Quarterly to Semi-Annual Reports

The U.S. Securities and Exchange Commission (SEC) is brewing a potentially game-changing reform for the American capital market, aimed at resetting information disclosure frequency based on company size to end America's mandatory quarterly reporting tradition that has lasted over 50 years.

According to market sources, the regulatory body is actively evaluating modifications to financial disclosure requirements, planning to transform mandatory quarterly disclosure into an optional choice, allowing companies to select semi-annual performance report releases. The proposal could be unveiled as early as next month.

This reform is not mere speculation; it directly responds to the Trump administration's previous call to "change corporate financial disclosure frequency from quarterly to semi-annual."

Atkins believes that the quarterly financial reporting system forces companies to excessively focus on short-term performance, which is detrimental to long-term strategic planning. Changing the disclosure frequency to semi-annually could allow companies (especially small and medium-sized enterprises) to focus more on long-term development.

Specifically, the core of the reform is to reduce corporate burden. By adjusting the disclosure cycle, it saves companies substantial time and costs, enabling corporate management to break free from complex compliance documentation work and invest more energy in long-term operational planning.

However, policy implementation still requires time. Following procedures, the SEC must first submit the draft proposal to the White House for review before it can release it to the public for comment.

Based on historical data patterns, the SEC's average rule-making cycle is approximately 18 months, meaning that even if everything goes smoothly, new regulations would not take effect until the second half of 2027.

However, market opinions vary. Supporters argue that this helps curb market "short-termism" tendencies and ease the continuing decline in the number of listed companies;

But opponents raise concerns, saying that reduced disclosure frequency will weaken market transparency, cause information asymmetry, and ultimately harm investor interests.

Overall, finding a balance between alleviating corporate burden and safeguarding investors' right to information will be key to whether this proposal can be successfully implemented.

#SEC # Corporate Financial Report Disclosure Frequency