The SEC is preparing a proposal that would allow public companies to release earnings reports twice a year instead of quarterly, according to WSJ.
Talk about making the quarterly requirement optional for those over 50 gained steam last year as companies bemoaned the cost and burden of preparing quarterly earnings. This requirement is seen as one of the reasons why some companies remain private for longer.
Those in favor of the change hope the semiannual requirement will encourage more companies to go public by making it easier to maintain public company status. SEC Chairman Paul Atkins and President Trump have both expressed support for the idea. The Journal reported that the SEC has already begun discussions with exchanges about potential next steps, but any changes are still a long way off.
When the SEC announces its proposal in the coming weeks, it will be subject to a public comment period and vote. There is precedent for this rule, the Journal notes. The European Union and the United Kingdom abolished quarterly reporting obligations in favor of semi-annual disclosures about a decade ago, but many companies in both markets still optionally report quarterly.
