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The Securities and Exchange Commission is working on a plan to move to semi-annual reporting for U.S. public companies from the current quarterly accounts, a practice that goes back half a century.
That would be a major change for CFOs whose jobs in part revolve around the three-month cadence of financial reporting. The plan still has administrative hurdles to clear: Once published, it will be subject to a public comment period and SEC vote. The idea has been endorsed by President Trump.
The president has argued that the proposal would help U.S. companies, but critics raise the prospect of less transparency for investors and the public at large. The WSJ’s Corrie Driebusch reported the news earlier this week, so we checked in with her for the back story.
How did your reporting of this idea come about?
The idea to move from quarterly earnings reporting to semi-annual first crossed my desk in September, when I learned that an exchange planned to petition the SEC on the topic. The exchange, the Long-Term Stock Exchange, at the time argued that the idea could save companies millions of dollars and allow executives to focus on long-term goals.
After our story on the planned petition was published, President Trump voiced his support for the idea, posting on Truth Social that companies should not be forced to report financial results every three months.
Why is this story important for companies and company leaders?
For the past 50 years, publicly traded companies in the U.S. have reported their financial results every quarter, a requirement some executives have complained is onerous and costly. Some private-company executives also use the quarterly reporting requirement as an excuse as to why they stay private.
What do you see happening next?
Our reporting shows that the SEC could publish a proposal to allow optional semi-annual reporting as soon as next month. Once the proposal is published, it will be subject to a public comment period, which typically lasts at least 30 days. After that, the SEC will look over the comments and vote on it. There are no guarantees it will ultimately happen.
President Trump briefly explored the idea of moving to semiannual earnings reports during his first term, but the effort went nowhere.
In your reporting, have you found that major index funds or investors are signaling they will penalize companies that stop reporting quarterly?
Moving away from mandated quarterly reporting is not without precedence. Europe and the U.K. have done away with quarterly reporting requirements, but many companies there still choose to report four times a year.
Many investors also say the reason they like investing in public markets is because of their transparency. If companies begin to only shed light on their finances every six months versus every three months, some investors may choose to move their money elsewhere.
✏️ Join the conversation. CFO readers, do you think the U.S. will shift to semi-annual reporting, and how would that change your role? (Hit Reply to this newsletter, and we may feature your comments.)
Editor’s note: CFO Council members will be weighing that question and more next week at our WSJ CFO Council Summit next week in Palo Alto, where WSJ Leadership Institute President Alan Murray will be interviewing Bill Harts, the Long-Term Stock Exchange’s chief executive officer, about the potential move.
Read on below for more details about our gathering.
—Walden Siew
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