The SEC’s eyes change to biennial reports

The SEC is working on a proposal to allow public companies to issue earnings reports twice a year instead of quarterly, of the WSJ.

Discussions about creating a 50-plus year quarterly earnings requirement have already started last year, with companies complaining about the cost and burden of preparing quarterly earnings. This requirement is also thought to be one reason why some companies choose to remain private for long periods of time.

Proponents of the reform hope that the two-year requirement will encourage more companies to go public by making it easier to maintain public records. SEC Chairman Paul Atkins and President Trump have both said they support the proposal. The magazine reported that the SEC has already started discussions and exchanges about the possible solutions, although any changes are still far away.

If the SEC releases its proposal — which could come within the next few weeks — it will be subject to a public comment period and then a vote. There is precedent for this law, says the Journal. The European Union and the UK phased out mandatory quarterly reporting about a decade ago in favor of short-term disclosure, although many companies in both markets still report quarterly by choice.