U.S. Securities And Exchange Commission To Reduce Number Of Public Company Earnings Reports

On May 5, the U.S. Securities and Exchange Commission (SEC) released a proposed regulation that would allow public companies to report earnings just twice a year instead of the quarterly earnings schedule that is now required. (That schedule has been in place for more than 50 years.)

According to a press release, companies that elect to file semiannual reports instead of quarterly ones would file one semiannual report and one annual report for each fiscal year in lieu of three quarterly reports and one annual report. Companies could choose the interim reporting frequency that would best serve the company and its investors. Under the proposal, the filing deadline for semiannual reports on Form 10-S would be 40 or 45 days, depending on the company’s filer status, after the end of the first semiannual period of the fiscal year. The proposed rule is intended to give public companies regulatory flexibility, with the ultimate goal of enticing more businesses to go, and remain, public.

“Public companies have an obligation under the federal securities laws to provide information that is material to investors,” said SEC Chairman Paul S. Atkins in a  statement. “Yet, the rigidity of the SEC’s rules has prevented companies and their investors from determining for themselves the interim reporting frequency that best serves their business needs and investors. Today’s proposed amendments, if ultimately adopted, would provide companies with increased regulatory flexibility in this regard.”

President Donald Trump floated the idea of semiannual reports last September, and also raised it in 2018. The SEC will take comments on the proposal for 60 days.

Find more information at the proposal, and learn how to comment, at this link.