Wall Street may face a major change after 55 years! SEC is considering cancelling the quarterly reports of listed companies, Trump's "semi-annual report" idea is moving forward.

The highest regulatory agency on Wall Street proposed on Tuesday to allow U.S. listed companies to switch from quarterly financial reports to semi-annual reports. This continues an idea that President Trump has been personally pushing for throughout his two terms in office. The proposal from the Securities and Exchange Commission (SEC) would end a 55-year-old regulation that requires U.S. public companies to share detailed financial performance four times a year within 45 days after the end of each quarter. This would be a significant change in corporate governance in the U.S. and is likely to face opposition from some investors. SEC Chairman Paul Atkins said in a statement on Tuesday, "The inflexibility of SEC rules has hindered companies and their investors from deciding the most appropriate reporting frequency for their business needs and investors." This move has been supported by exchanges and some large corporations, including JPMorgan Chase. These companies argue that quarterly reports bring heavy cost burdens to businesses. They believe that quarterly reporting also fosters a "short-termism" where companies sacrifice long-term planning for short-term gains, and is one of the reasons for the sharp decline in the number of U.S. listed companies over the past decade. However, some investors believe that quarterly earnings requirements make the market more transparent and less volatile. With comments officially pouring into the SEC in the next 60 days, a financial industry "tug-of-war" is set to begin. Brian Corbett, President and CEO of the Financial Services Forum, stated that before finalizing the proposed rules, the SEC should balance its goal of reducing administrative burdens for companies with the needs of investors who rely on timely information to assess companies and allocate capital. Among the issues raised in the feedback solicited by the SEC on Tuesday is whether the switch to semi-annual reporting will increase the risk of insider trading for companies. Additionally, the impact of this change on voluntary disclosures (such as press releases and earnings conference calls) is also being sought for feedback. An unnamed SEC official mentioned that companies opting for semi-annual reporting can still issue quarterly earnings press releases or hold earnings conference calls more frequently. "Asymmetric information" According to asset managers, many companies may not make adjustments immediately, or may not make them at all. To switch to semi-annual reporting, companies simply need to check an option in their annual financial reports submitted to the SEC. For many companies, the next opportunity to do this will be at the beginning of 2027. The proposal acknowledges potential drawbacks of semi-annual reporting, such as delaying the release of certain important information and exacerbating "asymmetric information" as some investors lack convenient access to alternative data between two financial reports. The proposal states that this may "weaken the sense of fairness, erode trust in the market, reduce market participation and liquidity." Other potential disadvantages include higher capital costs and weakened oversight of management and governance risks. An SEC official also pointed out that companies must consider the needs of investors and analysts, especially when their industry competitors are still conducting quarterly reports. This change will also require some index providers to update their methodologies. While the Nasdaq 100 index does not require its component stocks to report quarterly earnings, the S&P 500 stock index has relevant quarterly reporting rules. In a white paper released last year, Nasdaq stated that quarterly reporting is especially burdensome for small and medium-sized businesses, as they must allocate disproportionate time and resources to comply with these formalities. Mike Reynolds, Vice President of Investment Strategy at Glenmede, said, "If this measure proves to encourage IPO activity for small companies, it will be a very interesting case study."