SEC Plans to Eliminate Quarterly Reporting: Market Impact and Regulatory Analysis

This analysis is based on the Forbes report [1] published on November 2, 2025, which examines the SEC’s planned modification of the 55-year-old quarterly reporting rule for public companies.

The SEC, under Chair Paul Atkins, is preparing to eliminate mandatory quarterly reporting requirements in favor of semiannual reports, with implementation expected by late 2026 and full adoption by 2028 [1][2]. This regulatory shift follows President Trump’s September 15, 2025, directive calling for revised reporting rules to reduce burdens and counter short-term thinking [2]. The change would align U.S. markets with global practices already adopted by the EU, UK, Japan, Singapore, and other major economies [1].

Current market conditions show positive momentum, with major indices posting gains over the past month: S&P 500 (+2.79%), NASDAQ Composite (+4.95%), Dow Jones (+2.94%), and Russell 2000 (+1.37%) [0]. However, Technology (-1.74%) and Utilities (-2.00%) sectors declined, while Energy (+2.81%), Financial Services (+1.38%), and Real Estate (+1.77%) led gains [0].

: Contrary to theoretical concerns, empirical studies from EU markets reveal no meaningful performance differences between quarterly and semiannual reporters. A Goldman Sachs analysis of Stoxx 600 companies found no significant variations in return on equity, net profit margins, EPS growth, or price-earnings ratios [1].

: Semiannual reporting is associated with improved information quality metrics, including higher accruals quality, reduced earnings manipulation, better earnings persistence, and more precise pre-announcement information for investors [1]. This counterintuitive finding suggests that less frequent reporting may actually enhance overall information reliability.

: Survey data shows 78% of U.S. CFOs admit to sacrificing long-term value to smooth quarterly earnings, with 40% willing to offer customer discounts to accelerate revenue recognition [1]. However, UK studies found no statistically significant investment level changes when quarterly reporting was imposed (2007) or removed (2014) [1].

: The transition faces several uncertainties including whether semiannual reporting will be mandatory or optional, how Form 8-K material event disclosures will integrate with the new schedule, and potential legal challenges during the rulemaking process [2]. The SEC must follow formal procedures including public comment periods that could delay or modify implementation [2].

: Reduced reporting frequency may create information asymmetry advantages for sophisticated institutional investors with better management access [1][3]. Retail investors could face information disadvantages, though empirical evidence from other markets shows no meaningful impact on capital costs [1].

: NYSE and Nasdaq leadership support the reforms, citing reduced compliance costs and decreased “friction, burden, and costs associated with being a public company” [1]. The change could eliminate the “Earnings Game” distortions characterized by abnormal volatility and mispricing around quarterly announcements [1].

: Seasonal businesses may benefit from semiannual reporting that provides more consistent business pictures, while high-growth technology companies might face challenges communicating rapid progress with less frequent updates [3].

The evidence suggests transitioning from quarterly to semiannual reporting is unlikely to harm market functioning or corporate performance, based on international experiences [1]. The reform may reduce short-termist pressures while potentially improving information quality, though careful monitoring will be essential during the transition period [1][2].

Key monitoring factors include the SEC rulemaking timeline, market volatility patterns around earnings announcements during transition, company adoption patterns (if optional), international investor responses, and liquidity impacts on trading volumes and bid-ask spreads [1][2]. The regulatory change represents a fundamental shift in U.S. capital markets requiring adaptation from companies, investors, and intermediaries [1].