Investment professionals oppose SEC semiannual reporting plan

Investing.com -- Professional investors are pushing back against a Securities and Exchange Commission proposal to reduce financial reporting requirements for US public companies, according to a survey released Wednesday.

Nearly two-thirds of investment analysts and portfolio managers who responded to a CFA Institute survey said the SEC should keep mandatory quarterly financial reporting for public companies rather than moving to semiannual reporting.

Matthew Winters, a senior director at CFA Institute, said in a statement that "investors globally — not just in the US — continue to view quarterly reporting as an essential feature of transparent, efficient, and trustworthy capital markets."

Approximately 70% of survey participants oppose allowing companies to determine or change their own reporting frequency. Nearly 85% expressed concerns about the impact on comparability between companies if reporting frequency and format become flexible.

The survey also found that support for semiannual reporting was lower when limited to smaller or recently listed companies compared to adoption across all companies. Investors cited the same concerns about comparability and complexity regardless of company size.

The SEC released its proposal in May that would permit companies to eliminate quarterly financial reports and file twice yearly instead. Companies would retain the option to conduct quarterly earnings calls and provide guidance.

President Donald Trump requested the change in September, stating that a six-month reporting schedule would reduce costs for companies and enable managers to concentrate on business operations. Trump proposed the same concept during his previous term as president. The SEC examined the idea in 2018 but did not implement changes.

Supporters of the current plan, including Nasdaq, stated that reduced reporting frequency could decrease time and cost burdens on businesses and permit executives and boards to prioritize longer-term performance over quarterly financial targets.

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