SEC's Semiannual Reporting Push Ignites Deregulation vs. Transparency Debate

The Securities and Exchange Commission (SEC) has announced plans to overhaul public company disclosure requirements, a move aligned with President Donald Trump’s recent push to replace quarterly earnings reports with a semiannual reporting system. SEC Chair Paul Atkins confirmed on September 17, 2025, that the agency is drafting a formal proposal to shift public companies from quarterly to semiannual financial reporting, marking a potential end to a 56-year-old mandate established in 1970Preparing for the 2025 Proxy and Annual Reporting Season: Key Issues and Considerations | BakerHostetler^[6]. Trump, in a Truth Social post on September 15, argued that the change would reduce compliance costs and free corporate leaders from short-term pressures, enabling a focus on long-term growth strategiesSEC's Atkins Confirms Semiannual Reporting Proposal in Motion…^[5].

The current quarterly reporting system, which requires public companies to file Form 10-Qs, was initially designed to enhance market transparency following the 1929 stock market crash. Trump’s proposal, however, has gained renewed traction under the SEC’s new leadership. Atkins described the shift as part of a broader deregulatory agenda aimed at making U.S. capital markets more attractive for initial public offerings (IPOs) and listingsPreparing for the 2025 Proxy and Annual Reporting Season: Key Issues and Considerations | BakerHostetler^[6]. The SEC staff is reportedly preparing a rulemaking proposal that would eliminate the quarterly requirement, though the process will require a public comment period and a final vote by the commission.

Supporters of the change, including business groups and the Long-Term Stock Exchange (LTSE), argue that quarterly reporting fosters a short-term mindset among executives, who often prioritize meeting Wall Street expectations over long-term strategic planningSEC's Atkins Confirms Semiannual Reporting Proposal in Motion…^[5]. The LTSE recently filed a petition with the SEC to allow companies to report earnings semiannually, with the option to file quarterlySEC's Atkins Confirms Semiannual Reporting Proposal in Motion…^[5]. Proponents also cite the European Union and the United Kingdom as models, where semiannual reporting is standard, and companies can voluntarily issue quarterly updatesTrump says companies should no longer be forced…^[7].

Critics, however, warn that reducing reporting frequency could erode transparency and investor confidence. Professional investor groups, including the CFA Institute, argue that quarterly disclosures provide critical financial updates and help identify emerging risksSEC's Atkins Confirms Semiannual Reporting Proposal in Motion…^[5]. They contend that extending the reporting cycle may obscure red flags, such as liquidity issues or accounting irregularities, and could lead to increased regulatory scrutiny or litigationTrump says companies should no longer be forced…^[7]. SEC Chief Accountant Kurt Hohl acknowledged the debate, noting that the commission aims to simplify financial disclosures while maintaining investor protectionsPreparing for the 2025 Proxy and Annual Reporting Season: Key Issues and Considerations | BakerHostetler^[6].

The SEC’s initiative is part of a larger effort to streamline disclosure rules and reduce regulatory burdens. Atkins outlined additional priorities, including accommodations for smaller companies, simplified executive compensation disclosures, and modernized shareholder proposal processesPreparing for the 2025 Proxy and Annual Reporting Season: Key Issues and Considerations | BakerHostetler^[6]. These measures align with Trump’s broader "make IPOs great again" campaign, which seeks to address perceived regulatory barriers to public market participationPreparing for the 2025 Proxy and Annual Reporting Season: Key Issues and Considerations | BakerHostetler^[6].

The proposed rule change faces significant hurdles, including legal challenges and internal resistance. Critics argue that the SEC lacks clear statutory authority to eliminate quarterly reporting, and any rulemaking could be contested under the Administrative Procedure ActTrump says companies should no longer be forced…^[7]. Despite these challenges, the Trump administration’s active engagement with regulatory agencies suggests a likelihood of swift action, with final approval contingent on the SEC’s ability to navigate procedural and legal complexities.