The SEC has proposed amendments to allow businesses to report semi-annually. What are the benefits?

The U.S. Securities and Exchange Commission (SEC) on Ma. 5 proposed amendments that would allow public companies to file financial reports every six months instead of quarterly.

If the changes are approved, companies choosing the new format would file one semi-annual and one annual report for each fiscal year instead of three quarterly and one annual report. The flexibility provided by the proposed amendments would allow public companies to choose the frequency of interim reporting that best serves their interests and those of their investors, the SEC said in a statement.

The idea to replace quarterly reports with semi-annual reports was suggested by US President Donald Trump during his first term, and in his second term it became one of the priorities of his administration, Reuters reports. According to Trump, such a step "will save money and give the management of companies the opportunity to focus on effective management".

The initiative was supported by a number of corporations and investment banks, including JPMorgan Chase: they believe that mandatory quarterly reporting places an excessive and costly burden on businesses, Reuters reports. Supporters of the reform also point out that reports every three months push businesses to short-term decisions to the detriment of long-term strategy and may be one of the reasons for the marked decline in the number of public companies in the U.S. over the past decade, the agency notes.

Nasdaq last year emphasized that quarterly reporting is particularly hard on small and mid-cap companies, which have to spend a disproportionate amount of resources to meet regulatory requirements, Reuters recalls.

At the same time, some investors are against the changes: in their opinion, regular quarterly reporting increases market transparency and reduces volatility, Reuters noted. Against this background, a serious discussion may unfold in the industry - in the next 60 days, the regulator will gather public discussions of its proposal, the agency suggested.

This article was AI-translated and verified by a human editor