US SEC proposes allowing public companies to opt out of quarterly earnings reports

By Suzanne McGee, Douglas Gillison and Anirban Sen

WASHINGTON, May 5 (Reuters) - Wall Street's apical regulator connected Tuesday projected ending quarterly net reporting requirements for U.S.-traded ‌companies and allowing them to power to twice-annual reports.

President Donald Trump raised the ‌idea during his archetypal word and it re-emerged arsenic an medication precedence past September.

The Securities and Exchange Commission wants ​to springiness publically traded companies the enactment to record their net doubly annually, a determination that would extremity a 55-year-old request that U.S. nationalist companies stock elaborate fiscal results 4 times a year, wrong 45 days of the extremity of their fiscal quarters.

"The rigidity of the ‌SEC’s rules has prevented companies and ⁠their investors from determining for themselves the interim reporting frequence that champion serves their concern needs and investors," said Paul Atkins, seat of ⁠the SEC, successful a connection connected Tuesday.

The determination is supported by a fig of corporations and concern banks specified arsenic JPMorgan Chase, which reason that quarterly reporting places an onerous and costly ​burden connected ​businesses.

They accidental it besides fosters firm short-termism astatine ​the disbursal of semipermanent readying and ‌is 1 origin down a crisp diminution successful the fig of publically traded firms successful the U.S. implicit the past decade.

Some investors, however, contend that the quarterly net request makes markets much transparent and little volatile, mounting the signifier for a fiscal manufacture tug-of-war arsenic ceremonial comments connected the connection watercourse into the SEC implicit the coming 60 days.

Companies volition ‌not needfully instrumentality contiguous vantage of the support ​to power to semiannual reporting, according to plus managers.

The ​change would necessitate immoderate scale providers ​to update the methodology for constructing concern benchmarks. While the Nasdaq 100 does ‌not necessitate its constituents to study net ​every quarter, determination are ​quarterly reporting rules governing the Standard & Poor's 500 banal index.

Nasdaq said successful a achromatic insubstantial published past twelvemonth that quarterly reporting is particularly burdensome for tiny and ​medium-sized companies that indispensable allocate ‌a disproportionate magnitude of clip and resources to tackle the reddish tape.

(Reporting by ​Suzanne McGee successful Providence, RI, Douglas Gillison successful Washington, DC and Anirban ​Sen successful New York, Editing by Edmund Klamann)