According to Forbes, U.S. financial regulators are preparing to modify or rescind the 55-year-old rule requiring public companies to issue formal financial reports every 90 days, with full implementation expected by 2028. The Securities and Exchange Commission originally enacted quarterly reporting in 1970, but the U.S. now stands nearly alone among advanced economies after the European Union abandoned quarterly reporting in 2013, the UK repealed its requirement in 2014, Singapore ended its 17-year experiment in 2020, and Japan concluded its quarterly regime this year. Surveys consistently reveal business leaders’ concerns about the cost and distraction of short-cycle reporting, with evidence showing companies sacrifice long-term strategic investments and alter accounting schedules to meet quarterly targets. Academic studies indicate semiannual reporting may actually improve company performance and financial information quality while reducing the “Earnings Game” phenomenon that creates abnormal volatility and market manipulation opportunities.
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The Stakeholder Revolution: Who Wins and Loses
The shift away from quarterly reporting represents more than regulatory change—it fundamentally redistributes power and influence across the corporate ecosystem. For corporate leadership teams, this means liberation from the 90-day treadmill that has historically forced suboptimal decisions around product launches, R&D timing, and capital allocation. The experience of Unilever and other European companies that voluntarily maintained quarterly reporting after mandates lifted provides compelling evidence: executives report making better long-term decisions without quarterly earnings pressure. However, this freedom comes with increased responsibility—CEOs and CFOs will need to develop new communication strategies to maintain investor confidence without the crutch of frequent financial validation.
For institutional investors and analysts, the landscape transforms dramatically. The traditional quarterly earnings season—with its predictable cadence of preparation, guidance, and reaction—gives way to a more nuanced approach to company evaluation. Large asset managers like BlackRock and institutional investors may actually benefit from reduced noise, allowing deeper focus on fundamental business health rather than quarterly performance theater. As BlackRock’s comments to the SEC suggested, the current “culture of quarterly earnings hysteria” often obscures more meaningful long-term indicators. However, quantitative funds and high-frequency traders who thrive on earnings volatility may face significant strategy adjustments.
The Retail Investor Paradox: Transparency vs. Information Overload
Individual investors face a complex trade-off in this new reporting environment. While critics argue less frequent reporting reduces transparency, the reality is more nuanced. The current quarterly system creates what behavioral economists call “attention myopia”—focusing investor attention on short-term metrics that may not reflect long-term value. Retail investors often lack the resources to properly contextualize quarterly results, making them vulnerable to the very market manipulation and volatility that quarterly reporting exacerbates. The European experience suggests semiannual reporting, when combined with continuous material updates, may actually level the playing field by reducing the information advantage of professional analysts who can parse quarterly subtleties.
However, the transition period poses significant challenges for individual investors accustomed to the quarterly rhythm. As Barrons analysis indicates, the move requires developing new evaluation frameworks beyond earnings-per-share obsession. The danger lies in potential information gaps during the longer intervals between formal reports, which could increase reliance on potentially misleading interim updates or social media speculation. Companies will need to develop robust continuous disclosure practices to prevent creating information vacuums that disadvantage smaller market participants.
Global Capital Markets Realignment
The SEC’s move represents a remarkable convergence with international standards rather than American exceptionalism. As detailed in the EU’s 2013 Transparency Directive, the global trend recognizes that sustainable value creation requires reducing short-term pressures. This alignment could have profound implications for cross-border investment flows and corporate governance standards. Companies considering IPOs may find the U.S. market more attractive with reduced reporting burdens, potentially reversing the trend of companies staying private longer to avoid quarterly scrutiny.
The international evidence from markets that have already transitioned provides crucial insights. The UK’s experience—documented in the Kay Review—shows that corporate investment levels remained stable after quarterly reporting ended, contradicting fears that less frequent disclosure would reduce capital discipline. Meanwhile, European companies that switched to semiannual reporting demonstrated improved financial reporting quality with higher accruals quality and reduced manipulation, suggesting the quarterly cycle itself may incentivize financial engineering rather than transparent reporting.
Industry-Specific Consequences and Adaptation Challenges
The impact of reduced reporting frequency will vary dramatically across sectors. Technology companies, particularly those investing heavily in long-term AI infrastructure as mentioned in the source, may benefit most from reduced pressure to justify massive R&D spending every quarter. However, cyclical industries like retail and automotive may face different challenges—their businesses naturally operate on seasonal patterns that align poorly with either quarterly or semiannual reporting, potentially requiring more sophisticated communication strategies.
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The transition will also test corporate governance structures and board oversight mechanisms. Without quarterly financial checkpoints, directors will need to develop new metrics and monitoring systems to ensure management accountability. This could accelerate the adoption of ESG reporting and other non-financial indicators as complementary performance measures. The experience of Norwegian companies after their 2017 shift away from quarterly reporting suggests that boards become more actively engaged in strategic oversight when freed from quarterly earnings management concerns.
As the SEC moves toward implementation by 2028, the most successful companies will be those that proactively develop robust communication frameworks that provide meaningful updates without reverting to quarterly earnings guidance. The era of managing to quarterly numbers may be ending, but the need for transparent, substantive investor communication has never been greater.
