As we previously posted, the Securities and Exchange Commission had announced that at today's open meeting the Commission would, among other things, consider a request for comment regarding earnings releases and the frequency of periodic filings. Well, yesterday, the Commission released the Request for Comment.
This is not the first time that the Commission has considered the frequency of periodic reporting. In fact, from time to time, Commissioners and representatives of the Commission’s Division of Corporation Finance have questioned whether quarterly or semi-annual reporting is more appropriate for public companies. However, following comments earlier in the year regarding the burdens placed on reporting companies as a result of the quarterly reporting requirement and the focus on short-termism that may result from quarterly earnings announcements, the Commission had been urged to conduct a study on these matters. The Request for Comment solicits information regarding the frequency of reporting; suggestions regarding simplifying the process by which investors access quarterly information; an option for companies that issue earnings releases to meet their quarterly report requirements through an enhanced release; and whether quarterly reporting or quarterly guidance fosters a short-term outlook.
A more detailed legal update will follow.
Here is a link to the Commission’s Request: https://www.sec.gov/rules/other/2018/33-10588.pdf.
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