The SEC is mulling changes to the quarterly reporting requirements that have been the heartbeat of American markets for decades—and yes, former President Trump's past complaints about the system apparently sparked the conversation.
SEC Chair Atkins announced yesterday that the Commission is taking a fresh look at the reporting schedule that has corporate executives perpetually caught in what feels like an endless hamster wheel of financial disclosures.
Look, we've seen this movie before. The quarterly earnings ritual has become something of a sacred cow in American business—complete with its predictable cast of characters. There's the CEO reciting carefully rehearsed optimism, analysts asking pointed questions they know won't get real answers, and investors trying to decode whether "challenging headwinds" means "we're totally screwed" or just "slightly behind projections."
Trump famously called for an end to the quarterly system back in 2018, suggesting America should follow Europe's lead with biannual reporting instead. At the time, many dismissed it as just another presidential tweet storm, but apparently the idea stuck around longer than most expected.
I've covered earnings seasons since the early 2010s, and I can tell you they've gotten increasingly theatrical. Companies now treat these reports like mini-product launches, complete with slick presentations and messaging that's been focus-grouped to death.
"The quarterly treadmill creates perverse incentives," explained Jerome Wilson, a corporate governance expert I spoke with yesterday. "Companies—especially those with ambitious growth targets—end up making decisions that look good for the next 90 days but might be destructive in the long run."
But here's where it gets complicated.
Despite all the complaints about "short-termism," there's surprisingly little hard evidence that quarterly reporting actually causes the problem. When researchers have studied markets that switched reporting frequencies, the impact on corporate investment patterns turned out to be... well, kinda negligible.
The real culprits? Executive compensation packages tied to short-term stock performance, impatient investors, and—let's be honest—basic human psychology that makes us terrible at delaying gratification. We want results now, not later. (And by "we," I mean literally everyone involved in this system.)
The whole debate creates some fascinating political alignments. Progressive Wall Street critics who worry about short-term profit pressures find themselves nodding along with conservative business leaders who just want less regulation. Strange bedfellows, indeed.
What might change actually look like? Sources inside the SEC suggest we're more likely to see a tiered approach than a complete overhaul. Smaller public companies might get relief while S&P 500 firms would keep their current schedules.
"Even if reporting requirements changed, most major companies would still share quarterly numbers voluntarily," noted Maria Sanchez, portfolio manager at Clearwater Investments. "The market demands that information. You can't put that genie back in the bottle."
Meanwhile, on trading floors across the country? A collective shrug. The markets have barely reacted to this news, suggesting that investors either don't believe meaningful change will happen or don't think it would significantly impact how they evaluate companies.
That said, if you've ever spent time in a corporate finance department during the last two weeks of a quarter, you know there's a special kind of pressure that descends—a frantic energy devoted to making numbers look just right before the reporting deadline. Whether that pressure produces better business outcomes remains... questionable at best.
For now, CFOs should probably keep their spreadsheets handy. Quarterly reporting isn't dead yet, and the regulatory pendulum swings slowly. Very slowly.
But if there's one thing I've learned watching Washington and Wall Street interact over the years, it's this: ideas that seem momentarily dead have a curious way of resurfacing when the right confluence of political will and market conditions align.
And the debate about how often companies should open their books? That one's as old as the markets themselves.
