Former President Donald Trump has reignited the debate over corporate earnings reporting frequency, advocating for a shift from quarterly to semi-annual updates. This proposal, aimed at reducing costs and fostering a long-term business focus, has garnered support from industry leaders but raises concerns among investors regarding transparency and market efficiency. The SEC has indicated it is prioritizing the review of this long-standing mandate.

U.S. Corporate Reporting Standards Under Review Amidst Calls for Semi-Annual Earnings

U.S. equities face a potential structural shift in corporate disclosure as former President Donald Trump renews his call for publicly traded American companies to transition from mandatory quarterly earnings reports to a semi-annual cycle. This proposal, initially introduced in 2018 and reiterated on September 15, 2025, has swiftly captured the attention of regulators and market participants, prompting a re-evaluation of reporting standards that have been in place for over five decades.

The Event in Detail

President Trump’s rationale for the proposed change centers on the belief that less frequent reporting would significantly reduce operational costs for companies and free management from the constant pressure of short-term results. He argues that this would enable executives to concentrate more effectively on long-term strategic planning and business operations. The current mandate from the Securities and Exchange Commission (SEC) requires corporations to report financial statements every 90 days.

Remarkably, the SEC has indicated that it is prioritizing this proposal. Under Chairman Paul Atkins, the SEC’s Spring 2025 agenda reflects a marked shift towards deregulation, aiming to reduce disclosure and compliance burdens for companies. This alignment positions the U.S. closer to reporting practices observed in the United Kingdom and several European Union countries, where semi-annual financial updates are the standard. However, many large European firms still voluntarily provide quarterly updates to maintain investor engagement and attract global capital.

Analysis of Market Reaction

The proposition has generated a divided response across the financial ecosystem. Industry leaders have largely welcomed the idea, emphasizing the potential for cost savings and improved strategic focus.

Nasdaq CEO Adena Friedman expressed support, stating that "less frequent reporting would reduce friction, burden, and costs for companies."

Similarly, the U.S. Chamber of Commerce and Business Roundtable have previously advocated against the constraints of quarterly reporting, arguing it diverts corporate attention from long-term objectives. Influential business figures such as Jamie Dimon and Warren Buffett have also voiced concerns over quarterly reporting fostering "short-termism," which they believe can be detrimental to the broader economy.

Conversely, investor groups and critics express significant apprehension. Concerns are rooted in the potential for reduced transparency and increased market volatility. There is a prevalent worry that extended reporting periods could allow companies to delay or obscure unfavorable financial news, potentially eroding investor confidence and making U.S. stocks less attractive. Critics argue that timely and accurate financial information is crucial for informed investment decisions and market efficiency.

Broader Context and Implications

The debate over reporting frequency is not merely administrative; it touches upon fundamental aspects of market valuation and investor confidence. U.S. stocks historically trade at a premium compared to international counterparts, a phenomenon often attributed to the country’s stringent reporting standards and robust investor protections. For example, the S&P 500 currently trades at a price-to-earnings (P/E) ratio of 24.3 times expected earnings, notably higher than Europe's STOXX 600, which trades at 15.28 times.

Furthermore, market data reveals a noticeable uptrend in earnings day volatility for individual stocks. Since 2015, the average one-day move on earnings has steadily increased, nearing +/-7% in 2024 and 2025. This highlights how significant a portion of a stock’s overall performance is concentrated around its quarterly earnings release, underscoring the importance of these regular disclosures.

The historical context also indicates that quarterly reporting was not always mandatory in the U.S., with the requirement being instated in 1970. This suggests that the current system is not immutable and can be reformed if deemed beneficial for the broader market.

Expert Commentary

Objective analysis underscores the tension between corporate flexibility and investor transparency.

Jill Fisch of the University of Pennsylvania cautions that "delaying the disclosure of economically significant events could reduce market efficiency."

The CFA Institute's Research and Policy Center reinforces this sentiment, stating that "Timely and accurate financial information is the lifeblood of financial markets," and emphasizing that quarterly reporting ensures a more level playing field for information access, which in turn fosters investor confidence and optimized capital allocation.

A professional investor echoed these concerns, noting that six months is "too long to remain in the dark," given the rapid pace of macroeconomic changes that can occur in such a period.

Looking Ahead

While the SEC appears supportive of exploring Trump’s proposal, the rulemaking process is inherently deliberate. The SEC’s Spring 2025 agenda outlines proposed rulemakings scheduled for April 2026, implying that any final rules would likely be enacted in late 2026 or 2027, with effective dates potentially extending into 2027. This timeline suggests a phased approach to any significant shift in reporting requirements.

Crucially, even if a semi-annual reporting mandate is adopted, experts anticipate that many companies, particularly larger ones seeking to attract and retain global investors, may continue to provide voluntary quarterly updates, mirroring practices seen in the EU. The ongoing debate will hinge on striking a delicate balance between reducing corporate burdens and preserving the transparency vital for investor confidence and efficient capital markets. Market participants will closely monitor the SEC's progression and industry responses in the coming months as this potential paradigm shift unfolds.