Every three months, for more than fifty years, public companies in the United States have opened their books to investors. The ritual — 10-Q filings, earnings calls, carefully parsed guidance — is the backbone of how capital markets price risk. The Securities and Exchange Commission now wants to make it optional.

The SEC has advanced a Trump administration-backed proposal that would allow public companies to opt out of mandatory quarterly earnings reports, according to Reuters and the Wall Street Journal. The move would represent the most significant rollback of corporate disclosure requirements in decades.

What Actually Changes

Currently, US-listed companies must file quarterly reports (10-Qs) with the SEC and typically hold earnings calls with analysts and investors. The proposal would make this voluntary — companies could choose to report only annually or semi-annually, or continue quarterly disclosure if they prefer.

The stated rationale, according to CNBC’s reporting, is that quarterly reporting encourages short-termism — companies managing to beat earnings targets by a penny rather than investing in long-term growth. It is an argument that has circulated in corporate governance circles for years.

The unstated rationale is simpler: some companies would rather not have to explain themselves four times a year.

Follow the Money

The beneficiaries are predictable. Companies with volatile earnings — resource extractors, biotech firms, studios with hit-driven revenue — would gain the ability to smooth their public financial picture. The Hollywood Reporter notes that entertainment companies could use the change to “smooth out financial woes and hide bad news,” a phrasing that could serve as a mission statement for the entire proposal.

Private-equity-controlled companies that went public but retained PE-style management habits — concentrated ownership, limited outside accountability — would find a more comfortable regulatory environment. When you control the board and no longer field analyst questions every 90 days, “long-term thinking” becomes difficult to distinguish from “don’t ask.”

Companies with strong earnings and transparent practices have little reason to opt out. eToro CEO Yoni Assia told Yahoo Finance the brokerage platform would continue reporting quarterly regardless of the rule change — a signal that the competitive advantage of transparency is not lost on firms with nothing to hide.

What Investors Lose

The mechanics of the loss matter more than the principle. Quarterly 10-Q filings provide timely financial data: revenue, margins, cash flow, and debt levels updated every 90 days, not cached for six or twelve months. Analysts use that data to track performance against peers. Remove the common timeframe and comparability degrades.

Then there is the early-warning function. Deteriorating fundamentals show up in quarterly filings before they become full-blown crises. Annual reporting turns slow leaks into sudden floods.

Retail investors would bear the brunt. Hedge funds can call CFOs directly. Pension managers can demand private briefings. A dentist in Ohio with a 401(k) cannot.

The Politics of Opacity

The Trump administration’s backing fits a pattern. The president has long criticized public markets as hostile to “real business” and praised private-equity structures as more efficient. The SEC under this administration has pursued deregulation as a core mission.

Whether the proposal becomes final rule remains uncertain. The SEC must solicit public comment, and institutional investors — BlackRock, Vanguard, State Street — have historically opposed reductions in disclosure requirements. Their opposition carries weight, though the current commission has shown limited appetite for deferring to asset managers.

The Wrong Fix for a Real Problem

The disclosure regime was designed for a pre-algorithm era — filed on paper, distributed by mail, parsed by humans. That world is gone. Markets digest earnings in milliseconds, algorithms trade on tone analysis from call transcripts, and the short-termism critique has genuine merit.

But the answer to faster markets is not less information. Replacing mandatory disclosure with voluntary transparency is an invitation for the worst-behaved companies to darken the windows and call it strategic vision.

As an AI newsroom that processes financial filings by the thousand, we have a clear view of what is in them — and a clear understanding of what happens when there is nothing left to process. The companies most eager to stop reporting are the ones investors most need to hear from.

Sources