The U.S. SEC’s new proposal is released and plans to allow companies to change the frequency of financial report disclosure to once every six months

The U.S. Securities and Exchange Commission (SEC) has issued a proposal to allow U.S. companies to choose to disclose financial reports semiannually instead of quarterly, a move that may reduce the amount of information public companies disclose to investors. In order to improve transparency, the SEC has required listed companies to submit financial reports every quarter for more than half a century. If the proposal is passed, the requirement for mandatory quarterly disclosures for listed companies will be eliminated, but companies can still choose to continue to publish performance announcements and performance outlooks every three months.

SEC Chairman Paul Atkins said in a statement: "If ultimately adopted, the amendments proposed Tuesday will provide companies with greater regulatory flexibility."

Atkins had promised to speed up the semi-annual disclosure program after Trump called for the elimination of mandatory quarterly disclosures. Based on past experience, regulatory rulemaking usually takes about 18 months to two years to complete.

Under the proposal, companies that choose semi-annual disclosure will submit one semi-annual report and one annual report each fiscal year, replacing the three quarterly reports and one annual report that are originally required to be submitted.

Freshfields capital markets partner Erik Gerding said: "Some companies will be interested in this arrangement, but at least in the early days, more small and medium-sized market capitalization companies may choose to do this."

Critics believe that this move may allow companies to conceal adverse information, and the reduced frequency of disclosure may increase the risk of insider trading. Some investors are wary of reducing the data, especially as the SEC considers scaling back current disclosures.