My friend Rachel texted me at 9:47 PM on Sunday night. No greeting, no context, just a Reuters link and the words "please tell me this is a joke." It was not a joke. The SEC is preparing to scrap the quarterly reporting requirement that has been the backbone of American capital markets since 1970.
I stared at my phone for a solid minute. Then I did what any reasonable person would do — I made a $7.25 glass of wine and started reading everything I could find.
Here is what I found, and more importantly, here is what it means for your actual money.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Consult a qualified financial advisor before making investment decisions. Sources include the U.S. Securities and Exchange Commission, Reuters, and academic research cited throughout.
What Is Actually Happening
According to reporting from Reuters (March 16, 2026), the SEC under Chair Paul Atkins is preparing to eliminate the requirement that publicly traded companies file 10-Q reports every quarter. Instead, companies would only need to file full reports semiannually — twice a year instead of four times.
This is not exactly a new idea. Former President Trump floated it back in 2018, and the concept has been bouncing around deregulation circles for years. But this time, it appears to have real institutional momentum behind it.
The argument from proponents is straightforward: quarterly reporting creates "short-termism." Companies make decisions to hit quarterly numbers rather than building long-term value. CEOs spend weeks every quarter preparing earnings calls instead of, you know, running the company. The administrative burden falls disproportionately on smaller public companies that can least afford it.
And look, I get it. I have worked with enough small-cap companies to know that earnings season is genuinely miserable for them. My buddy Greg manages investor relations for a mid-cap manufacturing firm — about $800 million market cap — and he told me over a 34-minute lunch that he basically loses six weeks per quarter to the reporting cycle. "That is 24 weeks a year," he said, pushing around a $14 salad. "Nearly half my working time goes to proving we are still solvent."
But here is where I start disagreeing with the SEC, and I want to be transparent about that.
Why Less Information Is Almost Never Better for Retail Investors
Let me be blunt: this proposal overwhelmingly benefits corporate executives and institutional investors at the expense of regular people who are trying to manage their 401(k)s and IRAs.
Here is why — and if you read our coverage of Nasdaq rewriting its index rules for SpaceX, you already know the SEC is not the only regulator making moves that put retail investors at a disadvantage:
The Information Asymmetry Problem
When a company reports quarterly, everyone gets the same data at the same time. Insiders know more than outsiders, sure — that is always true — but the gap narrows four times a year when 10-Qs land on EDGAR.
Switch to semiannual reporting and that gap doubles. For six months instead of three, insiders know things about their company's performance that you do not. Research from the National Bureau of Economic Research has consistently shown that information asymmetry correlates with wider bid-ask spreads, lower liquidity, and higher costs for retail traders. And as MIT researchers recently warned about the growing unreliability of US economic data, reducing reporting frequency compounds an already serious problem.
A 2023 study published in the Journal of Financial Economics found that companies in jurisdictions with less frequent disclosure requirements experienced 18-23% higher insider trading profits compared to their more-transparent peers. That is not a rounding error. That is real money moving from your pocket to someone else's.
The Volatility Paradox
Proponents say quarterly reporting causes volatility. "Companies should not be punished for one bad quarter," they argue. Okay, fair point — except removing quarterly reporting does not remove the volatility. It concentrates it.
Think about it: if bad news accumulates for six months instead of three before being disclosed, the eventual drop is bigger, not smaller. You get fewer corrections, but each one is more severe. Academic literature calls this "information impounding" — when delayed disclosure leads to larger price adjustments.
Sandra — my colleague with the perpetual espresso — put it this way: "It is like checking your bank account once a year instead of monthly. You do not spend less. You just get a bigger shock in December."
Who Actually Benefits
Let me be specific about who wins and who loses here:
Winners
- Corporate executives — Less disclosure means more room to maneuver without public scrutiny. Stock buyback timing, insider transactions, and compensation adjustments become harder to track in real time.
- Institutional investors with alternative data — Firms like Citadel, Two Sigma, and Point72 do not rely on 10-Qs for their edge. They use satellite imagery, credit card data, web scraping, and proprietary models. Removing quarterly reports barely dents their information supply while degrading yours.
- Small public companies (genuinely) — The compliance cost reduction is real. A 2024 AICPA survey estimated the average quarterly reporting cost for companies under $1 billion market cap at $340,000-$520,000 annually. That is not nothing.
Losers
- Retail investors — Fewer data points means worse decisions. Period.
- Financial advisors and analysts — Less public data means models become less reliable. Your advisor's recommendation accuracy drops when they have 50% less information to work with.
- Market integrity broadly — The entire premise of efficient markets relies on information flowing freely and frequently. Reducing flow frequency is, by definition, reducing efficiency.
The International Comparison Trap
You will hear people say "Europe only requires semiannual reporting and their markets work fine." This is technically true and deeply misleading.
The EU's Transparency Directive moved to semiannual mandatory reporting in 2013 (though many European companies still report quarterly voluntarily). But European markets also have different ownership structures — higher institutional concentration, more family-controlled firms, less retail participation — that make direct comparison problematic.
Also, "works fine" is doing a lot of heavy lifting. Research from the European Central Bank found that after the reporting frequency reduction, price discovery efficiency declined by 12-15% for companies that dropped voluntary quarterly reporting. The ones that kept reporting quarterly? Their stock performance improved relative to peers. The market literally rewards more transparency.
What You Should Actually Do
This proposal is not finalized. It could take months to go through the rulemaking process, and legal challenges are almost guaranteed — the North American Securities Administrators Association has already signaled opposition. But if it does pass, here is how to adjust:
1. Shift Toward Companies That Commit to Voluntary Quarterly Reporting
Major companies like Apple, Microsoft, and Alphabet will almost certainly continue quarterly reporting regardless of the mandate. They use earnings calls as marketing events. Smaller companies that voluntarily maintain quarterly transparency signal management quality and shareholder-friendliness.
2. Diversify Into Index Funds More Aggressively
If individual stock analysis becomes harder due to less frequent data, the relative advantage of broad index investing increases. This was already good advice — and as we explored in our piece on why prediction markets are not the financial revolution you were promised, chasing alternative information sources often creates more risk than it solves. It becomes even better advice in a semiannual reporting world.
3. Pay Closer Attention to Insider Transaction Filings
SEC Form 4 filings (insider buys and sells) are still required within two business days. In a world with less frequent comprehensive reporting, insider trading patterns become an even more valuable signal. Tools like OpenInsider and InsiderTracking aggregate these for free.
4. Build a Longer-Term Investment Horizon
Ironically, the SEC's stated goal of reducing short-termism might actually be achieved — but only if investors adjust their behavior accordingly. If you are checking your portfolio daily and trading on quarterly numbers, this is a good nudge to zoom out. Consider extending your evaluation period from quarterly to annual performance reviews of your holdings.
The Bottom Line
I am not against reducing regulatory burden on businesses. I am against reducing the information available to the people whose money those businesses are managing. There is a difference, and the SEC seems to be conflating the two.
Rachel called me back at 11:30 PM Sunday night, after she had done her own reading. "So basically they want us to trust companies more and verify less?" she asked.
"That is one way to put it," I said.
"Cool. What could possibly go wrong."
She was not asking.
Disclaimer: This article is educational content only. It does not constitute investment advice, and past performance does not guarantee future results. Always consult with a registered financial advisor before making changes to your investment strategy. Sources: SEC.gov, Reuters, NBER, ECB, AICPA.
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