The Securities and Exchange Commission (SEC) published Tuesday a request for comment soliciting input from reporting companies regarding the nature, content, and timing of earnings releases and quarterly reports.
“There is an ongoing debate regarding the effects of mandated quarterly reports and the prevalence of optional quarterly guidance,” SEC Chairman Jay Clayton said. “Our markets thirst for high-quality, timely information regarding company performance and material corporate events. We recognize the importance of this information to well-functioning and fair capital markets. We also recognize the need for companies and investors to plan for the long term. I look forward to receiving thoughtful comments as we think about ways to encourage long-term investment in our country.”
Officials said the Commission is seeking feedback on how the existing periodic reporting system, earnings releases, and earnings guidance, alone or in combination with other factors, may foster an overly short-term focus by managers and other market participants. The public comment period will remain open for 90 days following publication of the request for comment in the Federal Register.
In 2016, the Commission issued a concept release on the business and financial disclosure requirements of Regulation S-K, officials said. Among other topics, the release solicited comment on periodic frequency and its impact on reporting companies and market participants.
The Commission received a range of comments on reporting frequency and the quarterly reporting process generally, and the most recent request for comment seeks to build on the quarterly reporting process information received in response to the concept release.