Professional investors are pushing back against a U.S. Securities and Exchange Commission proposal that would require companies to report financial results less often. The plan, which has not been formally released, would reduce the frequency of corporate disclosures — a shift investors say could hit market stability and their own risk management strategies.
Why investors are resisting
The proposal would stretch the interval between required earnings reports, moving from a quarterly cycle to a semi-annual one, according to people familiar with the matter. That change, professional investors argue, would increase information asymmetry. Companies would hold onto key data for longer stretches, giving insiders and large holders more time to trade on non-public knowledge.
“Our ability to assess a company’s health in real time depends on regular, standardized filings,” said one portfolio manager who asked not to be named because her firm is lobbying the SEC privately. “If we only get updates twice a year, we’re flying blind for months.”
The SEC has not publicly detailed its reasoning, but the proposal has drawn sharp criticism from asset managers, pension funds and hedge funds. The resistance is notable because professional investors rarely unite against a regulatory change before it is even published.
What's at stake for markets
Reduced disclosure frequency could increase market volatility, the investors warn. With less information flowing, price discovery becomes uneven. A sudden flood of data after a long silence could cause sharp swings in stock prices — exactly the kind of volatility that undermines long-term risk management.
Information asymmetry is another worry. When all market participants see the same numbers at the same time, the playing field is level. Less frequent disclosures tilt that field, giving an edge to those who can gather intelligence through other channels.
The proposal also challenges investors' ability to manage risk. Portfolio managers rely on quarterly data to adjust positions, meet redemption requests and comply with internal mandates. A shift to semi-annual reporting would force them to operate with stale information for months, raising the odds of miscalculations.
The SEC has not set a timeline for releasing the formal rule. Investors expect a public comment period after publication, and many plan to submit detailed objections. The question now is whether the agency will listen — or press ahead regardless.
