Wall Street Fights End of Quarterly Reports

Prominent Wall Street investment firms and hedge funds are mounting opposition to a potential U.S. Securities and Exchange Commission (SEC) proposal that would allow companies to opt out of quarterly financial reporting. Two Sigma Investments and D.E. Shaw are among those expressing concerns that such a change would curtail the essential flow of financial information to public company investors.

This opposition, which includes billionaire Ken Griffin's Citadel and asset manager Fidelity, has been communicated to industry groups like the Managed Funds Association (MFA). These institutions fear that eliminating regular reporting could lead to greater market volatility, wider stock price fluctuations, and increased costs for companies seeking capital.

The SEC is expected to formally solicit feedback on the proposal in the coming weeks, reviving an initiative first introduced in 2018. Proponents, including former President Trump, argue it would reduce corporate costs and discourage short-term focus. However, the MFA has cautioned that optional reporting could result in inconsistent disclosure practices, potentially deterring private investment.

U.S. companies have been required to report quarterly since 1970, a frequency different from many European and Asian countries. This debate comes as U.S. regulators seek to overhaul market rules, with a notable decline in the number of publicly listed companies since 2000.