The Securities and Exchange Commission has requested comments on the nature, content and timing of earnings releases and quarterly reports made by reporting companies. Specifically, the request solicits input on how the SEC can limit burdens associated with quarterly reporting, while maintaining or enhancing investor protections. The SEC is seeking to determine whether the existing periodic reporting system, earnings releases and earnings guidance have fostered an overly short term focus in the market.
As background, on April 13, 2016, the SEC issued a concept release aimed at soliciting comment on periodic frequency, its impact on reporting companies, and general disclosures related to Regulation S-K. The current request seeks to build off the information received from the concept release and includes 46 specific questions.
Some of the highlights from the request:
- Whether the nature and timing of disclosures that reporting companies must provide via Form 10-Q reports is appropriate, including when Form 10-Q disclosure requirements overlap with voluntarily provided earnings releases in Form 8-K.
- How efficiency can be promoted in periodic reporting by reducing duplication of information reported and how any changes could affect capital formation and investor protection.
- If SEC rules should allow for flexibility with regard to frequency of period reporting.
- How the current reporting system, earnings releases and earnings guidance affect corporate decision making and strategic thinking.
We expect there to be many public comments. A copy of the request for public comment can be found here: Request for Comment
