Earnings Releases Are No Substitute for 10-Qs
Paul Atkins, chairman of the US Securities and Exchange Commission (SEC), wrote in an op-ed in the Financial Times that he’s “fast-tracking President Trump’s proposal to equip companies with the option to report on a semi-annual basis,” allowing the market to work out the “optimal reporting frequency based on factors such as the company’s industry, size, and investor expectations” rather than SEC rules.[1]
If such a proposal were adopted, it would return the minimum reporting cadence for domestic issuers on US exchanges to where it was before Form 10-Q rules were adopted in 1970 and bring the United States in line with the United Kingdom and European countries that adopted semiannual reporting in 2013 and 2014, respectively, after requiring quarterly reporting for several years.
As many have pointed out, including Chairman Atkins, affected companies may choose to continue reporting on quarterly basis, as many have in the United Kingdom.[2]
So, would a change in required cadence significantly change what investors get? While investors may no longer get Form 10-Q filings, they would still get quarterly earnings releases, presentations, and conference calls with management. Form 10-Qs are often filed after earnings calls, so some investors may not even notice the difference between a mandatory quarterly regime and a voluntary one.
| Earnings Release | Form 10-Q | |
| Form and content | Ad hoc, decided by management | Prescribed by the SEC. Includes the full set of financial statements and notes, with some abbreviations permitted. |
| Independent assurance | None | Financial statements, including notes, reviewed by auditor. |
| Management Liability and certifications | Anti-fraud provisions in SEC Rule 10b-5 | Anti-fraud provisions in SEC Rule 10b-5. Management certifications per Sections 302 and 906 of the Sarbanes–Oxley Act |
In short, Form 10-Q is much more of a “legal document.” Companies must include a full set of financial statements, including a statement of cash flows, while an earnings release may include only a select number of financial measures (e.g., sales). The requirement for certification and signature by the CEO and chief financial officer, created by the Sarbanes–Oxley Act of 2002 in the wake of the Enron and WorldCom scandals, are also designed to protect investors from misstatement and fraud.
If first- and third-quarter 10-Q filings are replaced with voluntary earnings releases, investors lose these features and protections.
Chairman Atkins said that “mandatory quarterly reporting is hardly a cornerstone of the dynamism that distinguishes our capital markets.” While that might be true, mandatory quarterly reporting has been a feature of US capital markets since 1970. It’s impossible to say what the unintended consequences are from changing something that’s been at the foundation for so long.
Since 1970, we’ve not only had the passage of Sarbanes–Oxley and Dodd Frank, as well as other disclosure rule changes, but — in the bigger picture — US capital markets have grown tremendously in scale and complexity.
In 1970, the US fund industry had just $45 billion under management versus over $30 trillion today,[3] and the first exchange-traded fund was yet to be invented.[4] And of course, the technology behind the preparation, assurance, and use of financial information today versus 1970 is not even comparable. Personal computers did not become commonplace until the 1980s, and enterprise resource planning systems were not broadly adopted by businesses until the 1990s.
Mid-century furniture is lovely,[5] but we prefer something more modern when it comes to looking for inspiration for corporate disclosure rules.
[1]P. Atkins, “Let the Market Decide How Often Companies Report,” Financial Times (29 September 2025). www.ft.com/content/0f6be08a-fd24-4558-b373-6ada31e18900.
[2]S. Nallareddy, R. Pozen, and S. Rajgopal, “Consequences of Mandatory Quarterly Reporting: The U.K. Experience,” Columbia Business School Research Paper No. 17-33 (13 March 2017). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2817120.
[3]R. Jenkins, “The Evolution of the US Fund Industry — Innovations and Trends Influencing the Global Fund Markets,” LSEG (18 July 2023). https://lipperalpha.refinitiv.com/2023/07/the-evolution-of-the-us-fund-industry-innovations-and-trends-influencing-the-global-fund-markets/.
[4]Z. Chiwanza, “The World’s First ETF Turns 35,” ETFs in Canada, VettaFi (13 March 2025). www.etftrends.com/etfs-in-canada-channel/worlds-first-etf-turns-35/.
[5]L. Mather and R. Shinners, “17 Midcentury-Modern Living Rooms That Prove Why the Style Is Timeless,” Architectural Digest (5 December 2024). www.architecturaldigest.com/gallery/midcentury-modern-living-rooms.
