The chairperson of the US SEC has called for deregulation: replacing quarterly evaluations with semi-annual reports

Release Time：2025-09-29

The U.S. Securities and Exchange Commission (SEC) has sent a clear signal that it plans to significantly ease financial regulation and will assess allowing listed companies to replace the current quarterly reporting system with semi-annual reports.

On Monday local time, Paul Atkins, the chairman of the US SEC, announced in a commentary article for the Financial Times that he would rapidly advance the proposal made by President Trump to ease the frequency of financial report disclosure. Atkins emphasized, "The government should provide the minimum effective dose of regulation needed to protect investors while allowing businesses to thrive."

This move is one of the most significant policy shifts since Atkins took office. This latest statement confirms that under the Trump administration, the SEC will adopt a broader "touch" regulatory strategy, in sharp contrast to the comprehensive and aggressive regulatory agenda led by its predecessor Gary Gensler.

In addition to the financial reporting rules, the SEC under the leadership of Atkins has previously taken a more friendly stance in the cryptocurrency field and halted the defense work of the previously highly anticipated climate risk disclosure rules, demonstrating its systematic regulatory easing approach.

Evaluate the option of replacing quarterly reports with semi-annual reports

As a key step in its regulatory easing agenda, Atkins is rapidly advancing a proposal that would allow listed companies to choose to disclose their financial reports on a semi-annual basis on their own.

He believes that mandatory quarterly reports are not the cornerstone of the vitality of the US capital market. It is now time to "let the market determine the best reporting frequency based on factors such as the company's industry, size and investor expectations."

Atkins pointed out that this idea was not original. He mentioned that the United States did not implement the quarterly reporting system until 1970, and the current regulatory system has already provided this flexibility for some companies.

For instance, foreign companies listed in the United States are currently required to submit semi-annual reports, but some of them still choose to announce their performance quarterly. He also took the UK as an example. After the country resumed its semi-annual reporting system in 2014, some large companies still chose to continue releasing quarterly reports.

He emphasized that "granting companies the right to choose their semi-annual reports is not a regression in transparency", but rather a refocus on market-driven disclosure practices that are more beneficial to the interests of companies and their investors.

Regulatory tone shift: from strict regulation to "minimum effective dose"

Atkins made it clear in the article that he is committed to bringing the SEC back to its core mission and reversing what he considers a "mission deviation" from the previous years.

In his article, he pointed out that the core mission of the SEC is to protect investors, maintain a fair, orderly and efficient market, and promote capital formation. The regulatory core of the SEC lies in the "materiality principle", that is, the SEC should only require companies to provide information that rational investors consider important when making investment decisions.

In recent years, the SEC has deviated from the clear mission set by Congress for it over 90 years ago, as well as the precedents and predictability for maintaining confidence in the capital market.

He believes that rules formulated to cater to the motives of social change or the purpose of maximizing non-financial returns have let down investors. Atkins said that he would be committed to restoring trust in the agency under the guiding principle that "the government should provide the minimum effective dose of regulation needed to protect investors."

He wrote in the article:

I am pleased to report that this chapter on mission deviation has come to an end.

Criticize the previous agenda and European regulatory rules

Atkins' new regulatory policy is accompanied by explicit criticism of its predecessors and European counterparts.

He pointed the finger at the aggressive regulatory and enforcement stance pursued by his predecessor Gary Gensler during the Biden administration and has taken concrete actions to overturn his core agenda, such as the SEC's vote this year to stop defending a rule that requires companies to disclose climate risks in court.

In addition, Atkins specifically criticized the newly passed "Corporate Sustainability Reporting Directive" (CSRD) and "Corporate Sustainability Due Diligence Directive" (CSDDD) in Europe in the article.

He believes that these regulations have promoted a "dual importance" approach, requiring the disclosure of matters that "may have social significance but are usually not financially important", which is driven by "political trends or distorted goals".

He warned:

"These instructions may impose costs on American investors and clients, but offer little help in guiding capital decisions." "

Investor groups are concerned about the decline in transparency

Although Atkins provided sufficient theoretical basis for relaxing the financial report disclosure requirements, this move was not unanimously recognized. According to media reports, investor rights advocacy groups have expressed concerns over this.

These groups believe that reducing the frequency of financial report disclosure from once every three months to once every six months may significantly undermine market transparency.

They are concerned that the reduction in information disclosure will harm retail investors who rely on public information to make decisions and may undermine the efficiency that serves as the cornerstone of the US capital market. This point of contention is expected to become the main focus of debate in the future advancement of the proposal.

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