This means that employees would only be able to sell their stock 2 windows a year where they currently can sell 4 windows a year, correct?
Much larger windows though no? Blackout periods are prior to reporting dates.
US SEC preparing to scrap quarterly reporting requirement
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Re: US SEC preparing to scrap quarterly reporting requirement
#42This is an awesome move. They’re not saying the reports go away—just moving them to every six months. After hating how each company runs on an internal quarterly cycle, I have to welcome it despite how the change originated. Six months is still short from the perspective of perverse incentives, but if you free up one week of charade from execs every 13 weeks, maybe they can focus better. And it’s not just execs, but…
What will actually happen is that frauds and poorly run companies will opt for the 6 month schedule while well run ones will keep the 3 month.
To your point that "executives should be tracking performance daily", there's an argument that all that data should be publicly released daily. It would make it nearly impossible to hide mismanagement and actually remove most of the human overhead since it would be impossible to spin bad data on a daily basis.
Re: US SEC preparing to scrap quarterly reporting requirement
#43This means that employees would only be able to sell their stock 2 windows a year where they currently can sell 4 windows a year, correct?
I think the effect is actually backwards: there may only be 2 windows instead of 4 but the total amount of time window per year should theoretically go up significantly. The 2 removed reports should make both of those quarters less subject to insider trading and therefore more tradeable.
Re: US SEC preparing to scrap quarterly reporting requirement
#44so all EDGAR APIs need to be updated to support either 10-Q or 10-H per firm?
Re: US SEC preparing to scrap quarterly reporting requirement
#45This means that employees would only be able to sell their stock 2 windows a year where they currently can sell 4 windows a year, correct?
Much larger windows though no? Blackout periods are prior to reporting dates.
Rather, trading periods are for a limited time after reports are released. Before employees accrue too much non public information.
Re: US SEC preparing to scrap quarterly reporting requirement
#46This is an awesome move. They’re not saying the reports go away—just moving them to every six months. After hating how each company runs on an internal quarterly cycle, I have to welcome it despite how the change originated. Six months is still short from the perspective of perverse incentives, but if you free up one week of charade from execs every 13 weeks, maybe they can focus better. And it’s not just execs, but…
I have the opposite opinion. More information is always better. Absolutely the reporting requirements are onerous and there already are perverse incentives to chase things quarterly. Reducing reporting requirements is only going to make things worse though. The only solution I can imagine is to instead drop reporting requirements to instant. Make all public companies truly public. Reporting information should to be accessible via a feed 24/7. There can be no more perverse incentives if there’s no hiding. Insane and unlikely? Sure yea. But let’s not pretend that reducing information is going to help anything.
Re: US SEC preparing to scrap quarterly reporting requirement
#47This is an awesome move. They’re not saying the reports go away—just moving them to every six months. After hating how each company runs on an internal quarterly cycle, I have to welcome it despite how the change originated. Six months is still short from the perspective of perverse incentives, but if you free up one week of charade from execs every 13 weeks, maybe they can focus better. And it’s not just execs, but…
What will actually happen is that frauds and poorly run companies will opt for the 6 month schedule while well run ones will keep the 3 month. To your point that "executives should be tracking performance daily", there's an argument that all that data should be publicly released daily. It would make it nearly impossible to hide mismanagement and actually remove most of the human overhead since it would be impossible…
IMO, it would be ok if it was not unconditional.
If you have been public for >N years, and have had >X "clean" quarterly reports, no trouble with the SEC, etc, then sure, back off to 6mo (or even yearly, if your shareholders are ok with that).
But if you have an audit problem, violate SEC rules, get any kind of conviction, hell, even an inditement, then back to quarterly until you clean it up.
Re: US SEC preparing to scrap quarterly reporting requirement
#48This means that employees would only be able to sell their stock 2 windows a year where they currently can sell 4 windows a year, correct?
I think the effect is actually backwards: there may only be 2 windows instead of 4 but the total amount of time window per year should theoretically go up significantly. The 2 removed reports should make both of those quarters less subject to insider trading and therefore more tradeable.
In companies I've been in, insider trading windows close because there's been a certain amount of time since the last report. So less frequent reports = more time for insider to know things that aren't public yet = more time unable to trade, not less.
Re: US SEC preparing to scrap quarterly reporting requirement
#49This is an awesome move. They’re not saying the reports go away—just moving them to every six months. After hating how each company runs on an internal quarterly cycle, I have to welcome it despite how the change originated. Six months is still short from the perspective of perverse incentives, but if you free up one week of charade from execs every 13 weeks, maybe they can focus better. And it’s not just execs, but…
I see how it helps you and the company. What about investors who you borrowed money from.
Arguably better for everyone. Too much focus on short-term profits can harm long-term growth.
Re: US SEC preparing to scrap quarterly reporting requirement
#50This is an awesome move. They’re not saying the reports go away—just moving them to every six months. After hating how each company runs on an internal quarterly cycle, I have to welcome it despite how the change originated. Six months is still short from the perspective of perverse incentives, but if you free up one week of charade from execs every 13 weeks, maybe they can focus better. And it’s not just execs, but…
What will actually happen is that frauds and poorly run companies will opt for the 6 month schedule while well run ones will keep the 3 month. To your point that "executives should be tracking performance daily", there's an argument that all that data should be publicly released daily. It would make it nearly impossible to hide mismanagement and actually remove most of the human overhead since it would be impossible…
This is not how corporate fraud usually happens. You don't tamper with the quarterly report, especially since it gets audited. You tamper with the input data close to the source. For example, you record revenue that hasn't happened yet or you delay the recording of losses.