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US SEC preparing to scrap quarterly reporting requirement

reuters.com

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Re: US SEC preparing to scrap quarterly reporting requirement

#271

Post by davorak »

jandrewrogers wrote: post #152
mixdup wrote: post #142

Earlier quoted context omitted.

The reason quarters take so long to close is because the numbers are being fiddled with. There's no reason someone shouldn't be able to close a quarter and report the numbers with the automation we have today in technology, meaning without some magic AI/LLM, other than people are constantly trying to reclassify expenses or income in a way that saves the quarter Why, after 30-40 years of modern computing in accounting…

This is a naive view of what reporting entails and the difficulty of coalescing a report that meets the requirements of the audience the report is for. It isn't a numbers dump from a database, it requires substantial interpretation of things that the database does not and cannot contain. It isn't fiddling with the numbers, it is that the numbers can't contain things relevant to their representation for external parti…

> it requires substantial interpretation of things that the database does not and cannot contain.

Do you have examples? This seems like something that is a solvable problem, and from the outside it can seem like it is only about not being willing to switch to a new paradigm. That unwilling ness can come from avoiding real consequences like loosing a competitive edge due to allocation of resources to the switchover.

Re: US SEC preparing to scrap quarterly reporting requirement

#272

Post by terminalshort »

gottorf wrote: post #157
clickety_clack wrote: post #156

24/7 trading sounds like a nightmare. “Your retirement savings crashed 30% because there wasn’t enough liquidity to cover a 3am panic over non-news”.

Honestly, stocks should trade for three hours a day. 24/7 trading sounds like a win for exchange operators and a loss for anyone else.

If that were true then nobody would show up to trade during the extended hours and therefore absolutely nothing will change.

Re: US SEC preparing to scrap quarterly reporting requirement

#273

Post by davorak »

jandrewrogers wrote: post #225
Dylan16807 wrote: post #213

Earlier quoted context omitted.

Why can't that interpretation be done earlier in the process and then put into the database? Isn't it the same amount of transactions to be interpreted no matter what the reporting period is?

Do you understand that as a legal matter these must be good faith representations of the current state to the best of your knowledge? You can’t serve up intentionally stale information without inviting legal repercussions. The preparation process takes weeks. This is a very serious legal matter. These are being revised and updated right up until the point they are released to provide the most accurate reporting possi…

> You can’t serve up intentionally stale information without inviting legal repercussions.

> These are being revised and updated right up until the point they are released to provide the most accurate reporting possible.

> You gravely underestimate the legal seriousness of these reports.

All of these seem look like an argument for additional automation.

Re: US SEC preparing to scrap quarterly reporting requirement

#274

Post by wbl »

fc417fc802 wrote: post #228
ang_cire wrote: post #201

Earlier quoted context omitted.

Dollars/receivables in and dollars/deliverables out is just a question of rate, unless I'm missing something. If a 10 billion dollar company has a per-second dollar out/in rate of $1,000,000 due to actual organic business, a company with $2,000,000 can set up an LLC it buys and sells from, and legally 'swap' $1,000,000 a second back and forth in services "bought and sold" to mimic the appearance of the $10B company,…

I'm fairly certain you're describing fraud.

That's what all these accounting rules exist to stop. No, you can't pretend that equipment breaking doesn't happen. No, you need to account for fixing the roof etc.

Re: US SEC preparing to scrap quarterly reporting requirement

#275

Post by riffraff »

arduanika wrote: post #251
doom2 wrote: post #196

Earlier quoted context omitted.

> The theory is that if we close the gap in regulatory burden between public companies and large private companies, then maybe we'll see more IPOs like back in the 90's, before Sarbanes-Oxley and other new laws. And maybe more Enrons?

Yes, maybe. The optimal number of scandals is sadly not zero, and any given piece of legislation tends to overreact, fighting the last battle without seeing all the potential second-order consequences. Even the most carefully-crafted laws are worth giving another look, periodically. Note that FTX, for example, was privately held. If it had been born in the nineties, the norm would be for it to go public, and have at…

But Enron's bankruptcy affected people who could invest on the public market while FTX affected more directly "qualified investors" didn't it?

It seems the private/public split along the lines of "public companies should be more scrutinized" worked as intended.

Re: US SEC preparing to scrap quarterly reporting requirement

#276

Post by sneak »

JumpCrisscross wrote: post #151
balderdash wrote: post #106

What company doesn’t produce monthly financial statements, let alone quarterly. I could understand this for small caps. I also don’t see how less granularity in financials is a good thing, yes if you have bad quarter that bad (but at least you can make it up the next quarter vs a bad six months likely introduces more volatility (I think?). Also I think one of the biggest complaint is “short termism” in markets, but I…

> don’t see how less granularity in financials is a good thing Transaction costs. Preparing this transparency costs money and attention.

Having to do it more and more frequently means more and more of it gets automated.

Re: US SEC preparing to scrap quarterly reporting requirement

#278

Post by rogerrogerr »

cosmicgadget wrote: post #180
vessenes wrote: post #174

Earlier quoted context omitted.

It’s a common complaint of value investors that boards (especially in this post-Sarbox world) are solely focused on quarterly earnings reports, to the detriment of long term strategy. One way to talk about the added and persistent value of some companies is to note that many of them have powerful, recalcitrant, or somehow anti-quarterly-cadence founders: buffet, zuck, you could make a list.

I mean those personalities are also hyperfocused on share price.

Yes, but focused on it being the highest it possibly can _tomorrow_ or the highest it possibly can be in ten years is a huge difference. Only some executives have the ability to take actions based on a long view without being replaced by the board. Usually founders and near-founders.

Re: US SEC preparing to scrap quarterly reporting requirement

#279

Post by arduanika »

riffraff wrote: post #275
arduanika wrote: post #251

Earlier quoted context omitted.

Yes, maybe. The optimal number of scandals is sadly not zero, and any given piece of legislation tends to overreact, fighting the last battle without seeing all the potential second-order consequences. Even the most carefully-crafted laws are worth giving another look, periodically. Note that FTX, for example, was privately held. If it had been born in the nineties, the norm would be for it to go public, and have at…

But Enron's bankruptcy affected people who could invest on the public market while FTX affected more directly "qualified investors" didn't it? It seems the private/public split along the lines of "public companies should be more scrutinized" worked as intended.

Not quite, but only because the FTX case was weird. Many individuals from around the world were users. They didn't sign up to be investors, or even to be depositors in a banking sense, and so not all of them were qualified/accredited investors. However, SBF unilaterally and secretly treated them like investors, borrowing from them to finance various schemes. So no, FTX's fallout was not limited in that way.

The people and venture funds that officially owned FTX were a narrower group, and I assume they were all qualified investors. But the thing about our disclosure regime is that protecting the official owners of the company is only one goal, the one that serves as the pretext. Informally, various regs on public companies are designed to bring sunlight more generally, and to prevent a wider array of crimes and shenanigans than just defrauding the company's owners. Public companies also have rules and norms around governance which, had FTX been been subject to them, would have made a difference.

> It seems the private/public split along the lines of "public companies should be more scrutinized" worked as intended.

Only if the intention was also, "...and public companies should be an ever-shrinking share of the economy". There are a number of reasons why one might not have intended that. Ordinary investors miss out on early growth, and the good side-effect of general sunshine and governance norms only covers a sliver of the economy, missing many of the most dynamic firms that could use some scrutiny.

Re: US SEC preparing to scrap quarterly reporting requirement

#280

Post by namtab00 »

fractorial wrote: post #234
mcoliver wrote: post #120

Simultaneously they are opening up 0DTE options on certain stocks starting with large market caps but don't be surprised when this expands. Currently this was limited to large etfs like SPX. They are also extending trading hours towards 24/7 and eventually 365. How they square increasing liquidity with delaying information is insane. I know there is a lot of manipulation to make quarterly numbers and the tax code is…

SPY is an ETF and SPX is an index. The distinction is material. /ES does not trade between 5pm and 6pm ET. SPX options aren't marked until 8:15 PM ET. It's more plausible that large caps see MWF, then MTWHF possibly.

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