The American Bankers Association today commented on the Securities and Exchange Commission’s proposal to allow companies to file semiannual rather than quarterly reports.
Public companies, subject to Exchange Act Section 13(a) or 15(d), are currently required to file quarterly reports on Form 10-Q. Under the proposal, companies could elect to file semiannual reports on new Form 10-S instead of quarterly reports on Form 10-Q. Firms that elect to file semiannual reports would file one semiannual report and one annual report for each fiscal year rather than three quarterly reports and one annual report. According to the SEC, the proposed amendments would provide “flexibility” and “enable public companies to choose the interim reporting frequency that would best serve the company and its investors.”
ABA supports providing companies with additional flexibility.
“For banking organizations, this flexibility is warranted because the quarterly reporting process imposes recurring costs and demands substantial management attention, while banks already provide extensive information to investors through regulatory reporting, earnings communications and other market-facing disclosures,” ABA wrote.
Noting that “several practical considerations may limit the extent to which banks elect semiannual reporting,” ABA encouraged the SEC “to pair any optional semiannual framework with broader modernization of interim reporting requirements so that disclosure remains focused on material information and investor protection while reducing unnecessary cost and complexity.”
ABA also urged the SEC to look beyond reporting frequency “as the only, or even primary, path to burden reduction,” noting that the relief may come less from reducing the number of filings than from simplifying what filings require.
“We therefore urge the commission to continue reviewing interim disclosure requirements under Regulation S-K and Regulation S-X, and the Accounting Standards Codification in coordination with the Financial Accounting Standards Board as appropriate, to focus interim reporting more clearly on material changes, reduce duplicative MD&A updates, streamline interim financial statement disclosures and eliminate immaterial, boilerplate or repetitive disclosure,” ABA wrote
