The Long-Term Stock Exchange (LTSE) has demonstrated good timing with its push to eliminate quarterly reports. Following the severe market turbulence caused by Trump’s erratic trade-policy moves, and concerns over the soaring US national debt, US stock markets have not only returned to calmer waters –Nasdaq and the S&P have even set new record highs. The period of alarming capital outflows from the stock markets now seems forgotten, and instead Wall Street is once again proving to be a strong IPO magnet – most recently for young fintech and crypto companies. This makes the environment favourable for further deregulation measures in the capital market, especially with the argument that it could further increase the attractiveness of IPOs in the US.

The LTSE can rely on the support of US President Donald Trump and the new SEC Chairman Paul Atkins, appointed by him in April. While Atkins does not explicitly advocate eliminating corporate quarterly reporting, he generally considers a streamlining of what he sees as excessive reporting requirements to be necessary.

Such a change would have far-reaching effects on the global regulatory balance, particularly in comparison with the European Union. While the Transparency Directive already abolished the obligation to produce quarterly reports in 2015, in practice this has had little impact – at least domestically. The Deutsche Börse, in its own regulations for the Prime Standard – which practically all Dax companies are subject to – still requires quarterly disclosures of key earnings and financial figures. Index regulations for the Dax, MDax, SDax, and TecDax also mandate this.

In the Scale segment, which is primarily designed to make going public easier for young growth companies, these requirements do not apply.

Across the EU, the picture is different. Major companies in various countries have taken advantage of the easing. The same can be seen in non-EU countries such as Switzerland and the United Kingdom. For example, L’Oréal, Nestlé, and Vodafone report mainly revenue and sales figures for the first quarter and after nine months. However, the majority of globally operating corporations in the EU align themselves with the stricter US standards. The comparatively strict regulation and transparency are, not without reason, regarded as a hallmark and anchor for investors in the world’s largest capital market.

Unsurprisingly, investor reaction to the proposed relaxation has been rather muted. There is no applause to be heard. Many investors place a high value on timely information. This is naturally even more important for young companies that have only recently gone public, where investors seek greater transparency and reassurance about business performance. Excessive reporting requirements are undoubtedly a burden for startups preparing for an IPO and can even deter listings. However, extending the reporting periods is a double-edged sword – it does not necessarily make going public easier. Such a relaxation is more likely to reduce investors’ willingness to subscribe.

Even for established stock market heavyweights, where investors typically allocate larger sums, there is a justifiable need for frequent updates. This is particularly true when companies are undergoing transformation processes or facing other challenges. Studies have shown that, on average, stocks of companies with quarterly reporting outperform those reporting semiannually by around 60 % over five years and over 80 % over ten years. Relief can also be achieved in other ways: rather than abolishing quarterly reports, the required level of detail in the information provided could be reduced.