For over 50 years, U.S. stocks have filed quarterly reports to update the market on their latest financials. Soon, they might have an alternative option.

Per The Wall Street Journal’s Corrie Driebusch, the U.S. Securities and Exchange Commission is preparing a proposal that would eliminate quarterly reporting requirements for public companies.

That move would allow companies to decide whether they want to report on a quarterly schedule or on a semiannual one, making good on a promise from President Donald Trump and his SEC Chairman, Paul Atkins.

Proponents of semiannual filing say the move would be good for business. But as it turns out, what’s good for business might not be good for everybody.

It could be good for business…

At its core, the argument for a less taxing filing schedule is simple. Its proponents argue that it allows businesses to spend less time “living and dying by the quarter” and more time building and focusing on their business. This gives businesses, at least for the first time in 50 years, the option to shift to semiannual frames of reference.

That could be desirable for firms for many reasons. Chiefly, it saves time and money. Preparing quarterly reports takes man hours from accountants, legal, and investor relations teams. By going from four filings a year to two, you could argue that these people might be working half as hard. It might allow you to also hire less of those people, which is a particularly big deal for smaller firms.

Of course, there’s an argument that it also frees up firms to focus on building their business, rather than working about making each quarter count. Filing twice a year means you’ll only face an official account of your firm’s financials and health every six months. That means less need for financial engineering or short-term thinking; you can focus on the long-run.

But arguably, the most powerful element is that it allows you to control the narrative for longer. Say you move from a quarterly to semiannual schedule. Absent business updates, alternative data, or industry reports, investors might not know as much about how your firm is operating.

These factors also beg the question of whether this proposal might motivate privately traded firms to move up to markets. There was a time, not really that long ago, that it was attractive to be a publicly traded company. Thanks to the deluge of venture capital, many firms have stayed private for longer, avoiding compliance overhead that comes from being on the market.

But it’s probably bad for retail

Structurally, a loosening of reporting requirements has a huge downside: it keeps less resourced investors in the dark for longer. That’s particularly bad for retail investors and short-term traders; potentially even passive investors, too.

Many quantitative firms, high frequency trade shops, and institutional investors often have many resources at their disposal to trade on.

These firms don’t just employ smart people, but they boast sophisticated technology, models, and resources at their disposal. With six month-long silences between reports, they could gather a serious edge from industry data, alternative datasets, and physical assets that are not available to the everyman.

Separately, you could garner a picture of how businesses might exploit that silence. It might allow them to provide unusually upbeat business updates and cherry-pick positive information for the market, only to surprise them with the actual bill come report time.

Pair that with the increasingly lax enforcement provided by the SEC (perhaps, look no further than insider trading and crypto) and you can start to see how this might be fantastically bad: in a market that operates in silence, based on the premise of “lessening volatility“, retail would likely be last to know.