Morningstar CEO Endorses SEC Push for Semi‑Annual Earnings

### Context The U.S. Securities and Exchange Commission (SEC) has opened a 60‑day comment period on a rule change that would let firms file earnings statements only twice a year. Europe already permits optional quarterly filing, and Australia requires immediate disclosure only for material events. The shift would be the most significant alteration to U.S. reporting cadence in decades.

### Key Facts - Kapoor, who runs Morningstar (ticker MORN, market cap about $5.6 billion), told Business Insider that reduced reporting frequency would lower compliance expenses for public companies. He added that lower costs could make the IPO route more attractive for private firms. - The CEO urged the SEC to define clear thresholds for “interim disclosures” and to create safe‑harbor provisions that let companies share material information without violating the new schedule. - Kapoor also suggested the SEC discourage forward‑looking metrics such as earnings‑per‑share guidance, which he believes fuels short‑termism among executives. - Morningstar itself files quarterly results but never holds an earnings call, a practice the firm says treats all investors equally. - If adopted, the rule would align U.S. reporting with the European model, where firms can opt for semi‑annual filings while still disclosing any material impact immediately.

### What It Means A move to semi‑annual reporting could shrink the annual compliance burden by an estimated 10‑15 % for large issuers, according to industry analysts. Smaller companies, which often cite reporting costs as a barrier to going public, may find the lower cadence a decisive factor. The S&P 500 index, which currently reflects quarterly earnings beats and misses, could see reduced volatility around earnings seasons, potentially smoothing price swings that affect index‑linked funds.

Investors should watch the SEC’s final rulemaking timeline. A decision before the end of the year could reshape earnings calendars for the $40 trillion U.S. equity market and influence the pipeline of upcoming IPOs.

*What to watch next:* the SEC’s final guidance on thresholds and safe‑harbor rules, and any early adopters filing semi‑annual reports before the rule becomes mandatory.