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By Sarva Srinivasan, Global Head of Strategy and Managing Director, Americas, NeoXam
President Trump’s call for US companies to abandon quarterly reporting in favour of semi-annual disclosures has reignited a long-standing debate about how frequently public firms should update the market. Advocates argue less frequent filings would save companies money, reduce short-termism, and encourage a longer-term strategic mindset. Yet, while issuers may benefit, there is a critical dimension often overlooked: the burden such a change would place on the Asset Servicing industry.
Asset Servicing may not grab headlines, but it is the backbone of global Capital Markets. Custodians, Fund Administrators, and Service Providers ensure dividends are processed correctly, Net Asset Values (NAVs) are calculated accurately, Corporate Actions are implemented, and compliance requirements are met. All of this relies on timely, and most importantly, reliable data.
Quarterly 10-Q filings, alongside annual 10-Ks, provide a cadence of transparency that underpins the operations of Asset Managers and their service providers. Moving to a semi-annual cycle would create longer periods of uncertainty, forcing Asset Servicers to fill gaps with estimates, alternative data, or even partial disclosures. Far from reducing costs across the market, this risks spreading operational and financial burden more widely.
Take NAV calculations as a prime case in point. Fund Administrators depend on accurate financials from portfolio holdings to produce valuations. With only two reporting dates each year, administrators would need to lean more heavily on models, forecasts, or third-party data sources to bridge the gap. That increases both workload and risk. A miscalculated NAV is not a minor inconvenience; it undermines investor confidence, creates compliance headaches, and potentially exposes firms to litigation issues.
The same holds true for corporate actions. Dividend payments, buybacks, and capital restructurings are all closely tied to financial disclosures. Reduced frequency of Reporting could delay confirmations or force service providers to process actions on incomplete information. Even proxy voting and stewardship, already challenging areas, would be hampered by the lack of timely financial context for shareholder decisions.
Risk Management would also become much more complex. Regulators require Asset Managers to report exposures, stress tests, and solvency metrics. Semi-annual reporting leaves larger blind spots, particularly when markets were as volatile as they were back in April following Liberation Day. Asset Servicers would be under serious pressure to generate interim assumptions, increasing reliance on opaque or inconsistent alternative data sets.
Some argue that companies in Europe already report on a semi-annual basis, and the market functions effectively. However, this overlooks the fact that many European firms supplement their statutory filings with detailed trading updates, interim statements, or voluntary disclosures. If US companies reduced to a bare minimum of two formal filings a year, the transparency gap could be far greater.
Ultimately, fewer filings may ease the administrative load for listed companies, but the knock-on effects for the wider financial sector are significant. The Asset Servicing industry, often invisible to the public eye, would carry much of the additional operational and risk burden.
As the debate rumbles on following the President’s Truth Social post on Monday, it is paramount that regulators and market participants consider the full implications should semi-annual reporting turn from a tweet to legislative reality. Transparency is not a cost to be minimised, it is the foundation of trust in capital markets. Any reform that reduces the frequency of mandatory reporting must be balanced by safeguards that ensure Asset Servicers have the data they need to keep markets running smoothly.
