Two prominent hedge funds, Two Sigma and D.E. Shaw, have joined a Wall Street coalition opposing the U.S. Securities and Exchange Commission’s (SEC) proposal to relax quarterly financial reporting requirements for public companies, according to sources familiar with the matter. The move signals escalating industry pushback against regulatory efforts to reduce short-term market pressures on corporations.
The SEC’s controversial plan, first floated in 2025, would allow certain large-cap companies to transition from quarterly to semi-annual reporting. Proponents argue this would encourage long-term strategic thinking, but critics warn it could reduce market transparency and disadvantage retail investors.
‘This is fundamentally about maintaining investor confidence through consistent disclosure,’ said a financial analyst at a Tier 1 bank who requested anonymity due to client relationships. ‘Institutional investors have built complex models relying on quarterly data streams.’
The opposition coalition now includes at least eight major asset managers controlling over $3 trillion in assets, according to regulatory filings reviewed by Reuters. SEC Chair Gary Gensler has previously defended the proposal as a ‘balanced approach’ to modernize disclosure requirements.
Market observers suggest the growing resistance could delay implementation of the rule change, currently slated for 2027. Some legal experts note Congress might intervene if the SEC proceeds over Wall Street objections, setting up a potential constitutional clash over regulatory authority.