SGX must tread carefully on rules governing quarterly reporting

WHEN mandatory quarterly reporting was introduced in January 2003, it was preceded by vigorous debate over its merits that lasted many months. As a concession to those not in favour, companies with a market capitalisation of less than S$20 million were exempted for one year, and it was in January 2004 that all companies listed on the Singapore Exchange (SGX) were duly required to release their financial figures every three months.

However, because of ongoing pressure from the corporate sector and claims that the practice yielded little marginal benefit, the exemption threshold was raised over the years to the present S$75 million with no time limit.

Despite this loosening, there is still clamour to review quarterly reporting, with some observers suggesting that it should be scrapped completely. This is partly motivated by developments elsewhere - in the UK, for example, the requirement for quarterly reports was abolished at the end of 2014, as part of the government's push to encourage more long-term thinking and to bring the UK in line with rules prevailing in the European Union. In Hong Kong, quarterly reporting is not mandatory, but it still is in the United States.