THE recent call for public consultation on the quarterly reporting framework by the Singapore Exchange (SGX) has reignited the ongoing debate about quarterly versus semi-annual reporting. Besides Singapore, countries such as the United States, Canada, China and Malaysia also require companies on their major stock exchanges to report on a quarterly basis. Economies with semi-annual reporting include Australia, the European Union, Hong Kong and the United Kingdom, although some companies in the UK and Hong Kong are required to report on a quarterly basis. At the heart of the debate is the issue of "costs versus benefits" of quarterly reporting compared to semi-annual reporting.

Opponents of the quarterly reporting framework point to the rising burden of compliance and reporting costs in listing on SGX and highlight the need for SGX to be competitive in attracting listings. Anecdotally, we have seen companies (for example, Osim International) cite the detrimental impact of the quarterly reporting framework as a reason for their voluntary delisting. However, quarterly reports are not required to be audited, and current technological advances in data and information systems would reduce the cost of producing quarterly reports. The quarterly reporting framework is unlikely to be a major deciding factor for companies because the choice of stock exchange to list on is largely dependent on other factors such as the liquidity of the stock exchange.

Opponents also claim that instead of focusing on long-term sustainable performance, companies that report quarterly are more likely to take a short-term view of operating and investment decisions to meet performance targets. However, sustainable long-term investment requires a multi-year time horizon and companies are unlikely to take a long-term perspective on investments simply because the quarterly reporting framework is replaced with a semi-annual one. Instead, SGX's current initiative towards the framework of sustainability and integrated reporting may be more effective in achieving the objective of companies focusing on long-term sustainable performance.