Opinion on Quarterly Reporting

Introduction

The debate over whether public companies should continue to publish quarterly financial reports is not new. Calls for reform are resurfacing, most recently from political leaders who argue that quarterly disclosures impose excessive costs and foster short-termism. While these arguments have merit, the solution cannot be applied uniformly. Based on my experience as co-founder/CEO and President of the Market Authority of Easdaq ( later Nasdaq Europe ), I believe that quarterly reporting should remain mandatory for established companies with a proven track record. However, for firms in their first three years after listing, the requirement should be reconsidered. This opinion is based on admitting more than 60 European high growth companies onto Easdaq, some with a dual listing on Nasdaq.

Why New Companies Should Be Treated Differently

Young listed companies face a unique combination of challenges:

- Inexperience with investor relations: Many management teams lack the maturity and internal systems to handle the scrutiny of quarterly disclosures.- Pressure to deliver results: Investors often demand immediate performance, pushing companies into risky behavior or, worse, misstating results.- Higher risk of misrepresentation: In my own experience overseeing Nasdaq Europe, I witnessed several technology companies falter under the weight of quarterly pressures, sometimes resorting to practices that raised concerns of fraud or serious misstatement.

For such companies, the quarterly cycle is less a tool of transparency than a trap. It can drive management into unsustainable strategies or lead to disclosures that mislead investors rather than inform them. An alternative to quarterly reporting can be developed for these companies in order assure transparency to investors.

Why Established Companies Should Keep Quarterly Reporting

Large, established companies with long histories in the market should continue to publish quarterly reports. For them:

- Investor relations depend on frequent disclosure. Markets value transparency, and seasoned companies have the infrastructure to deliver it.- Global standards and comparability matter. U.S. and U.K. practices demonstrate that regular disclosure underpins investor confidence.- The risk of misstatement is lower. These companies are typically equipped with stronger governance, internal controls, and seasoned investor relations functions.

Abandoning quarterly reporting for such firms could undermine market integrity and reduce confidence in public markets.

A Balanced Approach

The solution lies in differentiation:1. Suspend mandatory quarterly reporting for companies within their first three years of listing.2. Maintain alternative reporting obligations (semi-annual reports and continuous disclosure of material events) to ensure investors can still follow performance.3. Retain quarterly reporting for established firms as a cornerstone of investor protection and market transparency.

Conclusion

Having been directly involved in challenging the rules of European capital markets, we were the first to introduce quarterly reporting in Continental Europe. We did so because we believed — and still believe — in the importance of transparency. Yet, I also saw firsthand how young, inexperienced companies sometimes became victims of the very system designed to protect investors.The path forward is not a blanket end to quarterly reporting, but a measured reform: protect new issuers from excessive pressure while preserving accountability for established firms. This approach safeguards both investor trust and the long-term health of public markets.

Jacques Putzeys

Co-founder of Easdaq ( Nasdaq Europe ) to become CEO and President of the Market Authority

2000 to present : Pre-IPO consulting