Exterior view of the U.S. Securities and Exchange Commission (SEC) headquarters in Washington.
Jonathan Ernst | Reuters
Prediction market traders are confident the Securities and Exchange Commission will change the rules governing how often companies must report financial statements to shareholders from quarterly to semi-annual, following the regulator’s formal proposal on Tuesday.
However, opinions differ as to when that will happen.
After the proposal was revealed on Tuesday, odds on the Carsi prediction market that restrictions would be eased by April 2027 jumped from 46% to 73%.
The chance of early approval by January 1 of next year initially jumped to 67%, but has fallen to about 50-50 and is now about 57%.
If approved by January 2027, the SEC’s rulemaking process would proceed at an unprecedented pace.
The proposal will be subject to a 60-day public comment period before the commission’s final consideration. Commissioners can then modify the structure of the proposal based on public feedback, but the comment period will only begin after the proposed rule is published in the Federal Register.
A 2023 analysis by law firm Wilson Sonsini showed that it can take anywhere from a few days to up to a month for the registry to post proposed regulations, with proposals longer than 100 pages typically taking longer timelines. The SEC’s proposed rules for semiannual reporting are 279 pages long.
Indicators of the SEC’s rulemaking activity indicate that recent timelines from proposed rule to final adoption typically take at least a year and sometimes several years.
At Polymarket, traders put a 51% chance that the SEC will end mandatory quarterly reporting in 2026.
In other words, traders are making a big bet that the commission will be more effective in changing corporate financial reporting requirements sooner than its history suggests.
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
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