Core Viewpoint - The core of the capital market is not profit, but information. A reduction in information disclosure will lead to a re-pricing of risk in the market [1]. Group 1: Potential Changes in Disclosure Regulations - The U.S. capital market is at a potential crossroads, with the SEC considering a reform that would allow companies to choose to disclose earnings only twice a year instead of quarterly [2][4]. - This change is not merely a regulatory adjustment but could fundamentally alter the operational logic of the U.S. stock market [5]. Group 2: Historical Context and Current Trends - For the past fifty years, U.S. public companies have adhered to a quarterly disclosure system, which has been a symbol of transparency in the market [7]. - The number of publicly listed companies in the U.S. has decreased from nearly 8,000 in 1996 to about 4,300 today, indicating a trend towards privatization partly due to the costs associated with information disclosure [8][9]. Group 3: Implications of Reduced Disclosure Frequency - Proponents of reducing disclosure frequency argue that quarterly earnings reports lead to "short-termism," pressuring management to prioritize short-term profits over long-term strategy [9]. - However, reducing the frequency of disclosures may lead to decreased transparency, making it harder for investors to access critical operational data [10]. Group 4: Market Dynamics and Investor Behavior - The discussion around disclosure frequency represents a re-negotiation of the balance between corporate management rights and investor information rights [11]. - If earnings reports are reduced, the "transparency premium" that U.S. stocks enjoy may be reassessed, potentially leading to a decline in overall market valuations [12][14]. Group 5: Comparative Analysis with Other Markets - The article draws parallels with the South Korean market, where companies like Samsung and SK Hynix face valuation discounts due to governance and transparency issues, suggesting that reduced transparency in the U.S. could lead to similar outcomes [15][16]. Group 6: Long-term Consequences and Investor Sentiment - Historical experience shows that trust in capital markets takes decades to build but can be destroyed quickly through regulatory setbacks [17]. - The long-term foundation of capital markets is trust, which relies on timely and comprehensive information disclosure. A decline in transparency could erode the global appeal of U.S. markets [19][20].