The U.S. stock market is about to undergo a major reform.

Friends who trade U.S. stocks, take note. The U.S. stock market is facing another major reform.

Last night, the U.S. SEC formally proposed a significant rule change. It would allow listed companies to use semi-annual reports to replace quarterly reports, meaning they would no longer be forced to issue financial reports every quarter.

Let's start with two key points.

First, the proposal has currently passed the White House stage, but it still requires later stages of public consultation and voting.

Second, even if the proposal is passed later, companies will have the freedom to choose. That is, they can choose to continue issuing quarterly reports or opt to only issue semi-annual and annual reports.

So, what impact will this have?

On the positive side, many companies won't be held hostage by short-term performance anymore. They will be more willing to make long-term investments and plans, which is beneficial for the overall U.S. stock market.

On the negative side, for some investors, if a company only issues financial reports every six months, any problems that arise in the interim might be hidden, making things less transparent than before.

Therefore, the market might lean more towards leading companies that insist on issuing more transparent quarterly reports. If you want to invest in more promising small and medium-sized companies, you'll need more skill and time to dig for them.

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