Kalshi traders confident SEC will end mandatory quarterly earnings reports
Exterior view of the headquarters of the U.S. Securities and Exchange Commission (SEC) in Washington.
Jonathan Ernst | Reuters
Investors in prediction markets are confident that the Securities and Exchange Commission will change its rules on how often companies must report financial statements to shareholders from quarterly to semiannually, following a formal proposal from regulators on Tuesday.
But opinions are more divided on when this will happen.
After the proposal was announced on Tuesday, odds that regulations would be relaxed by April 2027 rose from 46% to 73% in the Kalshi prediction market.
The odds of faster approval by next January 1 initially rose to 67%, dropped to about 50-50, and recently the odds have risen to about 57%.
Approval by January 2027 would mark an unusually rapid turnaround in the SEC’s rulemaking process.
The proposal is subject to 60 days of public comment before final committee discussion. After that, commissioners can change the structure of the proposal based on public feedback, but the comment period begins only after the proposed rule is filed in the Federal Register.
Law firm’s 2023 analysis Wilson Sonsini The records showed it could take anywhere from a few days to a month to publish the proposed rule, with longer timelines typically coming when a proposal is over 100 pages. Proposed SEC rule on semi-annual reporting is coming 279 pages.
According to the SEC report rulemaking activity indexThe final timeline between final adoption of proposed rules is usually at least a year, and in some cases years.
At Polymarket, traders are giving a 51% chance the SEC will end mandatory quarterly reporting in 2026.
In other words, traders are betting big that the commission will work faster to change companies’ financial reporting requirements than its history suggests.
Disclosure: CNBC and Kalshi have a business relationship that includes customer acquisition and minority investment.
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