It is a sign of the maturity of Singapore's financial markets that the Council on Corporate Disclosure and Governance (CCDG) is reviewing the rules prescribing quarterly reporting just three years since they were implemented. When rules and regulations are not working as they were intended, or could work better, it is much healthier for the market that these are reviewed openly than to insist companies comply to them. But when the CCDG deliberates over the merits of quarterly reporting it is critical it reviews all aspects to the debate, including the related issue of the time companies have to report their financial statements.

Overall, the review is all about improving communication of market sensitive information to investors. Since April 2003, companies with a market capitalisation of S$75 mln or more have had to release financial statements every quarter. This is up from the S$20 mln threshold, instituted only four months earlier. But several companies, most notably DBS Bank, say they have not seen a tangible return on the substantial costs and effort involved in communicating financial statements every quarter.

Part of the reason may be that analysts and journalists often must approach companies individually for additional comment and clarification, because the relevant announcements are released to the market without a briefing being held. This reduces the efficacy of quarterly reporting. The CCDG will inevitably have to take these various points into account.

But it should not forget another important issue: the deadline for reporting earnings. Companies currently have 45 days from the end of the relevant period to file their accounts. While speedier disclosure tightens discipline it also means there are a large number of fillings in a short period of time - too many for analysts and the media to digest properly during earnings season, followed by a long lull in newsflow. The communication with investors is at first drowned out, then sparse. Given that the whole issue of quarterly reporting revolves around communication with shareholders, it is an issue that also ought to get attention.