A RECENT spate of shock results from a number of relatively high-profile smaller companies has shaken the confidence of many of the remaining long-term investors in the sector. In many cases, no warning was given of the problems about to befall the companies in question. Results like those from Champion Technology, Lamex and Applied International have done nothing to instil confidence in the formal disclosures coming from these firms. There is a school of thought that argues these smaller firms should be unshackled from the apparently large burden of regulatory requirements to free them up from administrative burdens in their spring days of entrepreneurial growth. Unfortunately, this kind of thinking, if taken up seriously, will effectively become a ramp and burn 'em charter. Far from there being a need for less regulation, there is arguably a need for more regulation, especially in terms of disclosure. Many of these firms are high-risk investments, given their low capital bases and sometimes precarious margins. Being told a couple of months after the end of a reporting period about something that happened at the beginning of the period is wholly unsatisfactory. The regulators will tell you that under the listing agreement, companies and their directors are obliged to inform the market place of any important event or development that has a material financial implication for the listed entity. This is all well and good, but it clearly has not worked in a number of cases and, indeed, when companies have been found wanting in this respect they have not been reprimanded in any way. In some cases, company directors have been unwilling to make any kind of statement regarding their affairs, because of the distaste they have for what might be called a profit warning. What is needed at present is a form of quarterly reporting. The full year and second quarterly reports ought to be regarded as the main financial statements of the financial year. A first and third quarter report or condition check keeping investors informed of sales revenues, exceptionals and other important events would be helpful.