Trump asks SEC to mull half-year corporate filings vs quarterly

US President Donald Trump

US President Donald Trump

But he did say the SEC Division of Corporation Finance "continues to study public company reporting requirements, including the frequency of reporting".

In a tweet dispatched Friday morning, Trump said he had spoken to "some of the world's top business leaders" about making business and jobs "even better" in the US and they had advocated an end to quarterly reporting.

Such a switch would mark a huge change in the U.S. Securities and Exchange Commission's disclosure requirements and put them in line with European Union and United Kingdom rules.

The move would improve "flexibility and save money" Trump said.

However feasible or likely the plan is, Trump's tweet does represent the sort of business-minded approach that corporate America hoped it would get from having a former executive in the White House.

The SEC consists of five commissioners appointed by the president, although there now are only four in place, three named by Trump, including Clayton.

Trump said on Twitter that "some of the world's top business leaders" have advised him that converting to semiannual reporting would improve the country's jobs climate.

One reason for a possible change is that reporting every three months means that companies sometimes lose long-term focus because their efforts are spent on showing short-term profits each quarter.

"My comments were made in that broader context, and included a suggestion to explore the harmonization of the European system and the US system of financial reporting".

Others said quarterly disclosures are essential for investment decisions and support richer US stock valuations, and that a change could make shares more volatile. "So we're looking at that very very curiously, we're looking at twice a year instead of four times a year".

Donald Trump has called for USA companies to issue financial reports just twice a year rather than four times.

"The difficulty in making better long-term decisions away from a quarterly reporting cycle certainly stands out as being beneficial", said Art Hogan at investment bank B. Riley FBR.

"If public companies moved from quarterly to semi-annual reporting, that would deprive investors of timely information and dramatically increase the potential for insider trading", said Robert Pozen, Senior Lecturer at the MIT Sloan School of Management, who has studied the issue.

Updates with statements from Nooyi, SEC chairman; adds background.

President Donald Trump brought a long-simmering debate on Wall Street to the surface yesterday when he prodded regulators to look into scaling back how often publicly traded companies report financial results. "And so they don't do it, because the definition of being a successful business is narrowed to what your quarterly earnings reports are". I find it very rich that he's proposing this with some veil that it's going to help companies think long-term.

No. While the Securities Exchange Act of 1934 requires companies to report periodically, the SEC has the discretion to draw up or change the specific rules on how frequently this happens.

"Investors and other stakeholders benefit when regulations ensure that important information is promptly and transparently provided to the marketplace", said Amy Borrus, CII's deputy director. Two influential figures, JPMorgan Chase CEO Jamie Dimon and billionaire investor Warren Buffett, recently urged together that public companies either reduce or eliminate quarterly earnings guidance. In 1996, nearly 950 companies went public, according to data compiled by Bloomberg. A lot can change in a three-to six-month period, especially with all the disruption in technology.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.