Trump asks U.S. SEC to consider switch to half-year corporate filings

Muriel Colon
August 19, 2018

President Trump has instructed the American markets watchdog to investigate ending the quarterly reporting requirement for public companies that has been in place for almost 50 years.

The US President said he has asked the Securities and Exchange Commission to consider altering rules requiring firms to report every quarter.

The SEC could make such a change on its own without Congress passing legislation, but that doesn't mean it will, said David Martin, who previously ran the agency unit that oversees corporate filings.

"That would allow greater flexibility & save money", Trump said in a tweet.

On Twitter, Trump said that one executive had suggested the change as a way to boost business, but did not name the individual or the company. He said one had told him, "Stop quarterly reporting & go to a six month system". A spokeswoman for Chairman Jay Clayton did not respond to a request for comment.

Trump believes he has the support of some executives for a change.

The reports can be found on the SEC's website.

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

He picked a good moment to put the idea forward: Elon Musk is in the midst of a dramatic push to take Tesla Inc private in large part, he says, to remove the pressures of having to report quarterly earnings.

Billionaire investor Warren Buffett and JPMorgan Chase & Co Chief Executive Jamie Dimon wrote in the Wall Street Journal in June that US companies should move away from giving quarterly guidance, arguing it holds back spending on hiring, investment and research, but did not call for an end to quarterly reporting. What is clear is that investors are more reluctant to invest with companies when they have less information on their performance. "One of the inherent issues with quarterly reporting is that it does tend to drive management to make decisions geared toward short-term metrics, which is not always in everyone's best interest". The U.S. enacted quarterly reporting in.

Indeed, corporate stocks are known to see sharp gains and falls on the heels of quarterly earnings releases that beat or miss forecasts - and market watchers have often said investors' quick reactions are unwarranted or ill-advised. "She said, two times a year reporting, not quarterly".

In 1998, there were around 7,500 listed companies in the United States, compared with around 4,300 in 2017, according to data compiled by the World Bank.

The U.S. Chamber of Commerce and other lobbying groups have blamed compliance burdens for preventing more companies from selling shares. "Investors need timely, accurate financial information to make informed investment decisions".

Other reports by

Discuss This Article