Trump asks SEC to consider ending required quarterly reports

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

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

President Donald Trump said on Friday (Aug 17) he had asked stock market regulators to look into ending the requirement for businesses to issue quarterly earnings reports.

One criticism is that if companies are striving to report profit gains every quarter, they are more likely to buy back shares and cut costs than invest in their businesses.

In a tweet, he argued a longer time frame would "allow greater flexibility & save money".

The SEC is an independent agency, and the president can not force it to implement rule changes.

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 was created in 1934 in the midst of the Great Depression and requires publicly-traded companies to issue quarterly and annual earnings reports to keep the public informed on their operations and financial condition.

Trump later told reporters the idea was especially urged on him by Indra Nooyi, CEO of PepsiCo, who is stepping down in October.

Trump recently hosted a number of top company leaders while on vacation at his private golf club in Bedminster, New Jersey, including the heads of Apple Inc, Fiat Chrysler Automobiles NV, Boeing Co, FedEx Corp, and Honeywell International Inc.

Ultimately, the SEC would need the majority of its sitting commissioners (there are now four) to vote for the final changes. A spokeswoman for Chairman Jay Clayton did not respond to a request for comment.

But scrapping quarterly reporting is not on the SEC's near-term agenda, according to public records. He added that he has asked the SEC to examine moving to a six-month reporting schedule, instead of the current system of reporting corporate results every three months.

"I do believe it will help upper management".

"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.

Public companies must report their sales, profits and the state of the company's balance sheet every quarter.

The Trump administration has said it would like to reduce red tape it blames for a decline in public listings.

The SEC requires listed USA companies to issue quarterly and annual financial reports to keep investors informed about their financial position. Japan, though, moved in the opposite direction, gradually forcing companies to shift from semi-annual to quarterly reporting during the 2000s.

In a report published by the US Treasury previous year, the administration outlined policies it hoped would revitalize listings - but did not go as far as suggesting quarterly reporting requirements be scrapped. That was the argument made by Jamie Dimon, the chief executive of JPMorgan Chase, and investor Warren E. Buffett in a widely shared op-ed published by the Wall Street Journal in June.

"The president has highlighted a key consideration for American companies and, importantly, American investors and their families - encouraging long-term investment in our country", Clayton said.

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