(Reuters) – President Donald Trump on Monday pushed for the U.S. Securities and Exchange Commission to stop requiring quarterly earnings reports from companies and corporations and to have them report on a six-month basis instead. “This will save money, and allow managers to focus on properly running their companies,” he wrote in a Truth Social […]
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Trump renews calls for ending quarterly reports for companies
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(Reuters) – President Donald Trump on Monday pushed for the U.S. Securities and Exchange Commission to stop requiring quarterly earnings reports from companies and corporations and to have them report on a six-month basis instead.
“This will save money, and allow managers to focus on properly running their companies,” he wrote in a Truth Social post, adding that any change would be subject to SEC approval.
“Did you ever hear the statement that, ‘China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis??? Not good!!!”
Currently, the SEC requires corporations to report their financial statements every 90 days. Half-yearly reporting would mark a huge change in disclosure requirements and put the U.S. in line with the U.K. and several countries in the European Union.
Some supporters of the proposal have argued that a move to fewer financial statements could benefit investors by encouraging companies to focus on long-term goals, while others say having to wait longer for financial information would mean less transparency and increase market volatility.
Trump’s views on the matter are not new. He had asked the SEC to consider eliminating reporting requirements for public companies during his first term as well.
The U.S. regulator did not immediately respond to Reuters’ request for a comment.
It is not entirely clear if a move to reduce reporting requirements could save costs for companies. It could, however, make investing in U.S. stocks less attractive and spark volatility across public markets in the short term.
Investors argue that one of the reasons U.S. stocks trade at a premium to equities elsewhere is due to greater financial reporting requirements.
The U.S. benchmark S&P 500 index is trading at 24.3 times earnings estimates for the next 12 months, compared to 15.28 times for Europe’s STOXX 600, according to data compiled by LSEG.
Companies listed in the U.S. did not always report their financial results on a quarterly basis. The U.S. regulator mandated the shift from semiannual to quarterly reporting in 1970.
(Reporting by Brendan O’Brien, Doina Chiacu and Johann M Cherian; Editing by Bernadette Baum and Saumyadeb Chakrabarty)