US President Donald Trump is pushing regulators to loosen reporting requirements for public companies, echoing his efforts to end quarterly earnings reports during his first term in the White House.
Less frequent reporting, Trump argued, would “save money, and allow managers to focus on properly running their companies”.
The US has required public companies to report earnings every three months since 1970.
Trump had also called on the SEC to adopt semi-annual reporting during his first term, though his proposal failed to materialise.
In his post on Monday, Trump suggested that China’s reporting requirements for public companies were business-friendly, compared to those in the US.
In keeping with his attempts to abolish quarterly earnings reports during his first term in office, US President Donald Trump is pressuring regulators to relax reporting requirements for publicly traded companies.
Trump called for the Securities and Exchange Commission to switch from requiring companies to report on a quarterly basis to a semi-annual schedule in a post on Truth Social.
Trump contended that this would “save money, and allow managers to focus on properly running their companies” (p. 1).
The move’s proponents claim it could increase the number of publicly traded companies in the US, reversing a recent downward trend. For transparency, however, investors depend on frequent reports.
Since 1970, public companies in the US have been required to report their earnings every three months. Shareholders and other critics are likely to oppose any attempt to reduce the frequency of those reports, claiming that the change could jeopardize transparency and increase market volatility.
During his first term, Trump had also urged the SEC to implement semi-annual reporting, but his plan was never implemented. Current regulator leadership, including chair Paul Atkins, has criticized disclosures that businesses view as onerous.
An inquiry was not immediately answered by the SEC.
According to the Wall Street Journal, the Long-Term Stock Exchange, a stock trading venue, announced last week that it planned to request permission from the SEC to permit companies to report results twice a year rather than quarterly, indicating that support for Trump’s proposal is growing.
Particularly, JPMorgan Chase CEO Jamie Dimon and seasoned investor Warren Buffett have questioned the value of quarterly financial guidance, cautioning that a focus on short-term profits comes at the expense of long-term strategy.
According to Trump’s post from Monday, China’s public company reporting regulations are more business-friendly than those in the US.
“Have you ever heard “China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis???”? That’s not good!” Trump wrote.
If businesses were permitted to submit reports every six months, the US would more closely resemble the UK and a number of EU nations.
