President Donald Trump has proposed changing the requirement that companies submit quarterly earnings reports to a requirement that they submit semiannual reports instead.
Under current law, the Securities and Exchange Commission (SEC) mandates that companies file information detailing their financial performance, corporate governance, and other relevant disclosures. The purpose is to offer transparency for financial markets, shareholders, and analysts.
The president said that after about 50 years, it is time for reform.
In a Sept. 15 Truth Social post, Trump said publicly traded businesses “should no longer be forced to ‘Report’” every three months but rather on a six-month basis.
“This will save money, and allow managers to focus on properly running their companies,” he said. “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!”
Trump added that the idea is subject to SEC approval.
In 2018, during his first term, Trump stated on social media that business leaders worldwide said switching from quarterly to semiannual “would make business (jobs) even better in the U.S.” “‘Stop quarterly reporting & go to a six month system’ said one,” the president wrote on X at the time. “That would allow greater flexibility & save money. I have asked the SEC to study!”
Then-SEC Chairman Jay Clayton launched a review that year, evaluating the advantages and disadvantages of the quarterly system. Economists for the SEC concluded in a December 2018 paper that quarterly reporting requirements “have been attributed to greater transparency of information and a lower cost of capital for companies seeking to raise funds.”
The report, however, acknowledged that issuing guidance “blinds management from seeing the bigger picture,” effectively perpetuating “short-term thinking.”
“We have tried to balance the pros and cons of quarterly reporting by addressing issues that are currently being considered by top officials in government and regulators,” officials said. “In the end, like so many complex issues, compromises will have to be made, especially if we wish to encourage companies, large and small, to grow and prosper for all of their stakeholders.”
Current rules could be revised by either Congress or the SEC.
