Published: Sun, August 19, 2018
Money | By Ethel Goodwin

Trump to SEC: Consider ending quarterly reports

Trump to SEC: Consider ending quarterly reports

But he did say the SEC Division of Corporation Finance "continues to study public company reporting requirements, including the frequency of reporting".

America's 4,300 public companies publish financial statements every three months under a rule from the Securities and Exchange Commission (SEC) that dates back to 1970.

Trump said he called on the SEC to consider the change after talking with various business leaders.

For companies, "That would allow greater flexibility & save money", Trump tweeted.

Trump said the idea came from conversations with the "world's top executives", including PepsiCo's outgoing chief executive, Indra Nooyi.

The SEC consists of five commissioners appointed by the president, although there now are only four in place, three named by Trump.

According to Mr Trump, top business leaders from around the world claimed that removing the administrative burden of such regular reporting would boost the U.S. economy and create jobs. A spokeswoman for Chairman Jay Clayton did not respond to a request for comment.

"This is not something he can change with an executive order", he added.

Even if the SEC concluded the change was a good idea, companies would likely stick with the current regime to avoid investor backlash, said Ed Yardeni, founder and chief investment strategist at Yardeni Research.

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

Earlier this year, billionaire investor Warren Buffett and Jamie Dimon, the head of JPMorgan Chase, urged companies to stop issuing quarterly earnings guidance. And corporate leaders and trade groups have increasingly vented about Wall Street's obsession with short-term earnings and revenue targets, arguing that they can prevent firms from growing their businesses and creating jobs. The report compares company earnings with that of the previous quarter.

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.

But scrapping quarterly reporting is not now on the SEC's near-term agenda, according to public records. Less-frequent public disclosures could hand another advantage to sophisticated investors with easy access to corporate executives, corporate governance experts said. Still, Clayton hasn't floated reducing the number of times that companies must disclose their financial performance each year.

"Investors and other stakeholders benefit when regulations ensure that important information is promptly and transparently provided to the marketplace", said Amy Borrus, CII's deputy director.

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