Trump seeks to halve corporate reporting
NEW YORK • U.S. President Donald Trump on Friday said meetings with corporate executives prompted him to ask the U.S. Securities and Exchange Commission (SEC) to study letting public companies file financial reports every six months instead of every quarter.
Half-yearly reporting would mark a huge change in U.S. disclosure requirements and put them in line with European Union and United Kingdom rules.
By tweeting that the switch would give companies more flexibility and reduce costs, Trump waded into a long-running debate on how often companies should report.
“I’d like to see twice, but we’re going to see,” Trump later told reporters when asked about his tweet. He said outgoing PepsiCo CEO Indra Nooyi had brought it up to him.
“Many market participants, as well as the Business Roundtable which we are a part of, have been discussing how to better orient corporations to have a more longterm view,” Nooyi said in a statement.
Some investors on Friday said quarterly disclosures are essential for investment decisions and supported richer U.S. stock valuations, and that shares could become more volatile if companies report twice yearly.
But executives and other investors said Trump’s argument made sense because it would cut costs of compiling and filing results and remove short-term distractions for those running companies.
The SEC is an independent agency, and the president cannot force it to implement rule changes. Any move to scrap quarterly filings would have to be voted on by the SEC’s sitting commissioners, who are political appointees.
While capital market rules are not traditionally a partisan issue, a major rule change would likely meet opposition from the agency’s two Democratic-leaning commissioners, Robert Jackson and Kara Stein, who generally advocate for strong corporate governance.
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.
“It’s cockamamie idea. For starters, what’s the difference between six and three months?” Yardeni said.
Under Clayton, a Trump appointee, the SEC has taken steps to relax rules for issuers, including allowing firms going public to file information confidentially, and is currently discussing easing other compliance rules.
But scrapping quarterly reporting is not on the SEC’s near-term agenda, according to public records.
Billionaire investor Warren Buffett and JPMorgan Chase & Co. chief executive Jamie Dimon wrote in the Wall Street Journal in June that companies should move away from quarterly guidance, but did not call for an end to quarterly reporting.