Trump asks SEC to consider ending required quarterly finance reports

Trump asks SEC to consider ending required quarterly finance reports

U.S. President Donald Trump asked securities regulators to explore replacing quarterly reporting requirements with half-yearly filings at the urging of executives including PepsiCo Chief Executive Indra Nooyi, reigniting a debate about how often companies should give financial updates to investors.

"I asked [the leaders] what it is that would make business (jobs) even better in the U.S.", Trump tweeted.

The SEC was created in 1934 in the midst of the Great Depression and requires publicly-traded companies to issue quarterly and annual earnings reports to keep the public informed on their operations and financial condition.

Some market commentators believe the pressure to meet targets every 90 days causes executives to make decisions based on short-term thinking to satisfy the market at the expense of the long-term viability of their companies. The SEC requires public companies to report profit, revenue and other figures publicly every three months. Please read our before commenting.

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"My comments were made in that broader context, and included a suggestion to explore the harmonization of the European system and the USA system of financial reporting". One of the reasons Tesla CEO Elon Musk wants to take his company private, he told his employees last week, was the way quarterly reports distort decisions at the company.

Trump recently hosted company leaders at his private golf club in Bedminster, New Jersey, including the heads of Apple Inc AAPL.O , Fiat Chrysler Automobiles NV FCHA.MI , Boeing Co BA.N , FedEx Corp FDX.N , and Honeywell International Inc HON.N .

Switching to a six-monthly reporting system would "allow greater flexibility and save money", Mr Trump said.

Nooyi confirmed on Friday she had made suggestions on how to encourage companies to have a more long-term view. "In the end, all companies have to balance short-term and long-term performance".

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The SEC has been reluctant to make any changes in quarterly financial reporting, which has always been a cornerstone of USA capital markets. Less-frequent public disclosures could hand another advantage to sophisticated investors with easy access to corporate executives, corporate governance experts said.

In a report published by the US Treasury previous year, the administration outlined policies it hoped would revitalize listings - but did not go as far as suggesting quarterly reporting requirements be scrapped. Some said the change could help companies to invest more in their businesses rather than race to show profit gains each quarter.

The US Chamber of Commerce and other lobbying groups have also blamed compliance burdens for preventing more companies from selling shares. A statistic they often point to is the drop in IPOs over the past 20 years.

No. The SEC is independent of the administration and sets its own agenda. That number fell to 237 in 2017.

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Analysts said the idea of having companies report less frequently was not new, with some suggesting it could make markets less transparent and more volatile when financial data is released after such a long period.

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