Trump Calls On SEC to Study Ending Quarterly Reporting

President Trump speaks during a Cabinet meeting at the White House on Aug. 16

While it's hard to determine what will come of Trump's tweet and charge to the SEC, if such a change were to occur, Wedbush Securities analyst Christopher Svezia said there could be positives for both investors and companies.

The president on Friday said he has asked federal regulators to study whether public companies should be required to report results half as often as they now do - every six months instead of every three months, or once a quarter.

Trump said he directed the SEC to look into a change in its requirements.

"That would allow greater flexibility & save money", he said in a post on Twitter on Friday. While some business leaders have groaned about the rigors associated with having to meet targets and metrics four times a year, the SEC has been reticent to make any changes.

In a tweet early Friday, Trump said that after speaking with "some of the world's top business leaders", he's asked the U.S. Securities and Exchange Commission to determine whether shifting to a six-month reporting regimen would make more sense. A spokeswoman for Chairman Jay Clayton did not respond to a request for comment.

The proposal would mean rethinking a cornerstone of the country's accounting system since the Great Depression: Every three months, publicly traded companies must offer a detailed financial picture - including their revenue and profits - to shareholders.

It's a move that would benefit businesses and workers, the president said. It's unclear whether management at companies that report semi-annually take a longer-term investment strategy than management at companies reporting quarterly, said Salman Arif, a business professor at Indiana University who has studied the difference in reporting periods. Two influential figures, JPMorgan Chase CEO Jamie Dimon and billionaire investor Warren Buffett, recently urged together that public companies either reduce or eliminate quarterly earnings guidance.

Last fall it laid out changes to capital market rules in a US Treasury report, but did not advocate scrapping quarterly reporting. But some argue the quarterly requirement puts unnecessary pressure on companies because it forces them to focus on short-term results. Others said that the prospect of fewer financial reports could exacerbate price swings around earnings or fuel insider trading.

In a report published by the US Treasury past year, the administration outlined policies it hoped would revitalize listings - but did not go as far as suggesting quarterly reporting requirements be scrapped. Still, Clayton hasn't floated reducing the number of times that companies must disclose their financial performance each year.

The U.S. Chamber of Commerce and other lobbying groups have blamed compliance burdens for preventing more companies from selling shares.

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