MercoPress, en Español

Montevideo, November 21st 2018 - 10:00 UTC

Donald Trump wants US companies 'to stop quarterly reporting & go to a six month system'

Saturday, August 18th 2018 - 08:13 UTC
Full article
The move would improve “flexibility and save money” Trump said. Some analysts have criticized the idea, saying it would “keep investors in the dark for longer” The move would improve “flexibility and save money” Trump said. Some analysts have criticized the idea, saying it would “keep investors in the dark for longer”

Donald Trump has called for US companies to issue financial reports just twice a year rather than four times. The US President said he has asked the Securities and Exchange Commission to consider altering rules requiring firms to report every quarter.

 The move would improve “flexibility and save money”, Mr. Trump said. Some analysts have criticized the idea, which they say would “keep investors in the dark for longer”.

Mr Trump tweeted: ”In speaking with some of the world's top business leaders I asked what it is that would make business (jobs) even better in the US. 'Stop quarterly reporting & go to a six month system,' said one“, he tweeted.

President Trump said he had ”asked the SEC to study“ such a move.

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.

”If you reduce transparency, including the frequency of reporting, it is thus likely to increase uncertainty, which is the enemy of investors,“ said Robert Phipps, a director at Per Sterling Capital Management.

However, other analysts said reducing the frequency of financial reporting to twice a year could potentially reduce ”short-termism“ in listed companies' strategies.

”The difficulty in making better long-term decisions away from a quarterly reporting cycle certainly stands out as being beneficial,“ said Art Hogan at investment bank B. Riley FBR.

Randy Frederick at Charles Schwab argued that such a major change for both companies and traders would be ”like trying to turn around the Queen Mary in a swimming pool“.

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

The SEC requires listed US companies to issue quarterly and annual financial reports to keep investors informed about their financial position.

The Trump administration wants to cut red tape that it says is responsible for a 50% drop in companies coming to market over the past two decades, including relaxing some of the disclosure and compliance requirements for listed companies and those looking to go public.

In a report published by the US Treasury last year, the administration outlined policies it hoped would revitalize listings - but did not go as far as suggesting quarterly reporting requirements be scrapped.

Categories: Economy, Politics, United States.

Top Comments

Disclaimer & comment rules

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!