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It will be tough for Trump's SEC to overhaul reporting rules

19 August, 2018, 21:16 | Author: Lawrence Cooper
  • President Trump speaks during a Cabinet meeting at the White House on Aug. 16

Currently, all publicly traded companies in the US must file reports with the SEC four times a year, every three months.

US President Donald Trump has asked stock market regulators to look into ending the requirement for businesses to issue quarterly earnings reports.

According to a CNN Money report, Trump said, "I'd like to see twice, but we're going to see.

The move would improve "flexibility and save money" Trump said.

The SEC enjoys some level of distance from the White House because it's an independent agency.

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.

British companies are obliged to report their financial results every six months, although some provide more regular updates.... A spokeswoman for Chairman Jay Clayton did not respond to a request for comment.

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In addition to this federal requirement, Clayton would have to subject any changes to the SEC's own formal rule-making process, which would require the support of the majority of the SEC's sitting commissioners.

Donald Trump has called for United States companies to issue financial reports just twice a year rather than four times. Well-known chief executives, including JPMorgan Chase & Co's Jamie Dimon, Berkshire Hathaway Inc's Warren Buffett and BlackRock Inc's Larry Fink have raised concerns about the focus placed on earnings reports and guidance. "We start preparing three weeks in advance every quarter, essentially taking nearly a third of executives' time each quarter", said Bryan Sheffield, chief executive of shale oil producer Parsley Energy Inc.

Companies that want to move away from short-term scrutiny should instead stop publicly projecting the next quarter's earnings, Pozen added.

"My comments were made in that broader context, and included a suggestion to explore the harmonisation of the European system and the USA system of financial reporting". The statements are generally less detailed than the reports companies file with the SEC. Others said that the prospect of fewer financial reports could exacerbate price swings around earnings or fuel insider trading.

Last fall it laid out a blueprint for changes to capital market rules in a U.S. Treasury report, but did not advocate scrapping quarterly reporting.

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

"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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