Markets

Trump asks SEC to consider ending required quarterly reports

Trump asks SEC to consider ending required quarterly reports

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. "Most agree that a short-term-only view can inhibit long-term strategy and, thus, long-term investment and value creation", she said. "My comments were made in that broader context, and included a suggestion to explore the harmonisation of the European system and the United States system of financial reporting".

John McCain in Fort Drum, N.Y. Trump says he's asking federal regulators to look into the effectiveness of the quarterly financial reports that publicly traded companies are required to file.

Eliminating the quarterly reporting requirements could also lead investors to fill the information vacuum by relying more heavily on rumors and off-the-cuff remarks made by company executives, corporate governance experts say. Some high-profile executives, including JPMorgan Chase chief executive Jamie Dimon, have recommended that companies stop providing Wall Street analysts guidance on what to expect from quarterly profits, for example.

The Council of Institutional Investors (CII) believes that public companies should continue to report quarterly.

Investor reaction to the idea was mixed. Others said that the prospect of fewer financial reports could exacerbate price swings around earnings or fuel insider trading.

The US Chamber of Commerce and other lobbying groups have also blamed compliance burdens for preventing more companies from selling shares. In 1996, nearly 950 companies went public, according to data compiled by Bloomberg.

The reduction in transparency could encourage insider trading, said Robert Pozen, senior lecturer at MIT Sloan School of Management and former vice chairman of Fidelity Investments. "You're dramatically increasing the temptation for people to trade" on inside information, he said.




Last fall it laid out changes to capital market rules in a U.S. Treasury report, but did not advocate scrapping quarterly reporting. But Congress could effectively overrule any SEC decision by passing a law requiring quarterly reporting, although lawmakers may be reluctant to do so.

President Donald Trump had asked the Securities Exchange Commission to study how allowing companies to file reports with the agency biannually instead of quarterly would affect the USA economy. "We're looking at twice a year instead of four times a year".

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.

"A lot of people feel it will promote a more long-term perspective".

"Information comes out so differently these days".

"It made sense to me", he added.