Trump's proposal sparks divide as investors and regulators weigh transparency against costs
The US Securities and Exchange Commission is reviewing a proposal that could end the long-standing requirement for companies to publish quarterly earnings, following a request from US President Donald Trump.
A spokesperson told CNBC that “at President Trump’s request, Chairman Atkins and the SEC is prioritizing this proposal to further eliminate unnecessary regulatory burdens on companies.”
Trump announced on Truth Social that businesses “should no longer be forced to ‘Report’ on a quarterly basis” and instead report results every six months.
He said the change would “save money, and allow managers to focus on properly running their companies,” as reported by Reuters.
If implemented, the change would mark the biggest shift in US corporate disclosure rules in over 50 years.
According to Reuters, quarterly reporting has been mandatory since 1970, while in the UK and European Union, companies report semiannually.
China, however, requires quarterly, semiannual, and annual reports, with Hong Kong-listed firms reporting every six months.
The potential change has sparked debate among executives, regulators, and investors.
Art Hogan, chief market strategist at B. Riley Wealth Management, told CNBC that “the pros of quarterly reporting outweigh the cons,” warning that waiting six months for results “would cause more difficulties than it would add benefits.”
Jill Fisch, a law professor at the University of Pennsylvania, told Reuters that delaying disclosures could reduce efficiency, adding, “Our capital markets are the gold standard in the world for their efficiency and transparency.”
Others argue that quarterly requirements encourage short-term thinking.
CNN noted that JPMorgan Chase CEO Jamie Dimon and Berkshire Hathaway’s Warren Buffett wrote in a 2018 Wall Street Journal op-ed that quarterly guidance often sacrifices “long-term strategy, growth and sustainability” for near-term profits.
Norway’s sovereign wealth fund has also supported semiannual reporting to encourage a longer-term outlook.
Support for reform has extended to exchanges.
Nasdaq CEO Adena Friedman said in a LinkedIn post that giving companies the option to report less frequently would reduce “friction, burden and costs.”
CNN reported that the Long-Term Stock Exchange plans to petition the SEC to eliminate quarterly reporting altogether.
The regulatory process could take six to 12 months, according to Evercore ISI strategist Sarah Bianchi, who told CNBC that “with Trump’s directive this is now something that has to be taken seriously as a possibility.”
While the SEC could make the change with a majority vote, Reuters noted that many companies may still choose to provide quarterly updates to satisfy investor demand.
The White House declined further comment on Trump’s post, while SEC Chair Paul Atkins has not publicly spoken on the issue.
