Trump asks U.S. SEC to consider switch to half-year corporate filings

President Donald Trump

Oliver Contreras POOL EPA-EFE REX Shutterstock President Donald Trump

Chairman Jay Clayton issued a statement Friday saying the agency "continues to study" reporting requirements, including how frequently companies should announce results.

U.S. President Donald Trump asked securities regulators to explore replacing quarterly reporting requirements with half-yearly filings at the urging of executives including PepsiCo Chief Executive Indra Nooyi, reigniting a debate about how often companies should give financial updates to investors.

Asking the Securities and Exchange Commission (SEC) - an independent agency - to move to twice-yearly reporting could help create jobs, Trump said on Twitter.

For companies, "That would allow greater flexibility & save money", Trump tweeted.

Ultimately, the SEC is an independent commission-led agency and the president can not force it to change policies.

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".

Under federal law publicly traded companies must file a 10-Q report with the SEC every three months.

A top criticism is that if companies are striving to report profit gains every quarter, they are more likely to buy back shares and cut costs than invest in their businesses.

Trump tweets the USA could abandon quarterly financial reporting after meetings with business leaders.

Publicly traded companies in the United States, as well as Canada, now file their earnings reports every three months, or four times per year.

Businesses have long complained that the reports require company executives to focus too much on the short term. "So we're looking at that very, very seriously", Trump said as he was boarding Marine One on the White House lawn Friday morning.

"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. Japan gradually moved from bi-annual to quarterly reporting during the 2000s.

"It's cockamamie idea. For starters, what's the difference between six and three months?".

Tesla Inc (TSLA.O) Chief Executive Elon Musk stunned investors last week with a plan to take the electric carmaker private, a move he says would benefit shareholders by removing short-term pressures.

Scrapping the quarterly requirement "is a solution in search of a problem", said Charles Elson, a professor and director of the University of Delaware's Weinberg Center for Corporate Governance. 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.

He would need to draft a proposed rule-change which would then be put to an industry consultation during which investors, companies, exchanges, pension funds and public interest groups would likely bombard the SEC with information.

"It is not the fact that you report quarterly that is the problem; it's a bad management team", he said.

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