Trump asks the SEC to consider ending quarterly earnings reports

By Guadalupe Gonzalez

President Donald Trump is taking aim at quarterly reporting by public companies.

Trump tweeted on Friday morning that he has asked the U.S. Securities and Exchange Commission to consider moving from a quarterly reporting system to a schedule where public companies would report earnings every six months. Trump said the idea came from conversations with "some of the world’s top business leaders," after soliciting suggestions from them for how to "make business (jobs) even better in the U.S." He added that switching to a six-month system would "allow greater flexibility and save money," but did not get into the details of how.

In the U.S., publicly traded companies like Tesla, Amazon, and Facebook are required to file earnings reports every three months. This allows both shareholders and the general public to get a glimpse into companies’ finances and monitor whether they’re meeting set goals.

In June, Warren Buffett and J.P. Morgan Chase CEO Jamie Dimon co-authored an op-ed in the Wall Street Journal advocating to end quarterly earnings guidance, or the practice of predicting quarterly results, arguing the focus on short-term profits affects companies’ long-term strategy, growth, and sustainability. Buffett and Dimon wrote they still support the quarterly reporting requirement, however, and were advocating only for the elimination of quarterly earnings guidance, writing that "transparency about financial and operating results is an essential aspect of U.S. public markets."

Last month, the U.S. House of Representatives passed a set of 32 standalone bills that also called for an analysis of the costs and benefits of quarterly financial disclosures. Collectively known as the JOBS and Investor Confidence Act of 2018, or JOBS Act 3.0, the package is expected to hit the Senate floor later this year. If it becomes law, the SEC would have 180 days to share its findings on quarterly financial disclosures with Congress.

The original "Trump Asks the SEC to Consider Ending Quarterly Earnings Reports" article can be seen here.

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