Trump asks SEC to study ending quarterly earnings for public companies

Marco Green
August 18, 2018

Regulators have said that quarterly reporting acts as an essential check and balance on the market, but many companies complain that it is overly bureaucratic and gives an artificial, short-term view of their performance.

Abolishing the rule would "allow greater flexibility & save money" for businesses, Mr. Trump tweeted.

"I'd like to see twice (a year), but we're going to see", Trump said.

SEC chairman Jay Clayton issued a statement saying the agency "continues to study public company reporting requirements, including the frequency of reporting".

The SEC was created in 1934 in the midst of the great depression and requires publicly-traded companies to issue quarterly and annual earnings reports to keep the public informed on their operations and financial situation. "So we're looking at that very, very seriously".

Quarterly financial reports are a staple of USA corporate practice.

Other critics say companies should be required to report quarterly earnings but not quarterly guidance.

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. "She said, two times a year reporting, not quarterly".

Some believe that executives are making decisions based on short-term thinking to satisfy the market at the expense of the long-term viability of their companies.

There are also tremendous expenses associated with preparing quarterly and annual reports.

"Clear communication of a company's strategic goals-along with metrics that can be evaluated over time-will always be critical to shareholders", they wrote in the op-ed.

SEC spokesmen didn't immediately respond to a request for comment.

Other reports by Click Lancashire

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