In a statement on Friday afternoon, SEC Chairman Jay Clayton said Trump has raised a "key consideration" for USA companies and that the agency's "Division of Corporation Finance continues to study public company reporting requirements, including the frequency of reporting".
While Trump nominated SEC Chairman Jay Clayton as the agency's head, as well as two of its three commissioners (one additional Trump nominee is pending before the U.S. Senate), he does not oversee its work. By tweeting that the switch would give companies more flexibility and reduce costs, Trump waded into a long-running debate on how often companies should report.
Under federal law publicly traded companies must file a 10-Q report with the SEC every three months.
And he said, the SEC already had implemented some regulatory changes and continued to consider others that "encourage long-term capital formation while preserving and, in many instances, enhancing key investor protections".
She said cutting the required frequency of financial reports was one of several suggestions that she made, with the aim of moving companies toward focusing more on long-term goals rather than immediate results. "So we're looking at that very, very seriously", Trump said as he was boarding Marine One on the White House lawn Friday morning.
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Trump's proposal, offered in a 7:30 a.m. tweet, took the securities industry by surprise and prompted some to worry that it could unintentionally lead to more market volatility and corporate mischief.
Following Clayton's statement, the agency also announced it had voted to adopt a rule change first proposed in 2016 to streamline some company accounting disclosures, in an unscheduled private commission vote. "In the end, all companies have to balance short-term and long-term performance".
"It's cockamamie idea. For starters, what's the difference between six and three months?".
Listed companies in the United States must report financial results every three months, but in many other countries businesses are mandated to do so only twice a year.
Earlier this year, Berkshire Hathaway Inc.'s Warren Buffett and JPMorgan Chase & Co.'s Jamie Dimon urged companies to stop issuing quarterly earnings guidance.
Investors have mostly argued for more transparency, while some executives say too-frequent reporting creates an unhealthy focus on short-term targets. Japan, though, moved in the opposite direction, gradually forcing companies to shift from semi-annual to quarterly reporting during the 2000s.
"Investors need timely, accurate financial information to make informed investment decisions", Amy Borrus, deputy director of the Council of Institutional Investors, said in a statement.