Trump Call For SEC To Study Reporting Rules Sparks Debate

20 August, 2018, 21:16 | Author: Gerard Cortez
  • Trump calls for study on ending to quarterly earnings reports

SEC Chairman Jay Clayton, a Trump nominee, has said increasing the number of public companies and initial public offerings are among his top priorities.

President Donald Trump on Friday called on the U.S. Securities and Exchange Commission to study ending quarterly reporting requirements for public companies and switch to a six-month system in order to cut costs and spur growth, a major policy shift that experts say would likely be embraced by many businesses but resisted by investors.

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

Jay Clayton, Chairman of the Securities and Exchange Commission, listens during an interview with CNBC at the Sandler O'Neill + Partners Global Exchange and Brokerage Conference in NY, U.S., June 6, 2018. "I have asked the SEC to study!"

But he said energy companies would probably still report some oil and gas well data every three months to please investors.

Others said quarterly disclosures are essential for investment decisions and support richer US stock valuations, and that a change could make shares more volatile. At a July rally in Florida, Trump said the chief executive of "one of the greatest companies in the world" urged him to press his tariff fight even though it would impact his business. "Either way we're talking about a very short-term period", Yardeni added. Visit MarketWatch.com for more information on this news. "Many investors and market participants share this perspective on the importance of long-term investing". Nooyi said she thinks it would be beneficial to harmonize American and European rules on financial reporting. "One of the inherent issues with quarterly reporting is that it does tend to drive management to make decisions geared toward short-term metrics, which is not always in everyone's best interest". "So we're looking at that very very curiously, we're looking at twice a year instead of four times a year".

Imran Khan defeats Shahbaz to become Pakistan’s new Prime Minister
When the reporters asked him about it, he said that it is a Kashmiri shawl. PTI Chairman Imran Khan has been elected as Prime Minister of Pakistan.

The president did not name the leaders.

But scrapping quarterly reporting is not now on the SEC's near-term agenda, according to public records.

Quarterly earnings guidance is used by Wall Street and City analysts to build their earnings estimates and gauge company performance against these figures. The most recent data from the United Kingdom shows that only 57 of the companies in the benchmark FTSE 100 index were still issuing quarterly reports as of September 2017, according to the Investment Association.

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".

Quarterly reporting has always been a cornerstone of USA capital markets, with bank analysts known for making closely monitored recommendations on buying or selling stock tied to the numbers.

"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.

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