U.S. President Donald Trump is calling for public companies to stop issuing earnings reports on a quarterly basis and switch to semi-annual instead.
In a social media post, Trump wrote that his idea is “subject to SEC approval” and would “save money and allow managers to focus on properly running their companies.”
Current regulations require companies to report their financial results on a quarterly basis, though providing forward guidance is voluntary.
The rules governing disclosure by public companies can be changed either by the U.S. Securities and Exchange Commission (SEC) or by Congress in Washington, D.C.
President Trump is not alone in calling for a move to semi-annual reports rather than issuing quarterly financial results.
In a 2018 op-ed piece, investor Warren Buffett and JPMorgan Chase (JPM) CEO Jamie Dimon called for doing away with quarterly guidance, although not earnings reports.
Trump’s proposal would be more in line with markets in the United Kingdom and Europe, where companies are required to file earnings reports semi-annually but can issue quarterly results if they choose.
Earlier this year, Norway’s sovereign wealth fund proposed switching to semi-annual reporting, arguing that such a change would allow companies to focus more on the long-term.
Companies listed on the Hong Kong Stock Exchange in Asia only report their financial results every six months rather than four times a year.
It is not clear if the idea of switching to semi-annual financial results is something that either the SEC or the U.S. Congress is currently considering.
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