President Trump announced on the Truth Social platform today: “Subject to SEC Approval, Companies and Corporations should no longer be forced to “Report” on a quarterly basis (Quarterly Reporting!), but rather to Report on a “Six (6) Month Basis.” This will save money, and allow managers to focus on properly running their companies. Did you ever hear the statement that, “China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis???” Not good!!!”.
According to The CorporateCouncel.net website, Trump had asked the SEC to study the possibility of moving public companies from a quarterly to a semi-annual reporting standard in 2018. The SEC solicited public comment back in 2018, but no changes were made. View the article here: SEC Solicits Public Comment on Earnings Releases and Quarterly Reports.
Some arguments in favor for this change include:
- Cost savings for companies.
- Could discourage short-term performance metrics that may impede long-term strategies.
- Alignment with EU and UK as they have less frequent reporting requirements.
Some arguments against or concerns if this were to happen:
- Less frequent reporting may reduce transparency.
- Six month metrics could allow issues to fester unnoticed or create an increase in volatility when numbers are released.
- Could disrupt current forecasting models and comparability between companies.
We will continue to follow this and update as new information is available.