President Donald Trump‘s campaign to abolish quarterly corporate reporting is gaining traction as the White House takes a more active role in shaping the Securities and Exchange Commission’s (SEC) agenda.
SEC May Shift To Biannual Filings By 2027 Despite Pushback
Despite potential resistance from some investors, analysts anticipate that the SEC could adopt a European-style system, mandating companies to report only twice a year by 2027, reported Reuters. However, many large companies may choose to continue with the current quarterly system.
Trump previously advocated for this change, but it stalled due to a busy agenda and COVID-19; now, SEC Chair Paul Atkins, a critic of excessive regulations, is more likely to implement it.
The White House has influenced the SEC’s agenda, driving policy changes on cryptocurrencies, workforce cuts, and corporate disclosure reforms, while the SEC plans to review Trump’s proposal as a priority.
James Angel, an expert from Georgetown University’s McDonough School of Business, told the publication, “Trump 2.0 is bolder than Trump 1.0, so we may actually see action.”
Moreover, the U.S. Chamber of Commerce’s VP, Bill Hulse, echoes the sentiment, stating that modernizing disclosure simplifies compliance and helps investors focus on key information.
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Trump’s Proposal Sparks Transparency Debate
Trump has urged the SEC to allow U.S.-listed companies to switch to biannual disclosures. He argues that this shift would cut costs and enable management to concentrate on long-term objectives.
The President’s proposal has sparked a sharp debate among market commentators and analysts. While some argue that the current quarterly reporting system is detrimental to U.S. companies, others, like analyst Joseph Carlson, dismiss the argument that quarterly reports drive short-term thinking, calling it “nonsense.”
Former Treasury Secretary Lawrence H. Summers warned that Trump’s proposal could weaken accountability and transparency in U.S. markets. He drew a sharp analogy, comparing quarterly earnings reports to student grades, stating that being monitored and accountable for results is painful but necessary for proper functioning.
On the other hand, Tom Lee says, “A 90-day cycle is not how business operates. This is why so many companies are staying private.” He stated that shifting away from the current schedule would reduce pressure in public markets.
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