Trump ignites Wall Street debate with his tweet on earnings

Trump ignites Wall Street debate with his tweet on earnings

American firms should no longer have to report on a quarterly basis, U.S. president Donald Trump has said.

US President Donald Trump said on Friday he has asked the U.S. Securities and Exchange Commission to study the impact of allowing companies to file reports with the financial regulator every six months instead of every quarter.

The SEC could make such a change on its own without Congress passing legislation, but that doesn't mean it will, said David Martin, who previously ran the agency unit that oversees corporate filings. That would allow greater flexibility & save money.

Ultimately, the SEC is an independent commission-led agency and the president can not force it to change policies.

According to Mr Trump, top business leaders from around the world claimed that removing the administrative burden of such regular reporting would boost the USA economy and create jobs.

British companies are obliged to report their financial results every six months, although some provide more regular updates....

SEC spokesmen didn't immediately respond to a request for comment.

Trump said the issue was brought to his attention recently by Indra Nooyi, the chief executive officer of PepsiCo Inc.

Public companies must report their sales, profits and the state of the company's balance sheet every quarter.

Trump tweets the U.S. could abandon quarterly financial reporting after meetings with business leaders.

Billionaire investor Warren Buffett and JPMorgan Chase & Co Chief Executive Jamie Dimon wrote in the Wall Street Journal in June that companies should move away from quarterly guidance, but did not call for an end to quarterly reporting.

Some corporate leaders and trade groups have vented about public companies' focus on short-term earnings and revenue goals, arguing that it can prevent firms from growing their businesses and creating jobs. Others said that the prospect of fewer financial reports could exacerbate price swings around earnings or fuel insider trading. "We start preparing three weeks in advance every quarter, essentially taking nearly a third of executives' time each quarter", said Bryan Sheffield, chief executive of shale oil producer Parsley Energy Inc. One of the reasons Tesla CEO Elon Musk wants to take his company private, he told his employees last week, was the way quarterly reports distort decisions at the company. "And so they don't do it, because the definition of being a successful business is narrowed to what your quarterly earnings reports are".

"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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