Trump Calls for Shift to Semiannual Earnings Reporting to Reduce Regulatory Burden
President Donald Trump renewed his call on Monday for U.S. companies to abandon quarterly earnings reports in favor of semiannual disclosures. The move aims to alleviate regulatory pressures and encourage management to focus on long-term business strategies.
The U.S. Securities and Exchange Commission (SEC) confirmed it is actively examining the proposal. “At President Trump’s request, Chairman [Paul] Atkins and the SEC is prioritizing this proposal to further eliminate unnecessary regulatory burdens on companies,” an SEC spokesperson told CNBC.
Background and Industry Perspectives
Trump initially shared the idea on his social media platform Truth Social, noting the change would be “subject to SEC approval” and could “save money, and allow managers to focus on properly running their companies.” He contrasted U.S. practices with China’s purported longer-term corporate management outlook, stating, “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!!!'”
During his first term, Trump had requested the SEC study the issue, but no concrete recommendations emerged. The debate over quarterly reporting is not new. In 2018, Warren Buffett and Jamie Dimon co-authored a Wall Street Journal op-ed advocating for eliminating quarterly earnings guidance, citing its tendency to promote short-term profit focus at the expense of sustainable growth. However, they did not call for ending quarterly earnings reports altogether.
Regulatory and Market Implications
Current SEC regulations mandate quarterly earnings reports, though issuing forecasts remains voluntary. Modifying the reporting frequency would not require congressional approval but a majority vote at the SEC, which currently has a Republican majority of three to one, with one vacancy. Sarah Bianchi, chief strategist at Evercore ISI, estimates the process could take six to twelve months.
Bianchi emphasized that while SEC commissioners generally exercise independence, the administration’s policy priorities often influence regulatory agenda setting. “If the effort at the SEC to reconsider quarterly reporting gains steam, it could also prompt conversations around when and how companies issue guidance and communicate with investors that would have important ramifications for public markets,” she said.
Support and Criticism from Market Experts
Proponents of the existing system argue that quarterly reporting ensures timely transparency and investor confidence. Art Hogan, chief market strategist at B. Riley Wealth Management, remarked, “When you weigh this out and put it on a whiteboard, the pros of quarterly reporting outweigh the cons. Having to wait six months for official results, I just think would cause more difficulties than it would add benefits.” He also highlighted that U.S. companies’ use of generally accepted accounting principles (GAAP) provides a standardized and reliable framework, making U.S. reporting among the most transparent worldwide.
Trump’s comparison with China is complicated by the fact that Chinese companies are required to file quarterly, semiannual, and annual reports, although Hong Kong-listed firms report semiannually. The U.S. proposal would align more closely with the U.K. and European Union, where semiannual reporting is standard but quarterly reports are optional.
Hogan cautioned against direct comparisons with European markets, noting, “How many companies in the European markets have trillion-dollar market caps and are growing revenues at 60% a year or have gross margins that are north of 50%? The investor is better suited to having more information than less frequent information.”
Broader Context and Next Steps
Earlier this year, Norway’s sovereign wealth fund advocated for semiannual reporting, suggesting it would enable companies to adopt longer-term perspectives. Similarly, the Long-Term Stock Exchange platform supports reducing reporting frequency to emphasize sustainable growth.
The White House declined further comment on Trump’s social media post. CNBC has reached out to the SEC for additional remarks. Should the SEC move forward, market participants will closely monitor the regulatory process and any shifts in corporate disclosure practices.
FinOracleAI — Market View
The SEC’s active review of the proposal to end quarterly earnings reporting introduces regulatory uncertainty that could affect market transparency and investor decision-making in the short term. While reducing reporting frequency may relieve some compliance costs and encourage long-term strategic focus, it risks diminishing timely information flow crucial for market efficiency. The proposal’s progress depends on SEC dynamics and potential pushback from investors and market participants valuing transparency. Stakeholders should watch for SEC rulemaking developments and any congressional responses.
Impact: neutral
