Donald Trump asks SEC to look into practicality of corp

Donald Trump asks SEC to look into practicality of corp

Donald Trump asks SEC to look into practicality of corp

US President Donald Trump on Friday said meetings with corporate executives prompted him to ask the US Securities and Exchange Commission (SEC) to study letting public companies file financial reports every six months instead of every quarter.

There will now be an investigation into the impact of this policy idea by the Securities and Exchange Commission (SEC), the president added.

In a tweet, he argued a longer time frame would "allow greater flexibility & save money". The SEC is an independent commission-led agency, and the president can not force it to implement rule changes.

"In speaking with some of the world's top business leaders I asked what it is that would make business (jobs) even better in the USA", the president wrote on Twitter.

Speaking to the New York Review of Books in 2015, Obama said that he had talked to a large number of businesses executives who told him, "Because they've got quarterly reports to shareholders and if they've made a long-term investment that may pay off way down the line, or if they're paying their employees more now because they think it's going to help them retain high-quality employees, a lot of times they feel like they're going to get punished in the stock market". A spokeswoman for Chairman Jay Clayton did not respond to a request for comment.

Friday's Twitter missive featured what has become a hallmark of Trump's speeches - unnamed leaders at unspecified companies supportive of his agenda.

Even if the SEC concluded the change was a good idea, companies would likely stick with the current regime to avoid investor backlash, said Ed Yardeni, founder and chief investment strategist at Yardeni Research.

Publicly traded companies in the United States, as well as Canada, now file their earnings reports every three months, or four times per year. What is clear is that investors are more reluctant to invest with companies when they have less information on their performance. Less-frequent public disclosures could hand another advantage to sophisticated investors with easy access to corporate executives, corporate governance experts said.

Other critics say companies should be required to report quarterly earnings but not quarterly guidance.

Indeed, corporate stocks are known to see sharp gains and falls on the heels of quarterly earnings releases that beat or miss forecasts - and market watchers have often said investors' quick reactions are unwarranted or ill-advised.

The U.S. Chamber of Commerce and other lobbying groups have blamed compliance burdens for preventing more companies from selling shares.

In 1998, there were around 7,500 listed companies in the United States, compared with around 4,300 in 2017, according to data compiled by the World Bank. "Investors need timely, accurate financial information to make informed investment decisions".

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