SEC's Clayton says agency studying frequency of corporate reporting, after Trump tweet

SEC's Clayton says agency studying frequency of corporate reporting, after Trump tweet

President Trump wants regulators to study a move that would loosen the reins on public companies.

President Donald Trump had asked the Securities Exchange Commission to study how allowing companies to file reports with the agency biannually instead of quarterly would affect the US economy.

He said he has asked the US Securities and Exchange Commission to investigate making such a change.

Abolishing the rule would "allow greater flexibility & save money" for businesses, Mr. Trump tweeted.

President Trump recently hosted several top company leaders while on vacation at his private golf club in Bedminster, New Jersey, including the heads of Apple Inc., Fiat Chrysler Automobiles NV, Boeing Co., FedEx Corp, and Honeywell International Inc.

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

In a tweet early Friday, Trump said that after speaking with "some of the world's top business leaders", he's asked the U.S. Securities and Exchange Commission to determine whether shifting to a six-month reporting regimen would make more sense. "Stop quarterly reporting & go to a six month system", said one.

Trump later told reporters the idea was especially urged on him by Indra Nooyi, CEO of PepsiCo, who is stepping down in October. Chairman Jay Clayton issued a statement Friday saying the agency "continues to study" reporting requirements, including how frequently companies should announce results.

Public companies must report their sales, profits and the state of the company's balance sheet every quarter. It's unclear whether management at companies that report semi-annually take a longer-term investment strategy than management at companies reporting quarterly, said Salman Arif, a business professor at Indiana University who has studied the difference in reporting periods. And corporate leaders and trade groups have increasingly vented about Wall Street's obsession with short-term earnings and revenue targets, arguing that they can prevent firms from growing their businesses and creating jobs. "She said, two times a year reporting, not quarterly". Less-frequent public disclosures could hand another advantage to sophisticated investors with easy access to corporate executives, corporate governance experts said. One provision of the bill includes a requirement that the SEC review the quarterly reporting requirement.

Druckenmiller noted that investors like to know what's going on with the companies they invest in.

"Investors will demand they get their information", Ed Yardeni, founder of Yardeni Research Inc., said in a Bloomberg Television interview.

Last fall it laid out changes to capital market rules in a US Treasury report, but did not advocate scrapping quarterly reporting.

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