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Trump asks SEC to study six-month reporting system for public firms

Trump asks SEC to study six-month reporting system for public firms

The U.S. enacted quarterly reporting in.

Publicly traded companies in the United States, as well as Canada, now file their earnings reports every three months, or four times per year.

Some believe that executives are making decisions based on short-term thinking to satisfy the market at the expense of the long-term viability of their companies. To its detractors, it is, in the words of Hilton Capital Management's Dick Bove, "a disgusting idea".

Tesla Inc (TSLA.O) Chief Executive Elon Musk stunned investors last week with a plan to take the electric carmaker private, a move he says would benefit shareholders by removing short-term pressures.

Trump's proposal - released via Twitter and prompted, he said, by a recent conversation he had with PepsiCo Inc. "I have asked the SEC to study!".

Trump held a dinner for business executives on Aug 8, two days after Nooyi announced her departure, at his golf club in Bedminster, New Jersey. Nooyi said she thinks it would be beneficial to harmonize American and European rules on financial reporting.

In Europe, companies and regulators in recent years have backed away from requiring quarterly financial statements.

Companies that want to distance themselves from short-term scrutiny should instead stop publicly projecting the next quarter's earnings, Pozen added. That act also created the SEC, which sets the regulations which govern those quarterly reports.

Quarterly reports are "early warning signs of other bigger problems", Elson said. Other corporate leaders have raised the matter with White House officials, and the administration has been considering the issue for some time.

Nooyi confirmed on Friday she had made suggestions on how to encourage companies to have a more long-term view.

Investor reaction to the idea was mixed. 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.

"Imagine the volatility you would get", billionaire money manager Stanley Druckenmiller said yesterday in an interview.

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

While the quarterly earnings season has a negligible impact on market-wide volume, it does coincide with an increase in price turbulence among individual companies. "We're looking at twice a year instead of four times a year".

Business groups including the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and exchange operator Nasdaq have been lobbying for lawmakers and the SEC to relax listing rules, warning that the decline in listings hurts jobs and pension funds. A statistic they often point to is the drop in initial public offerings over the past 20 years.

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. "Changing the reporting period is not going to change that". "You're dramatically increasing the temptation for people to trade" on inside information, he said.

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