The U.S. Securities and Exchange Commission (SEC) is considering a rule change in response to President Donald Trump’s suggestion to replace quarterly earnings reports with semiannual ones.
Firms Have An Option To Pick Semiannual Or Quarterly Reporting
SEC Chairman Paul Atkins revealed the potential rule change on CNBC’s “Squawk Box” on Friday. Atkins stated that the proposal aligns with Trump’s vision and could be beneficial for shareholders and public companies.
Atkins, a Republican, emphasized that the current rules, which mandate quarterly reporting, could be altered by a simple majority vote. Notably, Republicans have a 3–1 majority in the body, while one seat remains vacant.
He pointed out that foreign private issuers are already required to follow semiannual reporting. “You have to realize that right now, semi-annual reporting is no stranger to our markets, foreign private issuers do it right now,” Atkins said.
He also spoke about the ongoing discussions about how quarterly reporting tends to encourage short-term thinking.
Atkins said that if the rule change is approved, companies could choose between semiannual and quarterly reporting.
SEC Likely To Shift To Semiannual Corporate Reporting By 2027
Trump has been advocating for this change, and it is gaining momentum. Despite potential resistance from some investors, analysts anticipate that the SEC could adopt a European-style system, mandating companies to report only twice a year by 2027.
However, this proposal has been met with criticism. Former Treasury Secretary Lawrence H. Summers warned that Trump’s proposal to eliminate quarterly corporate earnings reports could weaken accountability and transparency in U.S. markets.
On the other hand, Trump’s idea has been lauded for its potential cost-saving benefits. If America moved to semiannual reporting, it could have a significant impact on the market. Bill Harts, CEO of the Long-Term Stock Exchange stated that the rule “can be better not only for companies but for investors as well.”
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
