The chairman of the U.S. Securities and Exchange Commission, Paul Atkins, has announced that the agency will propose a rule change in response to President Donald Trump’s suggestion to switch quarterly earnings reports to a semiannual schedule. In an interview on CNBC’s “Squawk Box,” Atkins expressed his support for the president’s proposal and stated that he had discussed the matter with Trump.
Atkins emphasized that if the rule change is approved, it will be up to individual companies to decide whether they want to switch to a semiannual reporting schedule or continue with quarterly reports. He believes that allowing companies to choose the frequency of their financial reporting will benefit both shareholders and public companies, as the market can determine the most appropriate cadence.
Currently, publicly traded companies are required to report earnings on a quarterly basis, although providing forecasts is optional. Trump’s call for a switch to semiannual reporting has sparked debate, with some arguing that less frequent reporting could harm transparency for investors, particularly retail investors who may not have access to the same resources as institutional investors. On the other hand, proponents of a six-month reporting schedule argue that it would allow companies to focus on long-term goals.
Atkins pointed out that foreign private issuers already adhere to a semiannual reporting schedule, and highlighted the support for less frequent reporting from entities such as Norway’s sovereign wealth fund and the Long-Term Stock Exchange trading platform. He noted that there has been a growing recognition that quarterly reporting can promote short-term thinking in the market.
The potential rule change would only require a majority vote by the SEC, where Republicans currently hold a 3-1 voting majority with one vacant seat. Atkins’s remarks suggest that the SEC is open to considering Trump’s proposal and is willing to adapt regulations to better serve the needs of shareholders and companies.
In conclusion, the debate over the frequency of financial reporting continues to evolve, with the SEC considering a potential shift to semiannual reporting in response to President Trump’s recommendation. The decision will ultimately rest with individual companies, who will have the flexibility to determine the most suitable reporting schedule for their operations.
