While it's hard to determine what will come of Trump's tweet and charge to the SEC, if such a change were to occur, Wedbush Securities analyst Christopher Svezia said there could be positives for both investors and companies.
President Donald Trump on Friday said he has instructed the US Securities and Exchanges Commission to investigate the abolition of quarterly financial reporting for US companies, after discussions with business leaders.
The SEC could make such a change on its own without Congress passing legislation, but that doesn't mean it will, said David Martin, who previously ran the agency unit that oversees corporate filings.
The move would improve "flexibility and save money" Trump said. While some business leaders have groaned about the rigors associated with having to meet targets and metrics four times a year, the SEC has been reticent to make any 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 U.S", Trump tweeted.
Under federal law publicly traded companies must file a 10-Q report with the SEC every three months.
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SEC spokesmen didn't respond to requests for comment.
Trump later told reporters the idea was especially urged on him by Indra Nooyi, CEO of PepsiCo, who is stepping down in October.
The reports can be found on the SEC's website.
But moving away from reporting earnings every three months would be a much more dramatic change that would nearly certainly trigger resistance from shareholders who want transparency from the companies they invest in.
Tesla Inc 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.
"My comments were made in that broader context, and included a suggestion to explore the harmonisation of the European system and the United States system of financial reporting".
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Europe has backed away from requiring companies to file quarterly reports.
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.
"Less frequent reporting can raise the cost of capital", he said.
In a statement Friday, Nooyi said her comments were part of a broader conversation about how to better focus companies toward long-term goals. In 1996, nearly 950 companies went public, according to data compiled by Bloomberg.
He would need to draft a proposed rule-change which would then be put to an industry consultation during which investors, companies, exchanges, pension funds and public interest groups would likely bombard the SEC with information.
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