President Trump on Monday proposed to reduce the frequency that public companies report financial information to their investors and the public, suggesting cutting requirements in half by going to two, instead of four, reports a year.
“This will save money, and allow managers to focus on properly running their companies,” Mr. Trump said in a post on Truth Social. Public companies in the United States have been required to publish quarterly reports for more than 50 years.
It’s not the first time Mr. Trump has raised the idea. During his first term, he suggested moving to semiannual instead of quarterly reports, and the Securities and Exchange Commission explored the issue but never progressed to the point of changing the rules. Mr. Trump’s proposal would need the approval of securities regulators.
Mr. Trump has made deregulation a cornerstone of his presidency, already moving to reduce the amount of information companies are required to report to investors, regulators and the public.
In March, under Mr. Trump’s direction, the Treasury Department said that it would no longer enforce anti-money laundering rules that require domestic companies to report beneficial ownership; a beneficial owner is someone who might own a company through a trust or other vehicle. Foreign entities are still required to report their beneficial owners.
Scott Bessent, the Treasury secretary, said at the time that the rule change was “part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations.”
However, while relaxing reporting regulations might ease the burden for corporate managers, critics say it would reduce the amount of information available to investors, regulators and the public.
This information in theory helps investors make better decisions with their money, allows regulators to spot financial crimes and other problems; and gives the public a regular look into the details of businesses that shape their lives.
Some investors have also noted that while the intent of frequent financial reports might be sound, they can encourage executives to make short-term decisions to meet quarterly market expectations, rather than focusing on the long-term health of the business.
Joe Rennison writes about financial markets, a beat that ranges from chronicling the vagaries of the stock market to explaining the often-inscrutable trading decisions of Wall Street insiders.
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